Health economist Professor Alan Maynard suggests we need radical reform: end two decades of policy failure and let purchasers merge with providers

The Health and Social Care Act 2012 has created a plethora of new bureaucracies, whilst undermining collective memory about past decision-making by retiring and making redundant many effective managers.

211 Clinical Commissioning Groups are modestly staffed with support from 19 commissioning support units. The capacity of these organisations to succeed where primary care trusts failed is uncertain, except in the minds of faith-based reformers.

Easy as one, two three (billion)
Whether these changes cost one, two or three billion pounds is unclear.

The new NHS structures risk “pickling” or preserving well-established inefficiencies, inequalities and cost inflation in NHS health care provision. As Rousseau and Marx might observe, the liberated NHS is “everywhere in chains”!

The Lansley-Cameron “improved” bureaucracy is something of a nightmare to understand, let alone operate. For example:

i) It has created advocates of community care who assert this form of care is an efficient substitute for hospital care. The contrary argument is that what’s regular (in the NHS, this is hospital dominance) is not daft.

Both arguments need to be treated with caution. Hospital dominance is sustained by Payment by Results - activity-based tariffs. The risk is that investment in alternatives such as community care produces increased costs and better patient care. Alongside this, hospitals do not shrink; they merely pull in more patients and bill the CCG.

Thus community care may prove be an expensive complement to hospital care, rather than a substitute. With pay and prestige linked to size, what NHS Trust manager will voluntarily let her budget decline to facilitate the growth of community care?

ii) The 152 Health and Wellbeing Boards are to manage “public health” in co-operation with the NHS and other local interest groups. Because of the loss of co-terminosity, CCGs may have multiple HWBs with whom to work.

All have budgets to spend, and little evidence to support their investments. Medical care, with only about half of its potential interventions benefiting from an evidence base, looks scientific when compared with public health, where evaluation has been largely pathetic.

The faithful leading the blind
Public health practitioners all too often (like politicians and policy advisers) prefer faith-based advocacy rather than scientific evaluation of the cost-effectiveness of competing policies.

There is a risk that HWB will invest blindly, without evidence of efficiency and without well-crafted evaluation to validate their decisions. As ever, such inefficiency is unethical as it deprives patients of care from which they could benefit.

iii) The 19 Commissioning Support Units (CSU) complement the managerial capacity of CCGs. They have annual contracts with member CCGs, and after 2 years have to be financially independent.

What is the logic of CSUs? They offer NHS staff survival, at least in the short term. They offer some continuity of experience and potential economies of scale. However, it is inevitable that CCGs will ask themselves the question: why pay CSUs when the money freed up could augment CCG managerial capacity?

NHS England: the surrogate DH
iv) NHS England, previously known as the NHS Commissioning Board, is a surrogate and additional Department of Health (DH). NHS-E contracts with DH to deliver financial solvency and universal high-quality healthcare for English residents.

Bizarrely, NHS-E do not set hospital tariffs, which is the role of Monitor. They commission “specialist services”, thereby reducing CCG income and creating nice boundary issues about “joined up” quality of care.

They also commission GP services. Thus CCGs have control over the majority of hospital care, but little leverage on hospital PbR or the GPs. CCGs are potentially left as toothless bulldogs, as their leverage on providers may be mere “moral suasion”

Strategic Gosplanning, courtesy of LATs
Twenty-three local area teams of NHS-E will monitor and manage CCGs, and will no doubt be merged in time to restore SHA/Regional offices of old. NHS-E has many of the characteristics of the old Soviet planning agency Gosplan, which was the epitome of inefficient control!

NHS-E seems to have a simple remit: keep the politics of the NHS quiet by staying in budget and minimise Mid Staffs and Morecambe Bay quality problems.

The latest NHS England board member to be recruited is a Mr.Sooty, who brings with him expertise in the magic wand department!

Clinical senates: the stormtroopers of waffle
iv) 12 clinical senates are another institution of dubious utility. Inserted during the “pause” in the prolonged Lansley legislative process, they are apparently to offer secondary care doctors an advisory role. It would be surely more efficient to keep these clinicians in their hospitals treating patients?

