Tearing up the rulebook: legislation and new care models

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Over the past five years, the government and national NHS bodies have conducted a unique experiment: running health services as a planned system against the backdrop of a contradictory legislative framework, one that envisages arm’s length contracting relationships between purchasers and providers, independent provider organisations, and a significant role for competition. In doing so, they have turned their backs not just on the Health and Social Care Act 2012, but on almost three decades of reforms: separate commissioners, foundation trusts, payment for activity and patient choice among others.

In many respects, the ‘centre’ has done extraordinarily well. It is reinstating regional planning through sustainability and transformation plans (STPs); it is re-writing the purchaser–provider split; and providers are coming together in accountable care systems and similar collaborations to deliver new care models. Leaders of provider organisations argue that they are now subject to greater top-down control than ever before. All of this despite legislation that aimed to ‘liberate the NHS’. An outside observer might marvel that so much was achievable in a country governed by the rule of law.

At the same time, the strain is starting to show. Commissioners and providers are making good progress on STPs in some local areas, but rather less progress in many others. The threat of legal challenge casts a shadow over the reconfigurations outlined in many STPs. Many of the sites developing new care models seem to be tied up in contractual red tape.

So how much further can the NHS go without changes to the law (and it is now clear that there will be no major legislation in the near future)? Can the NHS really establish planned systems and deliver difficult service change through STP processes that lack legal underpinning, without any powers to direct the many organisations involved? Will the wheels finally come off, or will the NHS continue to find ingenious ways of subverting the 2012 Act?

On the one hand, there seem to be surprisingly few hard barriers to a planned system in the Lansley reforms. Commissioners may not merge with providers under current legislation but can work in strategic partnerships that come close to merger. None of the competition rules specifically prohibit commissioners and providers working together in regional collaborations. There seems little likelihood that the regulators will be actively enforcing many of these rules in any case, although overtly discriminating against private providers in procurements could still land commissioners in court. (Even the Competition and Markets Authority has acknowledged the incongruity of merger controls to protect competition in a sector where competition now has little role to play.)

On the other hand, there are substantial practical challenges. Success depends on large numbers of organisations working together voluntarily, sometimes against their immediate interests, each with a veto over decisions, each with the ability to walk away when things get difficult. Of course, it is possible to make progress through ‘collective action’ in the absence of formal decision-making structures. Some local areas have already made significant strides, typically those with the strongest leadership, more manageable finances and a simpler institutional landscape. But what are the chances for areas with dozens of clinical commissioning groups (CCGs), local authorities and providers, each struggling to keep their heads above water?

One useful approach is to invest in the shared vision for the local system as a basis for mediating between different institutional interests as in Canterbury, New Zealand and other successful collaborative health systems. Another is to gradually simplify the institutional landscape through CCG mergers or delegating responsibility to a single lead provider where this is possible. Anything that reduces the number of organisations holding a veto could increase the likelihood of success. Being clearer about which organisations are responsible for specific decisions in the STP should also simplify decision-making while reducing the risk of challenge. (A particular danger is that the wrong organisation makes the decision, or that organisations neglect requirements regarding board approval, the role of the foundation trust council of governors, or conscientious consultation.)

These are, of course, no more than workarounds to support regional planning in a system designed with a very different mode of operation in mind. One day, a future government will surely wish to re-establish some coherence between how the health system is run, how it is structured, and the legislation. The can of worms this will open is enormous, and extends far beyond repealing a few anachronistic competition rules: who will be the funders and planners in such a system; what decision-making powers should they have; what will be the operating rules for providers? What influence will patients have over monopolistic systems with little scope for meaningful choice? The list goes on.

In the meantime, the NHS has no option but to continue patching things up. Success in the short term will depend largely on how well the Department of Health, NHS England and NHS Improvement work together. If they act with one voice, perhaps they can encourage effective collaboration even in the most challenged local systems. If they remain divided, worrying about who is going to carry the can for worsening NHS finances, then so too will be the organisations they oversee. Like Confucius, we must hope that, in the absence of law or markets, the public health system is governed by a virtuous (and joined-up) elite.


Roger Steer

Healthcare Audit consultants
Comment date
29 August 2017
You can make decisions but before the treasury cough up the money necessary for the huge investments required a business case has to be presented that adds up .
That's the problem.

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