Sir David Nicholson will retire from his role as Chief Executive of NHS England, and from the NHS altogether, in March 2014.

The announcement of his retirement will relieve the pressure on him to resign following the Francis report, which implicated him in the Mid Staffordshire tragedy.

It also means that he will not have to deal with growing anger over revelations that the ‘Nicholson challenge’ of cutting £5bn from the NHS budget each year means an absolute cut in the NHS budget.

A former Communist Party member, Nicholson has been a strong supporter of current Conservative health policy: he began implementing the Health and Social Care Act prior to its approval by Parliament.

However, last autumn he warned that “carpet bombing” the NHS with private sector providers would lead to “misery and failure”. NHS reform needed to support clinical decision-making, he argued.

The Francis report into the unnecessary deaths at Stafford Hospital between 2005 and 2009 found that Nicholson, as head of the region’s SHA, had not acted on warnings about the hospital’s high death rate.

While the Francis report blamed inadequate staffing levels and bad management for the tragedy, Nicholson pinned the blame on the Labour Government’s infection control and waiting time targets.

Nicholson has worked in the NHS for 35 years, and was NHS Chief Executive for almost seven years. In April this year he became Chief Executive of NHS England, a role effectively continuous with his previous one.

In a letter to Professor Malcolm Grant, Chair of NHS England, Nicholson declared his continued support for the NHS reform process: “I still passionately believe in what NHS England intends to do. My hope is that by being clear about my intentions now [I] will give the organisation the opportunity to attract candidates of the very highest calibre so they can appoint someone who will be able to see this essential work through to its completion.”

Nicholson’s retirement will quieten the controversy over his role in the NHS reforms of this and the last government, and allow recognition of his lifelong commitment to the NHS.

The NHS cost-cutting policy known as the ‘Nicholson challenge’ will be extended indefinitely beyond 2015, according to NHS England.

The Government does not expect any improvement in the economy beyond 2015, so has put in place plans to extend the QIPP agenda on a long-term basis.

The statement by NHS England’s Policy Director, Bill McCarthy, refutes Government claims that the NHS budget is ‘ring-fenced’.

However, McCarthy emphasised that the incremental cost-cutting measures that have so far been used to achieve QIPP savings will not be either adequate to the challenge or possible to keep repeating.

Instead, NHS England – through its Local Area Teams – would look at “ambitious and radical” service changes.

The LATs will need to ensure that the decisions of individual CCGs do not conflict with this national service redesign agenda, he said – further qualifying the supposed ‘autonomy’ of CCGs.

Instead of closely monitoring QIPP savings at the local level, as the DH had done before, NHS England will rate the savings plan of each CCG as ‘red’, ‘amber’ or ‘green’ based on whether it can be and is being realised.

NHS England recently published a business plan indicating that it was drawing up a framework for “major service reconfiguration”.

Malcolm Grant, Chairman of NHS England, stated recently that the next government would consider the option of charging for NHS services.

The combined statements by Grant and McCarthy suggest that a radical reduction in the availability of free NHS services is planned beyond 2005.

The NHS will need to start charging for services if economic conditions do not improve, according to Malcolm Grant, Chairman of NHS England.

Grant warned that “a future government” can be expected to introduce “new charging systems” unless “the economy has picked up sufficiently”.

Possibilities include the intensification of the current rationing system and the introduction of a ‘co-payment’ system similar to that applied for NHS dentistry.

He also forecast “a complete rethinking of some of the fundamental tenets of the way in which care is provided,” with hospital services being moved into the community.

NHS providers have been rationing NICE-approved drugs and procedures since 2010, despite the Government’s claim that it does not sanction such measures.

The fact that the £6bn cut from NHS spending last year under the ‘Nicholson challenge’ was reclaimed by the Treasury and not reinvested in the NHS means that the NHS budget is not ‘ring-fenced’.

According to a 2012 report by the Institute for Fiscal Studies and the Nuffield Trust, within the next few years the NHS will need to carry on reducing the number of services it provides.

Ana Nicholls, Healthcare Analyst at The Economist Intelligence Unit, commented: “Malcolm Grant is stating the obvious when he says that unless the economy picks up, the NHS could be forced to impose user fees.” His statement was “bringing the debate out into the open, laying the ground for an eventual change of policy,” she noted.

“User charges, if they are introduced, could take several forms, though all would be controversial. Patients could start paying for services or treatments that are currently free. Alternatively, the NHS could introduce co-payments – small payments towards treatment to stop overuse.”

