Whoever wins the General Election in May, NHS policy over the next five years will be dominated by severe funding restrictions. Thoreya Swage discusses what this means for the NHS’s commercial partners and suppliers.
The message of the recent Government policy statement NHS 2010–2015: from good to great. Preventative, people-centred, productive was clear. In twelve years of economic growth, the NHS has experienced an increase in funding to put it on a par with other nations around the globe. It currently has a workforce of 1.4 million. Waiting times have been dramatically reduced. Patient satisfaction with the services is high, and the Next Stage Review has placed quality and innovation on the NHS agenda.
Hard times are coming, however, with a target of £15–20 billion (some say more) ‘efficiency’ savings to be made over the next three years from April 2011. This funding cutback is made in the context of higher patient expectations, an ageing population, changes in the nature of disease, and advancements in health IT and treatments.
The vision the DH has developed to meet this challenge focuses on maintaining and improving coalface services, restructuring care so that more people are treated closer to home, greater use of information-based technologies and ensuring that services are sustainable in terms of their impact on the environment and society. These changes are to be led by clinicians who will promote best practice, looking at services along whole pathways of care and not just within their own institutions.
The NHS is expected to make these savings by improving the quality of services as identified by the SHAs in the Next Stage Review and through the use of NICE-approved drugs, technologies and vaccines. There is a new emphasis on the need to act early through health promotion and preventative activity, focusing on younger people to encourage the development of healthy behaviours. Priorities indentified include risk assessment (e.g. NHS Health Checks) and advice on the safe use of medicines by high street pharmacists and earlier, prompt diagnosis – for example, a maximum of two weeks from GP referral to being seen by a specialist for suspected cancer, brain scans within one hour of admission for stroke patients and local primary angioplasty services for heart attack.
With the priority to identify conditions upstream, this will mean that PCTs need to be prepared to commission the extra care that will be needed to treat the previously unmet need – this will include more prescribing.
In systemic terms, the payment mechanisms are being linked more closely to the quality of care through the implementation of CQUINs (commissioning for quality and innovation), fines for poor-quality service (e.g. high rates of deep vein thrombosis, pressure ulcers or wrong site surgery) and a shift to the community (e.g. more chemotherapy and renal dialysis closer to patients’ homes).
Patients, particularly those with long term conditions, will be given greater power to choose their own health care through the use of personal health budgets currently being piloted.
Commissioners are required to be more robust in their contracting relationships with the NHS. If current services are underperforming, commissioners are to give the provider at least two opportunities to improve through contract management and benchmarking (which should include feedback on patient experience). A service review will be undertaken to generate a service improvement plan, assessed through contract monitoring. If no improvement occurs, then commissioners can go ‘within months not years’ to other potential providers tendering for services. Further details on this ‘NHS First’ approach will be published shortly.
Clinical knowledge is moving ever more to the centre of the commissioning process with practice–based commissioning consortia having devolved rather than indicative budgets and the document opens the way for Foundation Trusts to extend their provision of services by running primary care.
An uncertain relationship
All of this indicates subtle changes in the relationship between the NHS and the independent sector, with some mixed messages. It appears that the Government wants the NHS to look to its own services first before going elsewhere. Yet the door is kept open with the statement that the NHS will be looking to work with the independent sector, particularly if new services or new service models need to be developed to meet future need or to offer more choice for patients. The document offers to remove barriers to participation in the development of services, such as improved access to information systems and better staff mobility between the public and private sectors (through the use of a ‘staff passport’ that preserves the terms and conditions of NHS employment).
The major question not adequately answered is how improving quality can make savings. SHAs, in response to the Next Stage Review, developed their own action plans for improving quality in their regions. These plans were published prior to the economic downturn. They have been asked to revise their strategies since then – but not all have been forthcoming with new plans.
