Shooting down the NHS reform track
Authors: Rudolf Klein
Journal: BMJ (2006)

Anyone who wants to understand the process of change in England's National Health Service could do worse than to summon up memories of watching the bobsleigh events in the winter Olympics. The bobsleigh riders hurtle down the icy track at great speed. There is nothing they can do to change direction. Their course and goal is determined for them, and there is little they can do apart from keeping their balance and their nerve as they round the terrifying bends. If they were to brake suddenly, regretting that they had ever got themselves involved in such a high risk sport, disaster would strike. 

The policy makers engaged in transforming the NHS are in a similar position to those bobsleigh riders. Once the government had decided on the new three part model for the NHS, the course was set. In turn, the logic of the model—competing providers, active purchasers, and money following the patient—drives policy, and allows for no deviation or delay. Moreover, just like the bobsleigh riders, ministers are racing against the clock. For the time being, extra billions are flowing into the NHS at an unprecedented rate. But the government's commitment to this increased rate of spending ends in 2008. Thereafter, the annual increment in expenditure may be less generous, especially if the extra investment does not produce commensurate improvements. So, in effect, a deadline exists for the new model to show that it is working—that ministerial rhetoric about greater efficiency, improved responsiveness, and rising quality is being turned into reality—and for the NHS to turn into a political asset, not a political liability, for the government. 

The government may well have stumbled into devising the new model in an incremental, step by step process.1 But once adopted, the model drives the adopters. Success for the government depends on combining the elements of competition, purchasing, and payment by results; delay in introducing any element puts the whole model at risk. This interdependence of the various strands of policy explains the relentless pace of change, with ministers deaf to all pleas for adopting a less hectic pace for fear of derailing the whole exercise. If competition is to exist, private providers must be tempted to enter the market, even if they have to be paid over the odds. For active purchasing to occur, primary care trusts must be strengthened through amalgamation, even if this means adding to organisational disruption in the NHS. If payment by results is to provide the dynamic for greater efficiency and responsiveness, providers and purchaser trusts must balance their books, even if this leads to staffing cuts and painful service reconfigurations. 

The point about fiscal balance helps to explain the past and has implications for the future. The NHS has always been the envy of the world for its ability to contain spending within the annual budgetary limits set by the Treasury. But collective discipline went hand in hand with individual indulgence. An opaque system of loans and brokerage allowed some trusts to accumulate large year-on-year deficits, so smoothing out turbulence and avoiding the political embarrassment of painful cutbacks. However, this system is incompatible with the new model. If trusts are not required to stay within budget, if they can be rescued when needed, where is the incentive to be efficient and responsive? Which is why a minor financial blip in 2005-6—which turned out to be a deficit of £500m (€743m; $989m), the loose change in a £75bn budget—produced disproportionate shock waves and pain in the NHS as ministers cranked up the pressure on trusts to balance their books. Moreover, this will be the story of the NHS in 2007, even though its budget is rising to £82bn; the paradoxical spectacle of famine amid financial plenty will continue. 

In dealing with this situation ministers have, as argued, little room for manoeuvre if they are not to subvert their own policy goals. They might well wish to avoid the political costs of an epidemic of reconfiguration, widely perceived (sometimes accurately so) as a euphemism for service cuts. But because the new model is designed to produce a slimmer, fitter NHS able to cope with a more rigorous financial environment after 2008, they have to accept and justify such an exercise2; especially as the new model will, like all policy experiments, generate a new set of problems while dealing with old ones. Most conspicuously, in terms of public visibility, it will give a new edge to the question of how best to contain (ration) demands within existing and foreseeable future financial constraints. 

In the emerging NHS, provider trusts have for the first time an incentive to maximise activity—to attract more patients, to encourage hospital admissions, and to increase the number of procedures. This is what payment by results means. In theory strong primary care trusts will offer a countervailing power to aggressive providers. But they lack political legitimacy when it comes to taking tough rationing decisions. Perversely the government introduced an element of public representation into foundation trusts but resisted the stronger argument for giving primary care trusts a democratic dimension. And just how are primary care trusts to restrain demand? As waiting lists diminish, so this traditional method of discouraging demands loses much of its potency. As patient choice takes hold, so the ability of primary care trusts to control the direction of demand will weaken. Enter practice based budgets—fundholding resurrected—which are meant to create a framework in which general practitioners will take resource constraints into account in their clinical decisions when managing patients. Enter also referral assessment centres, wherein general practitioners are responsible for reviewing the referral decisions of their colleagues. 

To a non-medical observer of the NHS this last development, which has attracted surprisingly little attention, carries one step further a process that has gradually transformed relations between the government and the medical profession over the past decade or so. Increasingly, the government has relied upon the medical profession collectively to hold individual members to account. In effect, collective autonomy has been maintained and collective responsibility has grown, while individual autonomy has been increasingly circumscribed. And here we come to a paradox. The government's dependence on the medical profession collectively will increase as the new model NHS emerges, as the success of the model depends largely on the profession's active commitment to managing resources and introducing new patterns of service delivery. Yet at the same time, the government seems set to challenge the notion of collective autonomy by implementing Donaldson's proposals for substituting appointed members for those at present elected to the General Medical Council by the profession and for hiving off the educational role of the GMC to a separate body.3 This would greatly dilute the notion of professional self regulation—not a strategy calculated to generate enthusiastic cooperation. The way in which this paradox is resolved—whether policy makers come to see doctors as the solution to or the cause of the NHS's problems—may well decide how the perilous run down the icy track ends.