The revised Health and Social Care Bill remains contentious, but appears likely to pass into legislation. Simone Carron-Peters of Frost & Sullivan analyses its probable impact on the UK healthcare market.
The Government’s contentious Health and Social Care Bill has raised many concerns among the various stakeholders. The eight-week NHS listening exercise conducted by the NHS Future Forum has resulted in the proposal of multiple changes to the Bill, whose passage towards legislation is summarised in Figure 1 below.
This article evaluates the planned NHS reforms for impact on the health system and the life science industry.
Overview of the Bill
The Health and Social Care Bill proposes to create an independent NHS Board, promote patient choice and reduce NHS administration costs.
Its key focus areas are:
- To establish an independent NHS Board to allocate resources and provide commissioning guidance.
- To increase GPs’ powers to commission services on behalf of their patients.
- To strengthen the role of the Care Quality Commission.
- To develop Monitor, the body that currently regulates NHS Foundation Trusts, into an economic regulator to oversee aspects of access and competition in the NHS.
- To reduce the number of health bodies, including abolishing PCTs and SHAs, in order to help the Government cut NHS administration costs by one-third.
More power (and money) to the GPs
In its initial form, the reform aimed to improve the quality of service delivery by devolving NHS commissioning powers and responsibility into the hands of GPs. The GP consortia would receive budgetary allocations from the new NHS Commissioning Board, which would be responsible for managing and allocating about £80 billion of the health budget. The consortia would, in turn, devolve the funds to the various practices under them.
The new GP consortia would replace the 302 PCTs in England, which would be abolished by 2013. All NHS trusts were set to become Foundation Trusts by April 2014. It was anticipated that the consortia would require significant assistance, including support from the private sector, in exercising these new commissioning functions.
Medical organisations and NHS trusts were immediately sceptical about the implementation of this reform, saying that the changes could have negative effects on NHS services. Some trusts argued that it is risky to reduce the central grip on commissioning at a time where urgent savings are being made. Others agreed that GPs are well positioned to make decisions on the use of resources for their patients.
The BMA: a critical response
The reform plans have also not gone down well with the British Medical Association (BMA), who expressed concerns about the level of responsibility being bestowed on GPs. One of the BMA’s major concerns was the lack of clarity in the Bill with regard to the roles that the GP consortia would be expected to perform. The BMA also believes that it is important to ensure the funding for GP practices remains distinct from other budgets, as it would cause significant complications if GP consortia were to be made responsible for amalgamated budgets that included the management of standard GP contracts.
Currently there are about 177 GP ‘pathfinders’ (pilot groups of GPs testing the system’s concepts and functions) who are taking the lead in implementing the new commissioning roles.
In May 2011, the BMA’s Health Policy and Research unit conducted a national survey of GP opinion that received a response rate of 39%. The survey findings revealed an alarming 55.8% of the respondents citing NHS reforms as a reason for their intention to retire in the next two years. That figure was composed of 59.4% of the 688 principal or contracted GPs, 41.1% of the 30 employed salaried GPs and 35.8% of the 39 freelance GPs who participated in the survey.
The survey also asked GPs how confident they were that the GP commissioning consortia would be appropriately skilled and supported. 65.6% were ‘not confident’ that the consortia would be appropriately skilled, while only 15.8% were ‘confident’ that they would be. In addition, 70.9% of the respondents stated that they were ‘not confident’ that the consortia would be supported, while just 10.2% were ‘confident’ that they would be.
Amendments to the Bill
Based on the recommendations of the NHS Future Forum, the Health Secretary announced changes to the Health and Social Care Bill in June 2011. The Bill is due for its third reading on the 6th and 7th September 2011.
The role and functions of GP consortia are now better-defined. The consortia – now called Clinical Commissioning Groups (CCGs) – would be required to publish details on their constitution and how the allocated budgets have been used. They would also be required to follow guidelines from, and be accountable, to the NHS Commissioning Board. GPs are also bestowed with a responsibility to promote research and innovation.
