Provider reform: will anything be different this time round?

Plus ça change was the observation offered by Robert Naylor at our breakfast seminar on provider reform last week. Current debates about the future of hospitals and bringing care closer to home echo those of the 1970s. So will anything be different this time round?

Naylor’s answer to this question was unequivocal. The current configuration of hospitals in London is unsustainable and changes are urgently needed. More care needs to migrate to specialist hospitals, district general hospitals will have to change their role, and services should be delivered through integrated care organisations combining responsibility for primary care, community services and hospitals.

In his view, this might mean the development of around a dozen Foundation Trusts running a range of services. These integrated care organisations would replace the patchwork quilt of current providers and would lead the development of new models of care appropriate to the needs of an ageing population and the increased prevalence of chronic disease. Critically, financial incentives would need to change to stop rewarding hospitals for treating more patients and to support more care to be delivered in the community.

Moving in this direction would require a comprehensive programme of mergers and acquisitions to reduce the number of organisations providing care, and to overcome fragmentation between services. Naylor made a strong case for mergers arguing that they could produce benefits if well managed and were given time to work. He also challenged the view that PFI (private finance initiative) is a major cause of provider failure, citing the experience of University College London Hospitals (UCLH) as an example of how the environment of care can be improved at an affordable cost.

What chances are there that major reconfigurations will happen? In her contribution to the seminar, Candace Imison argued that the financial pressures on the NHS made it more likely that reconfigurations would occur, despite likely public and political opposition. Robert Naylor went further to suggest that the NHS has the opportunity to use its current financial surpluses to make once in a lifetime changes in how care is delivered, although he was sceptical about the likelihood of major changes happening this side of the election.

The challenge is who will lead these changes when strategic health authorities (SHAs) are being abolished and clinical commissioning groups (CCGs) are still finding their feet? This is exactly the question raised by the Fund in its analysis of the challenges facing the NHS in London. Although Naylor was doubtful about the ability of CCGs to fill the vacuum left by SHAs, recent experience in North West London where CCGs have been instrumental in leading debate about service configuration suggests it would be premature to conclude that they cannot take on this role.

The other unanswered question is whether regulators will be willing to sanction mergers that result in the emergence of integrated care organisations. The view advanced by Naylor that integration and collaboration, rather than competition, should drive health care reform runs counter to the direction of policy, and may well fall foul of the Co-operation and Competition Panel. Catherine Davies from the Panel explained at the seminar that each proposed merger would be considered on its merits with the Office of Fair Trading and the Competition Commission being involved where appropriate.

The elephant in the room was the future of primary care provision. Many GPs who recognise the need to strengthen primary care are fearful of being subsumed into large integrated care organisations led by experienced hospital managers. The challenge this throws down is whether integrated care can be built from a foundation in general practices, for example through federations of practices developing stronger links with community health services and social care, as well as with hospital-based specialists.