In Simon Stevens’ first major interview in his role as NHS England chief executive he talked to HSJ about small hospitals, provider and commissioner models, NHS funding, competition, NHS England, commissioning support and much more. Here we present the edited transcript

Simon Stevens

Simon Stevens

Simon Stevens

Skip to each section to see what Simon Stevens said on

NHS England

HSJ: NHS England’s role has expanded a lot from the originally envisaged “commissioning board”. What functions has it taken on which you’re not convinced lie within its remit?

Simon Stevens: My assessment is that in the run up to the launch of the new commissioning system and last year, significant effort went into making sure [clinical commissioning groups] were in a position to get up and running and do well. And probably less attention was paid by NHS England to itself as a commissioner and as an organisation.

Part of what we’re doing now is taking a look at where we’ve got to one year in.

[This involves] three things. One, ensuring we focus on the things NHS England should do.

[Two, seeking to] align our people internally more clearly, [and three, to] build capabilities in areas where we need that – particularly around core commissioning competencies.

Overall we’ve got a very good group of people, but as I’ve said to my employees, [we have] good people but [we are] not yet firing on all cylinders. [We have] an opportunity to do so.

In terms of focus, obviously first and foremost we exist as a commissioner and as a steward of the commissioning system, but I also accept that we have a shared system leadership responsibility.

But there are some things that have ended up on the NHS England docket that probably in the cold light of day there may be other bodies who are appropriate stewards for them.

The question has been posed does it make sense for a commissioning organisation to be overseeing the revalidation of 160,000 individual medical practitioners around the country?

Would it make more sense for the important work that’s being done around safety to come from the NHS itself rather than from a national body?

The question has been raised [about] have we got clarity about the division of labour on technology and information across the system. My view is that when it comes to IT our critical interest is the “I”. The “T” is supporting infrastructure that others can help bring about.

HSJ: How long do you think it will take to move functions you want to move?

SS: Those are obviously conversations that we need to have in the leadership of the NHS. I sense there’s a willingness one year in for people to have a look at where things stand and make adjustments where needed.

Commissioning, CCGs, and primary care

HSJ: What’s your own appraisal of the capabilities and achievements of clinical commissioning groups so far?

SS: There are two ways of thinking about CCGs. One is they’re one year in. The other is we are in year 23 of a model that attempts to get GPs involved in commissioning decisions.

Obviously there have been ebbs and flows over the course of those 23 years but this represents a pretty significant vote of confidence for the idea that primary care clinicians should be in a position to direct spending power inside the publicly funded health services.

Two thirds of the NHS’s budget is invested in CCGs and there’s no other country in the world that has done that. So in one sense we know quite a bit about how these organisations work well – you can go back to different versions of them – some of the [primary care trusts] did well.

But I think the distinctive feature of CCGs is they’re membership organisations and they have to be able to demonstrate that GPs both feel connected to the decisions they’re making and feel those decisions are making a difference.

Obviously what I did by signalling [I wanted CCGs to be able to have] primary care co-commissioning responsibilities was say, look, we’ve had all of the effort into creating CCGs, lets now give them an ability to make a difference.

HSJ: Having made that invitation to CCGs to co-commission, would you be disappointed if not very many come back asking for a significant role and responsibility for general practice?

SS: I’m open minded about it – I set it out deliberately as a permissive approach because some CCGs do see they would like to do a lot more with the [general medical services] and [personal medical services] contract as well as with the wrap-arounds.

I think just about everyone now accepts we’re going to have to reinvent out of hospital care – however you define that – more broadly… given the ageing population and the rise of comorbid chronic health conditions.

So those that want to and can do it well , I will back them, those that don’t, that’s fine. Obviously they’ll have to accept out area teams will do that for them.

HSJ: Were you disappointed the local medical committees conference came out against co-commissioning?

SS: I understand the thought but I don’t think that in practice the concerns will crystallise in the way that some LMC members might be worried about.

