Alan Maynard: could the Tories give PCTs bite?

Primary care trusts will wither if the next government maintains existing incentives which make these institutions toothless bulldogs. Would a Conservative government put some teeth into the purchaser role if they are elected in 2010?

As it “redisorganised” the health service, the government also increased NHS spending by over 50 per cent

The intention of the Thatcher NHS reforms was to make purchasers discriminating rationers of healthcare who held omniscient GPs and hospitals to account. New Labour considered these reforms a “failure”, in the usual evidence free way of governments, but proceeded to maintain the purchaser-provider divide with originally more than 300 and now some 150 PCTs.

As it “redisorganised” the health service, the government also increased NHS spending by over 50 per cent in real terms and leaked nearly 40 per cent of this into increased pay and prices concessions for which there was no quid pro quo in terms of productivity increases.

Gradually it dawned on policy makers that even though there were significant achievements in terms of waiting times and chronic disease services, the “value for money” emphasised by Thatcher was at best elusive and at worst absent.

PCTs, instead of being price and quality makers, were price and quality takers, paying the providers meekly with little regard to cost effectiveness. Thus they are bank clerks.

Like a crab on cocaine, the present government is now madly pressing the NHS to improve productivity. It scurries from one initiative to another and exhibits an inaptitude for joined-up thinking and the efficient exploitation of preceding reforms.

Some of these initiatives have considerable potential, particularly if used as part of an integrated approach to productivity change. PCTs have now been given a weapon: commissioning for quality and improvement - CQUIN. PCTs are requiring hospitals to collect data on key performance attributes and from April will be able to penalise providers who perform poorly. From April 2011 trusts which fail CQUIN targets could lose up to 10 per cent of their income. The nice issues are what aspects of care to incentivise and how providers, when penalised, can translate this into improved performance by staff.

For the wise provider the immediate response to CQUIN is to rigorously use the consultant contract and Agenda for Change. Agenda for Change requires staff appraisal and PCTs might usefully add success in this and its use to manage incremental progression in local CQUINs. They might also require providers to evidence consultant compliance with job plans and the activity rates they imply. It is remarkable that the Department of Health and PCTs have not linked these pay deals to monitoring and incentivising productivity improvements.

Labour has created an array of potential instruments to help PCTs translate themselves into active purchasers of cost effective care. Furthermore, patient level costing, hospital episode statistics, patient reported outcome measures - PROMs - and mortality data provide purchasers and providers with data to identify and manage better performance outliers among institutions, GPs and consultants.

Wasted potential?

Can the Tories exploit this potential? Their policies are at best opaque. They have indicated they favour “organic” mergers of PCTs, but do not evidence the criteria. But they also seem set on re-inventing GP fundholding, leaving a smaller number of PCTs with “public health” responsibilities.

Recent decades have demonstrated that twiddling with organisational structures does not necessarily improve processes of care and patient outcomes, let alone save money. The division between primary care and hospitals lacks an evidence base. So should GPs be able to take over hospitals or hospitals be empowered to take over primary care to produce integrated and evidence based patient pathways?

Such grand questions as these and the recreation of GP fundholding need to be developed carefully. The fundamental issue is that of incentivising providers to be more efficient, or what government calls “productivity”.

PCTs with teeth, such as potentially offered in CQUIN, may be able to drive producers to eliminate well evidenced “organisational slack” if the government is brave enough to allow them to be vigorous purchasers. Tight budget constraints will induce providers to be more efficient without PCTs’ pressure. More radically, and if PCTs remain toothless bulldogs, their abolition would save hundreds of millions by abolishing the purchaser-provider split. GP fundholding, apparently favoured by the Conservatives, may or may not help the drive for productivity and carries the risk that it will merely increase GPs’ incomes.

Conservative policies remain vague and Labour policy is frenetic and fragmented.