Proud of the BBC

 

This is what I got for Christmas. You can get one too, from Mitch Benn's website. Oh and while I am at it, watch his POTBBC video.



(The image is from Mitch Benn's site, but I hope that since I have provided so many plugs he won't mind me using it.)

Flu jabs

There is a lot of grumbling about flu jabs. Clearly there has been a cockup because the uptake of flu vaccinations this winter has not been good enough, and now that cases of flu are increasing, and the numbers of people needing intensive care in hospitals are at high levels, people are starting to go to their GPs demanding a flu jab and finding that there are none available. Why? Poor planning. However, the good news is that you can get a flu jab but only if you are willing to pay Boots £12.99 or Asda £8.

But note: you have to pay. And note: if Boots or Asda have the vaccinations then your GP doesn't (but note, Dr Clare Gerada the chair of the RCGP wants restrictions on sales). Last week Newsnight interviewed a GP who complained that it was a waste of his time to be hunting for available stocks of the flu vaccination, as a GP he should have access to the stocks that he needs. He's right, NHS GPs should have access to the vaccinations they need.

There are two explanations for this cockup. The first is that Lansley is just completely incompetent, he has no clue about how to run the NHS. The other explanation is that this is how the new NHS is supposed to work: those who want the flu jab should purchase it from a pharmacy and those who actually need it can only hope that the safety net of the NHS catches them. 

I happen to think that both explanations are true: Lansley does not have the competence, nor the inclination to run the NHS and he is trying as hard as possible to rid himself of this responsibility. It is also an illustration of what the NHS will be like if Lansley's re-organisation goes through.

I am quite familiar with the complaints of the worried well (and also at risk groups) complaining that they cannot get a flu jab from their GP and have to resort to buying it from a private supplier like a pharmacy. I am also familiar with the complaints that GPs cannot get the vaccination for their patients because the pharmacies are buying up all of the stocks. I am familiar with this because I have friends in the US and these were their complaints in the winter of 2009/10. At that time I smugly explained to my American friends that such issues did not happen in the NHS. Well now it does, and the rest of the NHS will soon be like this.

People with tea cosies on their heads

Today there was a piece in the Financial Times about Foundation Trust (FT) governors.

According to the white paper, all hospital trusts have to be FTs by 2014 (although the Department of Health admits that about 20 have no hope of getting their finances in a state to qualify as a FT).

A FT is semi-autonomous organisation. The state still owns the trust (indeed, every year they have to pay the Secretary of State a public dividend), but (nominally at least) the state does not run the trust. FTs are run by a board of directors. The board is made up of executive directors and non-executive directors. The executive directors are the managers who run the trust: the chief executive, the finance director, the medical director, the director of nursing, etc. These are people who know how the hospital works and are expert in its day-to-day running.

The non-executive directors (NEDs) are part time and are appointed from the community. According to the Appointments Commission:

Non-executive directors are responsible for providing independent scruitiny and constructive challenge of their executive colleagues and their organisations.  It is a role which has taken on new importance in today’s economic and political climate.  Budgets are tight and there’s an increased need to account for the proper use of public money while at the same time delivering high-quality.

Consequently, NEDs are specifically chosen for their business acumen. Their skills in business means that they can scrutinise the hospital's finances and the ways that the executives run the hospital. The chair of the trust is a non-executive director and chairs the board meetings.

A Foundation Trust also has governors. When the FT is created it determines how many governors it has, but the majority must be publicly elected by the "trust membership". Trust members are members of the community that use the trust and again, the trust determines the criteria for membership (some have an opt-out scheme, so that all patients are members unless they opt out; most trusts are opt-in where members of the community opt to be a member). The non-publicly-elected governors are "stakeholder" and staff governors. The stakeholder governors represent some other part of the community: local authorities, GPs, voluntary groups, local medical schools, PCTs etc; the staff governors are elected by the trust's staff.

The board of governors appoints the NEDs (including the chair of the trust) and they hold the NEDs (and through these, the board) to account. The board of governors is chaired by the chair of the trust, so this gives a link between the governors and the board.

The main role of the governors is to represent their members (the public membership, the staff membership or the stakeholders they represent) and ensure that their members are properly served by the trust. The governors do not run the trust. They are expected to influence the trust strategy and to highlight when the trust's decisions will affect their members adversely. This means that governors do not have an implicit right to inspect wards, nor rebuke staff. They do not have the responsibility of scrutinising the trust finances or care quality other than on a general sense that if the trust has poor finances and care quality it will adversely affect their members. (On this last point, Mid Staffs FT governors failed, however, I have spoken with a staff governor from this trust and she told me that the trust did not co-operate with the board of governors and consequently the governors did not know the full extent of the situation in the trust.)

