Creating More Mid Staffs

Robert Francis QC ascribes the poor care at Mid Staffs to:

The Trust prioritised its finances and its FT application over its quality of care, and failed to put patients at the centre of its work.

This is very clear: tight finances, so the trust was cutting staff (particularly nurses) and an obsession with achieving FT status above everything else, were the main drivers. The management of Mid Staffs was clearly poor and should have been replaced. In a recent debate in the Commons, Andy Burnham says:

In a national health service, there are areas where national direction is needed, and when things go wrong, there must be immediate powers of intervention, which, on my arrival in the Department in June 2009, I found I did not have. Foundation trust policy needs to be reviewed and adjusted to mitigate those dangers, including through a reconsideration of the power to de-authorise a failing foundation trust, which was recommended by the first Francis report, but repealed by the Health and Social Care Act 2012.

The original Act that created Foundation Trusts made them autonomous of Parliament which meant that they were no longer accountable to Parliament through the Secretary of State and so there was no power for Ministers to replace the management. On arriving at the Department of Health Andy Burnham found that he could not replace the management of Mid Staffs, the only people who could do that was Monitor. Indeed, it was Monitor who authorised a trust to be a Foundation Trust, it was not a case of the Minister deciding. It was Andy Burnham who changed the law to allow a Foundation Trust to be de-authorised, taken back under ministerial control so that the government can change the management.

The original Foundation Trust programme under New Labour was flawed. These three things were at fault: tight finances, Foundation Trust authorisation deadline and lack of ministerial control over Foundation Trusts.

At the 2010 election the Conservatives fully supported the Foundation Trust programme saying:

[We will] set NHS providers free to innovate by ensuring they become autonomous Foundation Trusts.

The Health and Social Care Act has several sections on "autonomy" which includes repealing the law that allowed Foundation Trusts to be de-authorised. Further, the White Paper on the NHS reorganisation said that all NHS Trusts must become Foundation Trusts within three years. The deadline was first put at April 2014, but then it was relaxed to April 2016. This deadline is as tight as the FT programme under New Labour.

Sixty percent of an NHS trust's income comes from Payments by Results (a fixed payment for activity)  and the current government has cut the PbR National Tariff by 1.5% in 2011/12, 1.5% in 2012/13 and from April this year, by another 1.3%. That means that NHS Trust incomes are going down. If an NHS Trust is efficient and makes a surplus on PbR payments, it cannot keep the surplus (this is a privilege that only FTs have) and instead the surplus is clawed back by the government as part of its deficit reduction programme. This means that NHS Trusts are under increasing financial pressure.

The three things that resulted in poor care at Mid Staffs are worse under the Coalition government, and they have been deliberately made worse. Indeed, the government could have retained the ministerial ability to de-authorise a failing Foundation Trust, but the government have deliberately repealed this law.

There is currently a Conservative HQ orchestrated attack on Andy Burnham. It is clear that it is orchestrated because the attacks are all the same, using the same language and the same points. Conservative HQ have used minor Tory MPs (so far Chris Skidmore, Charlotte Leslie and Steve Barclay) to make these attacks initially. They are testing the water to see how much mud sticks, and if it does, they will launch a much bigger attack using higher profile MPs. The sheer hypocrisy of these attacks is breath-taking. Rather than attacking Burnham (who tried to address the issues of Mid Staffs) the Tories should be learning from his actions to ensure that the situation will not happen again. Instead, the Tories are putting together the pieces to create many more Mid Staffs and are doing it fully warned of the consequences.

NHS Privatisation

There are two main aspects to the privatisation of the NHS. On the one hand there are the private, profit-making companies like Serco, Care UK and Virgin, who are contracted to deliver NHS services and make a profit that will be passed onto shareholders. This website is not about that aspect of privatisation. On the other hand there are NHS organisations behaving like private companies and carrying out treatments for fee-paying patients. This website is about this second aspect: private patients within the NHS.

