ME33ES MEDICINE AND ECONOMICSHEALTH SYSTEMS II

The NHS in England and Scotland

Summary

• The NHS in the UK: 1948-1999

• Gradual divergence: 1999-2010

• Sharp divergence? Equity and Excellence: 2010-

• Funding and Performance

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The NHS in the UK: 1948-1999

• UK is thought of as a publicly (tax) financed, publicly provided health care system but public provision and public finance have only ever applied to NHS secondary care

• Private provision and public finance: GPs and dentists are self employed contractors

• Public provision and private finance: NHS private beds

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• Private provision and private finance: private sector

• 84% of total health care expenditure in UK is from public funds (74% taxation, 10% national insurance contributions)

• 11% private health insurance

• 5% user charges (prescription charges, dentistry)

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• Prescription charges first introduced in 1950, just two years after foundation of NHS, breaching principle of free health care at the point of use

• National Insurance fund ran into deficit in the mid 1950s and had to be supplemented from general taxation

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• For first 40 years, fairly stable structure: most hospitals owned and managed by the state; employees salaried, except GPs and dentists

• Expanded private role began in small way in 1983 with Compulsory Competitive Tendering (CCT) for cleaning, laundry and catering

• ‘Internal market’ created in 1992 with purchaser-provider split intended to stimulate competition between hospitals

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• Purchasers (District Health Authorities and GP fundholders) agreed contracts with competing providers (350 NHS Trusts)

• Experiment did not work; in most parts of country, a single large general hospital had a de facto monopoly and there was concern about a ‘two tier’ GP fundholding system

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Gradual divergence: 1999-2010

• Labour government under Tony Blair introduces devolution in 1999

• Scottish Parliament, Welsh Assembly and Northern Irish Assembly have considerable power over various services, including health care

• Devolved services are paid for by a block grant from the UK Treasury

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Wales has:• Abolished the commissioner/provider split (2009)• Focused on wider public health issues and developed

partnerships between the NHS and local authorities• Abolished prescription charges

Northern Ireland has:• Retained the commissioner/provider split• Retained a traditional integration of health and social

services• Will abolish prescription charges in 2010

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Scotland has:• Abolished the commissioner/provider split (2009)• Free personal care services for the over 65s• Plans to abolish prescription charges in 2011

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England has:• Strengthened the commissioner/provider split with

emphasis on patient choice, pluralism in delivery and providers paid by activity (‘the money follows the patient’)

• Public reporting of performance (‘naming and shaming’)• No plans to abolish prescription charges• Introduced a NHS Constitution in 2009 (comprehensive

high quality care, responsive to patients, access based on need not ability to pay but no mention of either public financing or public provision of services)

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• All four countries experienced large increases in public expenditure and share the objective of reducing waiting lists but only in England has funding been linked to demanding targets

• Virtually all capital expenditure in NHS over last 15 years has been through the Private Finance Initiative (PFI), as part of system of Public-Private Partnerships (PPPs)

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• NHS signs a contract (often of 30 years+) with private sector consortium (construction companies, service management companies, banks) to Build, Manage, Operate and Maintain a hospital

• Scotland in particular but also Wales has sought to escape from PFI (although with limited success so far)

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• National Institute for Health and Clinical Excellence (NICE) only covers England and Wales but Scottish Medicines Consortium and Scottish Intercollegiate Guidelines Network play similar role

• Clear conclusion: we now have four NHSs for the four nations of the UK

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• Scotland (and Wales) have abolished the commissioner/provider split and provider competition, and (re)created organisations responsible for meeting the needs of the population and running services within defined geographical areas (‘integrated model’)

• England has an increasingly developed ‘contract model’ with NHS Trusts (publicly owned), Foundation Trusts, Independent Sector Treatment Centres (ISTCs), and private providers

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• Foundation Trusts are hospitals which have gained a degree of independence from Department of Health and local NHS authorities

• Created in 2002, now 160 of them; objective is to devolve decision making to local communities, with local people, patients and staff as Trust governor

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• Foundation Trusts are non-profit making bodies with a cap on proportion of their income from fee paying patients

• ISTCs are privately owned centres contracted by the NHS to treat NHS patients (mostly elective surgery and diagnostic procedures)