What priorities does Andrew Lansley’s draft mandate for the NHS Commissioning Board reveal?

The draft mandate for the NHS Commissioning Board (NHSCB), published on 5 July 2012, is a manifesto for the new NHS: the first clear public statement of the anticipated course of NHS reform since the Health and Social Care Act became law. It offers a snapshot of the emerging structure for local commissioning, and highlights the Government’s key priorities for an NHS reform that is now a reality.

Introducing Our NHS Care Objectives: A Draft Mandate to the NHS Commissioning Board to Parliament, Health Secretary Andrew Lansley said: “Today we will be laying the foundations of the new, more independent NHS.” By this, he explained, he meant an NHS “free from constant political interference” and “tasked with continuously improving the care that patients receive”.

Transfer of powers
A key background document to the draft mandate is Lansley’s letter to the new Chair of the NHS Commissioning Board Authority, Malcolm Grant, in April. The letter stated his primary objective as being
“to design the Board so it transfers power to local organisations”. Other priorities included integrating health and social care and promoting patient choice.

Another important background document is the NHS Outcomes Framework, published in December 2010 and updated a year later. This defines the patient outcomes the NHS has to work towards – a counterpart to the business processes defined by the reform agenda.

The draft mandate has been issued for consultation. The final NHSCB mandate will be published in October and will guide the Board when it assumes its full statutory authority in April 2013.

Improving healthcare outcomes
The draft mandate begins by setting the context: the NHS is facing “one of the tightest funding settlements in its history”, while elderly care, long-term conditions and mental health are growing priorities. It outlines 22 objectives for the NHSCB for the two years from April 2013, as well as ‘ambitions’ for the coming decade.

The first major section lists 11 objectives for improving outcomes. The first six relate to the NHS Outcomes Framework – one for each of the five domains and one for the whole – setting concrete targets in QALY and similar terms, but leaving the actual numbers to the final version.

While there are no objectives for specific conditions, this section refers to dementia and mental illness and notes the need for better integration of general healthcare with treatment of these conditions. The NHS should work towards treating mental health as “on a par with physical health,” it states. There are objectives for reducing health inequalities, including life expectancy at birth. However, the reference to “greater improvement in more disadvantaged communities” should be seen in the context of the planned shift of public health funding from the NHS to local government. Finally, there are objectives relating to service performance standards and support for patient self-care.

Patient choice and local control
While the first 11 outcomes are related to the agenda for NHS improvement defined by Lord Darzi in 2008, the last 11 belong wholly to the new reform agenda. One crucial objective relates to patient choice. The Board must ensure that people are “involved in decisions about their care and treatment”; that personal health budgets are available “to anyone who might benefit”; and that a patient who has waited 18 weeks for treatment is entitled to choose another provider.

The Board is required to develop integrated care through joint commissioning and other methods, particularly for “people with dementia or other complex long-term needs”. It should also improve the quality of NHS information, using IT to make the NHS “transparent” to patients and carers.

The Government’s innovation agenda is highlighted by an objective requiring the Board to “promote access to clinically appropriate drugs and technologies recommended by NICE”, as well as supporting the participation of NHS clinicians and patients in life science research.

The section on commissioning states that the Board should fully authorise “as many CCGs as are willing and able” by April 2013, and allow the CCGs “full control over where they source their commissioning support”. The new clinical senates and networks will provide advice, with CCGs “free to make their own arrangements”.

The Board must have a “transparent, principle-based system” for managing “poor performance” or “financial risk” by CCGs. It must “support a fair playing field between providers” and “ensure that financial incentives for commissioners and providers support better outcomes and value for money”. The latter objective includes the controversial Quality Premium, a bonus payment rewarding CCGs who achieve a surplus on their annual budget. This will be funded from within “the overall administration costs” available to CCGs.

Crucially for industry, there is an objective to support “changes in services that lead to improved outcomes for patients”. These must meet four criteria: support from clinical commissioners; strong patient engagement; a clear clinical evidence base; and consistency with patient choice.

On the critical issue of cost savings, the mandate says only that the Board must ensure that QIPP savings are made “in a sustainable manner” as dictated by the Treasury, but without reducing service quality.

Between the lines
Responses to the draft mandate have focused on its open-ended nature. Mike Farrar, Chief Executive of the NHS Confederation, commented: “Unlike documents that have gone before it, the mandate does not seek to develop an ever-growing ‘wish list’ of objectives. It rightly encourages commissioners to exercise their knowledge of the needs of their local communities to plan and deliver the best care.”

