NHS plan puts government on collision course with unions and doctors
Andrew Lansley, the health secretary, will announce the biggest shakeup of the National Health Service since its creation in 1948 with radical proposals in a white paper on Monday. It will include plans to use markets, not targets, to improve performance, hand £80bn of taxpayers' money to thousands of family doctors, and free foundation hospitals to leave the state sector and become "not for profit" companies.
According to sources familiar with the proposals, Lansley's analysis is that the NHS has suffered from a lack of competition and choice – and that the improvements over the last decade, such as major reductions in waiting times, have been driven largely by bureaucratic targets and tens of billions of pounds of extra spending. Given the parlous state of the economy, the health secretary has rejected both targets and spending as options for the government.
Instead, Lansley's sweeping plan puts the coalition on a collision course with the medical unions and hospital staff when the NHS has to find £20bn of savings. To help patients choose which hospital to use in the future, the health secretary will publish detailed mortality rates, down to the detail of individual surgeons. He will encourage charities and the private sector to challenge the public sector by making it easier to sell services to the NHS and introduce a "poverty premium" for poorer areas with higher mortality rates.
Perhaps the biggest change will be felt by family doctors, who are in effect private businesses with a contract to provide services to the NHS. These 35,000 GPs will be forced to band together into consortiums by 2013 – there will be no opportunity to opt out of the new system. These 500 consortiums will then commission treatment from hospitals on behalf of patients. At present, the NHS works via primary care trusts and the Department of Health determines each trust's spending priorities, which involves managing GPs' surgeries.
Family doctors are to be stripped of lucrative business opportunities – many run pharmacies and offer specialised operations, for example cataracts – as the health secretary has decreed they cannot buy services they sell. A new independent health board will determine minimum standards of care for GPs – stipulating that they will, for example, have to organise out-of-hours services. The Treasury had resisted the idea of GP commissioning, citing evidence from the US, where it has been in place since the mid-1980s, which showed poor management led to bankruptcies – unthinkable in the NHS – leaving millions of dollars owed to physicians, hospitals and ancillary service providers, because some doctors assumed too much risk and exercised too little control.
Lansley has got round this by forcing consortiums to have an "accountability officer" who will have the power to intervene on behalf of other doctors and stop a GP from spending too much or intervene when a medic's patients keep getting readmitted to hospital. However, many point out that the British Medical Association, the doctors' union, will extract a heavy price for its co-operation with the plan – despite the fact that the average annual salary for family doctors is already more than £106,000.
"This government has no fear of the unions. What can the BMA do? They could threaten to resign en masse from the NHS but in the current climate do you think there will be much sympathy for whingeing GPs? On £100,000 a year, in this climate. I don't think so," said one source, pointing out that the GP contract is renegotiated every year. "They might have to get used to doing more for less."
The BMA said it would not comment because it has "yet to see the full detail of the government's plans". It said in a statement: "It is important that any new initiatives have the interests of patients at their heart and that they are properly funded. We do live in tough economic times, but we must make sure that doctors, working together in groups, are given the necessary resources to implement any reforms properly."
The other big change is that foundation trusts, which represent more than half of the NHS, will be encouraged to become "social enterprises", ending the debate that has rumbled on under Labour between Blairites and Brownites over whether public bodies could run themselves, set their own pay rates, and borrow from the private sector.
Foundation trusts are in the black to the tune of £3bn. By 2014 every hospital should be a foundation trust and all will be allowed to leave public ownership while still providing public services – taking the cash with them. "They would be like universities – able to sack staff and close departments pretty much as they please," said the source. "But they will have money."
There are also plans for hospitals to become mutuals, adopting a John Lewis-style model where a medical centre would be owned by the staff. However, such a move would be fiercely resisted by trade unions as new employees would be shut out of the NHS pension scheme and the plan would introduce variable pay schemes across the NHS. Some have pointed out that the one-size-fits-all model has cost lives. Recent research shows that not being able to vary pay has meant that hospitals "in tight labour markets" have higher death rates and lower productivity.
Professor Chris Ham, chief executive of health thinktank the King's Fund, said it was still an open question whether Lansley's plan to force change on the NHS and the unions when there is no new money would work. "I think it will be an incredibly hard sell to ask the unions and staff to give up pay and conditions with nothing in return. We are moving away from a traditional NHS approach to one of choice, competition and diversity of suppliers. Andrew Lansley is taking Tony Blair's approach further and faster than anyone suspected."
