EQUITY AND EXCELLENCE: LIBERATING THE NHS BRIEFING FOR MEMBERS 13 JULY 2010

Equity and excellence: liberating the NHS, the coalition Government’s white paper, was published on 12 July 2010. It has at its heart three key principles:

• patients at the centre of the NHS • changing the emphasis to clinical outcomes • empowering health professionals, in particular GPs.

There is no doubt the white paper signals the biggest reorganisation of the NHS in its history and, as expected, almost every part of the NHS will see significant change if the proposals are fully implemented. The white paper is structured as follows: Chapter 1. Liberating the NHS – covers the Government’s vision for health, and sets it in context alongside its approach to public health and social care. Chapter 2. Putting patients and the public first – covers shared decision making between clinicians and patients, an information revolution for patients, increased choice and control for patients and carers, and HealthWatch that will strengthen the voice of patients and the public. Chapter 3. Improving healthcare outcomes – covers a new NHS Outcomes Framework, new quality standards to support progress on outcomes, and financial incentives for quality improvement. Chapter 4. Autonomy, accountability and democratic legitimacy – covers GP commissioning consortia, an NHS Commissioning Board, a new relationship between the NHS and Government, local democratic legitimacy, freedom for existing NHS providers, changing roles for the Care Quality Commission and Monitor, and NHS pay and pensions. Chapter 5. Cutting bureaucracy and improving efficiency – covers cutting bureaucracy and administrative costs, increasing NHS productivity and quality, enhanced financial controls, and making savings during the transition.

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Chapter 6. Conclusion: making it happen – covers proposals for legislation, the transition to the new systems, and a timetable for action. This briefing sets out the key points from the white paper. For ease of reference we have structured it along the following themes:

• Commissioning • Financial controls • Risk pooling • Future of providers • Regulation and inspection • Efficiency and bureaucracy • Quality and outcomes • Choice and control • Public health • Social care • Workforce • Mental health • Information revolution • Patient and public engagement.

The white paper sets out an ambitious timetable. By April 2012 it proposes establishing the Independent NHS Commissioning Board and new local authority health and wellbeing boards, and developing Monitor as an economic regulator. The new commissioning system is expected to be in place by April 2013 by which time SHAs and PCTs will be abolished. The Department of Health (DH) will be consulting on the white paper proposals until 5 October 2010. The NHS Confederation will set in place a number of opportunities for members to inform our work to influence the debate, including an event for members in September and our response to the consultation on the white paper itself. Please send any comments to sam.hunt@nhsconfed.org. Commissioning

• GP commissioning will be changed so it operates on a statutory basis, with commissioners’ powers and duties enshrined in legislation.

• All GP practices are to become part of a consortium. Consortia will need to have sufficient geographical focus. They will also assume responsibility for commissioning services for those people not currently registered with a GP and for commissioning a comprehensive urgent care service.

• Consortia will have a “maximum management allowance”, although the limit is not specified.

• A comprehensive system of GP consortia in shadow form is expected to be in place by 2011/12. The consortia will then begin to assume commissioning responsibility in the following year before taking full responsibility from 2013/14.

• NHS Commissioning Board (NHSCB) will commission GPs and family health services (dentistry, pharmacy and primary ophthalmic services). The NHSCB

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will have a duty to establish a comprehensive system of GP consortia and the power to assign practices to consortia.

• The NHSCB will be in shadow form from April 2011 as a special health authority before becoming a statutory body in April 2012. The Secretary of State will determine the board’s ‘formal mandate’ (covers three years, updated annually) and holds the board to account for delivery against those objectives. The Government may intervene in-year, but would have to lay a report in Parliament to explain why.

• Both Monitor and the NHSCB will ensure that competing to provide services is a fair and transparent process.

Financial controls

• NHS Commissioning Board will be accountable to the DH for managing within an annual revenue limit and will allocate resources to GP consortia on basis of need.

• GP consortia will be accountable to the NHSCB for managing public funds and will have an accountable officer.

• Commissioners will be free to buy services from any willing provider. • Monitor will be able to allow transparent subsidies where these are “objectively

justified and agreed by commissioners.” Risk pooling

• The white paper stipulates that current risk pooling arrangements will migrate away from SHAs.

• Monitor will be able to authorise special funding arrangements to ensure that essential services can be maintained in circumstances where they would usually have become unviable. Providers may be asked for contributions towards a risk pool by Monitor.

• GP consortia will be required to take part in risk pooling arrangements, overseen by the NHSCB.

Future of providers

• All NHS trusts will be part of or become foundation trusts (FTs) by 2013, with the abolition of the NHS trust model

• New FT models with staff-only membership (social enterprise) are intended for community FTs but not limited to them.

• The white paper contains a clear commitment that FTs “will not be privatised.” • Consultation proposed on increasing FT freedoms including:

o abolition of the cap on income that can be earned from other sources o enabling FTs to merge more easily o enabling FTs to tailor their governance to local needs.

• DH will assume responsibility for provider development. • Community services will operate under the Any Willing Provider ethos. • Monitor takes over responsibility for regulating all NHS providers from April

2013, irrespective of status. • Commissioning will be separate from provision by April 2011.

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• Special arrangements will be made for three high secure psychiatric hospitals to benefit from FT status.

Regulation and inspection

• The white paper stipulates a stable, transparent and rules based system of regulation

• The Care Quality Commission (CQC) will have “a clearer focus on the essential levels of safety and quality of providers.” It will inspect providers with a “targeted and risk-based” approach in accordance with those levels.

• CQC and Monitor will deliver a joint licensing regime, to cover essential levels of safety and quality and ensure continuity of essential services.

• Monitor as economic regulator for both health and social care will: o promote competition and concurrent powers with OFT to apply

competition law. Powers apply to privately and publicly funded health and social care services

o regulate pricing but only ”where necessary” and with flexibility between ‘efficient’ and/or ‘maximum’ price. Monitor’s powers to regulate pricing only relate to publicly funded health services

o have responsibility for FT continuity of service – “continued access to key services in some cases”

o authorise “special funding arrangements for essential services that would otherwise be unviable” (with agreement of NHSCB and subject to rules on state aid)

o have powers to intervene directly in the event of failure. • There is reference made to enforcing competition law. Monitor will be able to

undertake market studies and refer structural problems to the Competition Commission.

