James Gubb, director of the health unit at Civitas, reviews the recent evidence in their new report about the effect on performance of redisorganising the NHS.

The Coalition government’s plan to hand control of the bulk of the commissioning of health care in the NHS – potentially as much as £80 billion of resources – from primary care trusts (PCTs) to consortia of GPs have been widely trailed in the press.

The White Paper, in which the government are expected to put more flesh on the bones, is due out on Monday – despite HPI editor Andy Cowper’s recent suggestions to the contrary.

But what are the real implications of this – particularly for the NHS in tight financial times? It seems incredible that such fundamental restructuring can go on while attention is so squarely focused on driving productivity like never before (as is required).

OK. Let’s look at evidence
So what does the evidence say?

Nigel Edwards, acting CEO of the NHS Confed, recently penned a paper The triumph of hope over experience, looking at lessons from the history of reorganisation in the NHS (yes, there have been more than a few).

This statement from that document, in particular, got me thinking: ‘One important piece of anecdotal evidence is that the PCTs that were reorganised as part of Commissioning a Patient Led NHS performed significantly less well in the 2006/07 Annual Health Check than those that were not reorganised.’

Fine: maybe the reorganised PCTs typically performed worse than those that weren’t (perhaps also a reasonable justification for decisions on where they were to be made)? Or maybe not ...

Excavating the evidence
The digging began.

In 2006 (the last significant restructuring of commissioning in the NHS), following the publication of Commissioning a Patient Led NHS (DH 2005) the number of PCTs was reduced in size from 302 to 152, through merging 222 PCTs and leaving 80 PCTs unchanged.

Looking at (then) health watchdog the Healthcare Commission’s Annual Health Check ratings of PCTs on ‘quality of services’ and ‘use of resources’ pre-and post-mergers, the following effects of reorganisation are observed:

1. An absolute drop in performance on ‘quality of service’ and ‘use of resources’ lasting at least one year in PCTs that were merged.
• Where PCTs were merged in 2006 ‘quality of services’ dropped sharply the year after, with the percentage of merged PCTs rated ‘good’ or ‘excellent’ falling from 34% in 2005 / 06 to 12% in 2006 / 07. The percentage of merged PCTs rated ‘good’ or ‘excellent’ on ‘use of resources’ also fell, from 5% to 4%.
• This compares with significantly improved performance in the 80 PCTs that were not merged. In terms of ‘use of resources’, the number of PCTs that were not merged rated ‘good’ or ‘excellent’ jumped from 15% to 34% between 2005 / 06 and 2006/ 07. In terms of ‘quality of services’, the number rated ‘good’ or ‘excellent’ improved from 35% to 39%.
2. A period of three years before the relative performance of PCTs that were merged reached pre-merger (i.e. 2005/06) levels against those that were not.
• Ultimately, merged PCTs did subsequently catch-up with those that were not on ‘quality of services’, but it took three years to do so. As of 2008/09, merged PCTs remained further behind PCTs that were not merged on ‘use of resources’ than they were in 2005/06.
These timeframes are consistent with other evidence, mentioned by Nigel Edwards in his paper, on central government restructuring and hospital mergers.

For a bit of anecdote, South Staffordshire PCT – the primary purchaser of care from the now-infamous Mid Staffs NHS foundation trust hospitsal – was one of the largest reorganisations; a merger of four: Burntwood, Lichfield & Tamworth PCT, Cannock Chase PCT, East Staffordshire PCT and South Western Staffordshire PCT.

The Francis Inquiry had this to say of the failure of South Staffordshire PCT to provide proper oversight of Mid Staffs:: “several comments criticise the national reorganisation of PCTs in 2006/07, along with the resultant lack of capacity and organisational memory”.

The sound of warning shots

’The bulk of proposed £20 billion NHS efficiency savings rely on efficiencies driven by commissioning: the evidence presented suggests that these will not be made.‘

What does all the data tell us? That restructuring in the NHS, even on the comparatively minor scale of mergers rather than wholesale restructuring, costs time and money.

This must, at the very least, sound a loud warning shot so far as the government’s plans are concerned, not least because the restructuring of commissioning currently proposed - i.e. moving responsibility for commissioning from PCTs to new GP consortia, is widely seen by policy experts as a major and radical change.

Radical redisorganisation
Kieran Walshe, professor of health policy at Manchester Business School, recently told the Financial Times: “This has to be the biggest reorganisation of the NHS since 1974. Apart from the existing NHS foundation trusts, there is very little of the existing architecture that will be left unchanged. This is a massive structural upheaval, and it looks to be very expensive, and very risky to do it so quickly.”

Particularly risky when the NHS is facing the most austere time in its 62-year history. The King’s Fund/IFS have estimated that, with near-static real-term increases in funding, to do little more than maintain existing standards of care (in the face of inflation and rising demand), the NHS will have to get in the region of 4-6 per cent more for its money year-on-year over the next five years.

With such an imperative in mind, Andrew Lansley has reaffirmed the previous government’s commitment to driving £20 billion’s worth of efficiency savings in the NHS by 2014.

Yet, if the kind of performance drop seen with the merging of PCTs in 2006 (by NHS reorganization standards, a comparatively minor change) is repeated with the more fundamental changes proposed by government, the NHS’s efforts at driving performance could be set back by at least three years.

The bulk of proposed £20 billion NHS efficiency savings rely on efficiencies driven by commissioning: the evidence presented suggests that these will not be made.

Ruling out the fiscally implausible possibility that large extra spending on the NHS would follow, this would mean only one thing for patients: a return to explicit rationing, either by increased waiting times or by reductions in services.

Can we not work with existing structures?

James Gubb is director of the health unit at Civitas

Link to report: http://www.civitas.org.uk/nhs/download/civitas_data_briefing_gpcommissio...

Link to data: http://www.civitas.org.uk/nhs/download/PCTperformance_final.xls