HSJ: Do you agree with the point made by the King’s Fund and others recently that some GPs need to move beyond GMS, PMS or alternative provider medical services and into other agreements locally that incorporate wider services?

SS: Under just about any scenario there’s going to continue to be a national GP contract for the foreseeable future. The proportion of GPs who choose to have that as their contractual route ebbs and flows over time.

More generally I think we’re going to find, even with that chassis, we’re going to have to find new ways of blending funding streams in order to expand primary and community health services, and do so for defined populations in particular geographies.

That’s part of what I’m getting at when I’ve been talking about new care models and part of what I’m going to talk about when I speak at [the NHS Confederation conference on Wednesday].

HSJ: The work on co-commissioning will begin to create different approaches to commissioning around the country. Do you agree the NHS has been paying too much attention to administrative neatness, where everything must be structured in the same way?

SS: Definitely. Actually what it’s done over the years is mask differences in clinical services, and in heterogeneity of populations, by pretending we’ve got uniformity in administrative structures.

So we have a standard approach to headed notepaper but that’s not the same as having a standard approach to clinical care delivery.

So I think that’s one of the problems – one of the temptations – for a country the size of England that we’re neither so big that it’s obviously daft to attempt to do everything from your capital city or health service head office – nor are we so small that it’s perfectly feasible.

If you’re New Zealand or Scotland it is actually possible to say, “This is how things will be across the country.” If you’re India or the US, obviously it’s not.

Now there are many things the “N” in the National Health Service should stand for, but uniformity of frequently changing administrative arrangements does not have to be one of them.

HSJ: Where do you think the line is – if a CCG says it wants to hand its responsibilities to the local council for example, is that ok?

SS: We’ve obviously just put in a lot of effort to get CCGs up and going so I want to back CCGs and give them every chance to succeed. Does that mean we couldn’t also envisage at the margin some supplementary commissioning models in places? That’s certainly a discussion I’m open to.

HSJ: So they could, as an example, pass most or many of their responsibilities to a council? What is in and what is out in terms of possibilities?

SS: Obviously the statute places a clear line of sight for the NHS vote through me as the accountable officer for the NHS vote, so there are certain requirements that go with that.

We may see more pooling of funding between health and social care in years to come. That in part will depend on how the better care fund works.

But in all of these cases these are means to end. What I will be looking for is a clear understanding that when a local area is proposing a different set of arrangements than those which currently apply that they can, in a detailed way, show their working. Why is this, in this area, going to improve outcomes and the sustainability of the NHS for that community?

Where people can do that then I think we should be more flexible.

HSJ: As another example, in the current system so far, a commissioner has had to be geographically defined. If someone has a good idea, which stacks up, to do something other than that, would that be allowable?

SS: My answer to all this is that a further set of changes just for the sake of having a further set of changes would be a distraction and is not what people are looking for, I don’t think.

But, in the context of a five-year forward view about what it’s going to take for this particular community, then we certainly should not be hidebound by the particularly regulatory or policy designs that we’ve got in place.

I’m not talking about that idea specifically, but I’m talking in general when it comes to new care models, other ways of building more personalisation into the commissioning system.

HSJ: You made reference to year 23 of the experiment to getting clinicians involved in commissioning. Thinking about the commissioner/provider split, do you think we are at a point where the split is now beginning to flex in quite a significant way?

SS: If you want to see what happens when you have open ended provider funding without an effective commissioning function making some population based decisions on the bit before that, and what an entirely provider led allocation pattern looks like, then you no need look no further than what happened to specialised commissioning over the course of the last year.

So the consequence of not having that population based commissioning perspective is [that] money will just get sucked into high-tech hospital services. That’s the history of the NHS. We did not live in an integrated, primary and community care oriented system where mental health got proper resourcing, prior to April 1991. So I do think there’s real value in distinguishing the planning and funding functions from the provision.

But does it for all time have to be the split that we currently have and the way we work it? No, there are various models.

