First year report on the coalition government’s major NHS shake-up – part three
Hospitals were the one major part of the NHS in England not directly affected by the Lansley restructuring through the Health and Social Care Act. But during the past year, hospitals have been in the eye of an NHS storm – not least because of their finances.
Last month the trusts’ regulator, Monitor, announced that the number of NHS Foundation Trusts in England in financial difficulty had doubled over twelve months from 21 to 39 - of these 33 were acute hospitals.
They have been caught in the down-draught from the Act – most notably from the requirement to put services out to tender and the increasing moves to favour commercial providers.
Acute hospitals – like the Great Western – are reeling under the pressures of increasing demands for treatment at a time of highly constrained budgets. This may be partly because of the restructuring and partly because of other more general causes.
This unparalleled demand stems also from the growing population and its increasing longevity, from increases in chronic disease like diabetes (often connected to obesity), coronary and respiratory conditions – and the costs of new treatments.
The restructuring has undoubtedly given unprecedented commissioning power to GPs who are keen to enhance local primary care services and keep as many patients as possible away from expensive hospital beds and even more expensive hospital operating theatres.
But it was the aftermath of the Mid-Staffordshire hospital scandal in the shape of the Francis Report that has concentrated minds within hospitals and given politicians free rein to take pot shots at them.
That hospitals should have sufficient numbers of nurses was one of the key points of the Francis Report. During the first years of the coalition government, nursing numbers fell disastrously – between 2010 and 2012 the NHS lost 4,028 full-time equivalent qualified nursing posts. The GWH has been running a costly and successful recruitment campaign.
When reports on Mid-Staffs were published, nurses became the target of criticisms by right wing politicians and newspapers, not just because they were employed in the public sector, but because they were ‘too posh to wash’ or were not being ‘taught compassion’.
As winter approached the number of nurses (like GPs, many nurses choose to work part time, so these numbers are in terms of full time equivalents) rose dramatically: between September and November last year the NHS employed 4,500 additional full-time equivalent nurses for acute and older people’s wards – a three per cent increase in staffing levels at April 2013.
Even so, hospitals reported their budgets for agency nurses were going through the proverbial roof. And it was only in January that the government allowed an increasing in student nursing places.
The general slide towards privatisation of NHS services reached its peak when the chairman of the Care Quality Commission, David Prior, (a former deputy chairman and chief executive of the Conservative party and a former Conservative MP) announced recently that ‘failing’ hospital trusts should sold off to European or American ‘hospital chains’.
He said up to thirty hospitals could end up being sold off to private operators. This puts hospitals, whether they are Foundation Trusts or not, on notice that the government’s preferred way of solving costly problems in the NHS is by ordering fire sales.
As if the Health and Social Care Act was not enough, there will soon be the Care Act (which is expected to become law later this year.) This Bill has had tacked onto it a clause (Clause 119) that may affect all hospitals.
Health Secretary, Jeremy Hunt is changing the law so he can close down hospitals without reference to troublesome things like local opinion and competition issues. This Bill - with its Clause 119 safely approved by MPs - is about to go back to the House of Lords for its final parliamentary scrutiny.
The NHS’ first year under the new regime ends just as winter pressures are beginning to ease. GWH has not had an easy winter.
It bid for £4.2 million to help it through the winter – and got nothing. The RUH in Bath got £4.4 million and Oxford University Hospitals NHS Trust got £10 million.
For many weeks over the winter GWH has failed to hit the target figure that 95 per cent of people coming to A&E should be seen within four hours. And it has suffered from all the connected problems of overcrowded emergency departments – ambulances queuing, trolley waits and blocked beds.
One Commentator has called A&E “the canary in the mine; it tells the story of what is going on elsewhere in the service.”
GWH has been working closely with GPs to make sure patients are referred directly to the right department and do not just show up at the emergency department. A new urgent care centre managed by SEQOL opened on the GWH site in September. SEQOL is a Swindon based social enterprise organisation – “a business with a social purpose”.
And GWH is working with Wiltshire CCG on the Choose Well campaign – another way of encouraging patients not to use the emergency department as a first port of call.
Then in November NHS England found more money to prevent a winter breakdown at hospitals. £711,000 went to Wiltshire CCG and was passed on to Salisbury Foundation Trust hospital which used it for seven projects to help directly with winter pressures:
• extending their discharge lounge to help the flow of patients.
• establishing a unit for rapid assessment of the frail elderly.
• an enhanced paediatric service.
• extra support for its seven day service.
• additional bed capacity.
• extra ward staff to help reduce length of stay.