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Sharp divergence? Equity and Excellence: 2010-

Equity and Excellence: Liberating the NHS

White Paper on future of NHS in England, published July 2010

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Proposed major reforms include:• Abolishing 152 Primary Care Trusts which currently

commission care from GPs and hospitals• Giving about 500 GP commissioning consortia, groups of

GPs, budgets – totalling £70-80 billion – to buy all care (except maternity care and specialist care) on behalf of patients

• Scrapping most process targets• Transforming Monitor (which currently regulates

Foundation Trusts) into an economic regulator of all NHS providers

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• Main thrust is to devolve decision making to front line providers within a framework of competition, patient choice, contracting and public reporting of outcomes to drive better quality care

• Competition and patient choice are both currently weak and it is not clear what will encourage better performance

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• Membership of a consortium will be compulsory for GP practices

• GP consortia are likely to take some time to develop the required commissioning skills in contracting, quality assessment, billing, financial management

• At a time when management capacity in NHS is being cut, gap in expertise likely to be filled by existing private management consultancies

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• Part of GP payments will be contingent on commissioning performance but not clear yet how this will work

• GP consortia will become statutory public bodies; not clear what happens if they run into deficit

• All NHS Trusts will become or join Foundation Trusts

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• Monitor, the current regulator of Foundation Trusts, will become an economic regulator of all providers of NHS funded care, setting tariffs for Trusts’ provision of services to commissioners

• The previous cap on the proportion of work Foundation Trusts could do for private patients has been lifted

• Concerns among many that despite being non-profit bodies, ‘social enterprises’, Foundation Trusts will become increasingly private oriented bodies

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• What happens if it appears that quality and value for money would be better served by vertical integration?

• Also, unclear how the proposed reforms will move the system towards another declared government objective: moving more care from hospitals into the community

• Move to outcome targets rather than process targets (apart from 4 hour target of receiving care at Accident and Emergency) is risky

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• Waiting times are important to people

• Not clear to what extent competition and improved information will lead to better outcomes

• Public health funding is to be transferred to local authorities, with local directors of public health, working with a new national Public Health Service

• However, abolition of Food Standards Agency is a move in the opposite direction

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• Reforms are to be phased in over 2011-2014

• Underestimation of huge transitional costs

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Funding and Performance

Connolly, Bevan and Mays (2010) Funding and Performance of Healthcare Systems in the Four Countries of the UK, Nuffield Trust

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• In 1996 and 2006, Scotland had the highest, and England the lowest, rates per capita of expenditure, nurses, hospital medical and dental staff, and general practitioners (GPs) (except in 2006, when Wales had the lowest rate for GPs)

• In 1996, Scotland had the highest rates per capita for outpatient appointments, day cases and inpatient admissions

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• In 1996, England had the lowest rates per capita for outpatient appointments and inpatient admissions

• In 1996 and 2006, Scotland had the lowest rates of outpatient appointments and inpatient admissions per hospital medical and dental staff member

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• England consistently had the best performance – over the time for which comparable data exist – for waiting times for inpatients and outpatients, and for ambulance response rates to what may have been life-threatening emergencies

• Connolly et al also compared Scotland, Wales and Northern Ireland with the North East of England, more similar in terms of size and socio-economic, demographic and morbidity characteristics

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Using averages per population of 100,000 for 2006:

• Expenditure and staffing in Scotland £180m 250 hospital doctors (medical and dental staff), 1,100 nurses, 730 non-clinical staff (management and support) and 81 GPs

• North East, £170m, 180 hospital doctors, 740 nurses, 420 non-clinical staff and 71 GPs

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• Services provided in Scotland would have amounted to 89,300 outpatient attendances, 7,600 day cases and 13,500 inpatient admissions

• North East, 105,000 outpatient attendances, 10,500 day cases and 20,700 inpatient admissions

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• How could a 6% additional level of funding per capita in Scotland, as compared with the North East, result in Scotland having, per capita, 14% more hospital doctors and GPs, nearly 50% more nurses and nearly 75% more non-clinical staff?

• How could lower levels of staffing per capita in the North East have delivered 18% more outpatient attendances, nearly 40% more day cases and over 50% more inpatients than in Scotland?