Taking the accent off the acute

The government has said it wants to transfer a significant portion of NHS resources from hospital to primary and community care, and from acute to preventive services. No longer would the NHS intervene too late with expensive hospital procedures, when cheaper treatments could be provided closer to home and preventive services could reduce people’s need for acute care.

The logic behind this goal, outlined in January’s health and social care white paper, Our Health, Our Care, Our Say, is impeccable. Enhanced primary and community services, in tandem with social care, should improve well-being, particularly for the estimated 17 million people with long-term conditions.

Care closer to home is what people want, as demonstrated by the much-heralded public consultations that preceded Our Health, Our Care, Our Say. Such a shift is considered financially vital, as people with long-term conditions are responsible for most hospital bed use and a rapidly ageing population will ensure ever increasing numbers of patients.

The white paper is the latest in a series of documents marking a shift in government thinking on health, starting with the NHS Improvement Plan in July 2004.

The NHS Plan (July 2000) made no mention of long-term conditions. Although it stressed the importance of shifting outpatient work into primary care, its main focus was using national targets and increased capacity to drive down waiting times, mainly in the acute sector.

This it achieved. The number of people waiting more than nine months for in-patient treatment tumbled from around 125,000 in March 2000 to virtually none in March 2004.

As a result, the NHS Improvement Plan stated that waiting times were no longer the main issue and the service should focus on helping people with long-term conditions through community-based care.
Targeting this group made clear financial sense, particularly in terms of cutting hospital admissions. The plan estimated that 5 per cent of in-patients were responsible for 42 per cent of in-patient days.

The change in government thinking was marked by a new target for the Department of Health to cut emergency bed use by 5 per cent by 2008, established in the 2004 spending review.

But achieving a shift in services is no easy task. The dominance of acute care in the NHS is ingrained. Although 90 per cent of people’s contact with the service in England takes place out of hospital, just 27 per cent of the health budget is spent on primary care, the white paper states.

A King’s Fund paper last September, Incentives for Reform in the NHS, found that south-east London’s primary care trusts spent almost half their commissioning budgets on acute or general services, 20 per cent on primary care and 9 per cent on community services in 2004-5.

David Pink, chief executive of the Long Term Medical Conditions Alliance, does not doubt there has been a change of heart at the DH, but says the challenge is huge, given that “from 1948 to 2004, acute care was at the top”.

Crucial to the DH’s strategy is strengthening commissioning in primary care trusts and GP practices, to secure services that prevent people entering acute care and bring currently hospital-based procedures into the community.
Pink is clear this needs to improve: “Commissioning for change is not a well-developed skill in the NHS. It’s not well developed at PCT level and it’s even less well developed at practice level.”

The government’s approach is two-pronged. The recently agreed PCT reorganisation, which will cut their number from 303 to 152, was designed to create bodies with more clout with providers.

From 2006-7, PCTs will face more scrutiny of their commissioning function from the Healthcare Commission and will be assessed through a DH “fitness for purpose” programme by the end of the year. And from 2008 their ability to shift services into the community will be scrutinised annually by strategic health authorities.

The second prong is practice-based commissioning (PBC), under which PCTs delegate virtual budgets to GP practices to directly commission acute and community services for their patients, with PCTs drawing up and managing their contracts, providing support and taking on a strategic commissioning role (see panel overleaf). The DH wants PBC to be universal by the end of this year.

The rationale is that GPs will be more responsive to their patients’ needs and less likely to refer them to hospital because payment by results and budget-holding have made them more aware of the costs.

Under this system, hospitals are only paid for the work they do, not through block contracts, so fewer admissions and investment in community care should mean savings for GPs. GPs will also be able to keep surpluses generated through shifting services, although government guidance published in January said PCTs should retain up to 30 per cent of these. As an incentive to GPs to take up PBC, they receive a payment, worth 95p for every registered patient, in return for drawing up a plan to redesign services. Success will lead to a further incentive payment.

But the implementation of PBC, payment by results and PCT reorganisation has proved difficult. Michael Dixon, a GP and chair of the NHS Alliance, which represents PCTs and practices, says take-up of PBC has been about 20 per cent, although the government is yet to publish authoritative figures on this.

Dixon says the incentives have been insufficient to override a lack of motivation on GPs’ part and a lack of support from PCTs. GPs’ lack of motivation has several sources, including change fatigue, he says.

“People question whether it’s worth it as there have been so many changes [in recent years]. Many don’t think it will be around in five years’ time.”

