Editor’s blog Wednsday 13 April 2011: Liberating or liquidating the NHS? The War Of The Health Policy Pamphlets

It's The War Of The Health Policy Pamphlets. Seconds out! Let's get ready to RUMBLE!

Labour lead off with a haymaker called Undermining The NHS: the hidden reality of David Cameron's health reforms.

Its title tells you the name of the game: associate That Nice Mr Cameron personally with the Health And Social Care Bill. Presumably its first draft subtitle was 'Cremating Mr Cameron'?

This is politically adroit, as the Prime Minister is hoist with a 'heads Labour win, tails Tories lose' petard (yes, I rarely mix my drinks; but my metaphors often). It is scarcely news to readers of Health Policy Insight that we consider Secretary Of State For The Time Being Andrew I could do transport' Lansley to be strictly time-limited.

There is a more interesting tension for Mr Cameron to resolve: if the Bill goes ahead, everything that subsequently goes wrong in the NHS will be laid at the door of the Bill, and thus at the black-pained Georgian 10 Downing Street door of Mr Cameron. (This will be a bit unfair, since some of it would have gone wrong anyway - but life is unfair.)

If the Bill does not go ahead, it is a reverse which will make the U-turn over forest privatisation look trivial.

Labour know this, and feel bullish. Bullish enough to waste a certain amount of time attacking the Lib Dems. But their main line is "You can't trust David Cameron with the NHS" - a reiteration of long-standing Labour doctrine, as well as a reworking of the classic Conservative line 'you can't trust Labour with the economy'.

The five-point attack
Labour offer the following five attack lines, quoted below in full.

"1. No protection from insolvency for NHS hospitals – NHS hospitals could go bust, leaving patients without the services they have relied on.
• The Health and Social Care Bill will apply commercial insolvency law to NHS Foundation Trusts. The Bill details that this is to create a “level playing field” which is “in the best interests of [Foundation Trusts’] creditors” – not necessarily in the best interests of the patient.
• Under the reforms, there are no provisions to protect NHS services which may be threatened by competition from the private sector. There is no clear mechanism to stop NHS hospitals closing.

"2. EU competition law and fining hospitals – NHS hospitals could be fined up to 10% of their turnover by the new economic regulator
• According to a recent Parliamentary Answer, the Government plans to make EU competition
rules "increasingly" applicable to the NHS.
• Another recent Parliamentary Answer showed that the Government still doesn’t know ”whether and to what extent European Union state aid law will have an impact” in the NHS following its NHS reforms.5 This means that it is unclear whether and on what grounds private sector competitors of the NHS could subject NHS services to legal challenge.
• According to the Explanatory Notes for the Health and Social Care Bill, the design of the new NHS economic regulator, Monitor, is modelled on “precedents from the utilities, rail and telecoms industries, tailoring them to the particular circumstances of the health sector."
• Clause 60 of the Health and Social Care Bill gives Monitor concurrent powers with the Office of Fair Trading under the Competition Act 1998. The Office of Fair Trading has a wide range of powers to investigate businesses suspected of breaching competition law and can take enforcement action, for example ordering that offending agreements or conduct be stopped, and fining businesses up to 10% of their worldwide turnover. Similarly, under the Bill Monitor will be given powers to fine NHS Trusts up to 10% of turnover for breaches of competition law.

"3. Weakening local accountability over NHS closures and reconfigurations – Local NHS services could be closed down without any consultation
• David Cameron said at Prime Minister’s Questions in February that the Government are putting in arrangements to make sure that local people are listened to when decisions are being made about local NHS closures and reconfigurations.
• But the Government plans to weaken public accountability for the continuity of services that have not been “designated”. Currently, any major service changes have to be consulted on and decisions referred to the Secretary of State. But following the reforms, “providers will have greater freedom to adapt… without recourse to formal public consultation”. This would allow local services to be closed down with no public involvement, with no notice, and with no power to refer the decision to the Secretary of State.
• An NHS Service can be “designated” if the loss of that service could be deemed to have a significant adverse impact on the health of a population if that service was no longer provided. Health Minister Simon Burns has indicated that A&E services in London may not be “designated” services, meaning they could be closed without consultation under the Government’s plans.