Efficiency and bureaucracy

• The Government acknowledges that the cuts in administrative costs represent an “important but modest contribution” to the overall NHS efficiency drive.

• NHS management costs will be reduced by more than 45 per cent over the next four years.

• Strategic health authorities will be abolished by 2012/2013. • Tight cost reduction will apply to centrally managed DH programmes. • Other potential cost cutting solutions include: the forthcoming review of arms-

length bodies; NHS services increasingly empowered to be “customers of a more plural system of IT and other suppliers”; a reduction in the regulatory burden; and energy efficiency and sustainability.

• Existing providers will be freed from central and regional management and they will be supported by a system of economic regulation, overseen by Monitor.

• GP consortia will align clinical decisions in general practice with the financial consequences of those decisions.

• There is a commitment that the QIPP programme “will continue with even greater urgency” and it is hoped that SHAs and PCTs will devolve leadership of this agenda to GP consortia and local authorities as soon as practicable.

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• The DH will place requirement on SHAs and PCTs to ensure rigorous financial control over the transition period, supported in this task by Monitor.

• Best practice pricing, increased use of quality incentives and a move away from average cost prices, will be an important feature of the new system.

Quality and outcomes

• The document reaffirms the Government’s commitment to hold the NHS to account “against clinically credible and evidence-based outcome measures.”

• The new NHS Outcomes Framework will include national outcome goals, chosen by the Secretary of State (following consultation), with the NHSCB held accountable for attainment. The first framework will be available in April 2011, with full implementation expected a year later. It encompasses the domains of quality, safety and patient experience.

• GP consortia will have a commissioning outcomes framework, which should “create powerful incentives for effective commissioning.”

• The National Institute for Health and Clinical Excellence (NICE) will develop quality standards for the NHSCB, with 150 different standards ultimately expected. The library of standards should be “reflected in commissioning contracts and financial incentives.”

• The NHSCB will be responsible for a payment system structure, with the economic regulator looking after pricing.

• Current Payment by Results tariffs will be refined, with the introduction of best practice tariffs to be accelerated. The DH will evaluate the scope for a benchmarking approach.

• Commissioners will be able to pay a quality increment if providers deliver excellent patient care in line with commissioner priorities.

• CQUIN will be extended to support local quality improvement goals. • Commissioners will be enabled to impose penalties on providers delivering

substandard care. • A “single contractual and funding model to promote quality improvement” will

be developed. • The Cancer Drug Fund will come into operation from April 2011. Value-based

pricing for NHS medication will be introduced once the current scheme expires.

Choice and control

• From April 2011, patients will be able to choose their consultant-led team for elective care where clinically appropriate.

• Choice will be extended to include mental health providers from April 2011, and for diagnostic testing and choice post-diagnosis from 2011 onwards.

• Patients will be able to choose a GP practice (with an open list), not limited to where they live.

• A consultation on choice of treatment is expected later in 2010, including “potential introduction of new requirements on providers, and collecting and publishing information on whether this is happening to support patients.“

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• Patients will have choice of treatment and provider for most NHS-funded services no later than 2013/14.

• A single number for all types of urgent and social care will be established and technology developed to help people communicate with their clinicians.

• A further tranche of Personal Health Budget (PHB) pilots will be encouraged with general roll out informed by evaluation in 2012.This includes the potential for introducing PHBs for NHS continuing care.

• The Government has confirmed there will be no bail-outs for organisations that overspend public budgets.

Public health

• A Public Health Service will be established, encompassing the existing health improvement and protection bodies and responsibilities.

• Local authorities will assume the responsibilities for local health improvement currently held by primary care trusts. While the Public Health Service will set national objectives for improving population health, local authorities will have the freedom to determine the means by which these are achieved.

• Directors of Public Health (DPHs) will be jointly appointed by the Public Health Service and local authorities. They will be given control over ring-fenced public health budgets in their local area.

• A ‘health premium’ will be introduced, aimed at alleviating health inequalities. • A separate Public Health White Paper is due for publication later this year. • Health and Wellbeing Boards will be created within local government in an

attempt to coordinate commissioning of NHS services, social care and health improvement.

Social care

• The Department of Health will establish a commission on the funding of long term care and support to report within one year. A white paper is then expected in 2011, with the aim of introducing legislation in the second session of this Parliament.

Workforce

• The Government advocates allowing all employers the right to determine their own pay levels. However it acknowledges that many providers will wish to utilise national remuneration contracts.

• The DH will take more of a back seat role in relation to education and training. The Government wishes to see employers agreeing plans and resources for workforce development with their staff. Healthcare professions at both a local and national level will assume leadership for education commissioning.

• The review of public sector pensions chaired by Lord Hutton will examine issues including labour market mobility and the potential impact upon plurality of provision, alongside affordability and sustainability.

Mental health

• Choice of both treatment and provider will be extended into some mental health services from April 2011.

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• The importance of decision aids to enable effective patient choice is particularly acknowledged for mental health and community services.

• A set of Payment by Results ‘currencies’ for adult mental health services will be introduced from 2012/13. There are also plans to develop currencies for child and adolescent services.

• Payment mechanisms to support the commissioning of talking therapies will be formulated.

• An assurance is made that the criteria utilised within the NHS Outcomes Framework will ensure that mental health outcomes are included.

• The NHSCB will take responsibility for commissioning some specialist mental health services.

Information revolution

• The white paper includes a focus on the publication of “comprehensive, trustworthy and easy to understand information” from a range of sources.

• Patient Reported Outcome Measures (PROMs), patient experience data and real-time feedback are all expected to be utilised more frequently in the future. Patients will have the opportunity to rate services and specific clinical departments.

• National clinical audit will be broadened out across a larger range of treatments and conditions.

• Quality Accounts will be revised in an attempt to enhance local accountability. The White Paper also states all providers of NHS care will have to publish accounts from 2011, subject to evaluation.

• Hospitals will be required to be open about mistakes and to always inform patients of errors made with their care.

• A consultation on health records will be held later in 2010 to determine the appropriate confidentiality safeguards. Records will be made available in a standardised format, with patients enabled to provide access to third parties if they wish to.

• The virtues of a voluntary accreditation system will be examined, which would allow organisations to apply for a quality standards kitemark.