And so, to be specific about it, could I envisage a situation where we say, again in the context of the five-year strategy for a particular community, we would create a delegated population budget that combined hospital, primary care, community services [and] would manage with more fluidity at the boundary. Yes, I could imagine that.

HSJ: In the context of commissioning flexibility, it looks like if there were an incoming Labour government there would be increased influence for health and wellbeing boards at the expense of CCGs. Would that worry you?

SS: Well I think CCGs have got to prove themselves, health and wellbeing boards have got to prove themselves. At the moment [HWBs] are about to have another £1.9bn vested in them from next April and so, one of my favourite sayings, “by their fruits ye shall know them”.

Commissioning support services

HSJ: In relation to commissioning support services, do you think market development is a priority? Whether that is on the one hand, autonomisation or moving existing units outside the NHS, or shaping the units and market which already exist.

SS: When you think about how we’re spending on the commissioning function at the moment about 70 per cent is in CCGs and [commissioning support units] and slightly under 30 per cent is spent by NHS England directly.

We know some CCGs are taking a look at what they do themselves versus what is done by the CSUs and as I understand it that was part of the way the system was set up, so there would be that customer feedback.

My sense is there are many CSUs that are doing a really good job and are going to be an indispensable part, however organisationally they’re structured. Whether they are independent entities [or not].

I suspect in some places we might decide in some places there are things CSUs are doing that they could do for NHS England and for the commissioning system as a whole, as well as their retail level support for individual CCGs.

So I think [in] the next 24-30 months or so, we’re going to see some flexing of exactly what the division of labour is between CCGs, CSUs and NHS England.

HSJ: Are you saying CSUs can more quickly take on some of NHS England’s resources?

SS: I think there are some things CSUs could do for NHS England which at the moment they’re not. There are some things CSUs are doing that CCGs may choose to do for themselves.

And there are some CSUs that are going to be very successful, and there are some that are clearly getting a signal from CCGs that actually they’re not happy.

So we’ve got 9,000 skilled staff in CSUs and we’re going to use the next 24-30 months to make sure those skills are properly retained for the commissioning function, even if the organisations change.

Finance

HSJ: You were part of the seminal reform process that was sparked by Tony Blair saying we need to increase health spending as a proportion of GDP. Now, of all the G7 countries, only Italy spends a smaller proportion, and spending has fallen as a percentage of GDP, and it will fall for another year. Does that worry you?

SS: The NHS has done incredibly well during this five year period of austerity in that it has maintained fundamental performance standards, and it has done so when at previous points in history it was not able to do so. In part that was because this period of austerity was coming on the back of a long period of growth catch-up.

Had it not been for the fact that during the 2000s there was the big expansion in investment and in staffing and in patient facing performance, then I think there would have been a crisis by now.

You can look back at 1951 and 1968 and 1976, 1996, 1999 [when the NHS struggled]. The NHS has done well [since 2010] because it had that prior period [of growth].

HSJ: But the percentage of GDP was chosen by the New Labour government as a symbol of how committed it was. Is that no longer something you need to worry about, because that was clearly something you spent time worrying about [in the Labour government]?

SS: I think the forward looking question, as you look out five years, seven years [is] what are the prospects? If the economy rebounds, and the signs are it is, then most economists would predict that by the end of the decade we would be spending more in real terms on health than we are now.

[Proportion of GDP] is one of a number of indicators but the reason I don’t think it is the correct single measure for this next period is that the easiest way to increase health spending as a share of GDP would be to hold health spending and for the economy to crash.

If the economy is doing well then actually as a share of GDP even rising NHS spending may go down. There’s the size of the cake and the size of the slice. Shrinking the cake the slice is proportionately bigger, which is why I don’t think percentage of GDP per se is going to be the principle measure of whether or not we’re properly funding the NHS.

HSJ: When do you think it needs it – this financial year, or next, or some point further? How urgent is the need?

