BS2032 Public Sector Management 11:Managerial Reform in the NHS

1. BS2032 Public Sector Management11:Managerial Reform in the NHS Why is the NHS always under pressure? [1 of 3] Demography • 80+ will rise from 1.8 million(1985)..2.6 million (2011) • Average health spending on 16-64 £85 65-74 £1087 • But is right to see this as an inevitable burden ?

2. BS2032 Public Sector Management11:Managerial Reform in the NHS Why is the NHS always under pressure? [2 of 3] Technology • Medical technologies developing extremely rapidly (transplant surgery, genetic screening, computerised tomography), laser treatments, pacemakers, advances in radiotherapy and chemotherapy, gene therapy) • More use of day-case surgery and procedures (endoscopy) • is it diagnosistherapy cure or just diagnosistherapy

3. BS2032 Public Sector Management11:Managerial Reform in the NHS Why is the NHS always under pressure? [3 of 3] Rising expectations • ‘A pill for every ill’ • Rising levels of consumerism in society at large • But who is the ‘consumer’ of health care ? • Does the rise of complementary therapies indicate great dissatisfaction ?

4. BS2032 Public Sector Management11:Managerial Reform in the NHS Griffiths Report (1983) • Politicians sought a managerialist approach by appointing 4 businessmen (led by MD of Sainsbury’s) to get a tighter grip of costs • Griffiths focused on the absence of clear management responsibility ‘if Florence Nightingale were carrying her lamp through the corridors of the NHS today, she would almost certainly be searching for the people in charge’

5. BS2032 Public Sector Management11:Managerial Reform in the NHS Griffiths Report (1983) • Griffiths attacked the notion of consensus management (administration, finance, variety of professional groups, political and community representation) were all roundly condemned) • Who was responsible for ultimate decisions – the NHS or the (then) DHSS

6. BS2032 Public Sector Management11:Managerial Reform in the NHS Griffiths Recommendations (in part) • Define and appoint General managers at each level within the NHS (this would clarify the responsibility for carrying out policy) • Improve accountability • Clinical staff to be more closely involved in budgetary considerations • Evaluate the quality of the service particularly from the perspective of the patients ( the ‘consumers’)

7. BS2032 Public Sector Management11:Managerial Reform in the NHS Griffiths implementation • Government wished management to be drawn from the ranks of businessmen (but lower salaries, no fringe benefits, 3-year contracts) • Majority of managers were, in practice, previous administrators (approxc. 2/3rds) • Only 20% came from outside the NHS (and were usually disastrous)

8. BS2032 Public Sector Management11:Managerial Reform in the NHS The internal market In 1990, the Conservative government introduced an internal market (‘quasi-market’) into the NHS by introducing the: purchaser/provider split

9. BS2032 Public Sector Management11:Managerial Reform in the NHS Purchasers • GPs have always been main providers of primary care but now budgets were given to some GPs to purchase non-emergency secondary health care • GP fundholders covered 50% of the population by 1997 (change of government) • Other purchasers were the District Health Authorities who ‘bought’ healthcare for that part of the population not covered by fundholders

10. BS2032 Public Sector Management11:Managerial Reform in the NHS Providers • GPs themselves, dentists, pharmacists, opticians • NHS Trusts (hospitals in the main) which were self- governing, public corporations within the NHS • Any NHS service grouping could call itself a Trust e.g. community services • NB it was possible to be both a purchaser and a provider ( as all District Health Authorities were)

11. BS2032 Public Sector Management11:Managerial Reform in the NHS Operation of the market Management • The purchaser/provider split would restrain clinical autonomy • New GP contract made family doctors more accountable to government (e.g. targeted incentive payments for ‘immunisations and vaccinations’, financial incentives to give older patients regular check-ups, financial penalties to prevent over-prescribing)

12. BS2032 Public Sector Management11:Managerial Reform in the NHS Operation of the market Market discipline • Inefficient providers would lose customers and close and/or change their practices in order to compete • ‘Money would follow the patients’ so that flexible, efficient producers would be rewarded with extra revenue

13. BS2032 Public Sector Management11:Managerial Reform in the NHS Operation of the market Efficiency • Traditionally, NHS has not been responsive to consumer demand. Now consumers could, in theory, ‘shop around’ to get the services they wanted • In practice only healthy, middle class families could do this – drug-users, elderly etc. etc. could be refused and hence the possibility of a • two-tier health service

14. BS2032 Public Sector Management11:Managerial Reform in the NHS Evaluation The BMA claimed that a ‘two-tier’ health service was being created and that ‘patients are no longer being treated on the basis of clinical need…’ Legrand, Julian, Mays, Nicholas and Mulligan, Jo-Ann (1998),”Learning from the NHS Internal Market- a Review of the Evidence” Kings Fund

15. BS2032 Public Sector Management11:Managerial Reform in the NHS Evaluation Efficiency • ‘Cost-weighted activity index’ appeared to indicate that efficiency increased • Fundholders generated more financial surpluses than Health Authorities (but this did not mean that they were necessarily more efficient)

16. BS2032 Public Sector Management11:Managerial Reform in the NHS Evaluation Equity • A major fear was that the internal labour market would lead to ‘cream skimming’ • apart from anecdotal evidence, no real evidence that this happened on a large scale • certainly a two-tier system emerged – but were the patients of non-GP fundholding practices worse off?

17. BS2032 Public Sector Management11:Managerial Reform in the NHS Evaluation Quality • No real improvement in quality in the Trusts but fundholding did (to a limited extent) • Waiting lists continued to grow (but waiting times to fall) • Levels of dissatisfaction increased (25% in 1983, 47% in 1990)

18. BS2032 Public Sector Management11:Managerial Reform in the NHS Evaluation Choice and responsiveness • No evidence that choice for patients had increased • More choice for fundholders from the providers • Most GPs regarded themselves as ‘well-informed agents on the patient’s behalf

19. BS2032 Public Sector Management11:Managerial Reform in the NHS Evaluation Accountability • accountability of Health Authorities to central government (and the electorate) much higher than GPs • No evidence that Trusts became more accountable to their local populations

20. BS2032 Public Sector Management11:Managerial Reform in the NHS Evaluation Little Change ? • ‘Incentives were too weak and constraints were too strong’ • Players in the market could not act as free agents (e.g. could not keep/invest any surpluses, subject to a stream of directives concerning priorities, waiting times) • People did not act in the way that market theory demands

21. BS2032 Public Sector Management11:Managerial Reform in the NHS The internal market http://www.oheschools.org/ohech4pg5.html

22. BS2032 Public Sector Management11:Managerial Reform in the NHS The New NHS- Modern, Dependable • No return to ‘command and control’ of the 1970’s • Internal market to be retained but partnership and co-operation to be the key, not competition • Primary care Groups (PCGs) set up who commission (purchase) in the system • National Institute for Clinical Excellence established (to evaluate drug treatments)

23. BS2032 Public Sector Management11:Managerial Reform in the NHS General source material on NHS http://www.oheschools.org/ohech4pg1.html The ‘New’ NHS http://www.oheschools.org/ohech4pg8.html