Funding Health and Social Care
Responsibility for both defence policy and defence expenditure is evidently expecting too much of the MoD. If that's true it might be better to transfer the purse strings to the Foreign and Commonwealth Office who know best where our forces are needed. The government has already applied this thinking to adult social care. The Department of Health has been responsible for adult care policy these past seven years, and that role has been emphasised by adding it to the departmental title. Yet expenditure mainly comes from the Ministry of Housing, Communities and Local Government. As a result, almost all the government’s social care money gets to the front line.
By contrast, only 71% (£99bn.) of the Department of Health budget is used to treat patients, together with £670M (0.5%) topping up local social care budgets to facilitate bed unblocking. The comparison with the MoD is uncanny: both would have plenty of money if they focussed it on the front line.
Primary and secondary care are funded by Clinical Commissioning Groups (CCGs) which were created by the 2012 Health and Social Care Act with the praiseworthy aim of reducing tiers of NHS management. They replaced Primary Care Trusts and Strategic Health Authorities. The idea was to put GP practices in charge and to use market competition to reduce costs. In the event, market forces have no impact on NHS hospitals: these juggernauts roll on as they, or their consultants, will. And the 211 CCGs created mini-bureaucracies distracting GPs from their patients. Nobody outside the system now likes CCGs but a credible alternative has yet to emerge.
The “key messages” of National Health Service Clinical Commissioners' (“the independent voice of clinical commissioning groups”) most recent self-justification was a set of semantic moves. From “In the future, there is unlikely to be a single model of clinical commissioning but all models should be locally driven and defined” through “Strategic commissioning provides an opportunity for CCGs to increasingly work together” to “Where a model of strategic commissioning develops, we expect national bodies to support this as a valuable part of the health system.” In other words, NHSE HQ is not going to change anything, just standardise everything. No specific improvements are proposed and the bottom-up, patient centred claims are abandoned. The patient loses but bureaucracy wins.
The system fails to recognise the root funding problem: treatment needs are not predictable. No hospital can know ahead of time what CCGs will commission nor can CCGs perfectly predict what will walk through their doors. CCGs are supposed to budget for a small surplus, which, if they make it, ultimately returns to NHSE. A commercial organisation, or even the BBC, has the flexibility to make savings, even late in the year, to offset over-runs elsewhere. But healthcare provision cannot be switched on and off like electricity.
The West Norfolk CCG has just provided a case study. Due to poor accounting, a £7.8M commitment was overlooked in 2016/7 and became a loss. The budgeting process for the following year, being unaware of the hole, made the same error so by January 2018 it appeared that they would be overspent by £10M for the current year.
The Chairman told his members they had to “face a star chamber of NHS executives. The Regional Director, Dr Paul Watson, was the lead inquisitor alongside three other NHSE big wigs. At the end of the meeting we were left in no doubt that unless we immediately start reducing expenditure then NHSE would not hesitate to disempower the Governing Body and current executives and send in managers under legal directions to turn things around. They would have little regard for the long term consequences of their actions, their prime imperative would be to simply save money.”
The main problem concerned commissioning primary care practices to provide “Local Enhanced Services” (LES), such as phlebotomy, electrocardiograms and minor surgery that would otherwise have to be provided (more expensively) by hospitals. This is part of the sensible strategy to push work back from secondary to primary care and thereby save taxpayers a great deal of money. Unfortunately the West Norfolk CCG (now departed) Finance Director had not budgeted for the work the surgeries were now contracted to do. The master plan of the NHSE executives, it turned out, was to save the money by simply not paying surgeries for the LES work they had done.
As the Eastern Daily Press and British Medical Journal reported, this caused uproar in West Norfolk. The Norfolk and Waveney Local Medical Committee and the Primary Care Contracting Committee (yes – how do GPs find the time to treat any patients when there are so many committees to attend?) were up in arms. Questions included whether NHSE had the authority to take over, still less unilaterally break contracts. If the NHSE executives suspended, as threatened, LES expenditure, the taxpayer would ultimately have to meet the higher patient costs elsewhere.
Overall, CCGs are coping well but the West Norfolk CCG is far from alone. The National Audit Office found “an improved underspend of £154 million across clinical commissioning groups, yet 62 groups reported a cumulative deficit in 2016-17, up from 32 in 2015-16.” Of course CCGs and hospitals should not overspend their budgets but these accidents will happen from time to time and the system should allow for that. The simple solution would be to abolish CCGs, and the concept of “commissioning”, and fund hospitals and primary care practices directly, as is increasingly the case for schools with limited funds held back centrally by NHSE. Bearing in mind that most practicing GPs are independent and Foundation Trust hospitals are answerable to parliament, NHSE executives should see themselves as counsellors and promoters of best practice, rather than as line management.