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Editor's blog Monday 21 March 2011: Health select committee on commissioning challenges - closures, cherry-picking and cash

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The uncorrected transcript of the latest health select committee evidence session on commissioning is now online.

Extracts of a few key exchanges follow below.

Alwen Williams, CE, N London PCT cluster: "In terms of the impact of the reforms, there will be an issue as to how the functions of GP commissioning consortia are transacted collectively around reconfiguration issues. Often they are issues that require very close collaboration and partnership across a range of commissioners. That depends on the nature of the services being addressed, but one of the issues will be the way in which GP commissioning consortia work together across broader population bases and are held to account for the delivery of high quality, effective and cost-efficient services on behalf of their populations".

Professor John Black, President, Royal College of Surgeons: "We would bitterly oppose reconfigurations brought about by artificial outside influences, such as the European Working Time Directive".

Dr Paul Hobday, GP and ex-local BMA chair in Kent: "As GPs we feel-and I feel from my own personal experience, particularly in Maidstone where I practise-that we have been very much left out of the process completely. It is only in recent days, since Mr Lansley’s announcement that we were to take the commissioning driving seat, that the PCTs and the acute trusts woke up to consult us. Obviously I would say that is a good thing. I feel GPs are in a position to give good evidence for the value of the reconfiguration, considering we see 90% of patients in the NHS and have over 300 million consultations every year.

"Locally, as to the four rules that Mr Lansley has imposed, I have a very good example where all four rules have been broken and GPs’ opinions have been totally ignored. I would hope that that would not continue to be the case.

"(In Kent) our local trusts and the local area merged because it needed the size to build a new PFI hospital. But it produced real divisions in the whole area between the two main towns in our PCT group, Maidstone and Tunbridge Wells, where there was almost warfare between the two ends. Without decent co-operation, you cannot produce decent services because people were coming from completely different directions".

Sean Boyle, senior research fellow, LSE Health: "The evidence (for recrondfiguration) has to be clearly presented and it has to be presented to the public so that people will feel they are properly consulted on what is being proposed and will understand. Often the public are treated like fools, but they do understand a lot of the technical side of this. They can see what a trade-off between access, cost and quality might mean. They also know when they are not being given the real story".

John Black: "We saw this with (GP) fundholding, that the more distal-based commissioning is (i.e. the nearer it gets to the patient), the more the local hospital is defended".

Paul Hobday: "On the arguments about whether it (reconfiguration) is financially driven or not, we have a good example in the last 10 years again in Maidstone. There was always total denial that the reconfiguration of the surgical and orthopaedic services, and, later, the maternity and the paediatrics, was a financial decision. But it has turned out that it clearly was a financial decision and there was no transparency for people to scrutinise it. The consequence is that, in our area, there is now immense suspicion that the policy is made and then the evidence is looked for, rather than the other way round. That is widespread in my area. Transparency has got to be there ...  We had a survey in our area that was audited correctly and showed that 97% of GPs were against the closure of a consultant-led maternity unit but it was ignored. We had a clinical evidence base ignored and genuine public opinion ignored".

Paul Hobday: "PCTs were fairly impotent, as they were in our area, to tackle the acute trusts. I don’t see how GP consortia will be much stronger, unless we go back to the size issue and we have so much clout that, again, it covers vast areas and vast population numbers".

Alwen Williams: "It is how we design the system. My concern is that one could design a system that is pretty fragmented. You have touched on small scale, potentially, GP commissioning consortia, in a set of relationships that may be more about transactional contracting with NHS trusts and foundation trusts. My view is that isn’t going to deliver the best NHS. It is very much about how commissioners play their role and how providers play their role but we need to ensure that, as we design the system, the system needs to be an integrated offer. Only by doing that, I believe, are we going to continue to improve quality of patient care, make the best use of financial resources and not create, inadvertently, a system that is, in a sense, at loggerheads with itself or, in a sense, so fragmented it is unable to achieve large-scale service change".