• The Information Centre will have an enhanced role, with centralised data returns and the responsibility for reviewing existing data collections.

• Clear contractual obligations around accuracy and timeliness of data will be placed on providers. Compatibility of data among both providers and commissioners is paramount.

• There will be a consultation on the information strategy in autumn 2010. Patient and public engagement

• The NHSCB is to act as a champion for patient and carer involvement. • HealthWatch England will sit inside the Care Quality Commission. LINKs will

become the local arms of HealthWatch and will be both funded by and accountable to local authorities.

• Local HealthWatch and HealthWatch England will play crucial roles in providing advocacy and support and within the complaints procedure.

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• Local HealthWatch will also be empowered to recommend investigating services deemed to be inadequate.

Further documentation NHS chief executive Sir David Nicholson wrote to NHS leaders on 13 July about managing the transition and we expect a number of detailed documents to be published in the near future on:

• commissioning • local democratic legitimacy in health • freeing providers and economic regulation • NHS outcomes framework • ALB review • social care • information strategy • patient choice • education • data returns.

Viewpoint The plans laid out in Equity and Excellence: Liberating the NHS indicate the most significant restructuring of the NHS in its history. The paper sets out a very major shift in where power and accountability lie in the health service, and in where responsibility for public health will lie in future. A large number of unanswered questions remain which we hope will be addressed over the summer as detailed policy documents are published but it is clear that some solutions will have to be determined locally. Key questions about the proposed approach include the nature of accountability for GP consortia, how the areas of commissioning that fall outside the scope of consortia will be dealt with, and how the large scale change needed to move responsibility from PCTs to GP consortia will be accomplished. For providers, the implications of new freedoms and the development of a new economic regulator are just as significant. For example, Monitor will have the power to require providers to grant access to their facilities to third parties. For patients, there is a strong emphasis on increased choice and control, but previous white papers have had similar ambitions and the difficulty of converting rhetoric into reality has been considerable. For GPs, there are new challenges and the difficult task of balancing patient centred and population viewpoints. The new system will look very different to the current NHS. It is clear that GP consortia will not be mini-PCTs, and the driver of change in this new system seems to be individual choices by GPs rather than traditional planning approaches. Accountability will be for outcomes rather than process measures or targets. The system will be rules based, subject to competition law, and governed by standards for commissioning that will create a more explicit statement of what patients can expect. It is clear that there will be fewer policy initiatives from the centre.

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The end point of these reforms will be a radical shift from where we are now, but there are risks and uncertainties about the journey that mean adjustments will be made as the policy is implemented. The transition risks are significant, and David Nicholson’s letter on transition sets out the extensive programme of change, restructuring, capacity building and policy development that will be required. It is unfortunate that the way the reforms have been portrayed has failed to acknowledge the progress that has been made in commissioning and PCTs over the past few years, and keeping SHA and PCT staff motivated during the transition period will be important. Staff working within SHAs and PCTs will be asked to continue to manage performance and finances tightly; it will not be seen as politically acceptable for performance or financial management to slip over the next few years because the NHS budget is being protected relative to other public sector services. The NHS Confederation and its networks will be working with the Department of Health to influence the policy as it develops and to help members to make sense of what is an emerging picture. As ever, we are keen to hear your views to inform our response to the white paper consultation. Please send any comments to sam.hunt@nhsconfed.org.

PROPOSED FRAMEWORK FOR TRANSPARENCY IN OUTCOMES – A FRAMEWORK FOR THE NHS 19 July 2010

The Government published Equity and excellence: liberating the NHS, its health white paper, on 12 July. The Department of Health (DH) launched a public consultation on 19 July setting out proposals for an outcomes framework that can be used by the Secretary of State to hold the (yet to be established) NHS Commissioning Board to account for its management of the NHS based on improving the quality of healthcare and outcomes for NHS patients.

This consultation is the beginning of a systematic attempt to develop a focused but balanced set of progressive outcome indicators that will provide an indication of the overall performance of the NHS. There will eventually be three outcomes frameworks covering NHS (this consultation), social care and public health for an integrated cross service approach. This is not about how directly chosen outcomes might be passed down the chain, for instance processes for holding commissioning consortia to account. It is not intended to be a set of priorities for the NHS. The Government will no longer hold the NHS to account on points of process however this framework document assumes that process measures will still be needed in the normal management of organisations. Timeline: • consultation period between 19 July and 11 October 2010 • Government response between end Oct/early Nov 2010 and DH business plan

agreed as part of the Spending Review • publication of the first NHS Outcomes Framework alongside NHS Operating

Framework end 2010/early 2011 • implementation April 2011. The full consultation document is available on the Department of Health website. Why is it important? The new NHS Commissioning Board will be responsible for working with the NHS to deliver good healthcare outcomes. This consultation is part of designing an accountability framework for this task. The DH is concerned that the NHS underperforms in measurement of several key health outcomes when compared with its peers, and is reviewing all indicators for

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clinical relevance and improved health outcomes (Revision to the Operating Framework for the NHS in England 2010/11, 21June 2010, and Outcomes not Targets, Conservative Party 2008). Key points: • This spans the definition of quality which Lord Darzi set out in his NHS Next

Stage Review report, High Quality Care For All and which the NHS has embraced as a clinically sound definition of quality:

1. effectiveness 2. patient experience 3. safety.

• The consultation document begins to describe the framework as a balanced scorecard that the Secretary of State will use to gauge the progress of the NHS Commissioning Board in managing the NHS covering a large part of the £80bn of annual expenditure currently allocated to PCTs (Table of PCT Revenue Allocations, 2009/10 prices).

• The proposed principles that will guide the development of the framework are: 1. accountability and transparency 2. balanced 3. focused on what matters to patients and healthcare professionals 4. promoting excellence and quality 5. focused on outcomes that the NHS can influence but working in

partnership with other public services where required 6. internationally comparable 7. evolving over time.

• The framework will be structured around a set of five domains that the NHS should be delivering for patients:

1. Preventing people from dying prematurely (EFFECTIVENESS) 2. Enhancing quality of life for people with long-term conditions

(EFFECTIVENESS) 3. Helping people to recover from episodes of ill health or following injury

(EFFECTIVENESS) 4. Ensuring people have a positive experience of care (PATIENT

EXPERIENCE) 5. Treating and caring for people in a safe environment and protecting them

from avoidable harm (PATIENT SAFETY). • The diagram on page 3 explains how the framework will be structured for each of

the five outcome domains. See the consultation document figure 2 on page 15 for further explanation.