• addition weekend trauma surgery capacity.
In November Swindon CCG received £1.208 million pounds for winter pressure. This was not passed on to the Great Western Hospital and we have not heard in detail how it was spent. We do know that the CCG’s board was told the money “has now been fully committed.”
No sooner is winter over than hospitals will have to turn to coping with the Better Care Fund (BCF - see the second article in this series.)
The Fund will not start in earnest until 2015-16, but in the coming year it will begin to change how NHS money is used – with a switch of quite large sums away from acute hospitals to the joint CCG-Council BCF.
Will the BCF be able to keep enough of the frail and elderly out of hospitals to allow the hospitals to reduce their capacity – as, with less funding, they will be forced to do. NHS bosses believe that the switch in funding will only work if hospitals can reduce their activity by 15 per cent – and yet hospitals, even without the pressures of winter, are at full stretch.
Not only are they at full stretch as regards staff and patients. They are also at full stretch as regards their budgets.
For some full stretch has given way to over spend. It was reported last week that trust hospitals are seeking £376 million in bailouts for the financial year just ending. These hospitals are not yet being named, but they include five in the south of England which are asking for a total of £73 million.
Great Western Hospital is likely to break even. With the Better Care Fund about to start gnawing at its funding, how long will it be able to stay out of the red? And how loudly will GPs howl when services at the hospital are reduced because of the BCF?
First year report on the coalition government’s major NHS shake-up – part two
The NHS is about to begin yet another major change in direction. April 2014 sees the inauguration of the coalition government’s Better Care Fund (BCF) which will put NHS money into social care in a bid to reduce the NHS’ fast rising costs – largely fuelled by the ever increasing age of the population and the complexity of long-term illnesses.
The size of the problem is best seen in numbers: in Wiltshire the over 65s make up 21.8 per cent of the population. But, Wiltshire Clinical Commissioning Group (CCG) reckon they use 47.4 per cent of the health services the CCG commissions.
Or, to put it another way, the CCG’s annual spend per head of Wiltshire’s 479,992 population is £1,023. This increases to £1,600 for those between 65 and 74, to £2,917 for those between 75 and 84, and to £4,913 for those over 85 years old.
Wiltshire's Better Care Fund planThe BCF aims to reduce these costs by providing better social care for the ‘frail elderly’ in their own homes, treating them locally and avoiding inappropriate admissions to hospital. And if they do have to be admitted it wants to make their length of stay shorter.
The basic means to those ends is the close integration of social care (the responsibility of the Council) and health care (the responsibility of the CCG.)
The Fund was originally given the descriptive title of ‘Integration Transformation Fund’, then political spinners re-christened it with an aspirational title: ‘Better Care Fund’ – more like an election manifesto headline. Will it deliver what it aspires to deliver?
In 2014-2015 the BCF will start with modest pots of money – Wiltshire’s will be £22.37 million some of which will come from the CCG’s budget. In the first year, this money will be used “as a catalyst for stimulating integration of health and social services.”
For 2015-2016 Wiltshire’s BCF pot will rise to £29.51 million. The money will only be available once each local authority-and-CCG has a jointly agreed plan that is approved (by ministers) detailing how the fund will be used.
The BCF will rely on projects and commissioned services agreed, planned and run jointly by the CCG and the Council acting under the Wiltshire Health and Wellbeing Board (HWB) which was set-up under the Lansley reorganisation.
There is one somewhat grey area: some of the fund will be allowed to fund mandatory changes brought in soon by the Care Bill (now before Parliament.) And at least one CCG has agreed that it should fund existing social services on the grounds that they come under ‘preventative health measures’.
The BCF’s budget will not be new money. So where is it coming from? The BCF will largely be funded by ‘top-slicing the CCG’s annual budget’.
In Wiltshire it will mean the CCG surrendering – or ‘top-slicing’ – £15.52 million from its budget for 2015-2016. This will go into the pooled budget together with existing council social care funds.
While this sounds eminently sensible and laudable, there are four main risks around the BCF.
The first is that the CCG top-slicing will in fact come totally from the budgets of the foundation trust hospitals like the Great Western Hospital which would further destabilise this vital part of the NHS’ cradle to grave treatment regime.
When a Wiltshire Council committee examined the Council’s budget for 2014-2015, they delivered this analysis of the BCF: “The funding …will be drawn from the acute hospitals in the form of top slicing three per cent from their budgets to streamline services and form a centralised system aimed at providing more community care.”