Shadow Health Secretary Andy Burnham argued that Lansley had missed an important opportunity to highlight the issue of healthcare rationing – which the Health Secretary had recently stated to be
“unacceptable”. The delegation of control to local commissioners, Burnham argued, was “a mandate for privatisation.”

Dr Richard Vautrey, Deputy Chairman of the BMA’s GP Committee, praised the mandate for not placing too many restrictions on GP-led commissioning. However, he was strongly critical of the Quality Premium, which he claimed would encourage rationing and increase health inequalities.

Whatever the consultation period delivers, the draft mandate for the NHSCB is a clear statement of the NHS reform agenda: to deliver improved patient outcomes through CCG autonomy and provider competition.

The Government’s draft mandate for commissioning is too confusing, too detailed and fails to emphasise its main priorities, directors from the NHS Commissioning Board (NHSCB) have said.

Professor Malcolm Grant, NHSCB Chair, said there are parts of the draft mandate which go “further than you would have wished”.

Speaking at the Board’s monthly meeting in Leeds, Professor Grant said he now aims to rewrite the document with the Department of Health in order to simplify it.

“Given that it is so unique an opportunity, it would be immensely powerful as a document were it to seize the transformation agenda, to understand that the whole point of these difficult reforms has been to transform the quality of healthcare for patients,” he said. “In other words, a document that sets out quite simply what the high level objectives are.”

Mr Grant’s comments were echoed by Sir David Nicholson, NHSCB Chief Executive. “There is something here we can work on but it is some way from where we need it to be,” he said.

“Where you have process-driven targets you need to be really clear about how, and why, and what for. Just listing things down is difficult to communicate and difficult to work with people on.

“We can work on this and get it into a much better place for patients, and the system we want to run.”

Tim Kelsey, the Board’s Director for Patients and Information, added that a “massive historic opportunity” would be missed if the document is not revised correctly.

GP commissioners will start their new roles free of “legacy debts” and positioned to develop innovative care solutions, Andrew Lansley has said.

The Health Secretary reassured an audience of GPs at the Commissioning Show that CCGs would not need to “provide for deficits in the local health economy”: that would be the task of Monitor, he said.

Lansley’s speech placed strong emphasis on the need for NHS service innovation to deal with the coming “demographic tsunami”.

The NHS Outcomes Framework will “focus our minds” and “enable clinicians to lead, not be micro-managed from on high,” he said.

Addressing the fears of many GPs, he said the NHS Commissioning Board would not “top-slice” CCGs’ budgets or require them to be re-authorised once in action.

He intended to ensure that CCGs started with “no legacy debts”, though that would not be true of providers.

Echoing Malcolm Grant’s speech to the NHS Confederation last week, he said that “we do not want to tell you how to achieve” – though he did not mention the recently announced NHS CB guidelines on commissioning processes.

Lansley also cited the fall in GP referral rates as a positive achievement, without mentioning the National Audit Office’s recent statement that falling referral rates were harming diabetes care.

He highlighted the potential of GP-led commissioning to develop innovative care solutions such as telehealth, and to improve dialogue between GPs and local government.

THE NHS Commissioning Board’s role in NHS reform is still widely debated. Pf looks at how it will direct the NHS of the future.

The new NHS Commissioning Board (CB) is unique in three respects. Firstly, it stands to take on more power than any arm’s length body in NHS history. For up to three years at a time, it will be entrusted by the Government to run the NHS and allocate its entire commissioning budget, without regular scrutiny by Parliament.

Secondly, it stands to hand over more power than any arm’s length body in NHS history. Of its annual £80bn
commissioning budget, £60bn will be delegated to the 212 Clinical Commissioning Groups responsible for commissioning local services. While the CB will commission primary care from the CCGs and ensure that they deliver on the NHS Outcomes Framework objectives, it will allow them to devise their own solutions and choose their own partners.

The powers of the SHAs are being delegated ‘upward’ to the CB, while the powers of the PCTs are being delegated ‘downward’ to the CCGs. The widespread concern about a potential gap in responsibility led Sir David Nicholson to say: “The NHS Commissioning Board could turn into the greatest quango in the sky. So it needs to have clinicians at its heart and the powerhouse for change in the system must be the
clinical commissioning groups.”

Andrew Lansley’s letter to the CB’s Chair, Malcolm Grant, in April about the Board’s strategic objectives stresses that its first responsibility is to make a “shift of power from national and regional organisations to CCGs, Health and Wellbeing Boards, local providers and patients.” The CB will not be a monolith within a static system: it will be a facilitator of future NHS transformation. That dynamic role is the third unique
feature of the CB, and the most important.

