House of Commons - NHS Next Stage Review

NHS Next Stage Review - Health Committee Contents

3 Key issues

23. Witnesses had two general concerns about the Next Stage Review. These were:

Whether a review had been necessary; and
Whether SHAs, PCTs and clinicians had the necessary capabilities to implement the NSR's proposals successfully.

Was a further review of the NHS necessary?

24. The Secretary of State told the House of Commons that he had ordered a review of the NHS because he was aware that clinicians and the public had lost confidence in the NHS as a result of "top-down instructions and restructuring".[36] The Review was the Government's response to the concerns of these groups of people who, he said, "want a stronger focus on outcomes and patients, and less emphasis on structures and processes".[37] Mr Johnson added that the Review would ensure that the NHS kept abreast with the changing demands and expectations of patients.

25. Following the publication of the NSR, critics argued that many of its proposals are not new and are merely a restatement of previously announced proposals. Professor Steve Field, President of the Royal College of GPs, for example, told us that his initial reaction to the announcement of the NSR was "Why are we doing another review?".[38]

26. Since 1997 the Department of Health has published a number of White Papers and pursed a range of initiatives which have proposed significant improvements to NHS services. Indeed, some of the Department's initiatives placed a similar emphasis to the NSR on improving quality. For example, the 1998 consultation document, A First Class Service-Quality in the new NHS, argued the case for improving quality in strikingly similar terms to Lord Darzi ten years later:

High quality care should be a right for every patient in the NHS. The Government wants an NHS that is both modern and dependable. Such a National Health Service should guarantee fair access and high quality to patients wherever they live.[39]

The NHS Plan, published in 2000, which made proposals for how the NHS should be funded and "designed around the patient" and the 2002 Delivering the NHS Plan, which set out how it should be staffed, both sought to improve the quality of services provided by the NHS. Most recently only one year before Lord Darzi began his work on the NSR, the White Paper Our Health, our care our say contained proposals also covered in the NSR including promoting patient choice, shifting medical care from secondary to primary care and setting out the Government's plans for "a new direction for the whole health and social care system".[40]

Table 5: Significant White Papers documents published by the Department of Health since 1997

1998: A First Class Service-Quality in the new NHS
2000: NHS Plan: a plan for investment, a plan for reform (Cm 4386)
2002: Delivering the NHS Plan: next steps on investment, next steps on reform (Cm 6268)
2003: Building on the best: choice, responsiveness and equity in the NHS (Cm 6079)
2004: The NHS Improvement Plan: putting people at the heart of public services (Cm 628)
2006: Our health, our care, our say: a new direction for community services (Cm 6737)

27. Professor Nicholas Mays argued that the measures contained in the 2006 Our health, our care, our say White Paper had not had sufficient time to bed in and could not therefore reasonably be evaluated.[41] However, he thought that although there was little new in its proposals, three aspects of the NSR gave it significance: it had been led by a practising clinician (Lord Darzi) who understood clinical practice and the challenges facing clinicians; unlike other reviews (such as Commissioning a patient-led NHS in 2005), it did not propose any major structural changes to the configuration of organisations within the NHS; and it consulted a wide range of people, including clinicians, patients and the public, about their ideas for improving the NHS.

28. Other witnesses agreed that the NSR had been a worthwhile exercise. It was accepted that Lord Darzi's personal experience of working in the NHS and the consultative approach he took by involving clinicians, patients and other interested parties in the NSR process had been beneficial. Witnesses believed that this approach resulted in the NSR showing greater understanding than some previous studies undertaken by the Government both of the issues facing the NHS and of the appropriate solutions for tackling them.[42]

Implementing the Next Stage Review

29. There was less agreement among witnesses, however, about whether NHS institutions and staff were capable of delivering the proposals made in the NSR. We look at Lord Darzi's plans for improving clinical care later in this Report;[43] here we consider PCTs and SHAs.