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Overarching indicator

Improvement areas Outcome indicator

Supporting NICE quality standards

Frames NHS Commissioning Board’s broader responsibilities

SoS holds NHS Commissioning Board to account for progress

Support commissioning of high quality service

• For each domain, an outcome and an overarching indicator will be identified,

allowing the Secretary of State to track the progress of the NHS. • There will then be specific areas identified in which the NHS Commissioning

Board will be tasked with delivering quality improvement. The consultation asks about the appropriateness of the proposed way to select improvement areas to ensure a robust, evidence-based rationale.

• Under each of the specific improvement areas, the framework will include outcome indicators for which the NHS Commissioning Board will be held accountable. They will be constructed so as to make clear the extent to which the NHS Commissioning Board will be responsible for that outcome, in contrast to the contributions that can be made by public health or social care interventions.

• The potential outcomes indicators are described in the consultation as well as inviting other candidate outcome indicators from respondents. The following criteria are suggested for assessing individual candidate indicators:

1. meaningful to patients and clinicians as measures of the end-points of their care

2. clinically credible 3. measurable across the NHS 4. statistically meaningful at local area level 5. internationally comparable wherever possible 6. show clear evidence that they are cost-effectively amenable to

improvement. • Further assessment and analysis will then consider how individual indicators can

be combined into an overall ‘basket’ or baskets (and appropriate levels of ambition set) to ensure that they do not deflect resources from areas where more cost-effective improvement would be possible; that they are conducive to reduction in health inequalities; and that they are consistent with the Government’s wider objectives to improve the welfare of the population subject to budget constraint.

The NHS Confederation is undertaking an extensive engagement process with members over the summer, and will ensure the views of all parts of the NHS are included in our response to the consultation. To share your views and get involved please email whitepaper@nhsconfed.org.

LIBERATING THE NHS: LOCAL DEMOCRATIC LEGITIMACY IN HEALTH 22 JULY 2010

The role of local authorities The coalition Government believes that involving local authorities in delivering health services will increase democratic accountability and provide the perspective of local place. Therefore they “are uniquely placed to promote integration of local services.” On that basis, Democratic legitimacy in health, published on 22 July, proposes significantly enhancing the role that councils play, encompassing the following areas:

• taking the lead on Joint Strategic Needs Assessments (JSNAs) • supporting the engagement of communities and the development of patient

choice • ensuring a more joined-up approach towards commissioning of local NHS

services, social care and health improvement. Local authorities are urged to keep the NHS Constitution at the forefront when influencing decisions. They will be expected to undertake joint commissioning with GP consortia.

• leading the health improvement and prevention agenda at a local level. This policy aims to enable far deeper integration than at present between health and other services such as adult social care, children’s services and crime prevention. This briefing sets out the key points. Patient and Public Engagement Existing Local Involvement Networks (LINks) will become local HealthWatch, retaining LINks’ existing powers and obligations. They will continue to have rights to visit to local providers, but will also be able to report any concerns regarding the quality of the provision of local NHS or social care services to the national body, HealthWatch England, independently of their local authority. Local HealthWatch are envisioned as being not only “consumer champions” but also acting effectively as a “citizen’s advice bureau” for health and social care. However the Government proposes awarding additional functions and funding to these bodies:

• local authorities to commission NHS complaints advocacy services through either local or national HealthWatch

• helping members of their local community to exercise choice, with the example of GP practices specifically cited in the document.

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Local authorities will continue to both fund and contract local patient engagement services, while also holding local HealthWatch to account for delivering effective and efficient services. They are expected to intervene and even re-tender the contract if performance is deemed to be inadequate. Health and well-being boards The Government expresses its concern about the limited take-up of joint commissioning to date, arguing that its “full potential…remains untapped.” Therefore it advocates a statutory role for each upper tier local authority to support joint working on health and wellbeing. The preferred vehicle is a health and well-being board situated within the local authority, with assurances made that “requirements…would be minimal.” The boards are intended to replace existing arrangements for local partnership where they exist and also work with the local strategic partnership. Furthermore the statutory functions of Overview and Scrutiny Committees would pass into the hands of the board. It is proposed that the boards would have the following functions:

• examine local health needs and lead the JSNA • promote integration and partnership working • support joint commissioning and pooled budgeting, in circumstances where all

involved believe this to be a sensible approach • scrutinise significant service redesign proposals.

Both the local authority and commissioners (GP consortia and the NHS Commissioning Board) will have a statutory obligation to act as board members and collaborate on the delivery of these functions. The objective is that the former can wield influence over commissioning and the latter can wield influence over the health improvement agenda. Other board members would include social care and local HealthWatch representatives, with the elected local authority members determining who is appointed as the chair. Local authorities would be able to invite provider organisations into relevant board discussions, although the Government emphasises the need for engagement “in an equal and transparent manner.” The boards can also agree NHS and social care commissioning for particular services, with mental health identified as an example, or plan the allocation of place-based budgets (an evaluation of which will be undertaken in collaboration with the LGA). While the Government believes that the “emphasis on proactive local partnership would minimise the potential for disputes,” boards would have the power to refer decisions to NHS Commissioning Board or to the Secretary of State if the area comes under the purview of NHS Commissioning Board. The need for appropriate arrangements in London is identified, particularly the links between the borough boards and the Mayor.

