Editor’s blog Wednesday 21 July 2010: Government's confused response to Health Select Committee report on commissioning

The Health Secretary was in his element in front of the Health Select Committee yesterday, no? Detail, detail and more detail.

He makes more sense once you remember a few facts from his past. Andrew Lansley was a civil servant for eight years, the last three of them as PPS to Norman Tebbit (whom in 2001 Lansley cited as his "political hero”. The civil service background is a key to understanding his love of detail. Although it makes it even more surprising that his White Paper was so green.

He also ran two general election campaigns for the Conservative Party. The first, for John Major in 1992, was successful. The second, for William Hague in 2001, was not – and Lansley’s responsibility for the "political and strategic sides” of the latter campaign has been largely forgotten.

I was thinking again about his performance as I reviewed the Government’s official response to the Health Select Committee report on commissioning.

Quotes (in bold italics) from the government’s official response, and some thoughts, follow below.

What’s it all about, Andrew?
The official response to the HSC report states, “Commissioning is a crucial process in the NHS. It ensures that the health and care services provided effectively meet the needs of the population. It is a complex process with responsibilities ranging from assessing population needs, prioritising health outcomes, procuring products and services to managing service providers”.

This is interesting.

It is also not the definition health secretary Andrew Lansley gave the HSC in his evidence yesterday (very rough notes here): that ”Commissioning means establishing a conceptual framework, the purpose of which is to give patients choice".

Um, were we not moving away from process things?
“Liberating the NHS involves a cultural change at every level of the NHS. Decisions will be made closer to patients. Tiers of management will be reduced. Quality will be central, based on clinical criteria. This will transform the balance of power in the service. Power will be more in the hands of patients, more devolved, more clinically-led. Commissioning will reflect this design. The change in management will therefore be considerable.”

Spot-on that form should follow function, yet that “design” is mixing the philosophical (localism, quality) with that bad old process stuff (management tiers) that we just don’t do any more.

“Our proposals for GP commissioning include setting a maximum allowance for management costs. We will ensure that there is a consistent way of classifying and recording management costs, both for GP commissioning consortia and for the NHS Commissioning Board”

Good. When?

Once it is in charge of commissioning specialist services, “the NHS Commissioning Board will need to ensure the strong engagement of GP commissioning consortia in the arrangements for specialised commissioning and ensure a smooth interface between GP commissioners and specialised services”.

This is wildly confusing. Specialist commissioning will happen under the independent board. It will have very little or nothing to do with GP commissioning consortia, other than viring money from them (or perhaps from a national fund). Specialist commissioning will, however, need a lot to do with providers.

Tensions with cited material and other evidence
“We note that an independent study  has indicated that administrative costs in PCTs and hospital trusts associated with the introduction of Payment by Results (PbR) were relatively modest, representing about 0.2% of the total cost of activity covered by PbR”.

Here is one conclusion of the cited independent study of PbR: “PbR introduces incentives for gaming of information, and rather than placing the onus on PCTs to validate claims, greater centralisation of the auditing function might be considered”.

That independent study also made three recommendations:
- Centralise more data cleaning
- Hospitals should improve their internal costing
- Correct the imbalance of power between purchasers and providers

“With regard to the incentive for hospitals to generate activity to increase their income, the Government notes that the Code of Conduct for the operation of PbR says that PbR is not a mandate for providers to supply activity. …  This Government notes that audits of clinical coding in hospitals undertaken by the Audit Commission have found no evidence of clinical coding being manipulated by hospitals to increase income”.

It is always hard to prove deliberate fraud. But there are other issues to this.

Here is the Audit Commission’s PbR data assurance framework for 2010-11. It says that “since we started the programme in 2007, the average number of clinical coding errors at trusts has decreased by 5 per cent (from 16 per cent to 11 per cent)”.

Here is a report of the 2008-9 publication of that framework. It says that “The PbR Data Assurance Framework for 2008-09 sets the error rate at 12.8% for the year, an improvement from the 16.5% of 2007-08”.

Here is the Audit Commission’s ‘Assure’ publication, which tells us of inpatient acute care that in 2007-8, 8.9% of HRGs were incorrectly derived; falling to 7.1% in 2008-9 but rising to 10% in 2009-10 (it postulates that “the increased complexity of HRG4 which is leading to the higher HRG error rates”). It says that in 2007-8, 16.1% of procedures were derived incorrectly, falling to 10.7% in 2008-9 and 10.6% in 2009-10. And it says that in 2007-8, 17.6% of diagnoses were derived incorrectly, falling to 12.9% in 2008-9 and 12.6% in 2009-10.

What is striking about those figures?

Improvement in coding accuracy practically stopped between 2008-9 and 2009-10.

Can the introduction of HRG4 account for all the arrest of progress? Is the intrinsic error rate for coding – not only for HRG but also for diagnosis and procedure - about 1 in 10?

The role of competition
“Our vision is for a new direction in health that is founded on improving outcomes, empowering patients and delivering more patient-centred services through autonomous providers and empowered professionals. The role of competition in this vision is as a principal driver of improvements, allowing a more patient-centred system based on the principle of any willing provider that meets NHS standards within NHS prices.

“We recognise that in some areas of the country commissioners are faced with powerful acute sector providers and that alternative service providers are sometimes not available. In addition to devolving commissioning power to GP consortia that will have a stronger understanding of local health needs, we intend to address this by establishing an economic regulator for the health sector with powers to address barriers to entry and anti-competitive behaviour and by extending patient choice and the Any Willing Provider model".

Responding to the HSC report’s ’Whatever the possible benefits of using consultants, we doubt the ability of PCTs to use consultants effectively’, the Government says, “As part of the forthcoming engagement on our plans for NHS commissioning, we will be inviting views on what support GP commissioning consortia will need to access and evaluate external providers of commissioning support to help ensure value for money”.

Responding to the HSC’s comments that commissioners ’require a more capable workforce, with people able to analyse and use data better to commission services. They also need to improve the quality of management, attracting and developing talent’, the Government says, “the NHS Commissioning Board will be responsible for providing national leadership on commissioning improvement. This will include setting commissioning guidelines on the basis of clinically approved quality standard developed with the advice of NICE, designing model contracts for local commissioners to adapt and use with providers, designing the structure of tariff and other financial incentives, hosting some clinical commissioning networks (for example for rarer cancers and transplant services) to pool specialist expertise, making available accessible information on commissioner performance and tackling inequalities in outcomes of healthcare.”.

Thus simply ignoring the issue raised.