Interview by Andy Cowper

Health Policy Insight: How are the new Vanguards doing?

Simon Stevens: The selection for the first crop of PACS/MCP Vanguards was only four months ago, and the ones chosen were not by any means all the usual suspects; nor were they in parts of the country universally deemed to be 'doing well'.

The challenge for the Vanguards is real. At a recent session together, we talked about how the first wave of Vanguards have to push through the pain barrier of disagreement and conflict to radically reinvent service models. They can’t do it in small, incremental improvements.

Because the whole point is to bust through the demarcations that we’ve hardwired into the care system for many years – in some cases, since 1948.

HPI: What about the next wave of acute hospital vanguards?

SS: Our future lies in networks and health systems, not individual go-it-alone institutions. David Dalton's report set out how other countries have thought about scaling and leveraging provider leadership across geographical campuses. We want more of that.

HPI: Are you worried about the recent spate of acute trust chief executive departures?

SS: Yes and no. Yes, because this underlines how tough some of these jobs are - a point I (controversially?) made at the health select committee recently, in response to Sir Stuart Rose's recent insightful report.

But no, because I said last year that we should expect a changing of the guard on various senior post this year, and the recent experience at Oxford and Kings shows that we can fill these jobs with strong candidates.

And for the national roles we're now seeking to refresh at both NHS England and NHS Improvement, I’ve been encouraged by the calibre of the interested candidates.

I also want us to create some new cross-cutting leadership roles, for example in grabbing the surplus NHS estate issue by the scruff of the neck, to free up capital investment for new frontline services.

HPI: How should Monitor and TDA address pressures on provider finances?

SS: In-year steps that have already been set out include:
- working with providers to help tackle underlying cost-pressures driving deficits, including of course temporary staff bills;
- shifting to sensible measures of access targets such as the ‘incomplete’ RTT standard, that don’t distort clinical and management decision making;
- facing up to tough choices in parts of the country with longstanding issues, for example through the new so-called ‘success’ regime.

And this week Monitor and TDA have written out with their further 'asks'.

But clearly, the new NHS Improvement - which has responsibility for trust performance and productivity - is going to have to go much further.

HPI: On topics like procurement variation, success regime, agency caps and management consultancy bans, it feels as if we are entering a more directive period. Does the NHS have the balance between persuasion and command right?

SS: The short-term point is that organisations that lose control of their finances lose control of their destiny. That’s a truism.

The more fundamental issue is that a circle has to be squared here, between ensuring proper organisational autonomy and accountability; while also ensuring that the broader NHS acts more as a system. We need to be more than the sum of our parts.

As I say, our future lies in networks and health systems; not individual go-it-alone institutions. On too many procurement and workforce issues it has felt the opposite of that. That’s going to change.

HPI: That sounds quite different from the mechanistic 'regulated utility' approach overseen by Monitor?

SS: I'd say it a bit differently. Down the years, Monitor has brought rigour and rules-based predictability to many of its processes and responsibilities, and under different circumstances from now that has been a very important enabler of progress.

But for the next phase of the challenge confronting us, I'm keen that we have an NHS Improvement that supports us in backing much more rapid, flexible local variants, experiments, and new care configurations.

As the saying goes, 'time is not our friend', and our same-old same-old processes are nowhere near flexible or fast enough for what now needs to be done.

The good news is: it can be done. People are doing it. We want to see more Northumbrias, Greater Manchesters, Yeovils, Vitality and Hurley Groups, Royal Free/Barnet & Chase Farms, Dartford and Graveshams, Wrightingdon Wigan and Leighs, Oxleas ... to name a tiny few.

But we need more, and fast. Notwithstanding the statutory framework, we've got more freedom than we think. We just need to take the frictional costs and inertia out of the system.

We need to make the space for a new approach, vigour and vision to be sustained. One of my undelegatable personal responsibilities has to be to provide national ‘air cover’ for people doing exactly that.

HPI: What are the most important commissioning and decommissioning decisions NHS England has made?

SS: We’re prioritising four key health improvement areas for 2015-16 for commissioning action: cancer, mental health, learning disability services, and diabetes prevention. And we’ve begun using commissioning levers to kickstart service resdesign work on urgent and emergency care. We're funding and sponsoring the Vanguard programmes, now covering five million people across England.

On specialised commissioning, we’re about to conclude a major review of congenital heart disease services, which has been dragging on for over a decade. We're also reshaping the way the NHS funds new cancer treatments through an overhauled Cancer Drugs Fund. And we've overseen the phased introduction of a number of new specialist treatments in the NHS this year, including our single biggest new investment in Hepatitis C treatments.

Our cancer, mental health and maternity taskforces will all report this year, setting out the strategic commissioning agenda in those areas for the next five years.

HPI: How many CCGs do you think are doing World-Class Commissioning?

SS: If you mean genuinely world-class, and not the old Department of Health sloganeering, then naturally it's a minority.

But remember: CCGs are also only two years old, and most are doing well. Having established themselves, NHS England is now going to be taking a more differentiated stance - more freedom for the majority of CCGs able to use it (for example primary care co-commissioning), but more clearcut involvement alongside those CCGs that are struggling.

HPI: Why were CCGs’ emergency activity forecasts for the past financial year, 2014/15, so unrealistic, and does your having to intervene on their 2015-16 plans fill you with faith?

SS: CCGs’ aggregate emergency activity expectations for 2014-15 were under-clubbed for at least three understandable reasons.

First, they were understandably ambitious to begin the process of investing in out-of-hospital care, to reverse the relative under-investment in those services which has occurred over the past 5-10 years.

