Simon Stevens on the case for independence

It now seems likely that, regardless of political party, our next prime minister will toy with some version of 'independence' for the NHS. Independence for the Bank of England is seen as one of the government's more important reforms, so an NHS parallel could resonate. And shadow health secretary Andrew Lansley told the NHS Confederation conference that the time has come 'to take politicians out of the day-to-day management' of the service.

Why the attraction? NHS spending growth will be slowing, so putting daylight between politicians and the unions would probably suit a new PM. More high-mindedly, it could help embed reform while improving public trust and the transparency and rationality of decision making.

Well maybe, maybe not. One way of guaranteeing such a proposal fails spectacularly would be to establish the newly 'independent' NHS as some sort of 1970s British Leyland-style nationalised industry.

The de facto creation of an inward-looking and unresponsive provider monopoly, even accompanied by the inevitable but gimmicky appointment of a few business types to an NHS 'supervisory board', would be a massive act of re-centralisation masquerading as independence. We've been there before. The right way to grant NHS hospitals local independence is simply to convert them all into foundation trusts - immune from Whitehall tinkering.

But that is only half the story. Numerous other functions traditionally overseen by health ministers are already undertaken at arm's length from the Department of Health: inspection by the Healthcare Commission, rationing decisions by the National Institute for Health and Clinical Excellence, foundation trust governance by Monitor, board appointments by the Appointments Commission, pay negotiations by the NHS Confederation.

Other attempts have been less successful. The independent reconfiguration panel to take the heat out of hospital closures and mergers has not done so. The independent advisory committee on resource allocation has had only an indirect influence on primary care trust budgets. And we lack a transparent and predictable method of establishing and enforcing anti-cartel rules of the road for the health sector as a whole.

So what would a workable version of an 'operationally independent' NHS look like?

On this model the principal levers by which the NHS at a national level would influence healthcare would be a) via funding decisions given expression through commissioning; b) via independent regulation of a plural set of providers.

There would be no route c) involving Whitehall control of the means of production (ie hospitals).

There would need to be complete clarity about the new three-way division of labour between government, the newly 'offshored' national regulatory/commissioning superstructure, and providers. Government would continue to decide overall funding and probably the acceptable inflation uplift and efficiency assumption in the tariff.

A funding model

It is also possible to envisage a system in which the NHS moved onto a notionally 'funded' rather than 'pay as you go' basis, with a set of independent trustees who reported to Parliament annually on the extent to which the 'contribution rate' from Parliament was actuarially sufficient to meet likely future funding requirements. (A number of other countries have put this in place to stop governments playing fast and loose with accounting for future healthcare liabilities.)

Government would then specify a broad set of policy objectives to be secured via the commissioning and regulatory processes. There would then be a choice as to whether to combine national commissioning and regulation in one entity. It may well be better to keep them separate.

Ideally the new dispensation would be embedded in primary legislation - a 'constitution' for the NHS. It might seek to proclaim a set of NHS values, such as those set out in the opening pages of the NHS plan. And it could embed some clear patient rights, such as choice of provider to secure a reasonably short waiting time for NHS-funded care, as established at the European Court of Justice in the Watts case. However there are also real risks of something incoherent emerging from the inevitable horse-trading in the Commons and 'pet project' amendments in the Lords.

Most importantly, the new institutional arrangements would need to embed the NHS's new reforms, including level-playing-field contestable supply, and the tariff. This is because if the political process is not to be the main driver of change, it needs to be replaced by more sensitive and powerful 'bottom-up' mechanisms for ensuring patients' needs and preferences can be made to stick throughout the system.

Whatever you may think about the role politicians play in shaping how the NHS operates, in the current system they are one of the main transmission mechanisms between our fellow citizens and the people providing healthcare. If the politicians consistently get it wrong, they get booted out.

This Darwinian mechanism forces them to pay more attention to the views of the punters than sometimes providers do. That is partly because while the interests of staff and patients mostly overlap, they are not identical. The evidence for that claim? Look no further than last week's report on learning disabilities services in Cornwall, or the recent disappearance of Saturday morning GP surgeries.

In order to dispense with political pressure from on 'top', the NHS needs powerful new mechanisms to garner and give force to consumer views from 'below'. If that can be got right, it is just possible that the idea of independence will gain traction.

5 July 2008 is the 60th birthday of the health service. Maybe it should also become Independence Day for the NHS.

Simon Stevens is president of UnitedHealth Europe and the prime minister's former health adviser.