Hopefully, the role of Senates will be to never meet and have no policies or pronouncements. CCGs have enough challenge already to do without what could be another bureaucratic waffle-storm!

v) Local government is being destroyed by vicious budget cuts. They are potentially efficient partners of CCGs, but with 30% plus budget cuts services to the local population are being reduced.

Consequently, attempts to protect LA social care means cuts in road mending, leisure amenities and social worker support for vulnerable groups e.g. those with learning difficulties. Local authorities are beginning to go bust (e.g. in Somerset): this will make NHS-LA collaboration even more difficult.

Currently, NHS social care is free whilst LA social care is means-tested. Pooling budgets seems logical - but how can this be done? Should LAs just give CCGs their potentially shrinking local social care budgets and just accept their destruction? Clearly, the Coalition government wishes to destroy the surviving limited vestiges of local democracy.

The more new interference, the merrier
And so it goes on! In addition to all these jolly junketers, there is HealthWatch with powers to protect the public by (for instance) inspecting hospitals, and thereby potential to overlap the functions of CQC, CCGs and Foundation Trust governors in wandering the wards to ensure patient safety.

As well as this, there is the Trust Development Authority seeking to translate existing non-FTs into FTs, and facilitate the merger of “impossible case” defunct hospitals.

Public Health England and Health Education England add to the mix of advice and constraints on local flexibility.

These diverse new bureaucracies are exploring their remits and finding that relationships are complex, resource-intensive and poorly designed to resolve the long-standing problems of the NHS. The complexity of the new structures is nicely elaborated by Nigel Edwards (BMJ, April 6th).

As ever, long-suffering survivors of the Lansley managerial massacre and new GP managers will try to hold patient services together whilst our rulers in the “London bubble” reveal the “triumphs” of their decision-making, i.e. keeping the NHS out of the media!.

Re-disorganisation disguises more fundamental issues.

The Lansley reforms appear to epitomise the mushroom principle of management - i..e. keep them in the dark and feed ‘em bullshit! Re-disorganisation of NHS structures is disguising fundamental problems.

Some of these are explored by the House of Commons Health Select Committee’s report on NHS expenditure, published in March. The “Nicholson challenge” is derived from McKinsey report of the usual superficial nature (DH, 2010): an uncritical identification of “variations” and a belief that these can be magically reduced.

The Select Committee report is good in parts in illuminating the ambiguity of claimed QIPP “savings” Thus it shows that the majority of savings are non-repeatable, i.e. £2.4 billion from cutting hospital tariffs (41%) of total QIPP savings, and the pay freeze which saved £850 million. (14.6% of the total savings).

Demand management and reduced administrative costs supposedly saved £675 million and £717 million respectively. In total, QIPP saved £5,815 million.in 2011-12.

What QIPP data does not tell us
These data show significant expenditure reductions. They tell us nothing about financial viability of providers or the quality of patient care.

The next few years will have an increasing flow of hospital bankruptcies: perhaps 20% of foundation trusts will go bust. The journey to bankruptcy will be littered with staff cuts and “economies” that will threaten the quality of patient care.

To provide a genuine case that the claimed QIPP “savings” are real rather than reductions in care quality and access, we need better data. Focusing on money, the favourite approach of NHS policy makers and managers, just will not do.

The Select Committee requires evidence of fundamental service re-design. In particular, they focus on the need to integrate services and move away from the silos of primary care, hospital care and social care from local government and the NHS.

This was part of Barbara Castle’s Priorities in Health and Social Care paper in 1976. Why haven’t things changed?

By implication, the 2012 Act is useless as it maintains these silos. As ever, the Select Committee is too polite to emphasise noisily that the current reforms have no evidenced effects likely to remove the obstacles to integrated care of patients

Revolution rather than reform?
So what to do? Structural change is an expensive diversion from an evaluated approach to changing incentives. Perhaps progress can only be achieved by merging health and social care budgets and power - but no politicians seem capable of accepting the electoral costs of such a change.

The current perverse incentives which maintain NHS inefficiency need radical reform. This may include the removal of the purchaser-provider split, which, after 22 years, has offered patients and taxpayers little evidenced benefit.

It's time for government to allow CCGs to merge with local hospital providers and take over local primary care. Go on! I dare you anally-retentive centralising political chickens in Whitehall to allow radical local innovation!