NHS for Sale: Myths, Lies & Deception (13 page)

English general practice is in crisis, its workforce demoralised by political changes and cuts to funding, increased responsibilities, increased pressure and an ever-lengthening working day. The massive top down reorganisation forced on the profession in England (which does not apply to Wales, Scotland or Northern Ireland) has left GPs in the devolved nations standing by in horrified amazement, hoping that such policies are never introduced in their part of the UK.

GPs need strong leaders to represent them and stand up to the politicians and those parts of the media which day in day out seem to be trying to diminish their profession, rundown the NHS, and demoralise them even further.

General practice has been called the ‘jewel in the crown’ of the NHS. Our system of primary care, acting as the gate keeper to expensive specialist care, is in large part responsible for the efficiency and cost-effectiveness of the service. It would be an act of the utmost folly to undermine it: yet this coalition has done its best to do so. In a few short years the government and Lansley’s legislation have combined to
destroy GP morale, impose draconian cuts, slash recruitment and push experienced GPs to either resign from the NHS or retire earlier than planned. It’s not a record to be proud of – and certainly not what Lansley and Cameron promised GPs and their patients.

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It is no accident that the very first changes spelled out in Lansley’s Bill removed the duty of the Secretary of State to provide comprehensive and universal health services.

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A company formed in 2007 when BUPA sold their hospitals to Cinven, a private equity firm. Spire’s net income in 2013 was £99.7m.

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Both Dixon and Alessi were cheerleaders for Lansley’s Bill.

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Perhaps the fact that the average age of GPC committee membership was over fifty, with retirement and a good pension pot beckoning, meant they preferred not rock the boat. Younger members of the profession must have wondered why there was such a deafening silence from GPC HQ.

We are abolishing needless bureaucracy, and our plans will save one third of all administration costs during this Parliament.

Department of Health, 6 September 2011
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A Department of Health spokesperson said: ‘Our bureaucracy-busting reforms put power in the hands of local doctors and nurses and are saving the NHS over £1bn a year. There are now nearly 7,000 fewer managers and over 16,450 more clinicians than in 2010.’

The Guardian,
26 July 2014
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Andrew Lansley promised that his reforms would reduce the NHS bureaucracy that was holding back good patient care. In fact the layers of bureaucracy have increased as a result of the Health and Social Care Act. 150 Primary Care Trusts have become 211 Clinical Commissioning Groups, much of whose onerous work has to be done by Commissioning Support Units, themselves due to be outsourced in 2016. Many other new bodies have been created including NHS England (employing 4,000 people and which in turn has 27 Local Area Teams), Clinical Senates, and others too numerous to mention. As a result lines of accountability have become so complex that the RCGP described them as looking like ‘spaghetti junction’.

Lansley also promised that his reforms would save money but this is manifestly untrue. Implementing the reforms is estimated to have cost at least £3bn even before account is taken of their effects. The proportion of the NHS budget spent on administration has risen inexorably as the NHS is marketised, increasing from about 6 per cent before the introduction of Thatcher’s internal market to an estimated 15 per cent now. As well as the direct costs of running a market there are the opportunity costs in terms of both money and clinical time which would be better spent on direct patient care rather than on dealing with the demands of a competitive NHS. Despite promises to the contrary the Treasury has clawed back about £5bn from the NHS budget at a time when care is being rationed and waiting lists are growing.

The Health and Social Care Act has increased bureaucracy and complicated lines of accountability. It has wasted money on an unnecessary set of reforms and on establishing and encouraging an NHS market at a time when financial constraints mean that it is imperative not to squander the NHS budget.

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One of the reasons given for the massive reorganisation introduced by Lansley’s ‘reforms’ was to reduce NHS bureaucracy and NHS costs. Lansley claimed that bureaucratic red tape was stopping clinical staff from delivering high quality care and that the Health and Social Care Act would mean fewer layers of management. This ‘delayering’ would in turn result in savings for the NHS allowing more money for frontline care. In 2009, while still shadow secretary for health, he told a conference in Manchester that a third could be shaved off the annual £4.5bn cost of quangos and NHS management in England.
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In 2010 he pledged to cut £1bn a year from ‘central bureaucracy’ and promised that the savings, equivalent to the salaries of more than 30,000 nurses, would be reinvested
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in frontline services.
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But Professor John Appleby, chief economist at the King’s Fund predicted that ‘the sheer number of changes being made to the health system as a result of the government’s reforms risk creating additional bureaucracy’.
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The King’s Fund thought that the legislation would result in a picture of ‘considerable complexity’ which would be challenging for health professionals working within it and for patients trying to navigate it,
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in other words, a far cry from the simplified system Lansley was promising. Their comment is worth quoting in full:

The NHS system has grown exponentially, with complex structures developing to underpin it. While there was once a simple accountability hierarchy from front-line services to the Secretary of State, there is now a complex system of public and private providers, with a plethora of regulators who impact on what managers need to do. The advent of the internal market in particular, together with a growing recognition of national and international competition law, means the task is one of complex system management rather than simple administration.
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While Strategic Health Authorities and Primary Care Trusts were indeed replaced by a single layer of about 200 Clinical Commissioning Groups (CCGs), these CCGs were faced with the immense task of purchasing services for their patients in an aggressively competitive NHS where the government’s new legislation appeared to require compulsory tendering. Most GPs and their colleagues on CCGs had little or no experience in this new role and needed help. Technical advice was to be provided via Commissioning Support Units and help with specialist commissioning would come from Clinical Senates, two entirely new structures.