However, not all is bleak. A fair proportion of the second chapter is devoted to a detailing a number of ‘accelerated improvements in quality’ in five major areas of care, including cancer, cardiac conditions, stroke, maternity care and patient experience, together with greater emphasis on the management of long term conditions such as diabetes, chronic obstructive pulmonary disease and dementia. Some initiatives include ‘supporting adherence to drug therapy’ for COPD, ‘optimal medication’ for heart failure, tighter glucose control in diabetes and reducing the use of anti-psychotics for people with dementia to a third of the current level. Across all conditions the main themes are stopping the use of drugs that are not effective and increasing the prescribing of generic rather than branded drugs.
Tucked away near the end of the document mention is made of incentives being developed to recognise and reward good practice in partnership working between the NHS and industry to deliver productivity as well as preventative healthcare.
The document keeps quiet about the future of the Independent Sector Treatment Centre (ISTC) contracts, some of the first wave of which are due to finish in the first six months of this year. These centres have played a major role in reducing waiting times for common surgical procedures such as hip and knee replacements, and in driving up innovation and quality – but at a cost. As part of their contracts, the income of ISTCs has been guaranteed regardless of the actual number of procedures undertaken. That arrangement is no longer sustainable.
The responsibility for renewal of these contracts has now been devolved to the PCTs, who lack the procurement capability to undertake the necessary commercial discussions. This has resulted in great uncertainty for the companies running these centres, with some facing tender processes to rent the buildings they are using from the NHS, short-term extensions of three to six months and a change in their payment terms from block contracts to payment at tariff through patient choice.
With PCTs focused on making savings, it would be easy for them to turn their backs on the ISTCs since the latter are not a quick fix – and their relationship with NHS organisations has sometimes been problematic. This would be regrettable, however, given the strides in innovation made by the ISTCs and the continuing need of the NHS to concentrate on promoting best practice.
Into the blue
In their draft health manifesto, the Conservatives have acknowledged the need to make savings – taking the usual route of cutting NHS bureaucracy and scrapping formal targets. They have promised to create an independent NHS board, free of political control, to allocate resources across the country. This will include targeting funds for public health where they are needed.
As with the current government, the issue of patient choice is high on the Tory agenda – with the independent sector playing a role in offering alternative provision of healthcare. GPs will be given further commissioning clout through holding budgets to commission care on behalf of their patients. It is possible that innovative practices and practice-based commissioning groups may look to the independent sector for new forms of treatment. However, that may be difficult with stretched resources.
The road ahead
Though the chilly financial climate has caused the NHS to look in on itself in order to make savings and improve productivity and quality over the next five years, there are still opportunities for the pharma industry to support and be part of that process.
The emphasis on clinical staff taking the lead in achieving change, together with the requirement for clinical teams to be in charge of their own budgets, will make discussion on the use of appropriate medication to improve care easier. When a provider is going through a service review and agreeing a service improvement plan, the industry can help by demonstrating how performance can be improved through the effective use medication to streamline a care pathway, particularly if that results in a reduction in unnecessary hospital admissions, e.g. improving compliance.
The move to advice and better use of medication by pharmacists, real decision-making power to patients and practice-based consortia through actual budgets and the development of new providers with Foundation Trusts expanding their services out into the community, opens a wide range of opportunities to engage with different customers.
The message for industry to hang onto is the will to drive innovation, despite the gloomy economic background. This innovation ranges from evidence-based interventions to new services and service models.
We can be sure that NHS policy change will grind to a halt once the election date is announced, and decisions will be difficult to pursue over the next few months. It is also certain that the independent sector will have a part to play in providing NHS healthcare in the future – the question is, to what extent and how?
Dr Thoreya Swage has several years’ experience in the NHS, both as a clinician (psychiatry) and as a senior manager, including Executive Director for a Health Authority, in various NHS organisations covering acute and primary care. She has expertise in commissioning health services, most recently working with the independent sector as part of the Independent Sector Treatment Programme at the DH. She is currently working for a number of NHS organisations, including DH agencies, to develop a more commercial approach to the commissioning of healthcare.