Q from Rosie Cooper MP: "If, between now and 2013, you have boards which are moving towards, perhaps in 2012, beginning to pull together a commissioning plan and you hold the purse-strings, as we have just been told, could you veto any of those plans? If so, what would that do to the emerging consortia? How would they feel? What confidence would they have in themselves?"

Alwen Williams: "I would say it is a sign of failure of my system if I got to a position of having to veto a plan. There is a huge reliance on good working relationships, trust and confidence and the GP commissioning consortia having confidence in the management team of the cluster to give strong advice to provide high quality commissioning support services. Certainly in my experience of over 10 years as a PCT and, latterly, a cluster chief executive, I have never been in that position because you have to broker. You have to problem-solve together and broker solutions together and a system that ends up, in my view, either voting at a PCT board or vetoing someone’s plans feels, to me, a system that is clearly not working as well as it should be".

Chris Skidmore MP "Do you think those four key tests that Lansley set for the moratoria of previous reconfigurations were effective? Some of them were quite broad. I think only one of them was empirically measurable".

Paul Hobday: "I am worried that the upheaval will slow down the improvements that we have seen in trends and I recommend John Appleby’s paper in the BMJ a month ago from the King’s Fund who, I am afraid, discredited a lot of these claims of how poorly our Health Service is doing. If trends continue, for instance, as they are, next year we will have equally if not better myocardial infarction survival rates than France. It was not pointed out that France spends 29% more on health than we do, so there was a bit of selection and cherry-picking among the statistics there, I am afraid. The paper produces a lot more examples about how the cancer care in this country is much better than Mr Lansley is making out".

Andy McKeon, head of health, Audit Commission: "It is very hard to identify what the recurrent position of PCTs is, or even of trusts. It is quite clear when a PCT posts a deficit. It is less clear what their underlying position is from year to year. Last year there were only four PCTs with a deficit and there were six trusts which incurred a deficit. This year there is a forecast of four PCTs and three trusts which have a deficit. These are not significant sums.

"On the other hand, it is also clear that PCTs receive support from SHAs in one way or another. For example, last year North Yorkshire and York received some money as a non-payable transitional grant to enable them to get rid of their current problems in that year financially and to concentrate on a recovery package in the next year. I am afraid the message is that I can’t give you a figure for the underlying position across the country on PCTs and trusts. Having said that, it is clear that there is probably enough money in the system to deal with outstanding legacy debts but not whether a PCT is over-trading, for example, or a trust is over-trading, its costs are too high and it needs to do something with its cost base".

Chair: "That is a very important piece of evidence to me, that because of the way emerging recurrent deficits are effectively plugged by an SHA at the end of the year, which is, in effect, what you are saying, we cannot know which PCTs have a sustainable current budget".

Andy McKeon: "That is correct, yes".

Noel Plumridge, writer, consultant and NHS financial genius: "A recent paper by the Nuffield Trust has commented on how the efforts of making savings have been concentrated in the acute hospital sector. The acute hospital sector is less than half the average PCT commissions and the suggestion is that if we try and focus savings of at least 4% entirely on the acute hospital sector, we will face difficulties. That is a way of saying it may not be quite as rosy as that September projection".

Andy McKeon: "From our experience and research, up to a point management and mismanagement is a factor in creating a deficit. In our study in 2006 about financial failure it was clear that, in a number of cases, there was poor leadership by the board, there was often a turnover on the board or the information systems were not very good-Noel did quite a bit of research for us on this study- and all of that created a position where these organisations get into deficit. Again, poor financial information and poor information about activity, despite modern computer systems, is still a problem, and so, perhaps, is setting the budget in a way which doesn’t allow for the potential real level of activity and putting in something that is more optimistic. Failure to meet cost improvement programmes is another reason why people get into deficit. Management, undoubtedly, has a part to play in this but there are two or three other things I would say about deficit.

