Editor's blog Friday 29 July 2011: Co-Operation and Competition Panel elective care AWP report pro-choice; anti-commissioning

My swearing detox is officially over, just so you have been warned.

What is this shit?


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And I am not blaming the press for reporting this in the way that they have. If you read down to the end of Martin Beckford's story, you actually find a sensible comment about demand management from David Stout of the NHS Confed.

The Co-Operation and Competition Panel's report basically tells the demand management part of commissioning that it can fuck off: what the NHS needs is more routine elective activity (which is about £12 billion of the £83 billion commissioners spend).

It's pro-choice and anti-commissioning.

It describes "practices which excessively constrain patient choice and appear endemic among certain commissioners".

There is a mildly non-idiotic bit, where the document outlines "some external factors that are incentivising commissioners to restrict patient choice, such as ISTC contracts with minimum income guarantees and the application of the market forces factor to the national tariff. The scope for patient choice would increase in the absence of these influences on commissioner behaviour. However, efficiency and investment considerations also need to be taken into account in assessing these issues".

Overall, though, it reads rather like a marketing document for private hospitals.

There is nothing wrong with the private sector per se; there is nothing wrong with the NHS making appropriate use of it where justifiable and affordable.

There is everything wrong with this report's bland assertions that competition and choice should over-rule commissioning decisions because competition and choice are Good Things. The evidence that is being produced by Propper, Cooper, Van Reenen and others is starting to be contested by non-partisan or parti pris academics.

So what is happening?
The document notes that "a significant number of PCTs are restricting patient choice and competition in routine elective care. In many cases, PCTs acknowledge that they are restricting patient choice, and have told us why they believe this is justified".

The naivety of the document is neatly exemplified where it states "The provision of information by PCTs to GPs about providers can also be accompanied by an implicit or explicit recommendation to GPs about which providers should be favoured by GPs when making referrals or advising patients on their choice of provider. Given their contractual relationship with PCTs, some GPs may feel obliged to follow these recommendations".

I can hear hollow but sustained laughter from PCT managers across the land as they read this. The CCP document is coming from a parallel universe.

It describes PCT's motivations as including "lower tariffs negotiated with local community-based providers when routine elective care is shifted from an acute to a community setting ... (and relates a PCT CE's anecdote that 'in London where you have providers in close proximity with different uplifts, it is clearly in the PCT’s interest to encourage activity to go to those with a lower market forces factors and reinvest the savings in other health improving outcomes'."

Shifting care to community settings out of acute ones is a policy objective (and not a recent one either). However, the CCP document states, "If the service that has been shifted from an acute to community setting and meets the Code’s eligibility requirements for a local tariff, then it would appear that commissioners would also be justified in decommissioning this service from the acute provider and thus restricting patient choice to those providers offering the community-based service".

What the fuck?

Sigh.

Right, let's do this quite slowly.

Patients with less complex conditions might be very suitable for receiving elective care in a community setting. There will always be patients who require more specialist care, because they are older, sicker or multiply co-morbid. However, if a commissioner has decommissioned the required service for more complex care from the acute provider as suggested by the CCP here, well, you've got problems, Ringo.

There is also a particularly magnificent section which reads,"We are aware of at least two Trusts where a discount of 50% is applied to the tariff for patient volumes in excess of the Activity Plan. The implementation of this discount is consistent with the Payment by Results Guidance for 2011/12. However, such a discount could have an adverse effect on patient choice and competition where the marginal price for additional patients (at 50% of the national tariff) is less than the marginal cost of treating these patients. In these circumstances, similar to tightly managed Activity Plans and block or capped contracts, the Trusts will have little or no incentive to attract additional patients".

Right. So NHS providers are trying to force other providers out of business by losing money on exceeding the contract?

Mmmmmm.

Overall, the document lionises Payment By Results, right at the point where much of the NHS regards it as a dangerously outmoded payment system.

PbR was fine in an era of growth and desire to drive a lot of increased activity. Just now, when the real priority is The Nicholson Challenge,  it looks dangerously outdated.

Thank God for another outbreak of sanity where the CCP report states, "the first-best situation is one in which PCTs were able to control expenditure on routine elective care through setting clinical thresholds for treatment, and using referral management systems to ensure that referrals to secondary care are appropriate and consistent with these thresholds".

The quote that won all the media attention, "Experience suggests that if patients wait longer then some will remove themselves from the list or will no longer requirement treatment when it is finally offered. A PCT may therefore save money 'overall' by increasing waiting times", leads to an explanatory footnote on page 29, which is striking.

The footnote to the quote is also worth reading in full: "We understand that patients will “remove themselves from the waiting list” either by dying or by paying for their own treatment at private sector providers, and that there is a relationship between the self-pay market in private healthcare and the length of waiting lists in the NHS. However, research suggests that the effect of increasing waiting times at all hospitals is unlikely to be significant. A 10% reduction in waiting times is associated with an increase in demand of between 1.35% and 2.35%. Assuming increases and decreases in waiting times have a similar effect, it is likely that an increase in waiting times will have a small impact on overall demand for services".

The document does not, however, demonstrate that this is a widespread attitude or problem.

It does correctly observe that letting waiting times lengthen is a once-only strategy: "while PCTs may be able to reduce expenditure within a year through increasing waiting times, there is a question as to whether overall NHS expenditure is reduced because providers may be unable to reduce their costs in any meaningful way in response to an increase in waiting times. Where providers are NHS organisations, these costs will be met by taxpayers.".