In some respects the role of Foundation Trust governor is quite weak: they have no powers other than the ultimate extreme power to dismiss one or all of the NEDs - including the chair of the trust. Note that the most powerful member of the board of directors is the chief executive of the trust, not the chair. However, if the Foundation Trust is properly constituted and the board of directors treats the governors correctly, they can be very useful to the trust as a two-way channel to the community: determining what the community wants and as an advocate for the trust to explain to the community the trust policy.

The main regulating body, Monitor, is more powerful than the Foundation Trust governors, because Monitor can intervene in the running of a trust. For example, if a trust consistently shows poor financial governance Monitor can intervene ranging from taking a closer day-to-day oversight of the trust's finances, to replacing the financial team. In the future Monitor will not have this power since it will act as the regulator of all hospitals providing NHS-funded care (ie including private hospitals over which it has no governance control).

The Financial Times article is a bit thin on new information, it simply explains what the white paper says about governors as modified after the so-called "consultation" on the white paper. The article explains:

Under one of health secretary Andrew Lansley’s more radical changes to the health service, all public hospitals are to be turned into NHS foundation trusts – free-standing operations able to borrow, make surpluses and losses and no longer directly answerable to the Department of Health.

This has been the case since 2004, all FTs have been making surpluses (and hopefully not losses) although their ability to borrow has been restricted. The FT article goes on to explain that Lansley's policy is to put more responsibilities on governors:

locally elected governors, who currently appoint the chairmen and non-executive directors of trusts, will have almost full responsibility for the safe conduct of the business

This is a large change since, as I explain above, the NEDs currently scrutinise the boards decisions and hence the "safe conduct of the business". I wonder what the role of NEDs will be, since it appears to me that much of their responsibility will be handed over to governors. The response to the white paper consultation Legislation Framework and Next Steps section 6.15 says that the new bill will:

• make explicit the duty of governors to hold the board of directors to account, through the chair and non-executive directors (whom they have power to appoint and remove);
• give governors power to require some or all of the trust’s directors to attend a meeting. For transparency, the FT’s annual report would have to list any occasions when this power was used;

This sounds not much different to what governors do already, however, the Next Steps document goes on to say that this:

reflect a significant cultural shift: placing genuine responsibility on FTs themselves rather than on Monitor as FT regulator

In other words, it shifts this responsibility from Monitor to the governors.

Bear in mind what this shift means. Currently the governors represent their members. Their influence on the trust is solely for their members. If the trust wants to change the services it provides, the governors have a responsibility to ensure that the service change will benefit their members. Under the new arrangements the governors will have a responsibility to ensure that the service change will not affect the safe conduct of the business. Can you see the shift? Governors currently put their members first, but in future they will have to put the business of the trust first. Currently governors are community representatives, in future they will have to be business-savvy.

The Financial Times points out that the shift will mean a change in the skills of governors and it quotes David Bennett, the interim chief executive of Monitor:

there is a worry that as a whole they do not look like a group that is yet well equipped to take on this new role

Indeed not. Most elected governors stood for election to represent their community, not to run the trust. The article has a rather insulting quote from a "senior NHS figure":

According to other senior NHS figures, governors vary “from those with extensive business backgrounds to people with tea cosies on their heads”. 

I am an FT governor and I can say that out of the 14 elected governors at our trust just one is a current businessman, and two others have business backgrounds. The remainder have academic or medical backgrounds, or non-NHS related backgrounds; these I suppose are the "tea cosy wearers". (Under this definition, I am a "tea cosy wearer".) The "tea cosy wearers" are the community representatives and are the sort of people Lansley does not want, yet the community is best served by such people. At our FT meetings we do not spend time talking about productivity of the staff, or cost improvement programmes (we are shown the figures), instead we spend our time determining how the trust can provide the best service for the community. In my opinion the "tea cosy wearers" are far more important than the business people. At the last FT meeting, the businessman governor did make a fuss about productivity (unwarranted, the productivity is high at our trust), which drew the response from one of the "tea cosy wearing" governors "this is a hospital with patients, not a business with customers!".

We are constantly bombarded with the Big Society rhetoric from this government that says that people who care about their community should be running public services. We get the impression that Cameron wants "tea cosy wearers" running public services, but Lansley says he wants business people. I suspect he will not get what he wants. FT governors are unpaid and business people are unlikely to devote much time to an enterprise if they are not paid for that time (if they give away their skills so freely they cannot be successful business people).

I had better go shopping tomorrow for some new head wear for our next Foundation Trust governors meeting.

NHS Crises

Nick Bosanquet is the professor of Health Policy at Imperial College. He is also a consultant director of Reform (while it describes itself as a non-party think tank, it is certainly pro-market when it comes to public service reform). I do not accept his pro-market views for NHS reforms but I do respect his knowledge of the NHS and his predictions for the future.