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It is confirmed that GP consortia will also have a duty to engage the public in the planning of and any proposed changes to services. Health improvement Local authorities will assume responsibility and acquire the funding for health improvement when primary care trusts are abolished. Preventative services such as smoking cessation are intended to come under the umbrella of health improvement funding. There is also confirmation that the new National Public Health Service (PHS) “will integrate and streamline health improvement and protection bodies and functions.” The PHS will manage public health emergencies and work with local authorities on national campaigns. Local directors of public health will be appointed jointly by local authorities and the PHS, with accountability to both their councils and the Secretary of State. In advance of the forthcoming public health white paper, the Government commits to engaging with stakeholders on the arrangements for PCT abolition and the ring-fenced public health budgets. Implementation Democractic legitimacy in health recognises the need to ensure the health system remains financially sustainable during transition period. It is proposed that the Department of Health and Department of Communities and Local Government will support local authorities in establishing shadow arrangements with PCTs, emerging GP consortia and LINks in 2011, provided sufficient support for the proposals is secured. The consultation closes on 11 October 2010. Viewpoint We now have significantly more detail on the Government’s plans for developing the democratic structures in health. More detail has emerged about new health and well-being boards, first announced in the white paper on 12 July. It is clear that they will be tasked with driving forward further integration and partnership working, while their governance and membership will require collaboration and management of relationships between local authority members, GPs and GP consortia as well as the NHS Commissioning Board. The commitment to develop joint working is something the NHS has strongly supported and in this regard, the direction of travel is welcome. The NHS Confederation is undertaking an extensive engagement process with members over the summer, and will ensure the views of all parts of the NHS are included in our response to the consultation. To share your views and get involved please email whitepaper@nhsconfed.org.

LIBERATING THE NHS: COMMISSIONING FOR PATIENTS 22 July 2010

Introduction Commissioning for patients, published on 22 July 2010, expands on the commissioning principles outlined in the Government’s Equity and Excellence: Liberating the NHS white paper, published on 12 July 2010. Its premise is that commissioning responsibilities – and accompanying resources – should be devolved as close to the patient as possible. It confirms the intention that every GP practice will be required to be a member of a consortium, and that the consortia will commission the great majority of NHS services on behalf of patients. It is intended that consortia, once established, will be statutory public bodies, with powers and responsibilities set out through primary and secondary legislation. The document introduces the idea that the national commissioning board will be able to devolve some primary care performance management functions to consortia at its discretion. It also outlines proposals to allow commissioning consortia to commission some services outside the core primary care offer from constituent practices. A summary of what is proposed for commissioning consortia, GP practices and the NHS board is set out below, along with transition requirements for PCTs. The document also acknowledges the ”important progress” made by a number of PCTs in developing commissioning experience. This briefing sets out the key points of Commissioning for patients, specifically how GP consortia will work, and more information about the proposed NHS Commissioning Board. GP Consortia Structure Every GP practice will be required to be a member of a commissioning consortium. Consortia will need sufficient geographic focus to be able to agree and monitor contracts for locality-based services. Boundaries will interlock so that the entire country is covered but shape of individual consortia will be determined by GPs, provided the board is satisfied they are big enough to carry risk. Role It is intended that consortia will be statutory public bodies responsible for commissioning the majority of NHS services, including elective hospital care, rehabilitative care, urgent and emergency care (including out of hours), most

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community health services and mental health and learning disability services. Each consortium will have an accountable officer and a chief financial officer who may be shared by multiple consortia. Consortia will be held to account for outcomes achieved and fulfilment of duties rather than for the way in which they constitute themselves. There are certain services that the consortia will not have responsibility for commissioning, and which will be commissioned by the NHS Commissioning Board (further detail below). Responsibilities Consortia will be responsible for managing their combined budget and deciding how best to use these resources to meet the healthcare needs of the patients for whom they are responsible. Consortia will have the freedom to decide which aspects of commissioning activity they undertake themselves, and which require collaboration across several consortia, for instance through a lead commissioner. In some cases, commissioning will be permitted to take place at a sub-consortium or practice level. Consortia will decide commissioning priorities to reflect local need, supported by a national framework of quality standards, tariffs and national contracts established by the board. Though not responsible for commissioning primary care, consortia will become increasingly influential in driving up the quality of general practice and will be expected to intervene in the first instance where there are concerns that an individual practice is causing wasteful or ineffective use of NHS resources. The GP consortium will be the responsible commissioner for any patients registered within constituent practices – and those in the area who are not registered with a practice. It will need to develop arrangements to hold constituent practices to account. Specific responsibilities also include: - determining healthcare needs including contributing to joint strategic needs

assessments led by local authorities - determining what services are required to meet those needs and ensuring

appropriate clinical and quality specification of these services. - entering into and managing contracts with providers - monitoring and improving the quality of healthcare provided through these

contracts - providing oversight, with the NHS Commissioning Board, of healthcare providers

training and education plans. Specific duties of GP consortia - to ensure expenditure does not exceed allocated resources

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- requirements in relation to reporting, audit and accounts - equality, human rights, data protection and freedom of information - to work in partnership with local authorities in relation to health and adult social

care, early years services, public health, safeguarding, services for carers and criminal justice

- to inform engage and involve the public in identifying needs, planning services, and considering any proposed changes in provision

- where likely to result in changes to service configuration, to report on the likely impact of those changes and the impact of public involvement on commissioning decisions.

Funding The NHS Commissioning Board will calculate practice-level budgets and allocate these resources directly to consortia. Consortia commissioning budgets will include a maximum management allowance to reflect costs associated with commissioning. Consortia will be expected to enter into some form of risk pooling arrangement. Commissioner-provider split Consortia may choose to commission services from one or more constituent practice over and above the primary care services they have a duty to provide. Further work will be taken forward to allow this while guarding against conflicts of interest. Where GP practices wish to bid in a major procurement, it is anticipated that the procurement could be managed by another body such as the board or a local authority. Partnership Commissioners will be expected to forge effective partnerships with: - local authorities - local HealthWatch - patient participation groups - local voluntary organisations and community groups. On public health, consortia will have to ensure that they: - contribute to joint assessments of needs of populations and neighbourhoods - ensure commissioning plans reflect the needs identified - draw on the advice and support of the local health and wellbeing board in relation

to population health - identify ways of achieving more integrated health and adult social care for

example through pooled budgets and or lead commissioning arrangements - support improvements in children health and well being - play a systematic and effective part in arrangements for safeguarding of children

and protection of vulnerable adults - cooperate with the criminal justice system, for instance in relation to tackling

misuse of drugs and alcohol, offender health services and assessment of violent offenders.

