The controversial NHS reforms are expected to cost £300m more than was previously expected, Health Secretary Jeremy Hunt has said.

The fallout from the Health and Social Care Act is now believed to have cost in the region of between £1.5 billion and £1.6 billion. Originally, the reforms were estimated to total between £1.2bn and £1.3bn.

Ironically, the increase comes at a time when the NHS is tasked with making £20bn of efficiency savings.

Health Secretary Jeremy Hunt revealed the additional £300m reform costs in a written statement to the House of Commons.

The Act, which was passed through Parliament in March this year, has been formally opposed by a number of high profile organisations, unions, charities and royal colleges who argued it will increase privatisation within the health service and lower standards of care for patients.

The Department of Health’s Matthew Kershaw has been appointed as the trust special administrator at the failed South London Healthcare Trust.

The Director of Provider Delivery will combine chair and chief executive responsibilities after it made history by becoming the first trust to enter administration following debts of £65m last year.

Health Secretary Andrew Lansley said Mr Kershaw “must now drive the changes and shape a sustainable solution” at the trust.

As part of his new duties, Mr Kershaw will be required to produce a draft report containing recommendations for the future of the trust before Parliament by the end of October. This will then be submitted to the Health Secretary before he makes a final decision on the way forward for the trust by February 2013.

The DH said that the newly appointed trust administrator would be supported by “a dedicated expert team including an independent clinical panel as well as NHS and external strategic advice. In particular, he will bring together a clinical advisory panel”.

The NHS maintained or improved performance in 2011/12 against a range of indicators outlined in the NHS Operating Framework, the Secretary of State’s Annual Report says.

The report noted that the “NHS has performed well” over the last twelve months whilst meeting the first stage of its efficiency savings target.

Health Secretary Andrew Lansley said NHS staff across England have “maintained or improved quality while making significant cost savings and preparing for the transition to the new system”.

The annual report has been published a year earlier than required by law. The move was made by the Health Secretary to allow Parliament and the public to see the “direction the NHS is heading”, the Department of Health said.

It found that 212 CCGs are now on their way to being authorised by January next year. Also, as of April this year, there were 144 Foundation Trusts (FT), with 104 trusts remaining in the FT pipeline. Of these, only 18 trusts were not making progress towards gaining FT status and were in discussions with the DH to “develop recovery plans and progress towards sustainable, high-quality services”.

In future, the report will analyse the performance of the NHS against the three outcomes frameworks – NHS, public health and adult social care. As these are still being developed, it focused on “key achievements” during 2011/12.

It found that the QIPP agenda had generated savings of £5.8 billion; more than 12,500 patients had accessed the Cancer Drugs Fund; maximum waiting times for diagnosed and suspected cancer patients were met; and more people with diabetes are now being offered diabetic retinopathy screening than ever before.

Despite the structural reforms to the NHS, cost-cutting measures and the rationing of services, the report included data from a recent MORI poll which found that nearly three-quarters (73%) agreed that England had one of the best national health services – the highest level ever recorded.

Andrew Lansley said that performance data has “undoubtedly been positive”, but there were a number of “significant challenges” facing the health service. “Compared to other countries we continue to lag on performance on some key outcomes including life expectancy for women, cancer survival, and conditions related to obesity,” he said.

To meet “continued pressure” on finances, Lansley said there will need to be “sustained efforts to ensure that every penny of public money is spent as effectively as possible, delivering the best possible outcomes for patients.”

Future annual reports are expected to be published in October to allow Arm’s Length Bodies time to publish their own reports and accounts for the financial year.

The Department of Health’s risk register on the NHS reforms has been leaked online on the day the Health Bill reached Royal Assent.

The Transition Risk Register raised a host of concerns about the introduction of the Health and Social Care Bill including the NHS losing control of finance and performance, the morale of staff and dispute with unions.

Health Secretary Andrew Lansley had previously claimed the register was a “worst case scenario”.

Labour MP John Healey had requested the DH release the register whilst he was shadow health secretary in November 2010 under the freedom of information law.

A tribunal ruled earlier this month that the risk register should be published before the Bill had passed through Parliament. However, the DH indicated it would appeal the decision and the publishing of the register was again delayed.

The version which was leaked online is one of the first iterations of the register. Dated 28 September 2010, it was created three months after the Government’s initial white paper was published.

The most significant and likely risks, the document reveals, surround the loss of control of finances and performance. It states: “By dismantling the current management structures and controls, [there could be] more failures, including financial, e.g. GP consortia go bust or have to cut services, and credibility of the system declines as a result.”

Worries were also raised that the NHS Commissioning Board “is not sufficiently developed” and that consortia or GP leaders who are not sufficiently developed “may be drawn into managerial processes which drive clinical behaviour (rather than the other way around)”.