TAKING THE REINS

The DH plan Developing the NHS Commissioning Board (July 2011) outlines the intended structure and functions of the Board. It will have two broad national roles: to commission primary care and specialised services, and to ensure that the entire commissioning system is “cohesive, co-ordinated and efficient”.

Using £20bn of its annual budget, the CB will commission GP services and specialist health areas, including dentistry, maternity, community pharmacy and ophthalmic services. The Board will not govern the CCGs in a traditional way: it will “support” them and “hold them to account” while allowing them “freedom to innovate.” This support includes authorisation, an outcomes framework, guidance tools such as model pathways, and a means of intervening when CCGs are in difficulty.

The CB will host clinical networks to advise on specific areas of care and multi-disciplinary clinical senates to support CCG decision-making. Another key role of the CB is to lead the NHS Outcomes Framework by supporting local clinical improvement, providing “more services outside hospital settings”, improving acute care and the management of long-term conditions, and ensuring that CCGs implement NICE and other national standards.

In addition, the Board will lead patient-centred care by overseeing “the extension of patient choice and the expansion of information available to patients” and promoting both integrated care and innovative self-care.

Finally, it will develop a “medium-term strategy for the NHS” that will combine with the local priorities identified by the Health and Wellbeing Boards to provide a basis for local commissioning plans.

LEADER OF THE PACK

According to the 2011 outline, the CB will work in “partnership” with many other organisations: patient groups, healthcare professionals, healthcare providers, local government, industry and national organisations such as NICE.

The Board’s relationship with suppliers will “support its strategic approach to innovation and development” – in other words, it will play a part in the dynamic evolution of services and provider relationships.

The CB will be organised nationally around the five domains of the NHS Outcomes Framework, with a national lead for each domain. It will also divide its local teams into four ‘commissioning sectors’ reflecting the four existing SHA clusters, each with a sector lead.

The Board will take over functions performed by 8,000 people. It plans to reduce that number to 4,000 – a reflection of its ‘light touch’ approach.

RIDING THE WHIRLWIND

According to Lansley’s letter to Grant, the CB has a responsibility to “contribute to” improved health for “the whole population”, improved care and outcomes “for all patients”, and improved efficiency. Within this context, the Board Authority’s strategic objectives include “transferring power to local organisations” and “establishing the commissioning landscape”. The new NHS will then develop under its own steam, with the clinical networks and senates providing “leadership and insight rather than oversight and compliance”. The authorised CCGs will have the “assumed liberty” to design local services independently.

In addition, Lansley says, the CB will have a “vital leadership role” in enabling the personalisation of care by improving patient choice. This includes the use of personal health budgets. At the provider level, the CB will play a “crucial part” in developing a “level playing field” for competition.

In short, the role of the NHS Commissioning Board is to facilitate the evolution of a rapidly changing healthcare system. These changes will come not from the Board or the DH, but from the decisions of CCGs and their commercial partners.

The calm expression of Malcolm Grant, Chair of the NHS Commissioning Board, betrays that he is at the eye of the NHS reform storm. Maxine Vaccine considers what this quiet man has to tell us about UK healthcare.

As everyone knows, the NHS Commissioning Board is the engine-room of NHS reform. Charged with running the NHS for the next three years after April 2013, it’s already (in its shadow form) restructuring the healthcare landscape at such a pace that any still image of the process is a blur.

As PCTs and SHAs fade into the dawn, and CCGs progress towards authorisation with CSSs trailing them like hopeful fluffers, and thousands of dedicated clinicians wait to find out whether they still have a livelihood, there’s no question that the man of the moment is the quiet academic entrusted by Andrew Lansley with running the show.

Whereas Lansley is a demagogic politician out of his depth among people who expect more than a soundbite, and Nicholson is a sturdy bureaucrat with no trace of charisma, Grant is something else. He combines a feline precision with a diplomat’s charm and a surgeon’s presence of mind. The camera loves him, and Chuck Norris goes pale at the mention of his name. He’s like a cross between James Bond and Garfield.

During his speech to the NHS Confederation, the audience hardly breathed. In twenty minutes he said more about how the NHS is changing than Lansley could have expressed in a month. There were soundbites – describing the limiting factor of healthcare systems as “stagnant economies” was a good opening strike, while “the top-down approach is dead” was a killer blow. But above and beyond his neat turns of phrase, he delivered an incisive and unforgettable analysis of what the Board is up to.

