Farewell to the NHS market

Professor Calum Paton | March 15, 2021 | Blog

The NHS White Paper, Integration and Innovation: working together to improve health and social care for all, published on 11th February 2021, sets out the government’s proposals for a new Health and Care Bill which will supersede key provisions of Andrew Lansley’s 2012 Health and Social Care Act, and is intended to come into effect next year.

The Bill will give a statutory basis to the 42 Integrated Care Systems which are expected to cover all of England by April this year: ICSs will legally assume the commissioning function that currently rests with CCGs (which themselves, it seems assumed, will disappear). The decision-makers in ICSs will continue to include representatives of hospital trusts and GPs, so that the organisational separation between commissioners and providers (‘the purchaser-provider split’) will legally disappear: providers will be involved in commissioning services they themselves provide, and make strategic plans for their respective areas within budgets set by NHS England (which will itself absorb NHS Improvement and the NHS Trust Development Authority). ICSs will also be freed from the legal requirement to put all services out to tender, and the Competition and Markets Authority will no longer have the power to approve or block mergers between NHS trusts.

The new Bill will also give the Secretary of State power to give general directions to the chief executive of NHS England (a power which was removed by the 2012 Act), and specific powers to intervene in ‘reconfigurations’ of local services, such as mergers between trusts.

Many key details in the proposed legislation, such as the structure of ICS boards, the basis on which they will be selected and their accountability, are not specified in the white paper, leaving its implications unclear. With this in mind we hope to publish two or three commentaries from different angles, beginning with the following piece from Professor Calum Paton.

If the proposals in the government’s new white paper, Integration and Innovation, become law, the structure of the NHS in England will have come full circle in the 32 years since the Thatcher government began to implement the reforms announced in the 1988 white paper, Working for Patients.((Department of Health and Social Security, White Paper, Working for Patients, Cmnd.55. London, 1988.)) This will be denied by some, who will depict the integration outlined in the white paper as ‘new’, and as having been made possible only as a result of learning from the various phases of reform over the last three decades. This is a fallacy, but let us give the argument its best shot.

Those who see an (at least partly) constructive evolution over these years point to the fact the ‘new’ integration includes GPs and (to an extent) local government and social care, as well as new ways of working which, they will suggest, it took a series of reforms to develop. The ‘old’, pre-reform NHS, they argue, was solidified in silos by the ‘forces of conservatism’, which it took the catalyst of ‘market reform’ to unpick.

This is, however, fundamentally misconceived. Firstly, even if the proposals in the white paper become law, GPs will continue to be independent contractors to the NHS, who participate in what will become statutory rather than voluntary Integrated Care Systems (ICSs) only as a result of exhortation and incentives. Such innovation as is involved in the way they are currently involved in ICSs has been possible throughout the history of the NHS.

Secondly, social care services and local government participation will be enabled (to the extent it actually happens) on a voluntary and informal basis. Only by giving governance and control of the NHS to local government (or making social care part of the NHS) would a full integration be possible. That is not going to happen, especially not at the hands of a government which is seeking to ‘take back control’ of the NHS from a quasi-independent management board (NHS England). For one of the key aims of new legislation is to reverse the Lansley reforms and put paid to the ethos of ‘arms length’ managerialism first set out for the NHS by the late Sir Roy Griffiths in 1983.((R. Griffiths, Letter to the Secretary of State. London, The Nuffield Trust 1985.))

Thirdly, and most importantly, most of the innovations geared to collaboration and ‘integration’ (which has now become a motherhood-and-apple pie term) have been made against the grain of the reforms of the last 30 years, which have been aimed at developing a health-care market and dis-integrating the NHS into separate organizations: various incarnations of provider Trusts; a bewildering succession of small ‘purchasing’ Trusts and ‘commissioning groups’; and an ever-changing regulatory landscape which has rarely been fit for purpose. Such integration as we have arrived at has occurred as a result of managers and clinicians ‘working around’ a series of reforms which, if followed literally, would have been severely dysfunctional to the point of gridlock. To put it succinctly, collaboration ‘on the ground’ has occurred by happy accident or from grim necessity.

The pre-reform 1980s NHS did of course require improvement. This need was however technical and practical, not well served by ideological big-bang solutions. Instead of wasting tens of billions of pounds((See C.R.E. Paton, At What Cost? Paying the price for the market in the English NHS CHPI, 2014, and The Politics of Health Policy Reform in the UK. London, Palgrave Macmillan 2016, ch. 6.)) on the implementation of cataclysmic changes, the NHS could have been tweaked and steered in the right direction at very little cost at all.