The original 1946 NHS Act had provision for consultants to carry out their private practice in NHS hospitals. The Act was controversial and contained several compromises to persuade doctors to work for the new NHS. The numbers of private patients in NHS hospitals has waxed and waned with government policies and the economic situation. When the New Labour government brought in legislation to establish Foundation Trusts - autonomous NHS providers that are run like businesses – there was a lot of unrest on the Labour backbenches that the Act would be a massive expansion of the numbers of private patients. To assuage this backbench unrest, the government at that time created Section 44 of the 2006 NHS Act. This section said that:

the proportion of the total income of an NHS foundation trust … in any financial year derived from private charges is not greater than the proportion of the total income of the NHS trust derived from such charges in [2003]

The proportion of private patient income to the total patient income in 2003 is regarded as the private patient income cap and a Foundation Trust cannot exceed this proportion in any subsequent year. This cap is quite arbitrary. It includes the income from actual physical, in-the-flesh, patients, but it also includes income from other services like providing pathology or income from intellectual property. If an FT rents part of its site (for example, accommodation for nurses) then the money contributed to the private patient income even though no private patients were involved. This section of the Act, designed to restrict Foundation Trusts from offering a two tiered service, was clumsily applied. The 2009 NHS Act added a section specifically for private patients in mental health trusts. Section 33 said:

in the case of a mental health foundation trust designated under subsection (2A), that proportion or 1.5% if greater.

This section says that the minimum private patient income cap for a mental health provider was 1.5%. So even if the mental health provider had no private patient income in 2003, its private patient income cap is still 1.5%. For acute FTs the minimum cap was still 0%. The average percentage of private patient income for all FTs was 2% in 2011/12. Like all averages, this figure hides the wide range of income. Twenty eight FTs had no private income during this period, and 89 trusts (62%) had a private patient income less than £1m. A few trusts had very large incomes, as shown in the following table.

Foundation Trust	Private Patient Income (£000)
The Royal Marsden NHS Foundation Trust	51,144
Royal Brompton & Harefield NHS Foundation Trust	29,117
Great Ormond Street Hospital for Children NHS Foundation Trust	28,157
Guys and St Thomas NHS Foundation Trust	23,081
Royal Free London NHS Foundation Trust	19,224
Moorfields Eye Hospital NHS Foundation Trust	18,682
University College London Hospitals NHS Foundation Trust	18,006
Kings College Hospital NHS Foundation Trust	16,882
Chelsea and Westminster Hospital NHS Foundation Trust	11,264
The Christie NHS Foundation Trust	10,708

The Health and Social Care Act 2012 (HSCA) repealed sections 44 and 33. During the passage of the Act there were the same arguments about private care in NHS hospitals that there were during the passage of the 2006 Act. To try and reassure Lib Dem peers, the Coalition government came up with Section 164. Like the Section 44 before it, this section was also a fudge:

An NHS foundation trust does not fulfil its principal purpose unless, in each financial year, its total income from the provision of goods and services for the purposes of the health service in England is greater than its total income from the provision of goods and services for any other purposes.

This is usually quoted as the “49% rule” and is interpreted (wrongly) that 49% of the patients treated by a Foundation Trust can be private patients. This assumption ignores the fact that because it is far more expensive to treat a private patient the income from a private patient will be far more than from an equivalent NHS patient, so a Foundation Trust will need to treat fewer private patients to bring in the same income. However, this section is wider than Section 44 because the wording says that the majority of a Foundation Trust’s income must be from the NHS. This implies that the other income is from non-NHS sources rather than the more specific private patients.

Foundation Trusts are interpreting non-NHS income quite widely. The money that comes from car parking charges literally comes out of the pockets of patients (and not from the NHS) so is regarded as being part of the “49% rule”. If a trust delivers services (like speech therapy) to a local authority, the income does not come from the NHS and so is part of the “49% rule”. A Foundation Trusts does a lot of partnership working with social care and voluntary groups, and any income from this is treated as non-NHS income and hence part of the “49% rule”. In practice, it is extremely unlikely that 49% of the patients a Foundation Trust treats will be private patients.

The Health and Social Care Act has had a significant effect on Foundation Trusts. Analysis of the Forward Plans (the plan for the next three years) of the 144 Foundation Trusts that existed in June 2012, shows that 58 trusts (40%) intend to increase their private patient income. 