"4. Putting private patients first – NHS patients could suffer as hospitals prioritise those who can afford to pay
• Currently, Foundation Trusts can generate a limited percentage of their income from private patients. But the Health and Social Care Bill will remove the cap on private income, meaning that Foundation Trusts can generate as much income as they like from private patients.
• The Department of Health’s own impact assessment states that a risk of removing the cap is that hospitals could divert more of their resources to treating private patients, meaning that private patients could be prioritised above NHS patients leading to a growth in waiting lists.
• The Royal College of Nursing says that there is no guarantee that private income will not be taken at the expense of NHS patients.

"5. New GP powers to charge for services
• It is currently the duty of the Secretary of State to decide which services should be provided by the NHS. But the Bill takes away this duty from the Secretary of State, and hands it over to GP consortia.
• At present, the power to determine charging is given to the Secretary of State. The existing legislation says that the Secretary of State may “make such charge as he considers appropriate for anything he does in the exercise of any such power and to calculate any such charge on any basis that he considers to be the appropriate commercial basis”. Clause 22 of this Government’s Health and Social Care Bill gives this power to GP consortia.
• David Cameron, Nick Clegg and Andrew Lansley have offered no explanation of why these changes are needed or what they might mean for patients."

Conservatives' rebuttal
The Conservatives' rebuttal has been issued to live-blogger par excellence and UK political journalist of the year Andrew Sparrow of The Guardian, but is not available on their website. (Sparrow's judgment on who is right is well worth reading). The Conservatives' response, in parts paraphrased by Sparrow, says,

1. There would be nothing to stop NHS hospitals going bust.
The Tories are not denying any of this. But they say Labour's foundation trust hospital legislation also allowed for the possibility of a hospital going bust, and that insolvency regime powers were introduced in the Health and Social Care Act of 2003.

2. Hospitals would be subject to EU competition law, which means they could be fined up to 10% of turnover by the regulator.
The Tories are saying explicitly that the bill "does not extend the application of EU competition law at all, nor does it extend the application of domestic competition law."

3. There would be less accountability in relation to NHS services, which means NHS units could be closed without any consultation.
"The truth is there will actually be much more accountability under our plans.All providers - whether they are NHS, voluntary or private sector - will be exposed to scrutiny by local councils. Currently, local councils only have power of scrutiny over NHS providers."

4. Hospitals would be allowed to give priority to private patients.
The Tories are not denying this. But they say the primary legal purpose of foundation hospitals will remain providing services to NHS hospitals.

5. GPs would have the right to charge for services.
The Tories say that any charges to NHS services would have to be introduced by primary legislation under the original NHS Act of 1946. As far as the government is concerned, there is no loophole. That's because the clauses cited by Labour cannot overrride section 1 of the NHS Act of 1946, which is now incorporated in section 1 of the NHS Act of 2006. This says that NHS services "must be free of charge except in so far as the making and recovery of charges is expressly provided for by or under any enactment, whenever passed". This still takes priority, and it means parliament would have to approve any decision to introduce new charges.

UPDATE: Just been sent Labour's rebuttal to the Conservatives' rebuttal. This is getting a bit meta-

Anyway, here it is (right to reply is of course available for Conservative Party):

Undermining the NHS – response to Conservative rebuttal
The Conservatives have attempted to rebut the criticisms Ed Miliband raised at this morning’s
press conference. But in each case, their rebuttal fails to deal with concerns about the direction and potential consequences of their NHS reorganisation.

Hospitals going bust
Conservative attempted rebuttal -  Ed Miliband claims “there would be nothing to stop NHS hospitals going bust”. But the truth is powers to establish insolvency regimes were introduced in 2003 under Labour.