30. The Department's stated aim for the "transformation of the NHS" through the NSR will largely depend on how well it is implemented in hospitals, hospital trusts, and primary care settings. In its written evidence submitted to this inquiry, the NHS Confederation argued:

We believe that implementation will be the most difficult part. The review is very dependent on high quality local leadership taking responsibility for making change happen. To enable this to happen requires a change in the style of leadership from the Department of Health's performance management system: this has been promised and it will be important that it is delivered.[44]

31. The NSR states that local leadership for implementing the NSR regionally and nationally will be provided primarily by the 152 Primary Care Trusts in England. The performance of PCTs will, in turn, be managed by the ten SHAs which represent the NHS in the regions of England.[45]

Table 6: Primary Care Trusts

Purpose of Primary Care Trusts
PCTs are responsible for commissioning services for the NHS totalling £70 billion per year; over 80% of the 2008-09 NHS budget.
Typically PCTs [commission and] provide healthcare services for a population of 330,000 people.
Their main functions are to: improve the health of their population by reducing health inequalities; promoting health and commissioning services including GP services, hospital care, mental health, dentists, pharmacists and opticians; and developing staff skills.

Source: NHS Confederation

32. Lord Darzi described how SHAs and PCTs would be responsible for implementing the NSR:

There is fairly detailed implementation planning in every regional report and how they are going to make these changes happen based on the eight pathways. At the same time we will be holding the PCTs accountable in…translating the regional report into strategic plans, which will be published in the spring of next year [2009].[46]

PCTs are expected to develop strategies for implementing improvements in health and healthcare in their area in accordance with the priorities set by their SHA. These strategies should be included by PCTs in operational plans for 2009-10 and in their strategic plans covering, as a minimum, the period 2008-09 to 2010-11.[47]PCTs are expected to produce updated plans for approval by their SHA during the autumn and winter of 2008-09.

33. Table 7 below shows the schedule adopted by NHS South West for implementing the NSR locally through its PCTs.

Table 7: The NHS South West implementation timetable

In NHS South West, by January 2009 PCTs are expected to have updated their strategic plans covering the next five years and their operational plans for 2009/10. They are expected to undertake

a work programme for each clinical pathway; and
an annual review of each work programme.

The annual reviews will be supported by staff from the SHA and will be expected to identify the priorities for action for each NHS organisation and to assess any problems in implementing them.

Source: NHS South West, Improving Health Ambitions for the South West

34. The onus on what some witnesses called "local ownership" of the plans, rather than central direction from Whitehall, was welcomed by many of witnesses. Mr Niall Dickson, Chief Executive, King's Fund, argued that it was a major strength of the NSR that "responsibility for shaping the quality of care is going to be, or should be, led by staff at a local level".[48] The Chief Executives of SHAs argued that their PCTs were best placed to understand the healthcare needs of their local communities and how to meet them.[49]

PCTS

35. Several witnesses doubted the ability of PCTs to implement the plans they had drawn up. Indeed, PCTs have attracted a good deal of criticism over a long period, often focussing on their inability to evaluate data and identify cost-effective interventions based on evidence.[50] This Committee has expressed concerns about PCT commissioning in a series of inquiries from our examination of the Department of Health's restructuring of PCTs in 2005-06,[51] through our study of NHS Deficits in 2006-07, when we commented on the weakness of financial management, to our report into Dental Services in 2007-08, in which we concluded that some PCTs did not possess the required knowledge and experience to commission services effectively. Our most recent report, Foundation trusts, published in October 2008, highlighted weaknesses in the strategic planning capabilities of PCTs.[52]

36. Anxieties about PCT commissioning were reinforced during this inquiry. Professor Mays described commissioning as the "weakest link of the NHS".[53] Mr Niall Dickson gave three reasons to explain why PCT commissioning in some areas was poor: the NHS had provided insufficient investment in developing commissioning skills; PCTs lack data on the health needs of their communities; and, remarkably, PCT commissioning has been afforded a lack of status within the NHS.[54] Mr Dickson's analysis was not disputed by other witnesses. According to Professor Maynard, the weakness of PCTs as commissioners is epitomised by the Department of Health's decision to set PCTs performance targets over recent years.[55]

37. The task of PCT commissioners will become more difficult following the introduction of patient outcome measurements (such as PROMs) which PCTs will have to administer.[56] In addition PCTs will be expected to meet the regulatory requirements of the new Care Quality Commission.

