The Health and Social Care Act: what next for the NHS?

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After many long nights spent debating the hundreds of amendments laid before them, members of the House of Lords will have breathed a huge sigh of relief that the Health and Social Care Bill has finally been granted Royal Assent.

Secretary of State for Health Andrew Lansley will be equally relieved but for other reasons. His grand plans to redesign the NHS, developed during six years in opposition, have had a very difficult passage and, after much amendment, the final results are very different from the original.

Lansley's original aims were to liberate the NHS by giving patients more choice, clinicians more control and organisations greater freedom from central control and political interference. To realise this, the Bill was originally designed to do several things: establish a powerful regulator to promote choice and competition (the new Monitor), hand over commissioning budgets to groups of GPs, abolish layers of regional and local NHS 'bureaucracy', and hand over responsibility to more powerful independent bodies including the NHS Commissioning Board and Public Health England.

The reality is quite different. Monitor will tackle anti-competitive behaviour where this is not in the interests of patients and the public, but its more interventionist powers have been removed. Commissioning groups have more governance requirements and population responsibilities, need to be subject to more scrutiny by local authorities through health and wellbeing boards and have more stringent requirements on the handling of conflicts of interest. The Department of Health is in the process of downsizing and handing over responsibilities to various arm's length bodies, and the abolition of primary care trusts and strategic health authorities is well under way. However, the new structure of the NHS Commissioning Board suggests it will try to fill the gaps left behind with regional and local offices.

We know from our analysis of previous reforms that the real impact depends not on their design but on implementation. The task of implementation lies in the hands of others beyond government who may not share in the vision, may have their own priorities and interests, and may be influenced by other more powerful pressures. Whether these reforms deliver on the government’s vision and have the desired impact of improving outcomes will depend on the actions of the newly created national and local organisations. Here I set out briefly the three priorities that face the implementers.

A new approach to commissioning: at national level the NHS Commissioning Board needs to set out a clear vision for commissioning that focuses on securing improvements in health and providing the best health care for local populations with the resources available. It needs to provide the tools for local commissioners to contract for services (not with organisations), to specify the standards and outcomes (not the means of delivering them) and currencies which transfer risk to providers with incentives to innovate and change to more effective models of care (not rewarding activity). At local level, clinical commissioning groups need to work closely with local authorities to ensure their focus is on outcomes for their local population. This sounds very complex – what it really means is they need to focus on transforming services locally, not on transactions and performance management of providers.

Establishing clinical and financially sustainable providers: at national level the NHS Trust Development Authority, which has been set up to oversee the transition of all NHS trusts to become foundation trusts, needs to be given the freedom to restructure trusts that are not sustainable (rather than having to force mergers, which evidence has shown often result in poorer performance). Monitor will also need to act early to find solutions for foundation trusts that are no longer clinically and financially sustainable rather than waiting until providers are failing. Locally, the leaders of provider organisations need to recognise and make difficult strategic choices about their future sustainability. They need to be allowed to stop providing some services themselves and to develop innovative partnerships with other public, private and third sector organisations.

Balancing the benefits of choice and integrated care for patients: at national level Monitor will need to carefully balance the benefits of integrated care for patients with complex needs and the potential benefits of greater choice and competition. It needs to send a strong signal to local commissioners and providers about the importance of integrating care and explain how they can do this without breaching competition rules. Locally, commissioners will need to think carefully about the feasibility and desirability of applying competition to different types of services. They will need to offer a degree of choice and contestability but recognise that the majority of users have complex needs that span health and social care and physical and mental health.

In the face of these challenges, the real risk is inertia – that leaders in the system resist the reforms but in so doing resist change. The government has largely failed to win the support of the medical profession for the Act – as it now is – and yet without their support it is difficult to see how they can make this work. The political debate about the Act may be over but the political repercussions if the health and social care system does not change to meet the unprecedented challenges it faces will be great. Any failure to do so will firmly land at the government's door.

This blog was originally written for the LSE British Politics and Policy blog.


John Chater

Comment date
29 March 2012
It is true that most of the deckchairs have been rearranged, staff redeployed and new nameplates ordered. The crucial period will be from now until April 2013 when the new statutory bodies are created and CCGs will have to take up arms against providers.