The truth
• The Health and Social Care Bill extends corporate insolvency arrangements to Foundation Trusts. Clause 113 - Application of insolvency law to NHS foundation trusts 736. This clause removes the existing (and non-operational) failure arrangements set out in sections 53 to 55 of the NHS Act and obliges the Secretary of State to make secondary legislation as soon as is practical to apply existing corporate insolvency procedures to foundation trusts. Those procedures are company voluntary arrangements, administration and winding up as set out in Parts 1, 2 and 4 of the Insolvency Act 1986 respectively, and schemes of arrangement and reconstruction set out in Part 26 of the Companies Act 2006. (Health and Social Care Bill Explanatory Notes, Para 736)
• This would enable the affairs of a trust to be wound up in the best interests of its creditors. 737. This would assist in ensuring a level playing field between foundation trusts and other providers, and the procedures could facilitate the rescue of a failed foundation trust (for example, through administration or a voluntary arrangement with creditors) or enable the affairs of a trust to be wound up in the best interests of its creditors (for example, through voluntary or compulsory liquidation). Introducing an effective failure regime would allow for orderly market exit. It would also mean that trust directors would be under similar obligations to company directors since offences that may be prosecuted under the insolvency legislation would be applied through regulations and disqualification proceedings could be taken against directors who were held responsible for misconduct. (Health and Social Care Bill Explanatory Notes, Para 737)
• In opposition in 2007, the Conservatives complained that the Labour Government gave Treasury guarantees to support NHS Trusts and Foundation Trusts, saying that this “is not consistent with the development of competition in healthcare”, even though they acknowledged that “the use of more market-based mechanisms for securing capital investment brings risks of financial failure”.

"5.14 The Department of Health and the Treasury currently offer financial guarantees to support PFI projects and can provide public dividend capital to NHS Trusts and NHS Foundation Trusts.

“This is not consistent with the development of competition in healthcare, since NHS providers continue to have access to Treasury guarantees for their capital financing, whilst their independent sector competitors do not.

"5.15 We are aware that the use of more market-based mechanisms for securing capital investment brings risks of financial failure.

“Increased capital investment, in the absence of Treasury guarantees, will entail risks to the assets necessary for the provision of essential NHS services." - Conservative Party, “NHS Autonomy and Accountability: Proposals for legislation”, 20 June 2007, p. 24

Questions for the Conservatives
• Can the Tory-led Government state what the exact mechanism is in the bill that would prevent hospitals from going bust?

Weakening local accountability
Conservative attempted rebuttal - Ed Miliband claims “there would be less accountability in relation to NHS services”. But the truth is there will actually be much more accountability under our plans. All providers - whether they are NHS, voluntary or private sector - will be exposed to scrutiny by local councils. Currently, local councils only have power of scrutiny over NHS providers.

The truth
• Labour’s criticism is that the Health and Social Care bill will weaken local accountability over NHS closures and reconfigurations. The legislative framework published by the Government in December explicitly sets out how accountability for NHS service changes will be weakened for services which are not “designated”, where providers will be able to make changes “without recourse to formal public consultation”.

“In future, there will be a clearer distinction between: those services which are designated as subject to additional licence conditions and which Monitor will ensure continue to be provided, even if the provider fails; and those services where providers have greater freedom to adapt in line with changing demands, for example through patient choice, without recourse to formal public consultation.” - Liberating the NHS: Legislative framework and next steps, December 2010, p. 109
• Health Minister Simon Burns has given A&E services in London as an example of NHS services which would not be “designated”, and which could therefore be closed down without consultation. He said that this was “an illustration to make a point… not a prediction”.

“Shadow health minister Liz Kendall asked Mr Burns whether his definition of designated services meant that accident and emergency services in London would qualify.

“He said: ‘A designated service will be one to ensure that across the country there are appropriate services to meet the needs of the people. There are a number of A&E services in London, so there would not be a need to designate them… If I was talking about Cornwall, A&E would be designated there.’

“When questioned, Mr Burns clarified that he was not saying this will happen. ‘I was using it as an illustration to make a point, it was not a prediction,’ he said.” - HSJ, 3 March 2011, http://www.hsj.co.uk/news/acute-care/burns-london-aes-may-not-bedesignated/
5026490.article

Questions for the Conservatives
• Why will services which are not “designated” be allowed to close down without public consultation or the approval of the Secretary of State?
• Will A&E services in London be “designated” or not?

EU competition law
Conservative attempted rebuttal - Ed Miliband claims “hospitals would be subject to EU competition law”. But the truth is the Health and Social Care Bill does not extend the application of EU competition law at all, nor does it extend the application of domestic competition law.

