Nigel Edwards: After the market—what do the proposed new plans mean for the NHS? 

For 25 years, politicians from the Thatcher to the Cameron government tried to use market principles and competition to push the NHS forwards, culminating in the 2012 Health and Social Care Act. The publication of a new White Paper last week marks the decisive end of that approach, preparing to reflect in law the dropping of many of the more overt aspects of a market system since the 2014 Five Year Forward View

Since then a significant amount of NHS effort has been put into developing a more integrated and population health based approach, and planning service change. Both of these principles are hard to reconcile with a market driven system, and so over time the 2012 Act has increasingly been ignored. The national tariff for paying hospitals had already been abandoned in many places and there had been increasing emphasis on collaboration, which the response to the pandemic has reinforced. 

The new proposals to remove the jurisdiction of the Competition and Markets Authority, replace the procurement regime that often produced onerous bidding processes, and formalise Integrated Care Systems (ICS) as statutory bodies, are amongst a number of significant changes that complete the dismantling of much of the 2012 edifice. 

If markets and competition have now been largely abandoned the question is: what is now the mechanism for driving change and is it strong enough to deliver the very challenging goals that have been set? 

One that is proposed in the White Paper is a power for the Secretary of State of Health and Social Care to direct the NHS on strategic priorities. It is reported that ministers have been frustrated that they do not have the levers required to deliver their priorities, something that will be on their mind as the next election approaches. This assumes that the problem is a lack of will rather than, for example, a shortage of nurses or a limited number of orthopaedic surgeons. The Blair-era Secretary of State Alan Milburn, who also lamented the absence of levers, managed to reinvent them. However, achieving his goals involved a lot of additional money and staff, not just aggressive performance management.  

The main engine of change will be integrated care developed by the ICSs—committees established in law, with one board for the NHS and another for both the NHS and local government. 

Within them there will be “place” based Integrated Care Partnerships (ICPs) consisting of primary care networks, local NHS organisations, social care, and other providers. The White Paper is explicitly permissive about how these will develop recognising their diverse geographies and that there is still much to work out about how they will operate. 

The transactional relationship of NHS purchasers and payers is largely to be phased out, although local government often still has a highly transactional approach to procurement. The questions of how money will flow through the system and be allocated to providers, and how and by whom the local provider partnerships will be held to account is not yet clear. The sheer number of different partnerships, collaborative arrangements between providers, joint committees, and other machinery will need a lot of thought if they are not to consume a lot of time for little purpose. 

These changes would keep the regime where patients can choose to go to any “qualified” provider, who then receives their payment, an attempt to ensure that there are still options for rapid access to elective care. This will mean that the payment by results system will continue to operate in this domain to some extent. The ICS will have an important role in enforcing choice for patients. 

There are some complex potential conflicts of interest that may need to be addressed. As the White Paper notes, the legislative framework it will create is only part of the story: how people behave and relate to each other is even more important. The constituent organisations still retain their own identity, with a long history of independence and being in a competitive market. All need to be financially viable and protect their long term future. 

This will create tensions where an ICS makes a decision which one of the trusts in its area sees as being against their interests. The White Paper proposes to deal with these by imposing a “broad duty” to collaborate and a duty to promote population health, quality, and efficiency (the so called “triple aim”).  Duties that have trade-offs are not easily enforceable and there will be bumps in the road. As a consequence this new system creates challenges that will require skilled leadership.

There is a welcome tolerance of differences in approach to meet local circumstances and, with the exception of the new powers for ministers, a lot of emphasis on devolution of responsibility to ICSs and ICPs. 

However, there are some risks. The way that ICSs replace Clinical Commissioning Groups raises some important questions about the voice of local primary care—how the primary care networks fit into this system is not specified. 

The other risk is that history suggests that fine talk of devolution and allowing different solutions can easily give way to a temptation to specify ever more detail and to issue ever more “helpful” guidance. Particularly when performance slips, as is likely in the wake of covid-19, will the system revert to old habits of central control and instruction? If so, it may not be a reassuring thought that the Secretary of State himself will now sit directly atop the hierarchy. 

Nigel Edwards, CEO Nuffield Trust.

Competing interests: none declared.