"One is that once you have got into a deficit it is quite difficult to get out of it ... the deficits tend to cluster around outer London and in some of the shires. There is a statistically significant-meaning it is there-but weak link between allocations and deficits ... The Private Finance Initiative is clearly on the hospital rather than the PCT side. It is a bit unclear. There is some evidence that private finance might add something like two or three percentage points to overall costs. That is the difference between non-PFI and PFI hospitals. It is relatively small in the scheme of things but it may be there".

Professor Margaret Whitehead, public health specialist, University of Liverpool; "The current PCTs have responsibility for all people resident in a defined geographic area. They cannot pick and choose which people they serve. They have the lot. That is an incredible protection against cherry-picking. You don’t have that constraint with consortia. It is based on registered patients only in a very fuzzy, ill-defined area. You have GP practices coming together and choosing which of their colleagues to work with in consortia. You can have great scope for cherry-picking. You can get some practices shunned because of their patients. You can have some, perhaps, from more affluent areas encouraged to join a consortium. There is great scope for cherry-picking at that level as well as other levels. Then, when it comes to trying to devise a formula to allocate resources to consortia, you have a big problem. You haven’t got the geographic footprint that you have with the PCTs, none of the data are configured in the ways that the consortia are configured and trying to pick out measures of deprivation and other health care needs of the population will be incredibly difficult".

Noel Plumridge: "It might be worth highlighting a further pressure in the system which we may see emerging. Professor Whitehead mentioned that the formula we have had since the 1970s has effectively been based on an estimate of health need and is, therefore, a means of redistributing funding within England. Crudely, lorries load up with money in the south-east of England. Some falls off the back as it goes round the M25 but a lot more makes its way up the M1 and the M6 and is redistributed to the northern cities. How you then measure age or deprivation is another matter, but the people in control of funding in the south-east have been saying, for some time, that this is not their version of fair and perhaps those who pay the greater share of taxes ought to get a better health system than those who do not. That is a pressure that we have seen recently from the leaders of the south-eastern shire counties. We would, you might say. But the pressure has not gone away. It is also one that is visible in some other European countries as the economy has come under pressure, for instance in Belgium and in Italy. That may rear its head as time goes by".

Andy McKeon: "Looking at past failures I would say, first of all, the degree of clinical engagement that there is within the consortia is the critical point. The quality of their financial planning, which is going to be rather difficult because some will not have a track record but there will be a way of looking at whether their plan is a sensible one, what it takes into account and so on. The degree of financial awareness across the consortia, which perhaps goes with clinical engagement, would be another critical test, and the supply of information and their ability to monitor that and to act on it".

Noel Plumridge: "Assuming that GP consortia achieve a level of capability and competence that we have become used to with PCTs, I suspect that there is a risk about the governance regime and the effective freedom to act that the new organisations will have. We have already seen the enthusiasm with which GPs are approaching their task. However, they will be working within a governance framework that will be unfamiliar and will need to be tested. There may be some ripples in 2012-13 as that emerges.

"A second risk point, I suspect, is the context. By April 2013 we will have been through a further two years of an NHS with cost pressures but negligible growth funding. That suggests that the financial challenge and the need for action may be rather greater than they would have faced were they sailing on a smooth sea".

Margaret Whitehead: "The individual consortiums will have to devise methods of monitoring their individual practices and, in some way, managing them. In that respect, it will come down to individual decisions by GPs and there will be a delicate relationship between the individual GP and the management of the consortium. I am sure there will be quite a lot of conflict in some places in that ... It may, in fact, be a tighter control by each consortium of its members".

Andy McKeon: "if this system is to work then the consortia will have to influence the clinical practice of their GP constituents and, hopefully, improve it. You talk about rationing and demand management but one of the questions that we will undoubtedly ask is, "There are so many patients from your practice who are attending the A&E department. Is there anything that we can do to give them an alternative?" and so on in order to improve the practice. Although you could speak very negatively about demand management and rationing, it could be rather positive in terms of improving clinical practice and getting your GPs-all GPs-up to the standard of the best".