The truth
• This is a highly misleading response. Health Minister Simon Burns has said, in terms, that while the Bill itself does not extend the applicability of UK and EU competition law, those laws “will increasingly become applicable” to the NHS as a result of the Government’s reforms.
Tom Blenkinsop: To ask the Secretary of State for Health what recent assessment he has made of the likely effect of (a) UK and (b) EU competition rules on the operation of GP consortia. [44028]
Mr Simon Burns: The Health and Social Care Bill itself does not extend the applicability of current United Kingdom or European Union competition law to the health sector of England.
However, as national health service providers develop and begin to compete actively with other NHS providers and private and voluntary providers, UK and EU competition laws will increasingly become applicable. - Hansard, 7 March 2011, column 896W
• Burns explained this in detail at the Committee stage of the Bill. At present, according to Burns, 90% of health care provision has been delivered by public providers fulfilling a largely social function, which are not subject to EU competition rules. In future, Burns says, “the majority of providers are likely to be classed as undertakings for the purposes of EU competition law.

"May I just explain this first? As NHS providers develop and begin to compete actively with other NHS providers and with private and voluntary providers, UK and EU competition laws will increasingly become applicable. The safeguards offered by those laws will therefore apply equally to all providers. In the health care sector, 90% of health care provision has been delivered by public providers fulfilling a largely social function. Organisations fulfilling a purely social function are not for profit and are not considered to fall within the definition of undertakings, so they are not subject to EU competition rules. Markets have been developing only in certain limited sectors over the past decade, as, for example, in elective care. However, in a future where the majority of providers are likely to be classed as undertakings for the purposes of EU competition law, that law and the protections it offers against anti-competitive behaviour will apply." - Simon Burns, Health and Social Care Bill, Public Bill Committee, 15 March 2011, column 718,
http://www.publications.parliament.uk/pa/cm201011/cmpublic/health/110315/am/110315s01.htm

Question for the Conservatives
• If the Tory-led Government’s proposals would not make UK and EU competition law increasingly applicable in the NHS, then why did the Conservative Health Minister say that they would, and explain in detail how and why they would?

Putting private patients first
Conservative attempted rebuttal - Ed Miliband claims “hospitals would be allowed to give priority to private patients”. But the truth is that NHS Foundation Trusts' primary legal purpose is to provide services to NHS patients in England – this will not change.

The truth
• The Tory-led Government’s impact assessment of its own Bill clearly states that “there is a risk that private patients may be prioritised above NHS patients resulting in a growth in waiting lists and waiting times for NHS patients”.
‘‘B153. In removing the PPI cap, it is assumed that FTs wishing to generate additional private sector income can do so from three different sources:
• existing independent sector private patients (privately insured or pay-as-you-go)
• additional non-EEA overseas private patients (whom otherwise would not have been able to be treated in England due to the caps); and
• patients who would have otherwise been treated on the NHS but for whom reduced private prices (due to increased competition) now makes private treatment just affordable.
‘‘B154. The impact of any such increase in private activity on NHS patients will depend upon how near to capacity an FT is operating and whether:
• NHS FTs respond to the additional private patient income by creating additional capacity to treat private patients; or
• NHS FTs simply allocate more of their existing capacity to treat private patients.
‘‘B155. If the former, then NHS patients may derive benefit if the new or enhanced facilities are shared between private and NHS patients.
‘‘B156. If the latter, there is a risk that private patients may be prioritised above NHS patients resulting in a growth in waiting lists and waiting times for NHS patients. This is the eventuality that the PPI cap was originally introduced to prevent.’’ - Health and Social Care Bill, Impact Assessment, 19 January 2011, p. 60

Question for the Conservatives
• Does the Tory-led Government agree with its own published impact assessment to the Health and Social Care Bill that “there is a risk that private patients may be prioritised above NHS patients resulting in a growth in waiting lists and waiting times for NHS patients”?
• If this is not a risk, why did they agree to put it in their own impact assessment?

Charging
Conservative attempted rebuttal - Ed Miliband claims “GPs would have the right to charge for services”. But the truth is that the Bill does not allow GPs to charge for NHS services. Any charges for NHS services must be introduced by primary legislation, as set out in the original NHS Act in 1946.

