Editorial Thursday 29 January 2015: The future of tariff, the Corinthian spirit and the NHS as a political football

First, the good news: the 2014 British Social Attitudes survey found that satisfaction with the NHS has resumed its upwards trend, and is back to its second-highest level ever. This is a remarkable testament to the hard work of NHS staff.

(It will be instructive to see whether those who criticised the BSA's methodology when it found the massive drop in public satisfaction in 2010-11 change their tune now that its findings may be more convenient.)

Now for the less-good news, which is that the consultation on the 2015-16 tariff has received an overwhelming level of objections, and Monitor will have to pick a new course.

Experienced heads will probably think, ‘Tariff withdrawn a few weeks from the start of a new financial year, putting NHS financial plans into chaos? Seems like 2006 all over again’.

Mmmmm.

Nostalgia isn't what it used to be.

We are some way past the 50% of providers in deficit tipping point of an NHS financial crisis (oh, and the mood in commissioning land isn't significantly brighter).

The situation is straightforward: there is a mismatch between the funding available and the demand presenting to the NHS. Mind the gap.

Oh, tariffic
Everyone's favourite Saviour And Liberator Andrew Lansley was fond of using the phrase "the tariff was made for man, not man for the tariff".

It's a good line, and a good point. The longstanding observation has been that tariff mechanisms - fee for service - are what to use if you want more of that service. When we had two-year elective waiting lists and A&E trolley waits measured in days, as in the late 1990s, the NHS very definitely wanted more of those services.

We spent a lot of money and got them, largely by paying consultants a lot to work at weekends alongside ISTCs, process improvements in internal flow. It wasn't very sophisticated whole-system redesign: it was mostly more of the same.

That was back when the NHS had 6% real-terms year-on-year cash growth for a decade. This will not be returning soon to a Treasury near you. We did this late last year.

At a point in time where the Government makes the political choice to prioritise reducing an easy-to-fund deficit over resourcing the NHS to meet its demand, the question of tariff starts to look academic.

Tariff was introduced in no small part to seek to get clinical decision-makers to understand the resource implications of their choices.Under a block contracts system, the NHS used to get a bit more (or less) than the previous year, to do an unspecified amount of work. As one senior CE put it, "my boss came along each year and said 'here's a big bag of money; do the best you can with it'!"

It was also introduced to prevent the massive increase in NHS funding (from £48 billion a year in 2000 to £106 billion in 2010) merely buying cost-inflation. Many people decry the impact and unintended consequences of using targets, and make a few valid points about metrics and culture.

Nonetheless, targets were a crucial part of improving waiting times for NHS care out of all recognition. Political leaders, who took the electoral risk to raise our taxes to help fund increasing the NHS spending power, could reasonably expect the oversight of finance and performance to improve in a step change to match the funding increase. As it has done.

Tariff also has some value as a means of getting the NHS to adopt demonstrable best practice, such as increasing the amount of elective care delivered as day cases and with links to outcomes (a declared health policy goal since Barbara Castle's 1976 'Priorities For Health And Social Care').

The limitations of tariff become evident if the NHS is not going to be adequately funded under any likely scenario. Simon Stevens' Five-Year Forward View put an £8 billion price tag on the cash requirement to 2020.

New work by the Health Foundation suggests that funding pressures on the NHS will increase to £65bn above inflation by 2030/31.

These are large numbers. Yet we have to recall past experience that it is suggested that the cost of catch-up spending ends up higher than the spending foregone.

The 2015-16 proposal for a cap on specialised commissioning is a curious one. Back when he was a mere special adviser to Alan Milburn and then Tony Blair, NHS England's Messiah Simon Stevens used a quadrant chart on the x-axis of health services with high-low contestability and on the y axis of ones with high-low measurability to establish a quadrant where servoices were both highly measurable and highly contestable. This, the Messiah proposed, was where market mechanisms underb a national tariff could be effective.

He populated this high-contestability, high-measurability quadrant with routine elective and diagnostic, and from memory, some primary care. (Tariff was not with us at the outset of the National Programme for IT, which caused quite a few issues.)

The nature of specialised commissioning is clear in its name: it's specialised. It does rarer treatments, of riskier illnesses. The possibility of an outlier totally throwing your numbers is high, kiboshing the high measurability criterion. The specialised nature of the services makes them very high-cost to do - so that kiboshes the contestability requirement.

Specialised services are therefore neither highly measurable nor highly contestable. Why are we trying to use a tariff here?

The relevance of a tariff for other activity in a system underfunded relative to actual and expected activity becomes less clear. NHS tradition says that tariff works well for elective care. International evidence is far from conclusive on its relevance for mental health.

So if HM Treasury won't fund demand in the NHS properly, and DH via the mandate and NHS England, Monitor and NICE also set crazy efficiency requirements, then the tariff looks increasingly daft.

Once upon a time, in its early incarnation, tariff was meant to reflect a national average of actual provision costs. Monitor and NHS England's discussion paper admitted the many weaknesses in the data used to create later iterations, and only one or two ever have).

NHS providers can't opt out of running unprofitable services without CCG consent.

Waiting time targets are set nationally.

Obviously enough, all of this fixes costs.

So why is the tariff right? In no other regulated utility field, such as gas, rail, electricity or water, are prices jointly set by a body which regulates providers pays tariff & oversees payers, as NHS England and Monitor do.

Complexity is not suiting the tariff. Its attempts to move from a Doric style to a Corinthian one has not seen significant benefits.

Tariff was designed for wealthier times. As a minimum, its setting and salience need to change.

The NHS as a political football: a feature, not a bug
One of the least enlightening parts of the ongoing NHS debate between Andy 'Mascara Kid' Burnham and Jeremy 'Bellflinger' Hunt is the accusations about politicising the NHS.

The dance between the two proceeds as follows: Mr Burnham accuses Mr Hunt of presiding over unprecedented NHS chaos. In return, Mr Hunt accuses Mr Burnham of treating the NHS as a political football. This would be a fair point, if Mr Hunt didn't then inevitably go on to accuse Labour of appalling failures with the NHS in Wales, where it is the party of government. Pot-kettle-black writ large.

PM David Cameron is apparently very exercised about Ed Miliband's telling BBC News' Nick Robinson that he wants to 'weaponise the NHS'. The PM's objection to Mr Miliband's approach is not on the sensible ground that the verbing of nouns is a crime against the English language, but because Miliband is militantly politicising the NHS as an issue.

The Corinthian spirit is, Cameron and Hunt suggest, being violated: Labour players are attacking the Conservative (and Lib Dem) gentlemen. Which is simply not cricket.

This critique of making the NHS a political football is hog-whimperingly misconceived. The NHS is political: spending £114 billion a year of taxpayers' money could not be otherwise. Politics created the NHS, in an epic Parliamentary, media and medical professional fight. It's the bit of population-level risk-pooling (also known as socialism) that the British people consistently report that they like.

A football is designed and made to be kicked. Politicians of all tribes have tried to kick lumps out of the opposing party in government over the NHS since, oh, 1948. The NHS has survived: its reputation with the public frequently topping opinion polls asking for the reasons people say they are proud to be British.

The more interesting point is about the skill with which the player handles the ball. Whether it is the ability to lose your opponent with a Cruyff turn, or to put spin on a crucial dead ball like David Beckham, it's a bit more skilful to do well than many people think.

And of course not all footballs are round. Sometimes, it's about the bounce of the ball.