The document also warns that the “new system” will be designed from an internal perspective without considering the views of the general public and patients and lead it to being “difficult for the public to navigate or hold to account”.

Risks referring to the Treasury include: an inability to reduce running costs due to the number of consortia; a reduction in the amount of time GP spend with patients due to management responsibilities; ‘postcode’ commissioning; an increase in “catastrophic failure” with no system management; and GPs creating an increase in their remuneration by “playing the system”.

The register also indicated the Government was considering splitting the Health Bill into two parts as it faced a host of opposition against the controversial reforms in the autumn of 2010. However, there were worries over whether parliamentary time could be found for two separate pieces of legislation.

The EMA is under investigation by the European Anti-Fraud Office (OLAF) over alleged conflicts of interest.

The investigation was raised by Michèle Rivasi, a French Member of the European Parliament, who claims independent oversight by the EMA is impossible due to the majority of its budget coming from pharma.

OLAF told The Independent the investigation opened in July, but “for reasons of judicial secrecy", could not give any further details.

It’s believed the inquiry relates to the Servier’s controversial diabetes drug Mediator. The medication was withdrawn from the European market in 2009, ten years after concerns were first raised the treatment may be responsible for fatal heart problems.

Mediator was on the market for more than three decades and was used as a weight loss drug taken by an estimated 5 million people in France alone, plus countless more in Italy and Spain. It is estimated the drug caused up to 2,000 deaths during its time on the market before it was withdrawn.

The fallout from the scandal saw the French regulator, the Health Products Safety Agency, overhauled and its chief executive resign after an official report found it had “failed in its duties”.

The EMA was formed back in 1995 to provide a collective voice on drug regulation systems in the EU. The Agency has been attempting to its transparency with a series of new working principles and said in October it had “strengthened the rules on how it handles potential conflicts of interest of its staff and experts" after criticism by the Budgetry Control Committee.

A spokesman for the Agency said it was aware of the inquiry but had yet to see any allegations. “We have a robust process for dealing with conflicts of interest. It is transparent and there's no attempt to hide anything,” he said.

Despite the ongoing criticism of the Health Bill as it passes through the House of Lords, structural changes are still happening at ground level. Dr Thoreya Swage outlines the timescale for changes as PCT clusters switch responsibilities to CCGs.

The momentum of reform of the National Health Service in England continues to gather pace. Following a four month hiatus while the wise and the good of the NHS Future Forum pondered and produced recommendations for the adjustment of the Bill, the DH published further guidance on the developing role of the Primary Care Trust (PCT) clusters.

Although the 151 PCTs have been squeezed into fifty-one PCT clusters in preparation for their demise in April 2013, it seems that they have a vital part to play in the development of the emerging Clinical Commissioning Groups (CCGs).

This guidance or ‘shared operating model for PCT clusters’ has been produced by the mandarins at the DH to ensure that the commissioning landscape is as consistent and smooth as possible in time for the takeover by the CCGs. This is so that the nascent NHS Commissioning Board inherits a robust enough system to take account of further developments and improvements in healthcare in early 2013.

 

A shared model

There are six main functions or ways of working for the shared operating model for the clusters. These have been identified where consistency of approach is considered to be of importance and they are listed as commissioning development, financial and operational issues, ensuring quality, emergency planning, development of providers as Foundation Trusts and communications.

 

CCG development

The most important function is the preparation of CCGs for authorisation as soon as possible following the successful passage of the Health Bill through Parliament. The process of authorisation to become fully fledged commissioners is due to begin in the second half of 2012.

Although this is a year away, CCGs can commence their preparations now using a self diagnostic tool – an interactive computer-based assessment that helps them to determine their capability in six domains and identify their development needs.

The areas covered include:

• A clear clinical focus of the CCG commissioning plans to include tackling health inequalities and improving primary care
• Demonstration of meaningful involvement of patients and the wider community
• A plan for development that is clear and credible which, in particular, delivers the QIPP (quality, innovation, productivity and prevention) agenda
• Capacity and capability of the CCG, i.e. robust constitutional and governance arrangements which enable the CCG to commission care effectively and ensure financial control
• Collaborative arrangements for working with other CCGs, local authorities and the NHS Commissioning Board
• Capacity and capability of the CCG leadership which ensures effective working.

The tool helps the CCGs identify priority development areas which form the basis of the developmental plan paving the way to full authorisation.

To support all this work CCGs will receive £2 per head from the PCT clusters as well as extra management resource to help the groups hone their commissioning skills and capability.

CCGs experiencing difficulty in defining their boundaries will have guidance from PCT clusters on how to resolve this. PCT clusters also have the unenviable task of engaging the reluctant practices that so far have not participated in their local CCG discussions, with the aim of being part of a viable commissioning group by October.