The truth
• This attempted rebuttal does not address the concerns the Labour Party has raised that the Bill transfers to GPs responsibility for determining which services count as “NHS services”.
• In fact, the Health and Social Care Bill takes away from the Secretary of State the duty to decide what NHS services are in the first place, and gives this to GP consortia. The current duty on the Secretary of State, as set out in the NHS Act 2006, is as follows.

Secretary of State's duty as to provision of certain services
(1) The Secretary of State must provide throughout England, to such extent as he considers necessary to meet all reasonable requirements—
(a) hospital accommodation,
(b) other accommodation for the purpose of any service provided under this Act,
(c) medical, dental, ophthalmic, nursing and ambulance services,
(d) such other services or facilities for the care of pregnant women, women who are breastfeeding and young children as he considers are appropriate as part of the health service,
(e) such other services or facilities for the prevention of illness, the care of persons suffering from illness and the after-care of persons who have suffered from illness as he considers are appropriate as part of the health service,
(f) such other services or facilities as are required for the diagnosis and treatment of illness.
(2) For the purposes of the duty in subsection (1), services provided under—
(a) section 83(2) (primary medical services), section 99(2) (primary dental services) or section 115(4) (primary
ophthalmic services), or
(b) a general medical services contract, a general dental services contract or a general ophthalmic services contract, must be regarded as provided by the Secretary of State.
(3) This section does not affect Chapter 1 of Part 7 (pharmaceutical services). - National Health Service Act 2006, clause 3

• The Health and Social Care Bill substitutes “A commissioning consortium” for “The Secretary of State” in the above clause.

9 Duties of consortia as to commissioning certain health services
(1) Section 3 of the National Health Service Act 2006 is amended as follows.
(2) In subsection (1)—
(a) for the words from the beginning to “reasonable requirements” substitute “A commissioning consortium must arrange for the provision of the following to such extent as it considers necessary to meet the reasonable requirements of the persons for whom it has responsibility”, and (b) in each of paragraphs (d) and (e) for the words “as he considers” substitute “as the consortium considers”. - Health and Social Care Bill 2011, Clause 9, p. 5

• The Bill also amends the Health and Medicines Act 1988 to transfer from the Secretary of State to GP consortia the right to make charges for the purpose of making additional income available for improving the health service.
• The Government has offered no explanation of the purpose of these significant transfers of powers to GPs.
• Dame Barbara Hakin, National Managing Director of Commissioning Development, Department of Health, says that introducing charging is not the Government’s intention, but could not deny that it might be allowed by the legislation. “[Government] lawyers have spent hours and hours trying to get the right words for the intent [of the policy) ... I find it disappointing that hordes of commentators out there then try and look for where one word might possibly allow for something that nobody intended in the first place. Quite frankly if that happened [commissioners attempting to reduce or charge for services] I’m sure the system would intervene.” - Dame Barbara Hakin, National Managing Director of Commissioning Development, Department of Health, Health Service Journal, 31 March 2011, http://www.hsj.co.uk/comment/opinion/hakin-rejects-disappointingreform-
criticisms/5027711.article
• It is not only Labour that has raised concerns about these powers. Professor Martin McKee of the London School of Hygiene and Tropical Medicine raised the issue in a letter to the Independent."There are now four simple changes that the Government can make to provide some reassurance. First, restore the duty of the Health Secretary to secure or provide a comprehensive service and be the only person, subject to Parliament, who can impose extra charges for NHS treatment." - Professor Martin McKee CBE, London School of Hygiene and Tropical Medicine, Independent, 8 April 2011, http://www.independent.co.uk/opinion/letters/letters-perspectives-on-changes-to-the-nhs-2264845.html
• As Ed Miliband said, Labour accepts that it is not the Tory-led Government’s intention to
introduce new charges. But Labour does question whether the Government properly understand the implications of their own bill and what the consequences of this transfer of powers are likely to be.

Questions for the Conservatives
• What charges do the Government intend to allow GP consortia to make, as a result of Clause 22 of the Health and Social Care Bill?
• Will the Government remove the clauses in the Bill which allow GPs to make charges they have not previously been entitled to make?