SS: What I’m doing in my first three months is my current due diligence on the state of NHS finances both for 2014-15 and 2015-16. And as part of that we’re taking a very close look at where CCGs and providers have got to in the commissioning round for 2014-15, and for 2015-16 obviously a lot of discussion is playing out around the Better Care Fund.

More generally, as I’ve said, this five-year forward view that we’re going to be working on now through the autumn.

One of the things I want that to do is answer the question, “What sorts of changes could we make over the course of the next parliament that would put the NHS on a more sustainable footing?”

And, the by-product of that, under different scenarios, “what do the funding pressures look like in the next parliament”? So I’m not going to answer that question today, because there’s work to be done to properly lok at that.

But uffice to say that I think most people would say that to the extent you accept the assumptions that built the £30bn gap for the next parliament, at the moment it seems folks have got a line of sight to about half of that.

Provider models, hospitals and the foundation trust pipeline

HSJ: Your predecessor as NHS England chief executive gave the view that the foundation trust pipeline was now a waste of time. Do you agree with that?

SS: When the legislation was framed for FTs in the first place, deliberately there was dual key control put in place on who could and couldn’t become an FT, because what had happened with self-governing trusts in the 90s was, by the time you got to the last cohort, the discipline around saying, ‘Are these hospitals well run?’ was diluted as the politicians wanted to get them out.

So the reason the original [FT] legislation said Monitor had a judgement to make was to try to ensure that these difficult questions about was happening could not be glossed over.

So in some senses the fact that we’ve not just diluted the rigour that goes with being an FT is a deliberate and positive feature of the environment that was established.

Behind the question however is that, what that [FT authorisation process] reveals is that there are a set of providers for whom under the current circumstances, as currently configured, it’s going to be quite difficult to get across that threshold. So in those situations I think we’re going to have to look quite differently about what it would take in some of those health economies.

This is part of what I was getting at when I’ve been talking about relaxing some of the constraints or the assumptions about what’s required for sustainability in different geographies.

So rather than talking about failing institutions, perhaps we need to talk about pressurised health economies, and community-wide alternative solutions or models rather than just singling out the hospitals that happen to be located within them.

Now that’s not always the case. In some cases it is just that it’s the hospital that has issues and the rest of the service is doing all right. But in other cases there are deep seated structural problems that have lasted many years and that is what we’ve got to ask some hard questions about.

HSJ: How would taking that approach be different to what we’ve seen in recent years?

SS: In some cases it’s going to mean we’re going to have to completely reinvent what we mean by a hospital, by a local hospital. We’re going to have to say the division between what consultants do in hospitals, what GPs do in community settings, that is going to be dissolved. [It could mean saying we will] create a unitary provider group that might take delegated financial risk.

We’re going to have to look at a lot of the assumptions that mean in this country we think the minimum efficient scale for a hospital is a lot higher than they do in other countries.

It used to be the case – I don’t know if it still is – that the NHS accounting manual defined a consultant as a fixed cost, which in once sense I understand, but in another sense attaching our staffing to our bricks and mortar and to our traditional ways of doing things has got us to a very ossified set of services in particular places. And there’s no God given reason why that should be true, and it’s actually in our gift to do something different.

[In] the conversations I’ve been having with some CCGs and some hospitals in some of these parts of the country, people actually are pretty up for a conversation about how to reshape things quite radically, but they didn’t realise they had the permission to do so, if you like.

HSJ: These things would mean quite big changes to the workforce status of those consultants, or the contractual status of those GPs. Does it feel like people are up for that?

SS: I think so potentially… the status quo is clearly not working for a number of people in a number of parts of the country. So at that point you either say it’s time to do something differently, or people are just faced with the more typical response, which is services have got to close.

Small hospitals and centralisation

HSJ: You have raised the issue of smaller hospitals and their sustainability, and how this could be helped by changes to medical training. What did you mean by that?