The essence of which is: the Board is delivering control of the NHS to local commissioners and providers in a way that could not happen without central governance. To break down a monolithic system into autonomous fragments that stand any chance of individual success, you can’t just pitch it into the world of competition like a cow being fed to piranha fish. The market needs the hidden hand of government.

And so the NHS CB is there to orchestrate the decentralisation of the NHS: not just to make fundamental changes, but to ensure the system goes on changing as the patterns of clinical outcomes and profit play out at local and national level. Nothing will look like a public sector service provider any more: not Foundation Trusts, not CCGs, not CSSs, and certainly not commercial providers like Serco. This is a business plan for the NHS, and Grant delivers it with all the authority of a seasoned corporate CEO – but without the pomposity or the bad jokes.

The keynote of his presentation was “local autonomy”: by finding their own solutions, the CCGs – with their partners and providers – will reshape the national character of healthcare in England. The task of the CB is to provide “stability and continuity” as the national becomes the local, services become businesses, and austerity bites deeper.

Another of Grant’s elegant turns of phrase was the statement that the CB would define outcomes for CCGs, but not processes. A few days later, the CB announced that it would define commissioning processes for CCGs. While there are U-turn features in this shift, it’s probably more accurate to see it as another subtle twist in the dialectic of policy and rhetoric. The new NHS is a flagship experiment in free-market economics. As such, like a supermodel, it needs a high level of off-screen maintenance to keep that ‘natural’ glow intact.

Grant has admitted that when things go wrong, the person most likely to be facing the music on Newsnight is him. But where politicians are all fake swagger and bluster, Grant radiates a steely nervous energy that says “Bring it on.” He forecasts a future of community-based healthcare in which outcomes and cost-cutting are held in a dynamic balance. He says the CB’s draft mandate, due to be published in July, is “completely about the future”. And the future is now.

Maxine’s views are not necessarily those of Pharmaceutical Field.

The NHS Commissioning Board exists to facilitate NHS changes that will be driven by CCGs, according to Malcolm Grant.

The Board Authority Chair said the new NHS depended on collaboration between local and national organisations: “The top-down approach is dead.”

Speaking to the NHS Confederation conference, Grant described a future NHS whose national character is the sum of new services devised at local level.

All healthcare systems faced the same challenges, Grant argued: the growing prevalence of long-term conditions, the rising costs of drugs and medical technologies, and the limitations of “stagnant economies”.

He described the leadership of the new Commissioning Board as resembling a company’s board of directors, with an executive core and a non-executive team representing more diverse experience and talents.

The role of the Board, he said, is “enabling, facilitating and supporting those with whom it works”. It will define outcomes for the CCGs, but not processes.

He urged clinicians responding to the Board’s draft mandate, which will be published in July, to focus on its message of “local autonomy” and not try to dilute it with clauses representing narrow sectional interests.

The challenges facing the NHS would be met through new and locally-driven service models that shifted care into the community, Grant predicted.

Finally, he described the Board as being “obsessed” with outcomes, cost-effectiveness, innovation and pragmatism.

Grant’s speech offered significant clarification of the role of the Board and the business model of the new, decentralised NHS.

Four new non-executive directors have been appointed to the NHS Commissioning Board, completing its team of seven.

The four new names represent expertise in the voluntary sector, legal services, social work and finance.

The Commissioning Board Authority’s previously announced plan to appoint a leading doctor in one of these roles has been abandoned.

The new non-executive directors are:

• Lord Victor Adebowale (pictured), Chief Executive of the mental health and rehabilitation charity Turning Point.

• Margaret Casely-Hayford, Director of Legal Services and Company Secretary at John Lewis.

• Dame Moira Gibb, Chair of the Social Work Reform Board and former Chief Executive of the London Borough of Camden.

• Naguib Kheraj, Vice Chairman of Barclays Bank.

The four will join the CBA from 1 July, completing the non-executive director team together with CBA Chair Malcolm Grant, Provost of University College London; Ciarane Devane, Chief Executive of Macmillan Cancer Support; and Ed Smith, former Strategy Chair of PricewaterhouseCoopers.

Malcolm Grant said: “These are appointments of the highest quality, and they bring to the NHS a wealth of experience and expertise from a wide range of backgrounds.

“I am pleased that we now have a full group of non-executive directors, with complementary strengths and skills, to work alongside the executive team led by Sir David Nicholson.”