Department of Health measures to improve commissioning

Practice based commissioning

38. Lord Darzi accepted that commissioning capabilities of some PCTs was poor but he also argued that the Department had taken measures to improve the situation. The Department was promoting stronger clinical engagement in the commissioning process by reinvigorating its "practise based commissioning" initiative. Practice Based Commissioning (PBC) is a scheme intended to give commissioning powers to healthcare professionals working in primary care (general practitioners [GPs], nurses and others), based on the belief that these staff are best placed to make decisions about their patients' needs. GP practices have been allocated "indicative" budgets with which to "buy" health services for their population (these are "virtual" budgets and PCTs continue to hold the actual money). According to a recent King's Fund report on PBC, the scheme was intended to:

encourage clinical engagement in service redesign and development
to bring about better, more convenient, services for patients
to enable better use of resources.[57]

39. The NSR did not provide much detail about how PBC would be reinvigorated but, according to Lord Darzi, it would be done by involving "all clinician groups in strategic planning and service development to drive improvements in health outcomes".[58] More specifically, the NSR proposed improvements to PBC that would "ensure that primary care trusts are held fully to account for the quality of their support for practice based commissioning".[59]

40. Witnesses were critical of the Department's initial attempts at Practice Based Commissioning (PBC) and doubted whether the situation would improve. The submission from the Company Chemists' Association was particularly scathing, describing PBC as a "costly failure" which had failed to deliver any significant patient benefits.[60] Professor Steve Field, Chief Executive, RCGP, argued that GPs had not often chosen to take part in PBC because they "do not understand what it is…and PCTs think they are losing their influence if they hand over commissioning to groups of healthcare professionals".[61] According to Mr Niall Dickson:

PCTs are either not really encouraging them to do it or are not interested in doing it and are not promoting it. On the other side, some PCTs are saying that a lot of GPs are really much more interested in the provision side than the commissioning side.[62]

The BMA thought that it was important for the Department to provide a clearer explanation of what practice based commissioning is and what it is expected to achieve. The organisation considered that clarifying the goals of PBC was more important than the Department's proposals to employ business consultants to help GPs and PCTs "work better together on commissioning".[63]

World Class Commissioning programme

41. The Department's main means of improving the performance of PCT commissioning is its World Class Commissioning (WCC) programme which began in July 2007. Like practice based commissioning, many of our witnesses were uncertain about what WCC was and what it was intended to achieve. However, the Department subsequently provided us with its description in Table 8 below.

Table 8: World Class Commissioning

World Class Commissioning has four components:
(i)  A vision for world class commissioning setting out how the programme raises ambitions and strengthens PCTs as commissioners on behalf of their patients and populations;
(ii)  Eleven organisational competencies that a world class commissioning organisation will need to demonstrate;[64]
(iii)  A commissioning assurance system to hold commissioners to account and to reward performance and development; and
(iv)  Support and development tools and resources to help commissioners achieve world class commissioning.[65]

Source: Department of Health

42. The Department argued that its evaluation of commissioning capabilities under the WCC programme would help achieve greater consistency among PCTs. According to the Department this "Assurance Scheme" due to be completed by the end of 2009, will be the first time that evidence, rather than anecdotes, has been used to assess PCT performance in this area.[66] The evaluation, which will be carried out by SHAs, will review a "PCT's status and current direction of travel, and development needs, [as well as] focusing on organisational health issues".[67] According to the Department, the system has three elements by which PCTs will be measured: "outcomes, competencies and governance".[68] The Department will reward those PCTs displaying high levels of performance or improvement with "certain freedoms from monitoring or regulation" while those performing least well and not improving will have "interventions applied in line with the NHS Performance regime".[69]

43. Until the evaluation has been completed, Mr Mike Farrar, Chief Executive of NHS North West, maintained that it would not be fair to assess the commissioning capabilities of PCTs. He stated that:

We are about to get the best evidence-base that we have ever had about their competences in the key elements of commissioning—their procurement, their needs assessment, their engagement with the public, the way in which they use a variety of providers.[70]

Previous criticisms of PCT commissioning have centred on their inability to evaluate data and identify cost effective interventions based on evidence. Neither the Department nor Mr Farrar elaborated on the criteria which should be used to evaluate PCT commissioning. Neither did they tell us how they would identify the actions that would be taken to address poor performance.