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GP Practices Responsibilities Every practice, whether GP-owned, nurse-led, a voluntary organisation or social enterprise will be required to be in a consortium, subject to negotiation. The Quality and Outcomes Framework will be redrawn to focus on health outcomes and provide incentives for continuous improvements in quality of care. Consortia are expected to take a particular interest in the performance of practices in identifying and managing long term conditions, accessibility and responsiveness of GP services and decisions on referral and prescribing. Funding Subject to negotiation, a proportion of GP practice income should be linked to the outcomes that practices achieve collaboratively through commissioning consortia and the effectiveness with which they manage NHS resources. This will be called the Quality Premium and should be paid in the first instance to the consortium which will decide how to apportion it. This will need to be funded from within existing resources. NHS Commissioning Board Structure The new NHS Commissioning Board will be an independent statutory authority with a chair, chief executive, and executive and non-executive board members. It will be accountable to the Secretary of State for Health for managing the overall commissioning revenue limit and delivering improvements against a number of measures of health outcomes. The new board will be set an annual mandate based on a multi-year planning cycle. Role The board will have the duty and power to authorise consortia once happy they have the necessary arrangements and capacity to fulfil their statutory duties. It will have the power to allocate practices to consortia if appropriate. The board should have the power, where it judges appropriate, to ask consortia to carry out on its behalf some aspects of the work involved in managing primary medical services contracts. This includes promoting quality improvement, reviewing and benchmarking practice performance and ensuring clinical governance requirements are met, and enabling peer review and challenge. Responsibilities - to support and develop the establishment and maintenance of an effective system

of GP consortia and hold consortia to account for outcomes, stewardship of NHS resources, and fulfilling duties such as public and patient involvement and partnership with local authorities

- to intervene in the event that a consortium is unable to fulfil its duties effectively or

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where there is a significant risk of failure - to design model contracts - to design the structure of the tariff and other financial incentives (economic

regulator will set tariff levels) - to have a role in determining technical and data standards to ensure consistency

in information - where appropriate and by agreement with consortia hosting some commissioning

networks, for example cancer, ill and disabled children, coronary heart disease - championing effective public patient involvement in commissioning decisions and

patient and carer involvement in managing their own care - developing and agreeing with Secretary of State guarantees for patients around

choice - promoting and extending information to support choice, where it is provided and

who provides it – including personal health budgets - commission information requirements for choice and accountability – including

patient reported experience and outcome measures. Financial oversight The board will have overall responsibility for calculating practice level budgets and allocating them directly to consortia on the basis of seeking to ensure equivalent access to NHS services for all relative to prospective burden of disease. It will have overall responsibility for financial stability of commissioners and for accounting to the secretary of state for NHS commissioning expenditure. It will have limited powers set out in legislation to intervene where a consortium is failing to fulfil its statutory duties, or is at risk of this. This could include handing them to neighbouring consortia or take over their responsibilities as a last resort. Further work is proposed with the profession to develop triggers for intervention. The board will have a significant role in managing financial risk through for instance oversight of risk pooling within and between consortia. The principles for managing underspends and overspends, including whether these can be carried over to future years, will be agreed between the Department of Health, the board and the Treasury. Commissioning responsibilities The board will have responsibility for commissioning primary medical care, other family health services such as primary dental care, community pharmacy, and primary ophthalmic services, and national and regional specialised commissioning. It will also commission maternity services, and prison health services, “with the influence and involvement of consortia.” Accountability to patients and the public The board will develop an assurance process that enables consortia to be accountable for outcomes, stewardship of public resources and fulfilment of duties. The commissioning outcomes framework will also be used to hold commissioners to account.

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Transition Commissioning for patients states that a number of PCTs have made important progress in developing commissioning experience, which will be capitalised upon in the transitional period, where this is the wish of GP consortia. PCTs will have an important task in supporting practices to prepare for these arrangements over the next two years, though the Department of Health wants implementation to be “bottom up”, with consortia taking on responsibilities as quickly as possible and early adopters promoting best practice. Viewpoint We believe the plans set out in Commissioning for patients will recast relationships across the whole system, between GPs, patients, hospitals and local government. There is no doubt it will be challenging for GPs to take on the role of commissioning so many of the services provided by the health service at a time when there is already a need for the NHS to find around £20bn of efficiency savings. As well as confirming a number of proposals in the white paper, Commissioning for patients also introduces several interesting proposals which will require further consideration. These include the suggestion that the NHS Commissioning Board could ask consortia to carry out some aspects of the work involved in managing primary medical services contracts, for instance by promoting quality improvement, reviewing and benchmarking practice performance and ensuring clinical governance requirements are met. The document acknowledges that where commissioning systems have been weak, this is in part because PCTs were not properly empowered to reflect and respond to local health priorities. It states that the new proposals for GP commissioning will mark a fundamental break with this past. It notes that a number of PCTs have made important progress in developing commissioning expertise, and that this expertise and capability will be required to manage the transitional period over the next two years. Although this aspect of the white paper has an obvious and direct impact on the future of PCTs, all organisations working in and with the NHS will be affected by these new commissioning arrangements. As the document makes clear, GPs will need the support of skilled managers both during the period of transition and afterwards as well, if this new vision is to be made to work. The NHS Confederation is undertaking an extensive engagement process with members over the summer, and will ensure the views of all parts of the NHS are included in our response to the consultation. To share your views and get involved please email whitepaper@nhsconfed.org.

LIBERATING THE NHS: REPORT OF THE ARM’S-LENGTH BODIES REVIEW 26 JULY 2010

The review report, published on 26 July 2010, sets out the conclusions of the recent review of Department of Health (DH) arm’s-length bodies (ALBs) with executive functions, in line with plans for wider reform set out in its Equity and excellence: liberating the NHS white paper. The review does not cover DH bodies with advisory functions, or other regulatory and inspection bodies, such as the Audit Commission and Health and Safety Executive, which are not part of the Department of Health’s remit.

The review proposes simplifying the current national landscape of arms length bodies to remove duplication and better align the arm’s-length body sector with the rest of health and social care system. Proposals include:

• abolition of some existing bodies • transfer of some functions to other bodies • creating a more coherent regulatory system, with clarity of scope and

responsibilities • centralising data returns in the Health and Social Care Information Centre.

Key principles for the arm’s-length bodies sector The review is underpinned by the following principles:

• functions will only be exercised at a national level where it makes sense to do so • the number of ALBs will be kept to a necessary minimum • each body will have a clearly defined scope and remit, with clear authority and

minimal overlap between regulators, which should help to reduce mission creep • each body will be subject to triennial reviews to provide a regular assessment of the

need for functions to continue • ALBs will be expected to collaborate and co-operate to ensure that duplication of

activities and data collection is minimised • bodies will be expected to publish performance information and benchmarking data

online to facilitate greater transparency and accountability. The overall architecture of regulation envisaged is:

• one quality regulator • one economic regulator • one medicines and devices regulator • one research regulator.

