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Empowerment or upheaval?

Empowerment or upheaval?
15 September 2010






Head of Health and Social Care
Policy Exchange

Henry joined Policy Exchange in November 2008 and is responsible for developing the research programme into Health and Social Care. He has worked in the NHS as a junior doctor and, before joining Policy Exchange, in parliament for a number of leading centre-right politicians. Henry is the author of Which Doctor? Putting patients in control of primary care. He believes these are exciting and challenging times for the NHS and for policymakers in particular


With a new government comes change, and the new leadership at the Department of Health (DH) has already produced a raft of significant policy papers, with radical legislation expected in the autumn. There are currently six major consultations on complex topics such as clinical outcome measures and regulating healthcare providers. The NHS is bracing itself for yet more change, but consider the new health secretary's words: "If you're working in general practice, this is about empowerment, not upheaval."

Before considering GP commissioning in more detail, a word of warning about NHS finances. Just six months ago, everyone was discussing how the NHS was going to deliver the mooted £20bn of efficiency savings, and GP commissioning was just a political promise. Now that GP commissioning has become government policy, those savings still need to be found.

Even if the coalition government manages very small real-term increases in NHS spending over the next five years, the scale of the financial challenge facing the NHS is one never previously undertaken by any healthcare system in the world. To put these things in perspective, on generous estimates the coalition government's plans for the NHS are still some £7bn short in achieving the £20bn of "efficiency savings" (or "reinvested cuts" if you prefer).

So, is Andrew Lansley, the new Secretary of State for Health, right to focus on primary care and introduce GP commissioners? Well, a strong primary care service is cost-effective and key to a better healthcare system: 76% of all NHS activity takes place in primary care, but for just 11% of total NHS costs. And evidence suggests that health systems that are oriented towards primary healthcare are more likely to deliver better health outcomes and greater public satisfaction at lower costs.(1) International studies show an increased number of GPs is associated with improved health outcomes for cancer, heart disease and stroke, with increases in life expectancy and self-rated health.(2)

Implementation and buy-in
So, will GP commissioning help? Well, it did before. Between 1991 and 1997, under previous fundholding arrangements GPs became better at allocating scarce NHS resources; they responded to incentives, and referral rates among fundholding practices fell. For example, admissions for elective procedures among fundholding practices were 3.3% lower than they would otherwise have been.(3)

Moreover, giving commissioning and financial responsibility to GPs will actually help improve wider NHS efficiency. During the internal market of the 1990s, fundholding saw hospital efficiency increase by an average of 1.7% per year – but after it was abolished in 1997, efficiency fell by an average of 1.6% per year.4 It is clear then that a great deal of the responsibility for delivering the coalition government's NHS reform programme rests with GPs and their existing infrastructure.

There is evidence that a growing number of NHS people, particularly the clinical community, like the concept of GP commissioning. However, many others have concerns about this radical proposal. A few people have begun to direct their interest in implementation: why do we need a national roll-out so soon; and why does every GP practice need to belong to a consortium?

Of course, there is merit in these arguments because compelling individuals to do something, especially well-educated and well-organised professionals, is not the best way to achieve high levels of acceptance and buy-in. Some believe that up to 40% of GPs won't want the additional hassle and responsibility of being involved with running budgets and contract negotiations. However, many will recall that the move from GP fundholding to primary care groups in 1999 was mandatory and that change happened without dividing the profession.

A different approach for implementing GP commissioners might be to make it an aspiration for high-performing GP practices, much like the introduction of NHS foundation trusts. But beware the political perils of a two-tier NHS, as happened with fundholding.

Alternatively, a system of incentives for large GP practices or independent primary care providers could be introduced in areas where take-up of GP commissioning is low, in the same way that independent sector treatment centres exerted competitive pressures on sluggish hospitals. We might see both of these methods being used as shadow GP consortia begin to be adopted in their full form from April 2012 onwards.

Choice and accountability
Accountability mechanisms have also begun to attract interest, and not just from HM Treasury with its concerns about handing over the majority of the NHS budget to what some regard as untried and untested small businesses. It might be an anathema for the controlling tendencies within the treasury, but patients are fundamental to the accountability equation.

It's simple: let people decide. GP practices will be accountable to people who will be able to exercise choice in a way they haven't been able to before. Arbitrary practice boundaries are to be abolished and patients will be able to choose a GP practice that is convenient for them. Why is choosing a GP practice any different from choosing a dentist or a solicitor?