If that becomes the norm England’s already struggling hospitals could become endangered species. And when frail elderly people – not to mention other patients – are too ill or their condition too complex to be treated ‘close to home’, will there be beds and expertise left in the acute hospitals to treat them?
De-stabilising the acute hospitals is something that Wiltshire CCG’s finance director, Simon Truelove, has been warning against during the past year. All the BCF money is going to social care and community health care – there is no money in the fund to bring about the necessary changes in our hospitals.
At the March board meeting of NHS England (NHSE), its chairman, Sir Malcolm Grant, gave a stark warning about the BCF: “I think this is one of the most challenging and daunting things that lies ahead of us…I think it carries very high risks.”
NHS England's Jane CummingsNHSE’s Chief Nursing Officer, Jane Cummings explained the BCF’s inherent risks: “We anticipate that emergency activity [in hospitals] will need to reduce by about 15 per cent. There will be a massive risk if we continue to have the same system of patients in hospital and try and create this fund…there is quite a lot of risk associated with this.”
Where the BCF will show bright red on NHS risk registers is over the inevitable time lag between the steady build-up of relevant social services resulting in the promised “better care”, and the withdrawal of funds from acute hospitals leading to a swift reduction in their capacity.
The Wiltshire BCF plan lists seven areas of risk and they are all rated as ‘high’. The risk of destabilising hospitals is not among those risks – that is somebody else’s risk.
Outgoing NHS chief Sir David Nicholson warned the board meeting about the consequences of missing that 15 per cent reduction target: “We’ve never quite done it in that way. If we can’t do that we have to get hospitals to provide not [the existing] four per cent efficiency, but eight per cent – which I think is simply impossible.”
Or as one commentator put it: “Top slicing CCGs is fine, but there is the risk that the benefits of community oriented integrated care conforms to a longer timetable than that of the loss of funding created locally.”
Julie Jordan of the law firm Mills and Reeve, who specialises in health matters both NHS and independent, calls the BCF an “effective cut in the acute care budget” and she identifies another hurdle in the process of setting up the BCF.
This second risk stems from the change in CCG’s spending which will have to take place: “The mechanics of extracting such a large amount from acute service contracts must demand a degree of service reconfiguration, so we should expect to see a raft of public consultations on proposed service changes in the months leading up to April 2015.”
“Won’t that be jolly when it coincides with the final months of the current parliament, as we head for a general election on 7 May 2015?” (The Secretary of State’s new powers in Clause 119 of the Care Bill [see the third article in this series] may pre-empt any consultation.)
The third risk is that the money transferred from the CCG and from other NHS budgets will not be ring-fenced when it reaches the new pooled pot and may not be used only for its agreed purposes.
Ms Jordan, writing in the Health Service Journal, believes new legislation will be necessary to ensure ring-fencing is robust. And NHS England’s deputy chairman, Ed Smith, warned against “the diversion of money into other activities.”
And this brings us to the BCF’s final risk factor: it is being overseen locally by the HWBs which are committees of local authorities and very new, untried institutions.
Wiltshire’s HWB is chaired by the Council’s leader, Jane Scott, with the Chair of the CCG, Dr Steve Rowlands, as her deputy. It now meets in public and is responsible for the broad strategy for health and social care provision within the county.
But the CCG retains legal responsibility for the services it commissions. If it sees money from its allocated budget going into social care services it does not rate or which are non-health social care services, sparks may fly.
Julie Jordan again: “Some CCGs have already expressed concerns that the pooling of budgets will in effect result in the NHS subsidising non-health social care services. Not exactly the health and social care ‘happy families’ the government intended.”
MPs have called for HWBs to have a greater role in the move to integrated care. The Commons health committee’s chairman, Stephen Dorrell, said HWBs should become “commissioners of joined up health and care services.”
But the committee also said that without ring fencing of social care funds, “…there is a serious risk to both the quality and availability of care services to vulnerable people in years ahead.”
Ed Smith again: “We are reliant on the HWBs. I think the jury is out at the moment on whether they are sufficiently robust to be able to provide the assurances we need.”
It should be noted that at the March meeting of the Wiltshire HWB Jane Scott said: “I don’t think it’s going to be easy – it’s going to be quite challenging for all of us.” And she added that she was disappointed the BCF was restricted to the frail elderly. She wanted to include disabled adults and children and mental health patients.
The outline plan for Wiltshire’s BCF had to be drawn up in a great hurry to meet government deadlines. It already carries a list of seven risks rated ‘High’ with an outline of measures needed to mitigate those risks.
According to an NHSE executive the Wiltshire BCF plan has been “very well received – as being people centred.”