The new “business-like” aspect of Foundation Trusts mean that trusts are now creating private companies. Some are professional, serious businesses, like Kings Health Partners or Moorfields Dubai hospital. Others are comically amateur, like the private hair removal service at The Rotherham hospital. What is clear, however, is that such private enterprises distract from the core business of a Foundation Trust, that is, treating NHS patients. Section 164 of the HSCA supposedly addresses this:

An NHS foundation trust which proposes to increase by 5% or more the proportion of its total income in any financial year attributable to activities other than the provision of goods and services for the purposes of the health service in England may implement the proposal only if more than half of the members of the council of governors of the trust voting approve its implementation.

However, when you consider that the average proportion of private income is 2% for all Foundation Trusts, an increase of 5% is so large that it is unlikely to ever occur. This part of the Act will never be invoked.

The main private business that Foundation Trusts do is via private patient units (PPU). There are 43 foundation trusts with a PPU and these are usually just a few rooms (five or ten). The Forward Plans of Foundation Trusts show that 12 trusts intend to open a PPU. Every trust says that their PPU will provide income to the trust. However, closer reading of accounts and annual reports give a different picture. Although PPUs provide an income, the accounts do not give the expenditure of the unit and so we do not know the net profit or loss of providing a PPU. Trusts say that income from PPUs benefit NHS patients, but there is little evidence of this, and there is some evidence that private patients are detrimental to NHS patients. Indeed, most PPUs advertise the fact that private patients have full access (indeed, often better access) to NHS facilities. More telling is the occasional comment from trusts that the PPU was established to meet the demand from consultants. The HSCA is likely to increase this demand, consultants knowing that there are few impediments are demanding that their NHS trust allow them to conduct their private practice on trust premises.

Foundation Trusts also get income from charities. About a third (49) of trusts have charity income so small that they are listed as zero in their accounts. Nine tenths (129) of trusts have charity incomes less than £1m. However, there are a few trusts with significant charity incomes:

Foundation Trust	Charity Income (£000)
The Royal Marsden NHS Foundation Trust	31,790
Guys and St Thomas NHS Foundation Trust	12,667
Great Ormond Street Hospital for Children NHS Foundation Trust	9,334
University College London Hospitals NHS Foundation Trust	8,308
The Christie NHS Foundation Trust	6,697
University Hospitals Birmingham NHS Foundation Trust	3,334
Moorfields Eye Hospital NHS Foundation Trust	2,854
Blackpool Teaching Hospitals NHS Foundation Trust	2,357
Kings College Hospital NHS Foundation Trust	1,648
Gloucestershire Hospitals NHS Foundation Trust	1,569

It is apparent that there is a correlation between private patient income and charity income. In particular, trusts treating a lot of cancer patients (Royal Marsden, Guy’s) get a lot of income from cancer charities. The Royal Marsden has a huge income from private and charity sources and while it is clear that private patients benefit from the trust’s charity income (they have access to the Cyberknife facility bought with charity funds) it is unclear what benefits NHS patients have from the trust treating private patients.

One of the most business-like trust is The Christie, a specialist cancer FT in Manchester. The Christie has a joint venture company with HCA to treat private patients. The trust has used this company to hide its private patient income by listing the profit from the joint venture as its private patient income rather than the actual income from the private patients.

The Christie is one of two FTs that have been chosen to host a Proton Beam Therapy Unit (the other is University College London). These units are extremely expensive to establish, costing up to £150m. The government have rejected private funding of these units, so the capital costs will be met by taxpayers. A single unit can treat 750 patients and two units running at full capacity will only just meet the demand for all UK NHS patients (including 5% of patients for research). However, The Christie are currently building a private clinic specifically so that private patients can use the proton beam unit, even though there is no spare capacity for them. This raises the question of who will take precedence when the unit is running at full capacity: a private patient or an NHS patient.

It is clear that the passage of the Health and Social Care Act will increase the numbers of private patients treated by NHS hospitals: 58 trusts say they will increase their private patient income, and 12 say they will create a private patient unit. Annual reports and reports on trust websites show that these patients are more likely to benefit from NHS facilities than NHS patients will benefit from the income from these patients. Further, several FTs state that the reason for establishing a private patient unit is to benefit their consultants rather than NHS patients. NHS privatisation is controversial, and this report shows how the privatisation will occur from within.

