REFORM AGENDA Former DoH strategy chief urges government to be bold in reform

Published: 15/12/2005 Volume 115 No. 5986 Page 6

Government health policy has veered into 'incoherence' and reforms are dangerously 'out of sync', the former head of the Department of Health strategy unit has warned.

Professor Chris Ham, who left the DoH last June, said it was not clear whether the government was 'willing to live with the consequences of the creative destruction' it has unleashed on the NHS.

The head of Birmingham University's Health Services Management Centre told the Healthcare Financial Management Association conference last week that he believed policy had fallen out of sync in the last two years, as too much emphasis had been placed on provision and too little on commissioning.

He said the debate over how to strengthen commissioning had come too late, given that the last two years had been spent strengthening provision, particularly through independent treatment centres.

Professor Ham added that the current reorganisation of commissioners, and the rush to push purchasing onto an 'at best luke-warm' GP community, is compounding rather than addressing the problem of weak commissioning.

Professor Ham told the conference he is urging the government to restrict payment by results to 'planned' care to avoid elective care becoming the 'tail that wags the NHS dog.' He suggested emergency care should be protected from the excesses of the market: 'Unplanned care requires networks, but how will that be achieved as services are being fragmented? Unplanned care should involve choice, but within a network of providers commissioned on a block contract, ' he said.

However, DoH minister for delivery Lord Warner earlier told the conference that the government intended to stick to full roll-out of payment by results to cover emergency activity in 2005-06.

DoH finance director Richard Douglas told the conference he could not publish full details of next year's payment by results tariff, along with technical guidance, until the figures had been weighted according to PCT price baseline data, which he had only just received.

Mr Douglas said he 'did not want to make the same mistake' as last year by releasing the tariff before data was available, as he had then had to make adjustments 'in year'.

Both Lord Warner and Mr Douglas used their speeches to the senior NHS finance community to drive home the government's hard-line public stance on rising deficits.

Lord Warner confirmed that the government is giving the NHS until March 2006-07 to balance the books. But he said he had briefed SHAs that it would not accept greater deficits at the end of this year than had been accrued at the end of 2004-05.

He said that he did not 'underestimate' the 'difficulties and pressures on managers working in a goldfish bowl locally', but it was time for them to 'knuckle down and work with clinicians' to achieve operational efficiencies. 'If everybody was implementing the [Modernisation Agency's] 10 high-impact changes there would be no deficits, ' he added.

Can finance hit squads turn things around?

Teams of a 'mixture of NHS finance experts and the best expertise from the private sector' began meetings last week with around 50 organisations with the worst forecast deficits. The teams aim to help them with plans to break even by the end of 2006-07.

The work is being co-ordinated by accountancy giant KPMG.

Department of Health finance director Richard Douglas said the teams were being asked to work with local managers to complete a 'baseline assessment' by Christmas.

They would then have 18 months to achieve turnaround - but Lord Warner said the Government will 'expect to see some results by the end of the current financial year.'