NHS England (NHSE), the NHS central command and control and yet another new structure, was initially predicted to be ‘small and lithe’ but already its responsibilities run to many pages. It employs 4,000 people, (until recently 5,500) and has four regional offices as well as 27 local area teams (LATS). Other bodies have sprung up like mushrooms and the Royal College of General Practitioners estimated that the number of NHS statutory bodies was set to climb from 163 to 521 with the lines of accountability looking like ‘spaghetti junction’.
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Lansley had promised to get rid of NHS managers but he had perhaps overlooked the fact that managers would be needed to help with the complex new structure of the NHS. (The alternative would be to take clinical staff away from frontline care, which of course has happened anyway as CCGs and competitive tendering eat up clinical time). The result was that experienced NHS managers were sacked and then had to be rehired as the government woke up to the fact that good managers were needed to support clinical staff during the introduction of the new legislation.

This failure to anticipate the need for experienced managers was very costly. In July 2014 the
Observer
reported
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Department of Health figures showing that the cost of redundancy payments for NHS managers had reached almost £1.6bn as a result of the new legislation. The total included compensation paid to some 4,000 ‘revolving door’ managers, who left after May 2010 with large pay-outs and then returned either on full-time or part-time contracts.
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Cutting managers is also proving to be a false economy.

Along with his claims about cutting layers of management Lansley also said that his HSC Act would result in savings, another promise which fails to stand up to scrutiny. The cost of the reorganisation alone was predicted to be between £1bn and £3bn but as we have seen at least £1.6bn has already
been spent on redundancies, and many of these staff have had to be re-employed at further expense. This is only a small part of the costs incurred by the Act.

Reinforcing the NHS market through policies such as competitive tendering brings its own significant costs, including the costs of the tenders themselves, plus all the paraphernalia of the market including management consultants, lawyers and accountants, not to mention the very real cost of the time spent by clinical staff away from their patients.

Governments have always been shy about the cost of the NHS market in England, (discussed at greater length in
Chapter 2
) and have profited from useful confusions between the cost of administering the NHS and the cost of managing it.
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(It is these semantic muddles that allow MPs to stand up in the House of Commons and make contrary claims about the NHS while quite convinced that each is correct). It has been estimated that the NHS market has taken administration costs from approximately 6 per cent of the English NHS budget to somewhere in the region of 15 per cent, meaning that at the most conservative estimate it costs an additional £5-10bn a year to run the English NHS as a competitive market.
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Since Lansley’s reforms ramped up the market through competitive tendering and full on competition, overseen by Monitor, it is inevitable that the costs have gone up. The government is not of course telling us anything, but there have been noticeably few claims for cost savings after Lansley’s original promise.

The minimum estimate of £5bn currently wasted on pointless market activities would fund both the £4bn annual increase in NHS spending (needed to keep pace with pressures on the service) with some left over to contribute to free critical social care for everyone who needs it, which
the King’s Fund’s Barker Commission recently said would cost ‘substantially less’ than £3bn a year. But the whole subject of the cost, purpose and value of a market in health care is an evidence free zone in which politicians make unsubstantiated claims that – if they were doctors – would have had them struck off or welcomed as snake oil salesmen years ago. Almost all so-called think tanks have also avoided the subject like the plague, perhaps concerned that government funding (for example over £500,000 since 2010 for the King’s Fund)
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might dry up if they pointed out the obvious fact that the savings from abandoning an unwanted market would go a long way to filling funding gaps.

True to form the coalition government simply turned a blind eye to the additional costs of their expanding market or lied about them. For example the impact assessment for the contentious section 75 regulations (which introduced competitive tendering and were signed off by the ever reassuring Earl Howe) even went so far as to claim that with competitive tendering ‘there are negligible direct costs to patients, commissioners or providers’.
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David Lock QC wrote in an angry blog:

That statement would be laughable if this were not so serious. Another part of government, the Cabinet Office, has recognised the huge costs of procurement exercises and is complaining that too much cost is imposed by these exercises. This appears to be another case of a total absence of joined up government.

He added:

Procurement processes are hugely expensive and they delay contracts for extended periods. Conservative MPs ought to have learned that from the West Coast Rail tendering debacle which left the Department of Transport with a bill of £50m when just one tender exercise went wrong. These Regulations will impose countless procurement competitions on the NHS, and cause vast resources to move from patient care into administration.
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While we have heard very little about savings arising from the HSC Act, some alarming facts have come to light about the costs of the NHS market. The expense involved in the tendering process – a scandalous waste of public money according to one senior NHS manager
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– are discussed in
Chapter 10
. Suffice it to say here that a recent tendering process in Cambridgeshire (eventually awarded to a local NHS consortium) cost £1m, money which a cash strapped NHS can hardly afford to waste on bidding for its own services.

In 2013 a FoI request to CCGs revealed that they had spent over £5m on competition lawyers in the six months following the introduction of competitive tendering. This figure did not include similar expenses for NHS hospitals and NHS providers forced to tender for their own services. Labour, who had discovered the figure, estimated that this was equivalent to the cost of over 5,670 cataract operations, 873 knee operations or 841 hip replacements at a time when these treatments were being rationed.
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At the same time Labour reported a survey showing that nine out of ten hospital leaders wanted the incoming NHS chief executive to make removal of competition regulations his top priority.
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Not surprising, as it has been hard to find supporters of the NHS market anywhere beyond the major
political parties and those health professionals and NHS watchers who see their star rising as they promote what the government wants to hear.