But second, in what was their first year of operation they didnt have good longitudinal data, so they had no trend set on which to base a forecast.

And third, last year’s emergency admissions growth rate was substantially higher than in the previous year - there is annual volatility, which can't be predicted with complete precision.

So for 2015-16, we’re asking them to strike a pragmatic balance between ambitions to moderate demand growth on the one hand, and realism about likely emergency volumes that hospitals will have to support.

HPI: Can you clarify - have all RTT financial incentives/penalties now been dropped for 15/16?

SS: Definitely not. The only ones that have been suspended are the fines for the RTT 'admitted' and 'non-admitted' standard, as I set out at the NHS Confederation Conference, following Bruce Keogh's review.

But for the RTT 'incomplete' measure, as well as the other main areas of NHS Constitution performance such as 52 week waits, cancer waits, A&E they all remain in force.

Having made such huge gains in improving access over the past decade, patients tell us they definitely don’t want to see us take our eye off the ball on this. The same goes for winter readiness and performance. The politicians are of one mind on this, too.

HPI: You’ve said that the tariff shouldn’t be the only game in town when it comes to how providers are paid. What should replace or supplement it?

SS: Tariff will continue to be useful for reimbursing some procedures, but most countries are moving away from just paying for volume to paying for value.

What does this mean in practice? Over time, a move from paying for each click of the turnstile to paying for care bundles, years of care, or even whole populations' health.

And for any given element, a higher share of funding tied to quality markers, or where possible, outcomes.

We’ve now got practical work under way on a number of fronts. So for example, in 2016/17 we're looking to pilot blended payment models for urgent and emergency care; to test delegated population budgets in some of the Vanguards; and to develop in shadow form with one or more cancer networks a multi-year secondary and tertiary care cancer capitation fund, enabling lead providers more flexibility to move money around to drive the kind of care improvement signalled by the cancer taskforce.

And that’s not the complete list.

Equally, let's not kid ourselves that just as tariff is not the answer to all our prayers, nor is it the root of all evil. We can't pretend that we had co-ordinated and holistic care prior to the tariff: we didn't.

These are ultimately just financial flows: reimbursement mechanisms are either enablers or inhibitors, but they're only one element of a much broader set of changes needed to redesign and improve care.

HPI: Is the NHS doing all it can to meet inequalities duties in the Health and Social Care Act, beyond its response to Roger Kline?

SS: We definitely need to make more progress. We’re now focusing on three next steps.

First, we know that the ability of the NHS to serve diverse communities is dramatically strengthened where the NHS itself draws on the expertise, talent and energy of those communities amongst its own workforce.

This is why we’re recognising the fact that there is, as Roger Kline and others point out, still far too much ‘filtration and stratification’ in senior leadership. A higher proportion of black and minority ethnic staff report bullying, harassment, discrimination and blocked career progress.

I co-chair the NHS Equality and Diversity Council, and the new national standard contract has now incorporated a workforce race equality standard. That’s not the whole answer, but it will focus attention and effort.

Second, the EDC has just agreed a wider agenda of action on a range of equalities and human rights issue, including access to services. Part of our work with NHS Citizens has included efforts to ensure that the health needs of people in the criminal justice system and health needs of people with gender dysphoria are taken more seriously.

Third, to improve fair funding for different groups and tackle inequalities in access to health care, this year we're taking faster action to get to CCG fair shares financially across the country. We used the extra NHS funding for 2015-16 to cut the number of CCGs more than 5% below fair shares from 34 to 17. And we want substantial further progress on this next year.

We're also applying an extra discretionary 10-15% inequalities weighting, and we’ve asked the Advisory Committee on Allocating Resources (ACRA) to take a full look at whether the basis for primary care funding properly reflects inequalities. We've also begun tackling inequalities between physical and mental health.

Perhaps controversially, we’ve asked every CCG to increase in real terms their funding on mental health services by at least as much as their headline funding increases. And this was required even of CCGs in deficit positions.

HPI: How much will improved prevention contribute to the NHS' so-called £22 billion efficiency challenge?

SS: These are slow-burn but high-impact changes. To help save 30,000 lives by 2020, the independent Cancer Taskforce says we need to cut smoking rates from over 18% to 13%. On current trends we'd get to maybe 15%; so that needs more work.

Cutting problem drinking produces very quick savings in emergency care, as well as the police and criminal justice system. Obesity reductions would begin to produce savings - for example from lower growth in Type 2 Diabetes - by the end of the coming five-year period, with very large payoffs in the years that follow.

Frankly, if we’d taken the Wanless prevention agenda more seriously over a decade ago we'd have more funding headroom today to fund other higher-value care.

HPI: You’ve become increasingly vocal on the need for widespread action to tackle childhood obesity. Do you think the Government will act?

SS: It probably is true that I'm able to be more outspoken on some of the big health threats facing us, and I certainly think that part of my job is to mobilise public attention and energy towards more intense action on prevention.

Tackling childhood obesity is going to need wide-ranging action - not just by us as parents and by our children's schools, but by the food and retail industry and government.

That’s going to require food reformulation, changes to marketing unhealthy products to children, and improved labelling, to name just three items. There are some encouraging actions from some of the larger retailers.

But to create a level playing field we may also need new 'backstop' regulatory standards. My sense is that the Government is open to these arguments, and in the Autumn will set out some meaningful next steps.

HPI: Last question - Are you getting a summer holiday?

SS: Definitely. We’ve got school-age children, and I always look forward to it a lot. Last year, we went to Wales; this year it's Serbia and Italy. The beaches will be worse, but the red wine better.