The Welsh Assembly has plans for a third way between an internal market and a command and control system, with local health boards losing control of the commissioning purse strings. Alison Moore explains

If Welsh health minister Edwina Hart has a liking for 1980s movies, many in the NHS would bet her favourite is Back to the Future.

Just a few days ago she announced a consultation on NHS structure which could leave Wales with a system rather similar to that of the late 1980s - with the internal market abolished and local health boards stripped of their commissioning roles. Instead, an NHS board for Wales would play a major role in allocating resources to both hospital trusts and local boards; local boards would be cut in number from 22 to eight; and some community services could move from trusts to local boards.

The proposals, out for consultation until the end of June, herald another shift away from the English system. Wales has already rejected the widespread use of the private sector and the development of foundation trusts, but there is a general acknowledgement that the system needs to change, with fewer statutory NHS bodies.

The Plaid Cymru and Labour coalition that has run the country since the Welsh Assembly elections last May wants a more co-operative, partnership approach to public services. But beyond these principles, both the consultation document and the supporting papers are vague about how this system will work.

Marcus Longley, acting director of the Welsh Institute of Health and Social Care, puts this down to the lack of a firm vision of what a "third way" between an internal market and a command and control system will look like. "In terms of how radical it is, so much of the detail is unspelt out that there is a lot to play for," he says. "They freely admit they don't have all the answers."

At this stage, the major NHS pressure groups in Wales are reluctant to comment on the proposals. The Welsh NHS Confederation says only: "We will consult our members to produce a full response to the proposals. We are keen to work with the Welsh Assembly government to find the best way forward."

Form and function

Royal College of Nursing Wales interim director Richard Jones argues "form should follow function", but makes a case for a strong community nursing service.

Whatever responses are made to the consultation, they will have to be placed in the context of a co-operative rather than a competitive system of public services - a key talisman for the coalition government. How this will be achieved is less certain.

Staff in local health boards are likely to have most concerns. The system of 22 boards was set up five years ago to mirror the Welsh system of local government. But with fewer than 3 million people living in Wales, this meant boards served small populations - although often quite large geographical areas - and so were costly to run, with few opportunities for economies of scale.

What they have had is coterminosity with local councils and thus opportunities for innovative co-operation. Despite some good work, it is uncertain how much this has delivered - delayed transfers of care, for example, have not been reduced over the past two years. The announcement of reduced board numbers has started a debate about whether local councils also need to cover a larger area - could they end up mirroring the proposed board boundaries?

Boards were envisaged as simply commissioners (with the exception of Powys, which also runs hospital and community services), although some have started to directly employ clinical staff to provide services that independent contractors could not. But boards look small and weak alongside hospital trusts and a cut in numbers to create larger, stronger organisations has been widely expected.

Under the proposals there would be local health board involvement in planning - the term commissioning is avoided - but crucially they would no longer hold the budget.

Institute of Healthcare Management chair Andrew Corbett-Nolan says it will be interesting to know how in this new centralised structure policy makers will retain what boards have done well.

Ensuring the commissioning system still responds to local needs and circumstances, while being done centrally, will require particularly sophisticated and responsive mechanisms.

"Within a small country, the relationships are often good and long-lasting," he says. "If you work in that system, it is possible to do more and get a consensus more quickly than in England. The Welsh can do it - they have a track record of delivering some quite sexy stuff."

Large representation

The governance of these new super-boards is still up for grabs, although the supporting documents suggest the minister may lean towards a smaller board plus stakeholder input - England's foundation trust model is mentioned.

Currently local health boards have large boards with representation from across the community, including professional groups, councils and voluntary bodies. Mr Corbett-Nolan points to England, where he argues governance has worked better since the standard of board members has improved. Representing the local community can be done in other ways than sitting on a board, he adds.

But the new boards will have a different role, providing some yet to be defined community services.

Trusts, which have provided community services alongside secondary care, are a little put out. With around 130 hospitals - many tiny - the question of who is best placed to run some of these is unanswered; there is some possibility that community hospitals' management could move to boards, alongside other community services. But retaining them within hospital trusts might help to ensure economies of scale and offer career paths that attract excellent staff, including managers.

The number of trusts has been reduced - some mergers have just taken effect - and another merger is expected in the north, leaving seven general trusts, one specialist - oncology and other services - and an ambulance trust. Trusts and boards are likely to become coterminous (although hospital services in Powys may be delivered by neighbouring trusts).

Another change will be in the central structure of the NHS. The consultation puts forward three models for the proposed NHS board for Wales: a special health authority, a civil service board or an advisory board supporting an NHS chief executive. Many in the NHS favour the first of these.

Professor Longley can see numerous tensions in the system to work through. One is ensuring all the incentives in the system point the same way - which may be harder if community services are run by different organisations from acute hospital services. What incentives will hospitals have to manage down admissions once a tariff system is introduced? How will local boards influence what they do if they no longer control the purse strings? How responsive will central commissioning be? Where will mental health services be placed?

Unfinished business

Another unknown is how future mergers or closures of hospitals will be handled - unpopular past consultations are thought to have contributed to the loss of Labour seats in the Welsh Assembly. Yet, with no equivalent of the independent reconfiguration panel, decisions in Wales will inevitably be seen as political.

There is still unfinished business around reconfiguration of services and the loss of local services remains controversial. The NHS board for Wales will inevitably be involved in any decisions, but there is a question mark over how far it will be seen as making "depoliticised" decisions.

But the most pressing issue for many staff is likely to be the upheaval and concern over their future. Community staff could find themselves in a very different working environment, with closer links to primary care. Local health boards would need to gear themselves up to provide community services, but mergers could mean fewer senior managers are needed.

Mr Corbett-Nolan says: "Managing and keeping the service on the road through periods of organisational change is very much the day job. But managers will obviously be thinking about their own position."

He argues that despite concern about potential job losses, it is unusual for those who really want to keep a job not to have one.

But will these dramatic changes improve services to patients? A recent Health Inspectorate Wales report highlighted problems around dignity, respect and mixed wards. It said the structure of 22 local boards had "inherent problems".

Structural changes are widely accepted as slowing progression on other goals. But this may be a price worth paying for better services.

Further down the line, reconfiguration may still need to be tackled, along with painful issues such as how money can be diverted into the community sector.

"We have learnt what does not work," says Professor Longley. "We have been through the internal market and through command and control, but there's a bit of a vacuum in what else do we do?"

He warns that thinking on what is wanted - rather than what is not - is "woolly and unthought through". The new system is intended to be in place from next April - a challenging target.

It seems likely that Wales will develop its own distinct solution, helping to put what first minister Rhodri Morgan has described as "clear, red water" between the English and Welsh systems of government.