In its section on ‘Integration Aims and Objectives’ the glossy covered plan includes 17 principles for the integrated plan. They include principles of very great interest to everyone in the county:
• “Our principle: we will shift our services from being paternalistic to ensuring that services are designed for and with the people who use them.
• Our objectives for integration: People will be involved in the redesign of integrated services.
• Our measures: patients and service users will be involved in pathway reviews, service specifications and tendering.”
Whether it is ‘people’ or ‘patients’ or ‘service users’, Wiltshire Council and Wiltshire CCG are now committed to listen to and consult a very large proportion of the county’s population. We will see over the coming year how they intend to do that.
Marlborough News Online will be reporting on the specific projects the BCF is providing for Wiltshire.
First year report on the coalition government’s major NHS shake-up – part one:
A year ago root and branch changes in the NHS’ structure – embodied in the coalition government’s Health and Social Act - came into force.
Having promised in the coalition agreement there would be no more top-down NHS reorganisations, the coalition allowed Andrew Lansley free rein – given a few bumps along the way – to embark on the most radical NHS reorganisation since 1948, re-shaping most of the national service’s institutions.
At the important level of commissioning of health services for Wiltshire, out went the Primary Care Trust (PCT – known as NHS Wiltshire) and in came Clinical Commissioning Group (CCG – known as Wiltshire CCG) designed to be run by doctors from the county’s 58 general practices.
The respected NHS Managers blogger, Roy Lilley, reported in March on ‘the mood music I hear from Number 10’: “Lansley’s reforms have been a disaster; they have to be fixed by 2015 and competition isn’t going to help. The only issue is money.”
At their March Board meeting, Wiltshire CCG were very upbeat about their progress and achievements. Their chairman, Dr Steve Rowlands, declared they had in their first year made significant achievements and were “On the brink of a very exciting time for the CCG.”
They certainly achieved a good financial result ending their first year spot on budget with a £5 million surplus put away for even rainier days – unless (see below) it is snaffled by the Treasury.
Two of the coalition Act’s aims were to increase transparency and decrease ‘bureaucracy’ and its cost. The former simply has not yet happened at the local level.
And in Wiltshire the latter certainly did not happen – the cost of running the CCG is significantly higher than for the PCT which had a considerably larger share of the budget and of commissioning to administer.
The Wiltshire CCG chose to organise itself into three ‘locality’ groups – the one covering the Marlborough area is “NEW” (for North and West Wiltshire.) And a continuing problem is that these localities meet in private and give only fairly broad reports to the CCG’s (public) board meetings.
One year on the Lansley NHS at our local level looks much like the mirror image of the proverbial swan – beneath the surface the CCG is quietly paddling away at their task of re-shaping primary care services to GPs’ design plans.
To absurdly tight timetables from the top, they have produced strategic plans for two years, five years and for the Better Care Fund [see Part Two]. And they are working closely with Wiltshire Council on joint commissioning plans.
Above the water there is some chaos and turbulence which will have distracted some CCGs.
First there was the NHS 111 debacle. This was a government wheeze to save money by scrapping the NHS Direct telephone service and substituting it with a cheaper model for non-emergency inquiries.
Problems with the system were so great that in most parts of the country the introduction of the service was delayed until it was safe for people to use. NHS Direct which had successfully bid for some of the contracts said the model was economically unsustainable and walked away from their contracts.
For Wiltshire, the contract holder was the private company Harmoni and the service was supposed to go live in April. It took until October 28 for the CCG to accept the NHS 111 was safe.
In the process Wiltshire CCG had to pay out an extra £590,000 to support the service – all but £200,000 of this should be reclaimed from other CCGs using this Harmoni contract.
After NHS 111, the Department of Health now has another crisis on its hands. The introduction by the newly formed Health and Social Care Information Centre of the care.data scheme was so badly bungled that its introduction has been delayed by six months.
This scheme will upload all medical records held by GPs into a central data bank - giving researchers access to all the pieces of the health care jigsaw.
The information will be anonymised at various levels so it can be used for researchers trying to design new drugs and treatments.
It has still not been made clear exactly who can access or buy information from these records.
The phrase that has been put forward is that release of information will only happen where there is a “clear health benefit”. But, opponents of the scheme say, that could surely provide a criterion for any private insurer or health provider to gain access to the data.
In addition doubts over the ability of the NHS to prevent leakage of personal information remain a problem for care.data.
Hovering over the post-Lansley landscape has been the spectre of further and further privatisation of the NHS. The debate about which services must be subject to open tender (costing the CCG a great deal of staff time and money) is still going on and will run well into 2015 as existing contracts run out.