The plan for all NHS trusts to become Foundation Trusts by April 2014 has been amended. NHS trusts would become Foundation Trusts by 2016, based on their clinical readiness for transition. They would be given the liberty to make use of private health treatments, and would compete among themselves for patients.
The role of the National Institute for Health and Clinical Effectiveness (NICE) would increasingly focus on giving authoritative advice to clinicians on when and how the most effective treatments can best be used, and also on the development of quality standards for the NHS to aim for in the treatment of certain conditions.
Value-based pricing (VBP) would replace the Pharmaceutical Price Regulation Scheme (PPRS), which has existed since 1957. The purpose of VBP is to improve NHS patients’ and clinicians’ access to effective and innovative drugs and medical technologies by ensuring they are available at a price that reflects their value, based on an assessment of the outcomes they can achieve.
Impact assessment of the health reforms
The implementation of the Health and Social Care Bill will witness an increase in private sector and voluntary involvement in the delivery of healthcare. GP commissioning will allow the use of private healthcare for NHS patients. Healthcare vendors and providers can capitalise on this shift by offering products and services best suited to patients’ needs in order to influence GP commissioning.
The aim of value-based pricing is not to achieve the lowest price possible, but to encourage the development of new therapies and promote innovation. The principle of linking the price of innovations to their value has already received support from a broad range of stakeholders.
The priorities of the health reforms are ambitious; if instituted, they will have far-reaching effects on the way the British public accesses the health system. It will also affect the role of the private sector in the UK healthcare system, increasing opportunities for private providers of both clinical and support services to become involved in providing healthcare to NHS patients.
According to the Government’s calculations, the reforms will bring about a huge cost saving for the NHS. However, negative consequences such as redundancy for administrative staff in the health authorities will pose a huge socio-economic threat.
How will the savings affect the prospects for innovative medical technologies? The adoption of such products has always been necessary for medical professionals, predominantly because new technology aims to provide healthcare at a quicker rate – minimally invasive technologies being a major example. The Government has vowed to ensure the system delivers effective and appropriate healthcare to all who need it. Moreover, GPs have a greater understanding of patients’ needs than the managers or PCTs who at present make funding decisions. Thus the demand for innovative devices will arise regardless of the allocated NHS budgets.
One of the main objectives of the reforms is to put patients and public first by implementing a ‘no decision about me without me’ policy. National standards and independent inspection will continue to assure patients that all NHS-funded services are safe and of a high quality. Patients will have much more information about individual services and their performance, enabling them to choose the services that best meet their needs.
The reforms will ensure that services are easier to access and more responsive. Shorter patient waiting times, one-stop clinics for diagnostics, and increased provision of healthcare in patients’ homes are some examples of services that are likely to develop in response to new incentives. Patients will be able to gain access to healthcare in new ways that are more flexible. This is likely to mean more services delivered in local communities, such as urgent, preventative and rehabilitative care, thus helping to avoid unnecessary hospital admissions. Better information will help patients to understand and make the best use of the options available.
The reforms will also support services to become more integrated. Improved information systems will play a key role, enabling healthcare providers to exchange clinical data more easily and so gain a complete view of the patient’s condition. Increasingly, there will be opportunities for patients to influence the pattern of services within their locality. Local practices will have incentives to provide locally-based health improvement and health protection services. Patients will be in a better position to manage their own health.
The Government is confident that the health reforms will allow it to save billions. Figures from the Impact Assessment published alongside the Health and Social Care Bill earlier this year claim that the structural reforms to the NHS will save £5 billion per year, though this is a gross rather than net figure. The Bill promises to reduce NHS administrative costs while promoting patient choice. However, time alone will tell whether these reforms prove to be economic.
Simone Carron-Peters is a Research Analyst for growth consultants Frost & Sullivan.