GPs, Dixon says, also see PBC as a way of making them responsible for cutting NHS costs and feel insufficiently involved in the policy’s development.

However, he says there is also “a lack of zeal to take on a much broader agenda” among practitioners.

Dixon also points to some PCTs not fulfilling their responsibilities to allocate budgets to practices and provide them with adequate information on which to base their commissioning decisions, such as the needs of their population and their current referral and admission rates.

A lack of PCT support is the key problem for James Kingsland, a GP and chair of the National Association of Primary Care, which also represents practices and PCTs. He says: “PCTs are not so keen on devolving their budgets to practices.”

This, Kingsland argues, may be a case of PCTs jealously guarding their direct commissioning function, but he also suggests that the reorganisation of PCTs has been a disruptive influence.

The reorganisation threatens the entire project of shifting services, according to Chris Town, chief executive of Greater Peterborough Primary Care Partnership, which is responsible for commissioning health and adult social care in the area.

“The organisations that are supposed to approve decisions to shift work are facing reorganisation at the moment. I don’t think PCTs have a strategic direction of travel for out-of-hospital services.”

Despite the creation of enlarged PCTs in many areas, Town warns that some of the 152 may be too small to carry sufficient commissioning clout to shift services.

Payment by results was first mooted in Delivering the NHS Plan, introduced in 2003, rolled out more widely in foundation trusts in 2004 and extended across the board since. It applies to elective and emergency hospital treatment, and by 2008-9 is expected to apply to 90 per cent of hospital procedures. It does not yet apply to community services.

Payment by results involves hospitals being paid a national tariff for particular procedures, based on past average costs, and retaining any money from providing these at lower cost.

In Delivering the NHS Plan, payment by results, alongside the introduction of patient choice for elective care, was cast as a way of giving incentives to providers to compete against each other for patients and thereby increase efficiency and drive down waiting times.

However, in the white paper, it was presented as a way of spurring on commissioners to secure less expensive community treatment to reduce referrals to hospital and emergency admissions.

This creates a tension. Hospitals with marginal costs for treatment less than the tariff have an incentive to increase activity, in opposition to the white paper’s aims. And, in a report on payment by results last October, the Audit Commission outlined ways in which hospitals could manipulate the system to gain income, or “game”. These included inappropriate admissions from A&E, keeping patients in hospital longer than necessary and misclassifying treatment according to more expensive tariffs.

Although the commission said it was too early to tell whether “gaming” was happening, it said PCTs had claimed that it was and that safeguards needed to be put in place to prevent it.

Kingsland says: “Trusts will be looking to increase activity. There will be lots of covert gaming. That’s human nature.”
The commission report said partnership between PCTs and trusts was crucial to implementing payment by results, but relationships had been seriously tested by its introduction, a point echoed by Dixon.

Town, however, has a more positive story to tell, saying payment by results has helped shift services into the community in Peterborough, with the hospitals having already shut 120 beds.

The DH is planning to revise payment by results from 2007-8 to promote a shift in services. These include applying it to community services and “unbundling” tariffs so diagnoses, hospital care and rehabilitation can be costed separately. This will enable more services to be provided by community providers rather than acute trusts.

The third reform is basing tariffs on the most cost-effective way of delivering a service, rather than average cost. This would mean that, where a treatment was more efficiently provided in the community, this would be chosen by commissioners. Patient choice will also be extended from elective hospital care (pre-planned care, as opposed to emergency care) to community services.

So what of the delivery of primary and community care? As with hospital care, the government is keen to inject market forces to increase capacity and drive up quality. With primary care, it wants PCTs, which will retain direct commissioning responsibility, to look at using alternative providers from the private and voluntary sectors, especially in areas where GPs are scarce. With community services, it is keen for, though will not force, PCTs to divest themselves of the services they directly provide, such as district nursing, and open them up to competition.

Town says this approach will drive up quality. However, Pink says that people with long-term conditions should not just be presented with a set of competing providers offering the same service. Rather, commissioners should ensure people have a range of care options to choose from, including many that are currently scarcely available, such as cognitive behavioural therapy to treat depression.

This, he says, will require a radical culture change in the NHS: “The further things are from conventional, traditional medical care, the more likely [they are to be unavailable]. If the NHS wanted counselling, it would be available.”

If he is right, then the DH will need to do more than get its policies pointing in the right direction to achieve its ambition of a radical shift in services to community and primary care, necessary though that is. 

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