One argument was over the Wiltshire-wide community health care contract held by Great Western Hospital: the Council believe that re-tendering this will disrupt the introduction of the Better Care Fund (see separate MNO report.) The CCG fear a legal challenge if they do not put it out to tender and has decided it will go out to tender.
Perhaps the picture of the CCG quietly paddling away beneath all this turmoil is a little too benign.
Throughout the year, most CCGs have suddenly found holes in their budgets as NHS England scooped up millions of pounds to pay for the specialist services (treatments for rare cancers and other rare diseases) they commission. This was a major deficiency in the coalition government’s reorganisation.
No one thought to define which treatments are specialist services. Wiltshire CCG lost £2 million in September and now stands to lose another £3.9 million. Keeping to the agreed annual surplus (as required by the Department of Health) becomes even trickier with this kind of uncertainty.
There have been other problems following the reorganisation. One neighbouring CCG suddenly found itself being charged by PropCo (the company the Health and Social Care Act set-up to look after all NHS land and property) for the CCG’s headquarters which happened to be owned by Swindon Council.
In another blow to CCGs’ finances, NHS England has proposed that all England’s CCGs should contribute to a £250 million fund in 2014-2015 to cover any ‘legacy debts’ left over from the PCT regimes – mainly unclaimed, retrospective costs of continuing health care.
The Wiltshire CCG is putting aside £2 million as its share of this fund. This will be especially galling for them as they inherited a handsome reserve from the Wiltshire PCT and have been working hard to pay off continuing health care claims.
This proposal goes directly against the promise made by Andrew Lansley that CCGs would not inherit liabilities from previous organisations. NHS Clinical Commissioners, which represents the CCGs, says the proposal is a “significant concern” for its members.
Wiltshire CCG has been making steady headway in its commissioning plans – particularly in its plan to transform services so more people can be treated at home or nearer to their homes. One example is the introduction of 23 Care Coordinators across the county to strengthen the Neighbourhood Nursing service and support the Council’s somewhat under-funded Help to Live at Home scheme.
Some of the Care Coordinators are trained in social work, some are trained nurses. In some ways they foreshadow (or pre-empt?) the BCF – acting as links between GPs and at risk patients.
Apart from some ‘teething problems’, the only reported issue for Care Coordinators in our area is that one of them was given a workload she considered beyond her capacity.
In another innovation, the CCG has made a distinct difference in introducing much faster diagnosis of dementia – now less than four weeks rather than many months under the PCT. This scheme is costing £600,000 and involves training for GPs.
The only question to ask is why it took so long for GPs to push for faster diagnosis of dementia in this way.
And in the background is another coalition agreement promise: that the NHS’ annual budget would rise in real terms during the five year Parliament. Whichever way you cut the figures the NHS is struggling within its tightly constrained budget.
Whether, for instance the budget went up by 0.09 per cent in 2011-2012 or up by 0.02 per cent depends on how and when you view the figures. What is certain is that the budget has had to cope with the £2-3 billion costs of the Lansley restructuring – with its huge redundancies bill to be followed by many of those paid off returning to NHS employment.
And there have been annual repayments at year end to the Treasury of £1.9 billion (2010-2011), £1.4 billion (2011-2012) and £1.5 billion (2012-2013.)
This last repayment included provisions made by the outgoing PCTs to pay for those claims for historic continuing health care money. The Department of Health’s accounts say it was returned to the Treasury to “help in wider fiscal deficit reduction.”
Losing these provisions and having to fund the ‘legacy debts fund’ (mentioned above), local commissioning is being made to pay twice for such costs.
From April 1 another method of funnelling NHS money back to the Treasury comes into force. Changed guidance on old regulations for the VAT payable on outsourced services could lose the NHS £500 million a year.
You can go on adding sums of money that need to be spent and give NHS finance officers more sleepless nights: the government’s instant reaction to the Francis Report on Mid-Staffs was that student nurses must spend time as healthcare assistants: this may well cost £225 million.
Just as the government has eased private providers’ access to the NHS pension fund, employer contributions will be going up by £125 million.
And then the Care Quality Commission, the health service regulator, asks for an extra £40 million to employ 700 more staff (yes, that is about £57,000 in employment costs each.) Remember the promise to cut back room staff and push funds to frontline staff?
What is beyond dispute is that the NHS spend as a percentage of GDP is falling – the Office for Budget Responsibility’s chart shows this clearly. And at least one expert expects there to be an NHS funding crisis before the 2015 General Election.