About the Report

The report is a result of the analysis of the Annual Reports and Forward Plans of the 144 Foundation Trusts that existed in June 2012. The report lists the trusts' current private patient provision and plans to increase the numbers of private patients in the future. The web version of the report includes a selection of trust profiles, each one listing the private patient provision for that trust obtained from the Annual Report, Forward Plan and Board papers.

Executive Summary
Report
Site Map
About the Author

No Gaps

What is the NHS?

It is a difficult question to answer. Some people say it is free at the point of use, paid by general taxation and others say it is public provision of healthcare, and although both of these are important aspects of the NHS, I think the essence of what is the NHS is something more fundamental: no gaps.

In 1946 the government issued a white paper describing the new NHS (Cmd 6761). The document starts with this:

The Bill provides for the establishment of a comprehensive health service in England and Wales. A further Bill to provide for Scotland will be introduced later.All the service, or any part of it, is to be available to everyone in England and Wales. The Bill imposes no limitation on availability – eg,. limitations on financial means, age, sex, employment or vocation, area of residence or insurance qualification.

The NHS was created to provide a comprehensive, universal health service. Everyone was included, there were no exclusions. No gaps. The healthcare provided was comprehensive and every treatment was covered and made available to everyone. No gaps.

This principle has persisted to today. It is so instilled into the NHS that the public assumes that it happens and cannot imagine any other situation. The NHS puts a lot of effort in making sure that services are accessible by everyone, regardless of gender, race, religion, sexuality or disability. When commissioners plan the services for a population they look very carefully at demographics to tailor a service to the region, but they also plan for the minorities in the population to ensure that the services are accessible to them too. The same is true of providers, hospitals make every effort to ensure that everyone can receive their services.

For example, a patient involvement officer told me about a case he had worked on recently. The local hospital found that a particular service had few people from the Afro-Caribbean community and asked him to find out why this was the case. The officer found that elders in this community distrusted people in white coats and this distrust had been passed down through the community via churches and community groups. The patient involvement officer talked with the elders to find out the reasons for their fears and then liaised with the hospital to make changes to allay these fears. Once the elders were reassured the newly gained trust worked its way through the community and that gap had been closed.

To some people, this was patient choice: patients (though ill informed) chose not to use an NHS service. To people who have an obsession for consumer-led patient choice, the issue should stop there. But the NHS has a policy of no gaps deep in its core and the NHS (the providers and the commissioners) ensured that this population was covered.

The no gaps policy is alien to the private sector. The reason is very clear: it is cheaper to provide a one-size-fits-all service for the majority of people, and it is very expensive to provide a service that is guaranteed to cover everyone. When tendering for a general service, the private sector will deliberately exclude the hard to cover populations. On the other hand, the private sector can, and sometimes is, used to fill the gaps, but they will do so at a cost. 

No gaps in the NHS presents one of areas where the government's policy to have more private provision will fail. The government will allow private providers tendered under the section 75 regulations, or through Any Qualified Provider, to provide patient exclusion criteria. In other words, this government legitimises a policy of gaps in healthcare provision. In these exclusion criteria, private providers will cite their incompetencies: they will list their lack of equipment and lack of expertise to treat patients with multiple co-morbidities or who are difficult cases. Patient choice is meaningless if a patient is turned away from a provider because the provider cannot provide a safe and effective service for that patient. However, the government will claim that there is patient choice, while allowing such providers to turn away patients. It will be NHS providers, with their deep rooted no gaps policy, who will treat those patients, because the NHS never turns a patient away.

Section 75 suggested amendments

What's the Problem?

Tucked away in the Health and Social Care Act 2012 is Section 75. It says this:

75 Requirements as to procurement, patient choice and competition
(1) Regulations may impose requirements on the National Health Service Commissioning Board and clinical commissioning groups for the purpose of securing that, in commissioning health care services for the purposes of the NHS, they—
(a) adhere to good practice in relation to procurement;
(b) protect and promote the right of patients to make choices with respect to treatment or other health care services provided for the purposes of the NHS;
(c) do not engage in anti-competitive behaviour which is against the interests of people who use such services.
(2) Requirements imposed by regulations under this section apply to an arrangement for the provision of goods and services only if the value of the consideration attributable to the services is greater than that attributable to the goods.
(3) Regulations under this section may, in particular, impose requirements relating to—
(a) competitive tendering for the provision of services;
(b) the management of conflicts between the interests involved in commissioning services and the interests involved in providing them.
(4) The regulations may provide for the requirements imposed, or such of them as are prescribed, not to apply in relation to arrangements of a prescribed description.