SS: One of the things that has happened as a result of the medical staffing and training pyramids is the minimum number of doctors needed to keep rotas going has expanded quite significantly, which has started to dent the viability of smaller units. When you then put alongside that the continued sub specialisation in a number of disciplines, such that you don’t have rotas that cover each of the subdisciplines, and the sub disciplines are not wanting to do on-call, you’ve really had a tail wagging a dog in terms of hospital configuration.

There’s a sense that actually if we got back to general physicians in some of these smaller hospitals – call them general physicians call them hospitalists.

Actually the Royal College of Physicians has done good work with their Future Hospital project on this [and] the Royal College of Surgeons has been thoughtful about alternative training models given the pressures of the working time directive and so on.

So I think there’s a willingness to actually thing about these things in a way that perhaps in the past there hasn’t been.

We are unusual in assuming that every hospital will in effect do substantial amounts of junior doctor training. So I think there’s a conversation to be had there about whether that always has to be the case.

Small hospitals will often be great places for trainees, but I don’t think training rotas should be what is driving the reconfiguration of services across England.

HSJ: On the hospital centralisation issue, last year NHS England published Sir Bruce Keogh’s plan for emergency centres; and also suggested in planning guidance the creation of 15-30 centres for specialised services. Are these still relevant in light of your approach?

SS: Well I think they’re two different things. To the urgent and emergency care review, I think that was a great piece of work the headline of which was that there would be 40-70 major emergency centres there would not be a significant change in the number of emergency departments as Bruce envisaged it across the country. There would be that differentiation between the range of services, major emergency centres versus the others.

In the case of the 15-30 I regard that as a conversation opener.

HSJ: There are currently a lot of CCGs , providers who are currently in the process of attempting to make changes or downgrades to A&E, maternity, paediatrics and so on. Do you think they should be slowing down and giving more weight to the “community voice” now?

SS: I said last week at the King’s Fund [in a speech] that I think within the sustainable funding for a particular community, which is obviously the key caveat, we should take account of communities’ views on access versus specialisation but that does not mean a veto on change and that does not mean we’re going to be locking in aspic the current configuration of hospital services or individual specialties.

The NHS has been changing the way hospital services are delivered since the day it was created in 1948, when there were 480,000 hospital beds.

[Examples like] antibiotics for TB, short acting anaesthetics for day surgery, endoscopy – technology has driven a lot of changes and it’s going to drive a lot of changes so there absolutely will continue to be changes to the way services are configured.

HSJ: So is this a case of another system leader coming in and saying, “We’ve got to listen to our community… the consultation you’ve just done under the last regime is not good enough, go and do another one so that I look good.” There’s somehow this sense CCG leaders or so on are somehow ignoring the community voice. Is this what you are saying?

SS: As a matter of fact, actually NHS managers have been very successful at improving the efficiency of hospital inpatient services.

And if you look at what’s happened to acute beds since 2000, I think there are what, 34,000 fewer, and about half of those went during the biggest growth spurt the NHS has seen, and about half went during the longest austerity we’ve ever seen.

HSJ: I’m assuming you think that’s a good thing?

SS: Absolutely we’ve got to drive the efficient use of hospital resources and inpatients, and our length of stay certainly on the last international comparison we’ve got still was higher than a number of other European countries.

Being in hospital when you don’t need to be as a patient is not something individuals or families want, and obviously there’s an opportunity cost in terms of the other things the NHS can be doing as well.

Let me be clear about this, hospital managers are doing an incredibly difficult job and the range of options open to them is often severely constrained by decisions made by other people about medical specialities and standards that are applied that may not have a very strong evidence base and so on.

So do we need to take a hard look at some of those pressures that are being brought to bear on hospital managers? Yes, I think we do.

Monitor has a project going on on small hospitals right now. The Nuffield Trust is also taking a look at this too.