 

Separating commissioning functions

All through the last quarter of this year a very detailed exercise is being carried out by PCT clusters to identify and segregate the service areas that CCGs and the NHS Commissioning Board will be responsible for. Although CCGs will be commissioning acute, mental health, community and ambulance care there are other services that PCTs currently commission which will need to be transferred to the Board.

Services such as GP and other primary care contractor groups – primary dental care, pharmacy and optical services – secondary dental care, prison, specialised and military health services are set to go under the umbrella of the NHS Commissioning Board. Even though the contracts for GP services are held by another body, the CCGs are expected to have an input into primary care development and improvement.

 

Quality assurance

A vital component of the commissioning process is ensuring the quality of healthcare. Practices may have been involved to a greater or lesser degree in various quality assurance processes in the past. However, CCGs are required to take on board these responsibilities seriously.

There is a whole raft of procedures and measures including delivery of better health outcomes for patients, meeting the Care Quality Commission (CQC) requirements for safety and quality of services, standard contracts, the NHS Operating Framework, professional guidance and other relevant requirements that CCGs need to get to grips with.

This could potentially be a vulnerable time for the development of the CCGs if attention wanders and serious patient safety incidents are not acted on promptly. Clinical governance processes must therefore be extra secure.

 

Budgets and responsibilities

Over the next year or so there will be a period of dual functioning and handover as the CCGs mature and the PCT clusters delegate more and more responsibilities until April 2013. The handing over of the baton has started now with PCT clusters having identified a “clear percentage of budgets” to CCG pioneers or pathfinders in August and plans for future delegation of budgets set by October.

Sandwiched in between will be the agreement on which mental health and community services will be subject to ‘Any Qualified Provider’ (AQP). This policy is set to be implemented from April next year when GPs can refer to providers of certain services eligible for AQP from a list of approved organisations, including the private sector, drawn up by the DH.

A review of commissioning support required by CCGs has already been undertaken in July with clear arrangements agreed by the end of the year.

In March next year, CCGs will be required to enable the development of the local health and wellbeing boards supported by their PCT clusters – health and wellbeing boards being the mechanism for joint health and social care planning and commissioning locally.

Meanwhile, individual PCTs will continue to carry out their statutory functions through the clusters until their abolition in April 2013. The statutory functions include contract monitoring, ensuring that providers meet their QIPP obligations and other statutory requirements, for example, safeguarding children and vulnerable adults.

The big challenge for CCGs will begin when they will be required to lead the next planning round for 2012/13. This begins in the latter part of this year and is a function previously undertaken by the PCTs.

This will involve doing a needs analysis, identifying local inequalities, understanding demand and activity for local services, negotiating and setting priorities with partners and developing the local strategic vision. Handover of commissioning functions will continue with CCGs being an active participant in the subsequent contract negotiations and agreement.

 

The outside world

It is apparent that despite the pause for reflection on the proposed changes in the NHS earlier this year, the momentum for restructuring and dissolving healthcare organisations continues. The picture remains a little confusing however, as CCGs are in varying stages of development and maturity and it is not clear that all will be truly viable by the tight deadline set for October.

What is clear is that that work of commissioning and delivering healthcare has to go on and now is a good time to find out who the key movers are within the CCGs.

It is at this point in time when the developmental needs of CCGs will be uppermost and it is here that pharma can provide some input. Skills and knowledge in leadership development and highlighting therapeutic areas where evidence-based care really works are two such possibilities.

CCGs will be keen to smooth patient pathways across primary and secondary care and nowhere is this more pertinent than in prescribing effectively. Delegated prescribing budgets are now very real for CCGs and they will be keen to ensure value for money and improvements in care for their patients. This provides a good opportunity for pharma companies to demonstrate the effectiveness of their drugs in specific disease areas.

On the commissioning front, by December of this year, CCGs and PCT clusters will have had to agree what commissioning support they need to carry out this function. Given the requirement to reduce costs, commissioning skills and expertise may actually be thin on the ground within CCGs.

Bearing in mind that effective commissioning will be judged by outcomes achieved as outlined in the NHS Outcomes Framework, pharma is well placed to demonstrate how their products can meet the requirements of domain 1: preventing premature deaths, domain 2: enhancing the quality of life of people with long-term conditions and domain 3: aiding the recovery of people who have an acute illness or injury.

The next few months will be busy while the NHS sorts itself out structurally. Once the picture begins to clear, pharma will need to engage with the new clinically skilled commissioners who now have the financial responsibility for making decisions about healthcare.

Dr Thoreya Swage was formerly an NHS clinician and a senior manager in various NHS organisations covering acute and primary care. She has expertise in commissioning health services and is currently working for a number of NHS organisations, including DH agencies, to develop a more commercial approach to the commissioning of healthcare.