Extending choice into primary care in this way is important because it gives real options to patients and citizens; it gives them a real and meaningful choice in the NHS. It is a feature of markets that people with the power to "exit" exert control – and having a real choice of GP will put patients in control.5 To satisfy the bean counters at the treasury, GP practices will also be accountable to their local authority and to the new NHS Commissioning Board, with which they will have a contract.

More than anything else, it is the abolition of practice boundaries that will allow Mr Lansley's reforms to happen, but the impacts of this policy – and arguably its success or otherwise – will be felt in the administration of general practice. Extending the choice agenda into general practice means that patients will begin to switch GP practices; they might even be encouraged and enticed to do so. Intuitively, this will increase the bureaucratic burden on individual practices – but by how much?

Currently, about 3.5 million people change GP practice each year, mainly because they move house, although with the abolition of practice boundaries that number would reduce. Proponents of market forces in public services suggest that about 5% of people would need to switch GP practice each year for the market to begin to work and for services to improve for everyone. This translates to about 2.5 million of the 51 million people registered on GP practice lists in England and Wales. So the bureaucratic burden of a pro-GP choice policy would be considerable but not unworkable.

While on the subject of patient choice, it is interesting to consider other questions raised by the white paper. First, will patients moving into secondary care have more or less choice compared to now? The white paper suggests that patients will only have a choice of services within those commissioned by the GP consortia. But that depends upon which GP consortia your particular GP practice belongs to. Arguably some patients and, indeed, GP practices will be constrained by belonging to a particular GP consortia in the same way that some GP practices are constrained by their current primary care trust (PCT).

Real flexibility comes in letting GP practices choose which GP consortia they belong to, and in the long-run this would be a natural extension. In a competitive model, where patients can choose which GP practice to go to, all the evidence tells us that these more efficient, patient-focused GP practices will prosper.

Funding and further questions
Although the DH's recent policy papers explicitly cover many subjects, a number of critical issues remain unresolved. For example, if patient choice is going to be the key driving-factor behind GP commissioning, then what's the future of the Minimum Practice Income Guarantee (MPIG)? The language of the white paper is about markets, risk and failure with "a single contractual and funding model for GP practices to promote quality improvement, [and] deliver fairness for all practices," which suggests that MPIG is on the way out. How can it work any other way?

More interesting is the promise to "support free patient choice and remove unnecessary barriers to new providers", which could mean that the hidden value tied up in GP practice lists – GP goodwill – could be the bribe to get GPs to renegotiate your contracts and become part of Mr Lansley's revolution.

If you're starting to consider how much funding your GP practice will get to commission services on behalf of their patients, looking at practice-based commissioning target budgets or PCT allocations won't give you the right answer. The reorganisations proposed in the white paper will redistribute lots of budgets previously under PCT control.

Consider Specialised Commissioning, at about £5bn per year, which will be given to the new NHS Commissioning Board. The as-yet-undetermined public health budgets are likely to be another £4bn and will be ringfenced within local authority control. Those efficiency savings then need to be factored in – a full year's worth of savings could be made by giving GP practices another £4bn less than they were expecting.

Finally, the sceptics of the GP commissioners policy say that, in the long-run, GP consortia will slowly merge into 300 or so larger consortia and that this will leave the NHS in a similar structural position as before, except with 300 GP consortia in place of 303 PCTs. They are right, to some extent; but that is to miss the point. Structures are irrelevant; accountability is everything. Patients and clinicians will be in control from here on in, and that is the way to drive real healthcare reform.

1. Macinko J, Starfield B, Shi L. The contribution of primary care systems to health outcomes within organization for economic cooperation and development (OECD) countries, 1970-1998. Health Serv Res 2003;38:831-65.
2. Macinko J, Starfield B, Shi L. Is primary care effective? Quantifying the health benefits of primary care physician supply in the United States. International Journal of Health Services 2007;37(1):111–26.
3. Propper C. Market structure and prices: the responses of hospitals in the UK National Health Service to competition. Journal of Public Economics 1996;61(3):307-35.
4. Le Grand J. The Labour Government and the NHS. Oxford Review of Economic Policy, Vol 18; 2002.
5. Hirschman A. Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States. Cambridge, MA: Harvard University Press; 1970.

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