Interview by Andy Cowper

Simon Stevens is well-known to the NHS policy world as one of the principal architects of the New Labour health reforms as policy adviser to health secretaries Frank Dobson and Alan Milburn and PM Tony Blair.

He subsequently moved to US HMO UnitedHealth Group, where he is now President of Global Health. Stevens also chairs UnitedHealth Center For Health Reform, which looks likely to be a major influencer on the Obama administration's health reforms in the US.

He is also a trustee of the Kings Fund.

One of Stevens' key emphases during his period in making and shaping UK health policy (alongside the well-known and much-discussed choice and contestability agenda) was commissioning.

We spoke during the recent NHS Confederation conference (following his presentation) to discuss the emerging challenges and themes facing the NHS.

HPI: Mark Britnell, director-general of commissioning, is off to join management consultants KPMG. Do you see this move as a vote of confidence in the future of NHS commissioning?

SS: Mark has done a good job driving the commissioning agenda in recent times, but clearly it’s not ‘mission accomplished’. The Service will now be looking to David Nicholson to ensure that impetus continues. So it’s too early to know what the outcome will be.

HPI: Is the task of commissioning well-understood in the NHS?

SS: Well, the historical roots of NHS commissioning lie in overseeing the flow of healthcare transactions, rather than in intervening to change the mix of care being delivered, let alone seeking to manage the stock of population health risk. Unless you do all three of these, you can’t really claim to be a world-class commissioner.

HPI: Do you think the world-class commissioning assurance framework for PCTs repeats the traditional NHS mistake of confusing structures with outcomes?

SS: No, I think that – in its first year at least - it probably struck the right balance between a hard-nosed ‘how things really are now’ assessment, and a developmental program aimed at making things better.

That said, this is at least the third such attempt the DH has had to do this – and the previous two didn’t do the trick. That’s because, when push came to shove, the hard questions of what to do about underperforming PCTs were ducked.

So the jury is still out on whether this one will do that, though the signs are more promising.

HPI: What do you think is the new role for contestability in a recessionary climate?

SS: The main burden of responsibility for deciding when and how to use contestability mechanisms lies with commissioners. But this was one of the areas where PCTs scored lowest in the recent WCC assessment exercise. The search for better value in a time of constrained funding will require more sophistication here.

But contestability isn’t the only way of aligning incentives. We can also reform the way providers are paid, to reward those whose quality and total efficiency is greater, and to force providers with the opposite attributes to internalise the opportunity costs of their lower performance levels.

The Commissioning for Quality and Innovation (CQUIN) initiative was supposed to do that, but it’s yet to really have much impact. Getting that right should be a big area of focus for next year.

"downward pressure on unit prices via the tariff system cannot by itself satisfactorily tackle the oncoming financial pressures in the NHS"

HPI: The general opinion seems to be that payment by results (PBR) will be altered, rather than reverting to competition on price. What would be the unintended consequences of heavy-handed tinkering with PBR?

SS: Well, any time you play around with PBR you risk new unintended consequences. But that doesn’t mean it should be frozen in time. PBR is well-suited for the tasks it has been set – for example it helps offset the fact that in many parts of the country, PCTs face one or two dominant local providers with significant ‘market power’ and ‘pricing power’. By taking unit price off the table, PBR allows commissioners to focus on utilisation and quality.

But clearly, downward pressure on unit prices via the tariff system cannot by itself satisfactorily tackle the oncoming financial pressures in the NHS.

HPI: What are the key characteristics needed in the DH senior management team to successfully steer the NHS through the next rather choppy bit of water?

"There clearly needs to be a compelling conversation with the public about how - given national financial circumstances - difficult changes will be required in the NHS. This conversation can’t purely be left to the politicians."

SS: There clearly needs to be a compelling conversation with the public about how - given national financial circumstances - difficult changes will be required in the NHS. This conversation can’t purely be left to the politicians. So one key leadership attribute that senior DH people are going to need is the ability to engage with the public and with clinicians, both in national debate and local discussion.

HPI: Clinical engagement is the Godot of the NHS. What might be some effective strategies to enable honesty, sharing and ownership of the problems between managers and clinicians?

SS: For GPs, the next 12 months or so are critical in terms of engaging them in practice-based commissioning. It’ll be much harder to do that once the funding squeeze begins to bite.

There are also major opportunities from trying to detach some secondary care clinicians from hospitals and having them work in teams with community and primary health services. Finding the right way of doing that is one of the key local organisational challenges over the next couple of years.

"Given the oncoming NHS budgetary crunch, ... either the NHS will find smart and intelligent ways of getting more value for the money spent, or it will end up resorting to crude and backward-looking mechanisms like lengthening waiting times, reducing patient responsiveness, and arbitrary service cuts"

HPI: What are the opportunities for UnitedHealth in the UK?

SS: Given the oncoming NHS budgetary crunch, there seems to be a pretty widespread consensus that either the NHS will find smart and intelligent ways of getting more value for the money spent, or it will end up resorting to crude and backward-looking mechanisms like lengthening waiting times, reducing patient responsiveness, and arbitrary service cuts. So the opportunity is to help commissioners solve that conundrum.

HPI: In the HSJ commissioning webinar, you had an edge in your voice towards the end when you were talking about how the NHS can do better.

SS: Commissioning certainly requires a set of technical skills, and it is also about developing relationships across a local health economy. But these aspects mustn’t degenerate into a quest for a quiet life and complacency about the status quo.

So my point was that to deliver on the fundamental promise of commissioning, commissioners need to have fire in their belly. And a vision of how they will drive change and support health improvement for their people.

There’s a type of kosher hotdog called ‘Hebrew National’, and their motto is “we answer to a higher authority”. Maybe the same should be said of NHS commissioners …

Simon Stevens is president of Global Health at UnitedHealth Group, chairman of the UnitedHealth Center for Health Reform, and a trustee of the Kings Fund.