Commissioning: barking up the wrong tree?

In 2008, at the 60th anniversary of the NHS, Kenneth Clarke, the health secretary who introduced the purchaser/provider split into the NHS in 1991 observed: ‘if one day subsequent generations find you cannot make commissioning work, then we have been barking up the wrong tree for the last 20 years’.

Well, we are not quite there yet. But it is clear that faith in the ‘purchaser/provider split’ or in ‘commissioning’– and its accompanying concepts ‘choice and competition’ – as the key drivers of reform is fast dissolving.

The clue lies not just in the Labour manifesto promise, yet again, to abolish the Health and Social Care Act 2012, but in the little-debated section of the Conservative manifesto that promises ‘to review the operation of the [NHS] internal market’ and to legislate if necessary ‘if the current legislative landscape is either slowing implementation [of plans to improve patient care] or preventing clear national or local accountability’.

Leave aside for one moment the revival of the term ‘internal market,’ which virtually no-one has used since the 1990s. It still tells us two things. First, that May’s administration is prepared to legislate on the NHS when Cameron’s was so seared by the experience of getting Lansley’s Act through parliament that any talk of amending legislation was forbidden.

But second, that choice and competition – and with that greater use of the private sector – which many opponents of Lansley’s Act saw as its chief component – has ceased to be a key driver of NHS policy. That has been coming for a while.

In is notable, for example, that ‘choice’ appears 39 times in Liberating the NHS, the White Paper that set out the Lansley reforms, but it appeared only four times in Simon Stevens’ NHS five year forward view, then chiefly around ‘choice of treatment’ rather than choice of provider. Competition appears seven times in the White Paper; not once in the Forward View.

Sustainability and transformation plans emphasise collaboration rather than competition, to the point that some of them– an initial nine or so – will become local ‘accountable care systems’ – effectively groupings of hospital, community and primary care services allied to social care that will have a single budget to provide properly co-ordinated care for patients. As Simon Stevens told the Public Accounts Committee in February that ‘will for the first time since 1990 effectively end the purchaser provider split.’ As he noted at the time ‘this is pretty big stuff.’

That ruffled more than a few feathers. David Hare, the chief executive of NHS Partners (which represents many of the private providers to the NHS) warned that any such change must act ‘within the existing legal framework’ of competition and procurement law. And it is tweaks to that, and to the regulatory framework, that look likely to be the targets of the Conservatives’ review.

So why is this happening?

Well, the original idea of the purchaser/provider split was that the NHS should, arguably for the first time, consciously decide what health care provision it wanted to buy and then purchase it from the best provider – whether from NHS organisations who were to be made more independent by NHS trust status or from the private or the voluntary sectors, which would be free to compete for the business.

The Labour government refined this by introducing a price list for many procedures – ‘the tariff’ – which restored patient and GP choice of where patients got treated; this was accompanied first by the commissioning of independent sector treatment centres as privately run surgical factories to treat NHS patients and then by extending patients’ right to go to any private hospital willing to treat them at NHS prices.

For what was seen as the central problem of the 2000s – NHS waiting times – all this certainly worked: waiting times that were often at least 18 months dropped (broadly speaking) to no more than 18 weeks.

It remains highly debatable how far the ‘purchaser/provider’ split that drove that. There is plenty of anecdotal evidence that choice and competition had an effect and some academic evaluation to support the idea*. But looking at the data overall, it is hard to prove an impact. John Appleby has a neat graph that plots the decline of waiting times against each of the choice and competition initiatives; the line declines steadily, with no discernible acceleration as these changes took effect. Which is not to say that there was no impact. There is no counter-factual, other than in Scotland and Wales, neither of which embraced choice and competition on any scale, but where the different ways the waiting time numbers are compiled makes comparison difficult. In England the decline in waiting times might have slowed without the choice (and thus competition) initiatives. But, intuitively, it feels more likely that the key drivers were the other tools that were applied – huge amounts of extra money, a regime of ‘targets and terror’ which saw chief executives fired if they failed to hit their ever-tightening target, and the tariff.**

The tariff, however, was far from great for tackling another key issue: how to provide better integrated care for the growing numbers of mainly elderly patients with long-term and often multiple conditions. Furthermore, given the near impossibility politically of closing down health services, choice and competition in health seem to work best when there is a growing rather than a shrinking market – and, despite its relative protection, health has been a shrinking market since 2010 in terms of real spending per head adjusted for age.

So the tools that worked well for the political and service priorities of the 2000s do not work well now, and in some ways they have become counterproductive – encouraging the click of the turnstile at the hospital when better integrated care might not prove cheaper but should prove better for patients in terms both of their experience and outcomes.

There is a neat irony here. Lansley’s Act was seen at the time as taking to ultimate completion the ‘choice and competition’ approach to running the NHS that Labour had revived and re-launched from the Conservative days. Instead the Act has proved to be the high-water mark of faith in such mechanisms.

It is important not to overstate this. NHS England will still be the commissioner for accountable care systems or organisations, if we ever get to them. Or some different form of clinical commissioning groups will technically do the job. They will have to retain the patient’s choice over where they are treated, and they will be able to contract with the private and voluntary sectors and other parts of the NHS when they believe that is in patients’ interests. Any legislation to dilute or remove the application of procurement and competition law may have to await Brexit. And this shift raises more questions than can be addressed here.

But if 25 years of policy is not entirely being thrown out of the window, it is, at the very least, being massively modified. How long, one might wonder, before the wheel turns again and policy-makers start to worry about monolithic provision when one of the accountable care-type systems proves not to be great at the job?

---

* Also see Zack Cooper in the Guardian
** See Understanding New Labour’s Market Reforms of the NHS and From quasi-market to market in the National Health Service in England

Find out more

Keep up to date

Subscribe to our email newsletters and follow @TheKingsFund on Twitter to see our latest news and content.

Comments

#549887 Andrew Wall
retired CEO

In the discussion about the the purchaser /provider split before 1992 I always maintained that it would lead to mutual blaming whereas before if you wanted to change patterns of care you would have to live
with the consequences of that change and this would be more e-effective.So it has taken 25 years to come that conclusion?

#549891 Chris Gunstone
GP
Winshill Health Centre

Its easy to believe the NHS was a better place before 1991, but having worked in it, it was not. Patients get much better care now. Whether that was due to purchaser/divider spilt is debatable. What is clear is that money still flows preferentially to secondary care and away from public health, social care and primary care - whatever the rhetoric.

#550025 Louise Irvine
GP
Amersham Vale Practice

The purchaser-provider split will not go away - just shift to a bigger scale. The ACOs will be put out to tender and a private organisation like Kaiser Permanente, United Health or Virgin could bid to run them on a “prime provider” model, subcontracting to NHS, third sector and local authorities. The Manchester ACO contract worth £6 billion over 10 years has recently been advertised in the European Journal. I don’t know why no-one is talking about that.

Add new comment