The quality and economic regulators are expected to work closely together to deliver a joint licensing regime. Bodies that will continue to exist The review identifies six existing ALBs that have a clear future:

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• Monitor, which will take on a broader role as the economic regulator for health and social care

• Care Quality Commission (CQC) which will also act as host for the new consumer body, HealthWatch England

• National Institute for Health and Clinical Excellence (NICE), which will have an expanded scope including responsibility for social care standards

• Medicines and Healthcare products Regulatory Agency (MHRA) • Health and Social Care Information Centre • NHS Blood and Transplant Authority, with the Bio Products Laboratory transferred

into a DH owned company.

Bodies to be abolished • Alcohol Education and Research Council • The Appointments Commission (during 2012) due to the substantial reduction in the

number of appointments required. Accountability for remaining appointments will rest with ministers and the process will remain subject to scrutiny by the Commissioner of Public Appointments.

• The Health Protection Agency and the National Treatment Agency for Substance Misuse and their functions will transfer to Secretary of State as part of the new Public Health Service.

• The National Patient Safety Agency with some of its functions continuing under other agencies including:

o Safety functions to be transferred to the National Commissioning Board as a sub-committee of the Board

o National Research Ethics Service potentially transferred to a single research regulator

o National Clinical Assessment Authority to become a self-funding agency over the next two to three years

o The national confidential enquiries may transfer to the National Clinical Audit Patient Outcome Programme.

• NHS Institute for Innovation and Improvement (NHSII) whose functions relating to leading quality improvement transferred to the NHS Commissioning Board. The NHSII is expected to explore opportunities for alternative commercial delivery models for other of its functions.

• General Social Care Council with responsibility for the regulation of social workers transferred to the Health Professions Council.

Other proposed changes The review highlights the potential opportunity to create a single new research regulator with responsibility for different aspects of medical research regulation. A decision on this will depend on the outcome of the Academy of Medical Sciences review of medical research governance and regulation, which is expected to report in autumn 2010. The Human Fertilisation and Embryology Authority and the Human Tissue Authority are expected to remain as independent ALBs in the short term. However, there is a commitment to transfer various functions to other bodies, such as the CQC, MHRA and the new research regulator, by the end of the current Parliament, subject further work to consider the practicalities and legal implications. The future of the NHS Litigation Authority and the NHS Business Services Authority is still under review. While they are retained in the short-term, they will both be subject to review to

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identify potential opportunities for further commercialisation of services, which may result in removing certain functions from the ALB sector. For further information about this briefing, please email frances.blunden@nhsconfed.org. The NHS Confederation is undertaking an extensive engagement process with members over the summer on all aspects of the white paper, and will ensure that views of all parts of the NHS are included in our response to the consultation. To share your views and get involved please email whitepaper@nhsconfed.org.

LIBERATING THE NHS: REGULATING HEALTHCARE PROVIDERS 26 JULY 2010

Liberating the NHS: Regulating healthcare providers, published on 26 July 2010, expands on the proposals set out in the Government’s white paper, Equity and excellence: liberating the NHS, and considers the potential additional freedoms for foundation trusts and the core purpose of Monitor in its changed role as an economic regulator responsible for regulating prices, promoting competition, and supporting service continuity.

Introduction The proposals set out in Regulating healthcare providers align with the Government’s overarching intention to free providers so they can focus on improving outcomes, be more responsive to patients and innovate. The Government’s belief is that these freedoms should be given alongside a framework which ensures accountability. Its approach centres on the use of regulatory licensing and clinically led contracting as specific control mechanisms for providers to ensure this, rather than hierarchical management. As the health service moves away from a system of top-down performance management, the establishment of an economic regulator will be a necessary component of the system to protect the public interest in the provision of services. This briefing sets out the key points of the consultation document. Freeing providers The Government’s intention as set out in the white paper is to free foundation trusts from the constraints they are under, in line with their original conception. Liberalising proposals include policy around the following: Private income The Government will bring forward provisions to repeal the private patient income

cap imposed on foundation trusts. Statutory borrowing limits

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The Government will consider whether it remains relevant in the future to maintain statutory controls over foundation trusts’ borrowing limits in light of historic behaviour and the new system of economic regulation.

Changing constitution and configuration of a foundation trust Foundation trusts will be allowed to change their constitutions with the consent of

their boards of governors and directors. Foundations trusts will be required to notify Monitor, as specified by its new licensing role, of changes to their constitutions, although this will not be subject to regulatory approval.

Legislation will be put in place to remove any unnecessary barriers to foundation trust mergers, however like other organisations foundation trusts will be subject to merger control by the Office of Fair Trading (OFT) and the Competition Commission to protect competition.

Governance The Government will explore the potential of allowing some additional flexibility to

the foundation trust governance structure. This will include the possibility of defining a sub-group of providers that could be allowed to adopt a staff-only membership model from the start of their existence as foundation trusts.

Given the regulatory controls that are proposed to be removed, increasing the accountability of an organisation to its governors will also be considered as part of the wider consultation.

Taxpayer investment The document states the importance of managing the risk and costs of any

financial failure. As such it is suggested that the future form of this investment and its management should as far as possible be conducted on a commercial basis to ensure it does not lead to undue interference with foundation trust freedoms.

As Monitor moves into its new role, managing these risks should be undertaken in the Department of Health or by a third party working on behalf of the Department of Health – this could include Monitor if the independent role of the regulator is maintained.

Economic regulation In the white paper, the Government proposed the introduction of a system of independent economic regulation to sit alongside independent quality regulation. The new regulator would have the following duties, structure and core roles: Duties Monitor’s principal duty will be to protect the interests of the patients and the public in relation to health and adult social care services, by promoting competition where appropriate, and through regulation where necessary. Where it appears to Monitor that any of its duties conflict with each other in a particular case, it will need to take a balanced judgement and set out a clear rational for its decision.