I’m saying two things at once here. Yes there will inevitably and rightly be more change in how hospital services are provided. But two, we should take a very careful look at what is driving that to ensure there is actually a strong basis for thinking it will either improve quality or efficiency, and in some cases, I’m not sure that’s always been the case.

Health secretaries

HSJ: Since you were in 10 Downing Street, do you think there has been a fundamental change in the way health secretaries have done their job? Do you think anything fundamental has changed in the what the health sec thinks their job is?

SS: That’s a very interesting question. On the one hand, the individual doing the job of health secretary brings to that their own conception of the role. And down history, arguably there have been two flavours. One has been the steward of the NHS and the other has been the champion of the patient. Sometimes the same individual begins as the steward of the NHS and ends up as the champion of the patient. Others remain the steward of the NHS throughout their tenure. Others come into the job with a very clear, “I’m here to champion the NHS, call a spade a spade, rather than sticking up for whatever happens to have occurred through the system.”

I’m not sure there’s been a secular movement from one to the other. It’s depended on the personal convictions of the individual incumbent as to where on that spectrum they’ve chosen to do their role.

However, arguing against myself a bit, as we are on a long term trend to much more transparency about quality in the health service, as indeed is true in all industrialised countries’ health systems, in a sense the black box that previously was there, a lot of light has been shone into it, and people are rightly seeing things that are a source of concern, and they are speaking out about that.

And that’s a good thing because that’s a necessary precondition for improvement. So I think it’s much harder for a health secretary to brush stuff under the carpet than it might have been 20 years ago, 30 years ago. And as a patient I say, “good”.

Preferred provider

HSJ: Is the idea of an “NHS preferred provider” model one which would benefit the NHS?

SS: I think the question is who is doing the preferring?

In a democracy with an NHS the elected government gets to decide these broad thrusts of policy. As things stand right now the legal framework requires us to ensure that there’s a level playing field and that wherever possible it’s patient preferences that decide the answer to that question.

HSJ: What’s your view about whether an NHS preferred provider model would allow you to achieve the kind of things you want to achieve?

SS: Are NHS providers likely to remain the principle providers of NHS funded care for the foreseeable future? The answer to that it seems to me is yes.

Wherever possible, should patients choices determine where services and how services are provided? I think that’s what the NHS constitution says. Some of those rights are longstanding. Choice of GP goes back to 1948. The choice that women are supposed to have around how maternity care is delivered and where they receive services is longstanding as well.

So I think, wherever possible, allowing patients to make those kinds of choices is desirable.

But that won’t always be the case.

So, as I’ve said previously, in my mind, the tests for commissioning organisations, where patients can’t directly exercise choice, [is to] put yourself in the shoes of the patient, and think about it from the overall efficiency for the taxpayer perspective.

Competition

HSJ: You have now had a flavour of the current debate in England on competition. Do you think it’s a shame, some years on from the debates you were having when you were in government, that we’re in a position which is quite polarised?

SS: I’m pragmatic about this. I think stylised debates for or against don’t get us very far. The practical questions are what are the changes we want to see in terms of the quality or delivery of care, and what are the tools that are going to help us get us there?

And ex cathedra pronouncements for or against this or that have not really been terribly useful, so I think it’s going to be the facts on the ground that will decide where we get to with that.

HSJ: Are you disappointed at the extent that competition has been used in the past year, particularly of any qualified provider in primary care for example which has been very limited?

SS: Obviously the concern was that CCGs were going to find themselves having to put their health services out to tender – that has not happened. I think the stance has been commissioners should be in a position to make nuanced judgements about when and where to use that approach, and that appears to be what’s happening.

HSJ: Do you think CCGs have made good use of competition in the last year?

SS: As we said right at the start, CCGs have had an impressive first year but they are still finding their feet. As they are beginning to firm up their views on how healthcare services need to change in their geographies over the next 3-5 years, that’s a question they themselves will have to answer.

Topics

Simon Stevens’ first interview: parts of the NHS must be ‘completely reinvented’