One of the most politically striking and astute sections of the new White Paper makes it clear that it is possible to retain the analytical and practical distinction between planning (‘commissioning’) health services and providing them, which was one of the supposed rationales for marketisation, yet combine these in one cohesive organisation. It is politically striking because it comes from a hard-right government, and it is astute because – for once – politicians have learned the right lesson from recent mistakes. I have consistently advised health secretaries and shadow health secretaries of both main parties, as well as civil service and NHS policy-makers, from 1991 to 2015, that ‘market reforms’ are wasteful and counter-productive. It is possible to combine patient choice with incentives to cost-effectiveness without undertaking market reforms, and indeed it is easier to do it without them, besides getting the desideratum of integrated care. The three aims of choice, economy and integration could have been achieved organically at the end of the 1980s at very little cost.

It is a great advantage, if also a great irony, that it is a Conservative government that is now undertaking the reintegration of the NHS. Had Labour done so ─ whether under Blair, Corbyn or Starmer ─ the Conservatives would have called it a return to the bad old days of bureaucratic planning, and some latter-day Lansley-esque obsessive, or throwback Thatcher tribute-act, would have sought their political monument in reversing it. A government of the right abolishing the market is an example of what used to be called the ‘Nixon to China’ approach ─ only a Republican President who had built his career on anti-communism could meet Mao; only the Conservatives can fully embed a sensible policy of which ideological right-wingers will be deeply suspicious.

On the other hand it is a great pity that this government is doing such a worthwhile thing in the slipstream of its appalling record on Covid-19. Indeed the white paper and its proposals could be seen, or conceivably even intended, as a diversion from ‘Covidgate’ and the inevitable inquiry into its mishandling. But at the end of the day what is planned is still the right answer. Routine tendering for services, which is both expensive and demoralising, is to be abolished. The tariff for services is to be made more flexible, although the devil will be in the detail. The fragmentation of agencies heading up the NHS at national level – NHS England, NHS Improvement, etc – is to be ended. And most importantly of all, local NHS authorities – the ICSs – will bring together hospitals, other providers, commissioners (planners) and GPs.

Some may regret the end of a quasi-‘autonomous’ national NHS board. And, to be sure, if direct political control is of the malign variety, policy suffers. But in a tax-funded, politicised service, the managerialist vision of being ‘arms length’ was always a pipedream, and a recipe for behind-the-scenes skullduggery rather than honest political ownership. Former Conservative health secretary Jeremy Hunt, now chair of the House of Commons select committee on health, has welcomed the white paper’s approach. Former Prime Minister Theresa May prefigured it in 2018,((Theresa May, Speech on the NHS, London, Royal Free Hospital, 2018 (June 18). See The Times, ‘May prepared to reverse unpopular Tory NHS reforms’, www.thetimes.co.uk/article/may-prepared-to-reverse-unpopular-tory-nhs-reforms-82bj2tw, June 19 2018.)) as did a joint paper by NHS England and NHS Improvement((NHS England and NHS Improvement, The NHS’s recommendations to Government and Parliament for an NHS bill, London, September 2019.)) stating their intentions in September 2019. All that remains now to cement the approach beyond partisanship is Labour approval.

This is of course assuming that the proposals are well implemented. At the centre, if Simon Stevens remains in charge of the NHS, there is every prospect that it will be. He has shown himself to be pragmatic in prioritising service needs over the ideology with which he was once identified in his role as Milburn’s, and then Blair’s, health adviser. A problem may lie more in the culture of what will become statutory Integrated Care Systems (incidentally a terrible name – who’s for ‘Local Health Authorities’?). Many ICS chairs are seasoned apparatchiks who have been brought up on the incongruous combination of market and command-and-control culture that has evolved over the past few decades. Can a leopard change its spots?

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About the author

Professor Calum Paton

Calum Paton is Emeritus Professor of Public Policy (Health Policy), Keele University. He was Editor-in-Chief of the International Journal of Health Planning and Management from 1998 to 2019, and has been an adviser to several foreign governments, the European Union, and many senior British politicians. He also chaired the University Hospital of North Staffordshire NHS Trust (now University Hospital of North Midlands NHS Trust) from 2000 to 2006See all posts by Professor Calum Paton