The top-down reorganisation of the NHS is David Cameron’s “biggest single mistake” during his time in office, Shadow Health Secretary Andy Burnham (pictured) has said.

Mr Burnham claims the decision to combine the challenge to make £20bn of efficiency savings at a time of the biggest reorganisation in the history of the NHS is a “catastrophic error of judgment” by the Coalition Government.

Bringing a day motion on the coalition’s record on the health service, he accused the Prime Minister of breaking promises to push through the Health Bill and using pre-election statements to “help the Conservatives win votes in marginal seats”.

“People will remember only too well, running up to the general election, the then leader of the opposition’s ostentatious shows of affection for the NHS,” said the MP for Leigh. “His airbrushed face on the posters and three very personal promises: real terms increases in every year in this Parliament; no A&E and maternity closures; no top-down re-organisation of the NHS.

“He protested his love for the NHS, and at photocall after photocall on the wards, routinely wore his heart on his sleeve. He was protesting a little too much and today we expose the hollowness of his promises.”

The Shadow Health Secretary added that if Mr Cameron continues with the Health Bill he will “ultimately pay a heavy price for it”. When speaking about his counterpart Andrew Lansley, Mr Burnham also claimed that the controversial Bill was “unravelling before his eyes” and that the health policy introduced by the Government was currently in a chaotic state.

The Government has faced further opposition to its NHS reforms after campaigners staged a sit-down protest on Westminster Bridge in central London.

Approximately 2,000 health workers and activists attended UK Uncut’s ‘Block the Bridge, Block the Bill’ demonstration ahead of the Health and Social Care Bill’s debate in the House of Lords this week.

UK Uncut said: “If we want to save our NHS we need to shout as loud as we can. No-one voted for this Bill, but together we can stop it.”

The bridge, which links St Thomas’s hospital on the southern bank with the Houses of Parliament, was closed to traffic for the event until late afternoon.

Mark Arnold, a UK Uncut spokesman, said the protest had been effective and there was a “happy, party atmosphere” among those who attended.

The sit-down protest featured many demonstrators wearing hospital scrubs and bandages with fake blood.

Mark Serwotka, General Secretary of the Public and Commercial Services Union, said he hoped the protest would support the healthcare workers who “make our health service the envy of the world”.

The Government said the NHS reforms would give patients and doctors more choice, while encouraging the health service to focus on results, but has come up against various forms of criticism, including from the BMA, who said that the plans “pose an unacceptably high risk to the NHS in England”.

However, Health Secretary Andrew Lansley continues to back the Government’s reforms, claiming them to be “the right thing to do” for a better NHS.

Shadow Health Secretary John Healey has been replaced by former health minister Andy Burnham (pictured) as the Labour Party prepares to oppose the NHS reforms.

The appointment follows Healey’s resignation in light of the Party’s decision to abandon cabinet and shadow cabinet elections.

Andy Burnham, MP for Leigh, is currently Education Secretary, but was Health Secretary for the last six months of the previous Government, and formerly worked as Culture Secretary.

Healey’s resignation was joined by Business Secretary John Denham after the Labour Party Conference approved leader Ed Miliband’s call to scrap Party rules regarding shadow cabinet elections and give the Party leader personal control over the selection of cabinet.

In his resignation letter to Ed Miliband, Healey claimed that family commitments were his reason to resign as shadow Health Minister.

Further delays to the progress of the controversial Health and Social Care Bill are expected due to several challenges to its proposals during its passage through the House of Lords.

Baroness Glenys Thornton intends to seek crossbench alliances in order to question aspects of the reforms, including the role of the health secretary and competition regulation.

Labour’s health spokeswoman said to the HSJ that peers were likely to “demand” that the legislation was analysed in a Lords bill committee, rather than on the floor of the house.

A bill committee is the only way the house can hear evidence from external bodies.

The Baroness says the rare move away from a discussion on the floor would be justified due to the Bill’s length, complexity and as it has been significantly amended following the Government’s NHS Future Forum’s recommendations.

It’s believed that the move to a committee discussion has support from Lib Dem peers, although it is understood the Government has serious concerns about the resistance and further delays.

Baroness Thornton raised a number of issues that had not been discussed in the House of Commons because a lack of time and other amendments had not been scrutinised fully.

She said that due to the Bill’s impact being so “big and fundamental” it would usually be subject to a comprehensive parliamentary debate and a draft bill before the proposed legislation was published.

“There is certainty a case that some parts of this bill need more attention,” she said.

“Clearly the Government might find itself in some difficulty.

“We are taking this bill very seriously… There is a cohort of members who are well informed about this bill.”

She added that it was impossible to predict likely further delays but said that royal assent may be take place beyond when it is currently expected in early 2012.