Labour’s NHS vision let down by reforms

Leadership in Health Services

ISSN: 1751-1879

Article publication date: 3 October 2008




(2008), "Labour’s NHS vision let down by reforms", Leadership in Health Services, Vol. 21 No. 4.



Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited

Labour’s NHS vision let down by reforms

Article Type: News and views From: Leadership in Health Services, Volume 21, Issue 4

Edited by Jo Lamb-White

Keywords: Healthcare leadership, Healthcare reform, Healthcare vision

New Labour’s reforms have failed to deliver its vision to transform the health service, a major report has concluded.

The joint Audit Commission and Healthcare Commission report finds the overhaul of the health service under the 2000 NHS Plan has, in many areas, fallen well short of expectations.

It praises shorter waiting times and improved quality of care but says the introduction of foundation trusts, patient choice, payment by results and practice-based commissioning have not necessarily brought benefits to patients.

The inspectorates have urged the government to learn lessons, saying they must fully evaluate policies arising from health minister Lord Darzi’s next stage review.

The report says progress since the reforms, which cost upwards of £600m to administer each year, has been slower than anticipated. Expectations, including the Department of Health’s, had been too high and two rounds of reconfiguration and weak national “infrastructure” made faster change impossible.

Asked if the money had been well spent, Audit Commission managing director of health Andy McKeon said: “The jury is still out on whether the reforms brought benefits to patients.”

The commissions found the introduction of foundation trusts (FTs), one of the most controversial Blairite health reforms, had not improved service quality. “There is no significant evidence yet that FTs are delivering higher quality of care as a result of their status,” the report said.

Healthcare Commission chief executive Anna Walker told HSJ: “We’re yet to see much innovation (from foundation trusts). These are very good organisations but the idea of giving them this autonomy was to encourage them to break the mould.”

Ms Walker said a lack of clarity from the Department of Health about what foundation trusts were allowed to do – especially in the provision of primary care – had hindered investment of their £1.5bn surpluses. Mr McKeon said: “If you have taxpayers’ money and also a large surplus, there is some obligation to the tax payer to say how you are going to use that.”

If necessary, Monitor should introduce rules to ensure surpluses are not kept “over prolonged periods”.

The introduction of patient choice has been “disappointing”, the report says. There is “no evidence” that patient choice had improved service quality.

Major reforms such as payment by results were implemented at different speeds across the NHS, and usually driven by the establishment of foundation hospitals.

The difficulties of separating costs under payment by results have meant primary care trusts have struggled to determine the shape of local secondary care. Meanwhile, PCTs felt hospital trusts had embarked on “inappropriate” service expansion, the report says.

Mr McKeon said the commissions had been “frustrated by the lack of clear objectives, costs and evaluation” of the reforms. It was hard to see a relationship between the time and money spent on them and the expected results.

They call for regulators to help ensure greater local accountability leads to better services.

A DH spokesperson said: “Some people will always say the pace of change is too fast, others the reverse... We agree there has been a need to improve engagement in the reform programme and that’s precisely what the department has been doing through the next stage review.”

NHS workforce contracts represent a “missed opportunity” for change, a joint report from the Healthcare Commission and Audit Commission concludes.

It says there have been few gains from the £250m-a-year consultant contract or Agenda for Change, which has cost up to £1.8bn each year since its introduction in 2004.

There has been “an unnecessarily rushed implementation, leading to a focus on the administrative aspects of the contract without using the levers for change”, says the study.

While increasing transparency and pre-empting equal pay claims, the contracts have seen productivity drop, with the decrease in output per pound “caused almost entirely by the increase in staff wages”.

The impact these contracts have had on improving staff numbers is “unclear”, as much of the increase occurred before they were implemented.

Working against the policy of shifting care from acute services, the number of staff in primary care is increasing at a slower rate than in secondary care.

Job satisfaction in the acute sector has declined, the report notes, possibly because subsequent pay awards were seen as attempts to claw back some of the wage rises.

The full effects of the contracts for hospital and community staff may be seen only over longer periods of time.

The cost of reforms – estimated annual costs:

  • Payment by results administration – £50m.

  • Primary Care Trust reconfiguration – £192m.

  • Practice Based Commissioning (PBC) Incentives for GPs – £98m.

  • Incentives to GPs to offer choice – £19m.

  • Enabling free choice of provider* – £24m.

  • NHS Choices web site – £4m.

  • Independent Sector Treatment Centres (ISTCs) costs of activity – £178m.

  • Establishing ISTC programme – £49m.

  • Total – £614m.

Source: Audit Commission/Healthcare Commission, 2008

Key points:

  • Commissioning and payment by results not driving movement of care from hospitals.

  • Competition improving services for patients in some areas.

  • Wide variation in extent to which reforms have been implemented around the country.

  • Infrastructure not in place to support patient choice.

  • FT status not delivering innovative services.

  • Payment by results and FT status encouraging providers with incentives to improve.

  • Incentives for practice-based commissioning not strong enough.

  • Workforce contracts resulting in higher cost and lower productivity.

  • More clarity over hospital funding.

  • Controls needed over the size of FT surpluses.

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