44. When we asked him to describe the progress made by PCTs since the introduction of WCC, Mr Dickson informed us that "PCTs were only in the foothills of world class commissioning".[71] Although the Chief Executives of three SHAs who gave evidence to us argued that PCTs had been successful at commissioning some services, for example Accident and Emergency Services, they also accepted that WCC had yet to fully deliver the hoped for benefits and that PCT performance in this area had been patchy.[72] Sir Ian Carruthers recognised that the record of some PCTs with regard to tackling Healthcare Associated Infections (HCAIs) was sub-standard. Mr David Nicholson, NHS Chief Executive, was of the same opinion, acknowledging that there had to be greater consistency in PCT commissioning across the country, but also claiming that there were "islands of excellence" although he did not name them.[73]

SHAS

45. Although the Department hopes that its WCC programme might well over time bring about improvements to PCT commissioning capabilities, in the meantime it will be the responsibility of SHAs to make sure that commissioning staff in PCTs follow guidelines set by the Department and to manage their performance effectively.

46. This will not be easy. Mr Nigel Edwards, Director of Policy, NHS Confederation, explained the difficulty facing SHAs:

Most of these strategic health authorities are about the size of Denmark... "Local" is not really a word that you would use to describe them…The difficult challenge for them is how to do the often incompatible tasks of development and improvement with performance management.[74]

47. However, Mike Farrar told us that he saw his role of performance managing PCTs in NHS North West as vital. He then explained the consequences of not doing so:

It would be unacceptable in my case with 24 primary care trusts for 16 of them to deliver what we are talking about in the north west—improving lives, improving health, but eight, a third of the region, not doing so.[75]

48. SHAs told us that they would manage variations in PCT performance through a combination of initially providing support to and then, failing that, showing less toleration of, poorer performers. Ms Margaret Edwards told us that she saw the role of NHS Yorkshire and the Humber with regard to its PCTs as:

Holding people to account for delivering what they promise to do on behalf of their local populations and making sure that they assess what their population needs and they communicate with them. I would make no apology for holding organisations to account in that way.[76]

She added, and other witnesses agreed, that her role was not to order top-down orders without any evidence to justify them. Rather, the role of an SHA was to ensure that PCTs had carried out appropriate procedures and holding them to account on behalf of the NHS for spending taxpayers' money.[77] In response to questioning from Members about the role of SHAs, SHA Chief Executives argued that it was important to have a tier between the Department and PCTs, responsible for managing PCTs.

PRIORITIES AND COSTS

Priorities

49. The NSR and the SHA strategies contain many proposals that are described as a "priority" but do not rank them. We questioned SHA Chief Executives about this "shopping list" approach. Mike Farrar argued that PCTs would ultimately be responsible for deciding which of their priorities they would give greatest importance to,

Because clearly they are the people who are spending the money and resourcing this change. What then happens is that you get this immediate prioritisation, not against areas that you should be involved in but what are you going to go for first, what is the most immediate aspect…and that, I think, is emerging from our PCT plans as we speak about their key priority areas.[78]

The cost of implementation

50. The NSR also contains little detail about how much the NSR will cost to implement. In fact, the NSR devotes only eight paragraphs of the report to implementation, of which nothing is said about the cost of implementation at all. Professor Adrian Newland, Vice President, Academy of Medical Royal Colleges (AoMRC), told us that the NSR was "strong on aspiration but fairly light on the detail of how it will be achieved".[79] In addition it was argued that some of the incentive systems that were designed to increase productivity in the NHS had not been tried in any other health system. There was therefore no evidence on which to estimate costs or to evaluate them.[80]

51. In responding to these concerns, Lord Darzi argued that the NSR specifically requires PCTs to take on responsibility for implementing the NSR locally and that further detail about costs would become apparent when the PCT strategies were published in 2009; but it is not clear how much information there will be. The Minister claimed that improving quality would over time result in lower costs for the NHS. Improved clinical processes would eradicate waste and duplication and other inefficiencies as well as enabling patients to pass through the system more quickly.