It will be interesting to see how prepared the CCGs are, how many of them are fit for authorisation, have published their constitutions and are able to be trusted with commissioning responsibilities. Also, how many have had to farm out back office responsibilities to private companies.

Likewise in local authorities, an evaluation of the effectiveness of health and wellbeing boards' ability to bounce inadequate commissioning plans could make for entertaining reading. Hopefully, the King's Fund will be conducting an ongoing analysis of these issues.

The debate has largely been around the ability of GPs to manage commissioning budgets, but the big bucks are really on the provider side, with the private sector already moving in. Speculation around the George Eliot Hospital being taken over by a private provider, possibly Serco, Care UK or Circle (which is already running Hinchingbrooke) and NHS Devon and Devon County Council considering bids from Serco and Virgin Care for the provision of children's service are only the tip of the iceberg (to continue the Titanic theme).

Possible conflicts of interests abound – with the same companies providing admin and management support to CCGs, whilst simultaneously owning/running contracted providers.

It'll be interesting.

Tony Hockley

Comment date
29 March 2012
I wouldn't say that the final Act is really that different to the original. It is just a more bureaucratic version of the original. Only today the PM has proposed new powers to strengthen user choice in health and education. Whatever the Government might claim to the contrary, increasing aspects of the health system will find themselves subject to European competition law.

The big challenge is not really the professional union's opposition to the Act but the unprecedented and sustained financial pressures that the NHS must come to terms with, which Anna alludes to at the end of her blog. There are already plenty of wobbly Foundation Trusts, and these are supposed to be the best of the bunch. The new CCGs will have to take very difficult and unpopular decisions that used to all fall into the lap of the Secretary of State. Not all of the CCGs will be up to the task, and the pressure for yet another recentralisation (as happened since the Milburn devolution to 300+ PCTS) will take a lot of political will to resist.

The Act might lead to a little more flexibility in the health system, and a little more competition and choice, but only goes a very small way towards addressing the long-term financial problem facing the NHS in the new era of fiscal restraint.

John Kapp

Comment date
29 March 2012
Anna is thinking top down, as everybody has been in the habit of doing for 64 years. Why I am rejoicing at the Royal Assent is that the Act empowers patients to demand better (non-drug) treatments. There are NICE-recommended complementary treatments which are clinically appropriate for 2 out of 3 patients in primary care, namely depression (the MBCT course) and low back pain (spinal manipulation and acupuncture) for which the waiting time is presently thousands of years. I have created SECTCo to reduce this, in the same way that private providers reduced the waiting time for hip replacements. There are hundreds of thousands of complementary therapists who are seriously underwhelmed with clients, but who could now contract with CCGs to provide their services free to patients on the NHS, without waiting for any of the bureacracy that Anna mentions..


Comment date
30 March 2012
How come you've hardly mentioned patients? I believe that the new Act is a great opportunity for patients to get involved in the commissioning of care by telling their GPs what the want and need, rather than being forced to accept what the "great and the good" think that we need as happens at the moment.

Could The King's Fund please provide patients with some resources on how to work with GPs to get the care that is best for them.

A. Barkshire

Comment date
30 March 2012
Perhaps if everyone had not been so busy being reorganised some attention might have been paid to making the working of the care system (hospitals / community etc) more efficient, looking at how to care more effectively for an ageing population, and developing better outcome measures. Making some hospitals bust by introducing ever more private competitors has not been very helpful. I would suggest that the whole purchaser provider split onwards has been a disasterous distraction from improving the quality of care and misdirecting money into ever increasing transactional costs. A focus from the start on comparative outcomes would have done far more to harness doctors natural competitive desire to be the best instead we ahve focused on costing everything and valuing nothing.

