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Britain passes NHS reforms amid controversy Date: 06/27/12

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By John Lister

The British government’s highly controversial “Health and Social Care Acr” finally completed its bruising 15-month journey through the Houses of Parliament in March, in the teeth of opposition from doctors, nursing unions, public health professionals, and mounting public concern. The debate on the merits and implications of the proposals is far from over.

The 470-page Bill, which only applies to England, completely restructures the publicly funded National Health Service, to the point that “NHS” will eventually be little more a label for the pool of taxpayers’ money used to purchase services from a variety of private for-profit and non-profit providers.

The bill will accelerate a trend that was merging before the controversial bill passed. Official government figures show that about  £4.1 billion ($6.4bn, €5.1bn) of the overall £100 billion ($157bn) NHS budget was spent in the last full year on buying care from the private sector (almost £1 billion of this on acute care in private hospitals).  Some £560 million went towards care provided by the voluntary sector.  The way is clear for a much larger slice of public funds to be spent on private providers.

The changes apply at every level, with new bodies poised to take over the purchasing (commissioning) of health services. NHS providers also face changes, with new proposals to encourage for-profit and nonprofit providers to compete with each other in the new, competitive health care market, where an ever-growing number of services will have to be opened up to “any qualified provider.”  Critics have warned that existing providers will, in many cases, be financially destabilised, face cutbacks, mergers, or outright closure.

The pace of these changes will be increased by the backdrop of government targets for “efficiency savings” of £20 billion by 2014 – equivalent to an unprecedented 4 percent annual efficiency savings. The normally conservative Royal College of Nursing, whose conference this year booed and heckled the health secretary when he visited, is claiming that, among the jobs that would be lost as a result, are 60,000 nursing posts in England.

The new legislation means that all of the local NHS management bodies, which have been commissioning services with a combined budget of £60 billion ($94 billion) for a combined population of 50 million people, will be abolished and dismantled by April 2013, with many of their staff being becoming redundant.

In place of these 150 Primary Care Trusts, 212 new “Clinical Commissioning Groups” led by family doctors (general practitioners – GPs) will be established whose catchment areas range from just 67,000 to a 900,000 while three CCGs will have populations below 100,000, 16 will cover 500,000 or more, and more than a third (76) will have populations of from 100,000 to 200,000.

Although ministers have been keen to argue that doctors will be “in charge” of the new commissioning bodies, it is clear that few GPs have the time, energy or expertise to carry out the complex task of commissioning, and even fewer have the inclination to do so. Despite claims that most GPs are “interested” in commissioning while supporters of the bill could find only  one in 10 people who agreed with them eager to to get involved locally and only seven percent nationally.

In reality, much of the responsibility will be in the hands of managerial staff – either recruited from the ranks of newly-redundant primary care trusts, or from the private sector, through management consultancies including many U.S. companies including United Healthcare, McKinsey, PriceWaterhouseCooper, Ernst & Young and other big city names which have been seeking a slice of a support service market estimated at £1.3 billion.

On the provider side, more than 100 NHS Trusts, mainly acute hospitals, will either have to take the financial steps necessary to balance their books and become autonomous “Foundation Trusts”, (143 of which already run as nonprofit businesses outside the NHS management structure). If they don’t, they will be forced into mergers, or their services will be split between existing Foundation Trusts.

The bill gives Foundations new freedom to expand their provision of private medical treatment with links with private health insurers.  Given the constraints on the public health care budget, and the efforts being made to squeeze down the NHS fees paid per service, many of the larger Foundations, especially those with prestigious London hospitals, will be tempted to make full use of the chance to bring in cash from other sources, even at the expense of diverting resources from publicly-funded patients.


John Lister, the European web coordinator of AHCJ's focus on Europe, has been a journalist for 35 years, specialising in reporting health policy in England. He is a part-time senior lecturer at Coventry University.