52. The importance of the lack of detail about costs has been heightened since the advent of the present credit crunch. Witnesses told us that the wider economic situation would affect the Department's proposals. According to Professor Mays, although improvements to quality would ultimately lead to cost savings, some quality improvements might require significant initial outlays of resources which might prove difficult to gain from the Treasury in the changed economic environment. Improving quality would require significant initial expenditure such as the costs of establishing systems to measure the quality of patient treatment and outcomes (which we discuss in the next chapter).[81]

53. In addition it was argued that although the Secretary of State had pledged that NHS expenditure would not be affected by either the credit crunch or the associated general economic downturn, this now looks unlikely since the Pre-Budget Report of November 2008 which announced a smaller real terms increase to the NHS budget than it had experienced for the last ten years.[82] The impact of the economic situation on the NHS will, it was argued, make it even more important that the NSR delivers the savings that the Minister hopes will be achieved by improving quality.

Conclusions

54. The significance of the Next Stage Review owes more to the manner in which it was conducted than to the proposals it makes. Many of its key recommendations, such as the need to improve quality of care, have been made before. However, the involvement of the Strategic Health Authorities is new, as is the extent of consultation with clinicians and patients, which we welcome.

55. There is much to commend in the Review, in particular the emphasis on quality and leadership. However, we are concerned about its implementation. This will largely be done by PCTs, but we doubt that most PCTs are currently capable of doing this task successfully. We have noted on numerous occasions, and the Government has accepted, that PCT commissioning is poor. In particular, PCTs lack analytical and planning skills and the quality of their management is very variable. This reflects on the whole of the NHS: as one witness told us, "the NHS does not afford PCT commissioning sufficient status". We consider this to be striking and depressing. We look at ways of improving management below.

56. The Department argued that its World Class Commissioning programme will transform PCTs. While the programme has only been in place since July 2007, there are few signs yet that variations between PCTs in their commissioning capability have been addressed. The NHS purchasing/commissioning function was introduced nearly 20 years ago and its management continues to be largely passive when active evidence-based contracting is required to improve the quality of patient care. Given the failure of successive reforms to enhance commissioning, implementation of the NSR may be slower and more uneven than the Government hopes. The Government must publish milestones for implementation of the NSR and monitor them rigorously.

57. The Department's other main proposal to improve commissioning is through better use of practice based commissioning. We heard that practice based commissioning had failed to engage doctors and PCTs in the commissioning of services. We are not convinced that the Next Stage Review will succeed in reinvigorating the scheme. Moreover, the role of practice based commissioning in relation to the planned World Class Commissioning by PCTs remains opaque and needs greater clarification.

58. SHAs have an important role in managing the performance of PCTs. However, in recent inquiries we have heard evidence that the performance of SHAs in this area has been inadequate and we doubt SHAs' ability to manage effectively the performance of PCTs. We recommend that their work in this area be evaluated independently and rigorously. If SHAs are to manage performance effectively, they must improve their ability to gather and analyse data and to assess the strategic needs of their region.

59. Department of Health documents have too often provided a long list of priorities without ranking them. It is unfortunate that the NSR repeats this bad habit.

60. The NSR provides little detail about how much it will cost to implement its proposals. Lord Darzi argues that PCTs will produce local strategies with details of costs by spring 2009, but it is unclear how much information about associated costs there will be. He also asserts that, by improving quality, costs will be saved over the long term. However, we are concerned that neither SHAs nor the Department have made clear where and how much will be saved. We recommend that the Department publish, as soon as possible, figures for each SHA region and for each PCT, identifying the cost of implementing the NSR. We also recommend that the Department quantify the savings that it expects to make from improving quality and indicate when the money will be saved.

36 HC Deb, col 961, 4 July 2007 Back

37 Ibid Back

38 Q 2 Back

39 Department of Health, A First Class Service-Quality in the new NHS, 1998 Back