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Monitor will be required to account to central Government for the use of its resources and to publish annual accounts as well as report annually to Parliament. Monitor will also be required to review its activities as choice and competition develop and to reduce regulation wherever possible over time. Structure Monitor will continue to have the status of a non-departmental public body; it is envisaged that the Secretary of State will retain the power to appoint the chair of Monitor for a term of four years and approve the appointment of a chief executive nominated by the chair. The Secretary of State will also have powers to remove the chair or chief executive, during their terms, for reasons of incapacity or misbehaviour. Funding It is proposed that Monitor should fund its regulatory activities for licensed providers by charging fees and receiving grant-in-aid if needed to support other activities. Monitor’s core future functions: Licensing providers

Setting general conditions for all providers Monitor and the Care Quality Commission (CQC) will be jointly responsible for administering an integrated and streamlined registration and licensing regime. The CQC will continue to register providers of health and adult social care; meanwhile Monitor will license providers of NHS healthcare services only. The rationale for this is that there is limited choice of alternative providers for many NHS services and some communities are highly dependent on one, or very few providers. It will be a requirement of Monitor’s licence that organisations have gained CQC registration. The general licence conditions are likely to include a requirement that an organisation is a fit and proper body to provide NHS services; requirements to provide Monitor with details on provision of NHS services and to notify proposed changes to services; a requirement to report information (this data may be collected by the Health and Social Care Information Centre on behalf of Monitor); and, rules to protect patients’ and taxpayers’ interest. Setting special conditions for individual providers Monitor will also be able to set special licence conditions either because a provider enjoys a position of market power in a local area or because there is a need for additional regulation to protect requirements on providers to promote choice or requirements to protect continuity of services.

Appeals It is envisaged that groups of providers will have the right to appeal to the Competition Commission if a significant proportion opposes Monitor’s general licence conditions. Individual providers will also have the right to appeal proposed changes to their special licence conditions.

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Regulating prices Setting prices where necessary and using prices to improve efficiency The Commissioning for patients consultation set out that the NHS Commissioning Board would be responsible for designing the structure of tariff and other financial incentives whilst the economic regulator would set tariff levels. To achieve this Monitor and the NHS Commissioning Board (NHSCB) will need to work closely together in deciding which services should be subject to national tariffs, and in developing appropriate currencies for pricing and payment purposes. It is envisaged that the NHSCB will have primary responsibility for determining appropriate currencies however there may also be a role for Monitor, in setting tariff structures, to ensure that currencies do not restrict or distort competition against the public interest. Monitor’s principle role, as mentioned, will be to set prices or price caps for services subject to national tariffs. Monitor will be responsible for devising a pricing methodology. It will be required to run a public consultation process around this methodology, engaging with both the NHSCB and providers. In exceptional circumstances, it may be necessary for Monitor to modify the tariff price to sustain the provision of services. Monitor will also be under a duty to have regard to the need to make best use of limited NHS and social care resources, although primary responsibility for managing within the limits of these resources will be for the Board and the local commissioners. Appeals The NHSCB will be able to appeal to the Competition Commission if it opposes Monitor’s methodology for setting tariff prices. Providers will also have the right to appeal to the Competition Commission, however it is noted that it will be important to ensure the criteria for this avoids perverse incentives for providers to make trivial complaints. Promoting competition Preventing anti-competitive conduct Monitor will have a duty to promote competition and will have powers to impose remedies and sanctions to address restrictions on competition, through its licensing regime, and through concurrent powers with the OFT to enforce key aspects of competition law. The regulator will be able to consider factors that may put particular providers at a relative disadvantage and make proposals to the Government or the NHSCB to move over time to ensure that any differences are fair. As set out in the recent Commissioning for Patients document, legislation will be bought forward to set out the duties of the NHSCB and commissioners to promote choice, to act transparently and non-discriminatorily in all commissioning activities.

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Monitor however will have powers to investigate and remedy complaints regarding procurement decisions or other anticompetitive conduct, acting as the arbiter.

The OFT and the Competition Commission will be responsible for investigating mergers however Monitor will offer advice and assistance as required. The Cooperation and Competition Panel will continue to provide expert advice to the Secretary of State and Monitor during transition to the new system.

Carrying out market studies advising on competition Monitor will also carry out ‘market studies’ to investigate markets where competition is not functioning properly. It will be able to advise the Government and the NHSCB on changes to allow competition to function effectively and it will have powers to refer dysfunctional markets or barriers to competition to the Competition Commission. Supporting service continuity Additional regulation to ensure continuity Although commissioners will have the lead responsibility for ensuring continuity of services, Monitor may also need to intervene to ensure continued access to key services in some limited circumstance. As part of this, Monitor will be able to classify services which require additional regulation and set conditions in providers’ licences to protect continuity. Special licence conditions may protect the assets needed to protect these services and could also include requirements on providers to give notice of planned changes to these services. Special administration A special administration regime for additionally regulated health services will also be established in the exceptional event that a provider becomes insolvent. This will be modelled on other sectors, for example the water, transport and energy sectors. Monitor will have 14 days to trigger special administration to protect additionally regulation services, before the start of any other insolvency process. The regulator will also be responsible for establishing funding arrangements to finance the continued provision of services in this event. It will have the freedom to decide on the best approach for this but it is likely that it will initially do this by establishing a funding risk pool raised from the levies on the providers or regulated services. Viewpoint This paper sets out some more of the proposed structures for the new health system, the main building blocks of which were set out in the white paper. When implemented, these will amount to a major change in the way the NHS and its providers are governed, shifting to a more market based system with an economic regulator and more financially autonomous, self-governing providers including foundation trusts as well as the social enterprise and private sector providers.

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A number of the proposals, notably those around pricing, appear very complex and will involve organisations which are either new, or with new remits and responsibilities. As part of the consultation process, it will be important to explore in more detail what the statutory purpose and functions of each organisation will be and how they will interrelate. The consequences of these proposals are significant for both commissioners and providers of NHS services. This will not only involve changes in regulatory structures, but will require different behaviours from these two groups. Much of the detail will only become clear when primary legislation is published later this year in the proposed Health Bill, but will require much scrutiny to assess how these proposals will work in practice. The NHS Confederation is undertaking an extensive engagement process with members over the summer, and will ensure that views of all parts of the NHS are included in our response to the consultation. To share your views and get involved please email whitepaper@nhsconfed.org.