Starting with subsection (2) the important point here is that the section is only about services, not goods so if there is a contract that involves both goods and services, the regulations only apply if the value of the services in the contract is larger than the value of the goods. Subsection (1) gives the usual waffle about patient choice, but significantly, subsection (1c) says that services must not be procured in an anti-competitive way. The section does not define anti-competitive nor does it define the phrase against the interests of people who use such services.

The Explanatory Notes say:

15 Chapter 2 establishes concurrent powers for Monitor, alongside the Office of Fair Trading (OFT), under specific sections of the Competition Act 1998 and Enterprise Act 2002, as they will apply in the health care sector in England. It also provides delegated powers for the Secretary of State to make regulations imposing requirements on commissioners of NHS services, regarding good practice in procurement, protecting patients’ rights to patient choice, imposing prohibitions on anti-competitive conduct and managing potential conflicts of interest, which Monitor will enforce. It is intended that these regulations will enshrine a full range of options for commissioners, including the ability to secure services without competition, where this would be in patients’ interests.

Again, this uses the phrases anti-competitive behaviour and patients' interests but does not define them. The note does say that the regulations should enshrine a full range of options for commissioners and include the cases where services can be procured without competition in patients' interests.

There are two opposing themes here. On the one side the law says that services must be procured in a way that is not anti-competitive and in the patients' interests, and on the other hand there should be full options for services to be procured without competition but also in the patients' interests. To be able to describe both things, you have to define what is competitive and what is anti-competitive, and above all, what in the patients' interests means.

The recently withdrawn SI 257 regulations defines neither. The main sections are 5 and 10. Starting with the latter:

10.—
(1) When commissioning health care services for the purposes of the NHS, a relevant body must not engage in anti-competitive behaviour which is against the interests of people who use health care services for the purposes of the NHS.
(2) An arrangement for the provision of health care services for the purposes of the NHS must not include any restrictions on competition that are not necessary for the attainment of intended outcomes which are beneficial for people who use such services.

Again, these mention competitive and anti-competitive behaviour and the interests of people (or the intended outcomes). The regulations do not define these, other than perhaps, that anti-competitive is the opposite of competitive. Reading this through, however, you get the impression that it is people using the services (ie patients) who are being hurt, and so would have a complaint. Therefore, you would assume that it would be patients who make the complaints. However,

13.—
(1) Monitor may investigate a complaint received by it that a relevant body has failed to comply with a requirement imposed by regulations 2 to 12, or by regulations 39, 42 or 43 of the 2012 Regulations (choice of health service provider).
(2) Monitor may on its own initiative investigate whether a relevant body has failed to comply with a requirement imposed by regulation 10.
(3) Monitor may not investigate a matter which is raised by a complaint under paragraph (1) where the person making the complaint has brought an action under the Public Contracts Regulations 2006 in relation to that matter. 

The two significant things here are that subsection (3) says that the complainant must not have already complained under the Public Contracts Regulations 2006  this instinctively says that the complainant is not a patient, but a potential contractor. Further, subsection (1) says that an investigation does not even need a complainant, Monitor can roam willy-nilly around commissioning land poking its nose into commissioning to see if it is anti-competitive.

Again, these regulations do not define what the patients' interests are, but if the complainant is not a patient it is hard to see how they could successfully bring a complaint when the complaint is not about an action against their interests. It is also important to note that the regulations do not give any time limit, so a contract could be signed, and a provider could be delivering a service, and then another provider can complain. In such a case, Monitor has wide powers to re-tender or alter a the contract which is potentially disruptive and could easily be against the interests of the patients using the service!

Going back to section 5 of the regulations to see the only place where the full range of options are addressed:

5.—
(1) A relevant body may award a new contract for the provision of health care services for the purposes of the NHS to a single provider without advertising an intention to seek offers from providers in relation to that contract where the relevant body is satisfied that the services to which the contract relates are capable of being provided only by that provider.
(2) The services are to be determined as capable of being provided by a single provider only when—
(a) for technical reasons, or for reasons connected with the protection of exclusive rights, the contract may be awarded only to that provider; or
(b) (only if it is strictly necessary) for reasons of extreme urgency brought about by events unforeseeable by, and not attributable to, the relevant body, it is not possible to award the contract to another provider within the time available to the relevant body for securing the provision of the services.