David Griffiths

Comment date
30 March 2012
I used to work with accounting systems in industry and am intrigued by how NHS systems will cope with the new Bill. I don’t know how the existing systems operate but would have thought that the ‘commercialisation’ of the NHS will require commercial systems. For example, if a doctor decides to send me to a healthcare provider, he/she will have to raise an order with a price on it. The healthcare provider will then invoice the CCG. The invoice will be matched (usually automatically) to ensure the order cost equals the invoice cost and the invoice will be paid. Even this simple procedure requires orders to be raised for each consultation, invoices to be raised by each provider for each consultation, IT systems to match and pay them. Won’t this represent a significant increase in transactions?
However, many invoices won’t match, because the healthcare provider carries out additional work not on the order. Will they have to ask for an additional order before proceeding? If not, the invoice won’t match and will have to be approved manually, probably by a doctor. These matching failures will have a knock-on effect on payment and therefore on the cash flow of healthcare providers. Watch out for hospitals going bust, not because of their own incompetence but that of the CCGs.
I’ve looked at the NCB guidance but it only touches on these types of back office systems, yet it could be these which are the most costly.
Am I right, or am I making a mountain out of a mole(hill)?


ex social worker,
Comment date
01 April 2012
I agree with Paul. I am a carer for friend who has home dialysis who is waiting for a kidney transplant. I help him alternate days for 6 hours per session. He has asked for community care assessment since october 2011 - this has not happened and I have been told he does not have social care needs but has health needs therefore Direct Payments to fund and train a carer to provide some respite for me is not appropriate. no one will help us as we do not fit the rules. in Ireland I would at least get a tax credit to fund another carer to share the care.

Simon Merrick

Comment date
02 April 2012
I always find this 'patient choice' argument that is seemingly always thrust upon us as the mantra for massive change and upheaval. I raise one argument and I think rather critical. Do patients want choice and choice of what? I'm no expert on my health and that's why I go to a GP for him to recommend what I might need. I might query the location, but only if it is too far away. I might query the organisation if they have a bad review, but otherwise I expect my Podiatrist to operate the same as another Podiatrist and achieve the same outcome. I know I've simplified this, but I also know Kings Fund has conducted analysis on patient choice, especially around Maternity services. I await to see whether choice really is of benefit. I would tender, that just being seen in a reasonable time, by someone who knows what they are doing and isn't going to run away if the outcome isn't completely to my satisfaction... or am I asking too much as a patient?

David Roberts

Comment date
05 April 2012
Integration is a strong theme of the Act, but the Open Public Services agenda has competition as a key mechanism to improve quality, effectiveness and to restore confidence in services. Reconciling these two conflicting aims is going to make life difficult for community health and social care services, especially for specialist services where scale gives economies and supports specialism. The justifications for fewer larger acute units on quality and cost are the same in the community. Wither or whither localism?

Peter Walker

NHS employee ( for now !),
Comment date
05 April 2012
This really is the end of the NHS as a provider service. G.P.'s are independent practitioners and whilst I have the greatest respect for them as clinicians I have little or no respect for them as businessmen. Many GP's practices are already setting up their own provider services and writing to patients to inform them they have done so with the patients then being put under subliminal pressure to follow the GP as often happened with GP led baby clinics vs NHS led baby clinics.
With several commisioning groups covering a previous NHS borough I am convinced that with AQP only covering a percentage of services currently offered ( see the Podiatry spec) then different groups will choose or not choose extra areas of podiatry care to commision such as nursing home and residential care home provision thereby creating a post code lottery.

There is also an unanswered concern as to what will happen to long term conditions such as leg and foot ulcers and will the private AQP's be required to take on these conditions which are a drain on finances or will they be able to cherry pick the services which are for quick profit?

The lack of clarity on TUPE transfer for staff when the patient choice element is included will mean that many staff will nto transfer over with the patients causing the mass redundancy of many exeperienced community clinicians.

There appears also to be little clarity on whether the on costs such as long term leases to NHS buildings and NHS terms and conditions will have to be adhered to for private sector companies wishing to be judged an AQP( if they are not then they can build a portacabin that meets minimum standards and employ new graduates desperate for work on lower terms and conditions thereby under cutting the current NHS providers.)
This will damage patient care as it will remove a large swathe of experienced satff from the proviison of health care.

Bevan said the NHS would exist as long as there were people willing to fight for it, sadly this now appears not to be the case.

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