This says that the only cases when competitive tendering can be avoided are for technical reasons (with no definition), for the protection of exclusive rights (protecting those all important patents), or in cases of extreme urgency. This does not seem like a full range of options, indeed, it is a very narrow range and this is the reason why most people say that these regulations indicate that every NHS service must be tendered through competitive tendering.

In response to the complaints about these regulations, Lord Howe, the Minister of State, says about regulation 5:

In practice this criterion will be broad in its application. For example, this may be the case where the requirement is for provision of acute hospital services accessible on single sites; a range of integrated services to be delivered in the community; or where clinical volumes need to be maintained to protect patient safety. It is also likely to be the case for the provision of services in more rural or remote areas of the country.

Well, if Lord Howe thinks that these very broad definitions are how regulation 5 should be used, why doesn't regulation 5 say this? On competitive markets, Lord Howe says:

Furthermore, the regulations would not oblige commissioners to create the conditions for new markets to develop where they consider this unnecessary. For example, commissioners would not be obliged to fragment services to enable providers to compete or stimulate market entry where this would not be in patients' interests.

Again, he uses the term patients' interests without defining what this means. Lord Howe makes a lot of assumptions here, because it is not him that will determine if there is a case to bear on anti-competitive behaviour, or that a provider is an exception. This decision is made by Monitor. The explanatory note says that both Monitor and the NHS Commissioning Board must issue guidance about how commissioners will be compliant with the regulations and that only the former must get the Secretary of State's approval of the guidance. There is a potential for conflicting advice.

These regulations are a mess, there is not enough information to be able to interpret them and the draconian powers of Monitor has made commissioners very wary. This has led to Dr Mike Dixon (the interim president of the official sounding, but purely self appointed club, NHS Clinical Commissioners) to say that the regulations will "force commissioners through expensive procurement" processes and that commissioner "may walk".

So What Next?

The government have withdrawn the regulations because they say that the wording has been misinterpreted. Norman Lamb, Minister of State, said in the Commons:

Concerns have been raised that commissioners would have to tender all services. This is not our intention. And we will amend the regulations.

Lamb is not saying that the regulations are wrong, just that everyone else has misinterpreted them. This means that the new regulations will be more of the same, just worded differently.

So what could the government do now to keep with their idea of a plurality of providers "in patients' interests" without scaring off commissioners? Here are some suggestions:

1. Give a time limit. Ensure that a complaint against commissioners must be within a certain amount of time of the awarding of the tender: a month?
2. Remove the power of Monitor to act as a roving investigator. It should act only upon complains, it should not have the power to initiate the complaint, investigate and adjudicate.
3. Define "in patients' interests". Put the definition in the regulations. For example, the regulations could say that if more than (say) 25% of patients using a service were unhappy with the lack of choice, the contract is deemed not to be in patients' interests. Such a regulation could be powerful in removing poor providers.
4. Provide in the regulations a full range of options for commissioners. For goodness sake, commissioning is hard, don't make it harder. If Lord Howe thinks rural hospitals should be exempt then make the exception in the regulations. Provide a comprehensive list: that is what full range of options means.
5. Only allow patients, or an independent patient advocate, to make the complaint. The advocate should not be an organisation that will tender for the service. The advocate could be a charity, a patient group, a local council, or it could be local Healthwatch. This will make sure that in patients' interests means patients not providers.
6. The regulations should say that if a complaint fails then the complainant should be liable for all the costs of the investigation: both the costs of Monitor and the legal costs of the commissioners. This would have the double benefit of making Monitor cost-neutral (deficit reduction in action) and it would deter speculative and spurious claims.

Without such assurances commissioners will most likely put most contracts out to tender. Commissioners are responsible with public money and hence will try to avoid legal costs. No commissioner can justify spending scarce funds on legal fees rather than healthcare. This will mean that CCGs will employ Section 75 Compliance Officers to ensure that every single contract will be compliant with the regulations. Inevitably, such compliance officers will be risk averse and will competitively tender all contracts unless they are absolutely clear there is no danger of a complaint.