Recently at a seminar for Policy Review TV (the contribution starts at 1:20 but the entire seminar is worth watching) he described what he called "Bosanquet's Halloween Shocker" referring to the imminent financial crisis in the NHS. Prof Bosanquet started by giving some historical background:

There have been four rather similar crises in the NHS. These have followed a pattern. Funding and activity had increased by generous funding by government for a time and at some point that hit a funding constraint.

Sounds familiar? The four other financial crises in the NHS history had been when there had been a period when the NHS was well funded followed by a budget squeeze. Prof Bosanquet continues:

If the NHS was a flexible system that could say we will lower our costs, deliver more services and improve quality even though we have got less funding then that might not be a problem. But the NHS is not a flexible system.

In other words, the NHS is not flexible enough to withstand a sudden drop in funding.  In fact, it is arguable that no large organisation is. Imagine the effect on a large commercial organisation if it finds a sudden drop in income, it is doubtful that such a company would survive, so I do not see why we should expect the NHS to be any different.

Bearing in mind the Spending Review allocation of funds to the NHS, Prof Bosanquet predicts that:

Around November the first 2011 many trusts will find that they've not got the funds for the rest of the year. They will be faced with a very hard choice of insolvency or cutting back services.

Although it is clear that the financial crisis will be caused by the Conservative government inadequately funding the service, Prof Bosanquet gives three reasons why the financial crisis this year will be different to the previous four in the service:

1. Patients are more demanding for higher quality treatment
2. Many hospitals with PFI projects have not yet started paying the full charges.
3. The number of doctors being trained has increased and there will be pressure on trusts to find jobs for these graduates.

Prof Bosanquet says that these factors will make this financial crisis much worse than the previous ones, he says that the NHS will face the "father and mother of a fifth financial crisis".

A financial crisis in the NHS will be disastrous. Other than Prof Bosanquet's prediction of hospital insolvency (and remember that Lansley says that he will not "bail out" a trust that goes into debt, hence the hospital will have to close), there will be service cuts which means rationing of treatment. Both of these will result in public outcries. The outcry will not be from a section of the population that the government is happy to ignore (as was the case with the removal of EMA), it will be from their core vote: middle class and predominately older voters. The government will be seriously unpopular, and a Prime Minister like Cameron, who rules with one eye on his reputation, will be tempted to seek a quick fix. The only solution will be to increase funding.

A recent parliamentary report gives the level of funding for the NHS since it was created.The percentage increases in NHS funding is plotted on the following graph.

The interesting point about this graph is that there are periods when funding is fairly constant, followed by sudden dips (for example the dips at 1961, 1969, 1977 and 1996). The dips are then followed by sudden increases. In 1963 following the 1961 dip, funding has increased by 6.6%; in 1970 the funding increased by 8.5% and 1980 the increase was 9.8%. The point is that a sharp cut in funding cannot be sustained, in fact, the NHS has never sustained more than one years cut in funding, and any cut is followed by a sharp increase in the next and following years.

The Spending Review at best gave the NHS flat funding for the next four years, but other analysis suggests that NHS funding will actually be reduced by a small amount (John Appleby of the Kings Fund says that there will be a real terms decrease of -0.3%) every year until 2015. As you can see from the graph above, the NHS has never sustained a period of flat funding. The closest are 1961, 1969 and 1996 which were all followed by sharp increases in funding the following year.

However, the Spending Review funding is not the whole story. The NHS will have to make £20bn "efficiency savings" by 2015. This is a cut of about 4% year-on-year. The NHS has never suffered a cut that large for so many years. The graph above shows that when there has been a single year of cuts it has to be followed by several years of large increases in funding. These were the financial crises and the subsequent increases were due to the public demanding more funding.

So what will happen if there is no large subsequent increase in funding? One thing is very clear: the government will be extremely unpopular and there will be huge pressures on Lib Dem and Tory MPs to do something about the funding crisis. Cameron will have the dilemma of losing the support of his MPs or to raise funding. My guess is that he will choose the latter and we will see a real increase in funding in 2011/12. The public will also demand more than just extra funding, they will demand the head of the person who caused the funding crisis and that will mean Lansley will be replaced.

Cynic? Me?

Just at the time when Lansley is getting a lot of stick in the Press for his incompetent running of the NHS (the looming financial crisis, and his incompetent handling of flu vaccinations) the Department of Health suddenly comes up with a good news story: new money.

Following a successful efficiency drive, the Department of Health is able to make an extra £162 million available to local health and care services to spend this financial year on front line services, Health Secretary Andrew Lansley announced today.

The extra money will be spent on helping people to leave hospital more quickly, get settled back at home with the support they need, and to prevent unnecessary admissions to hospital.

The funding will bring forward the plans being put in place by health and local authorities to work together using NHS funding to support social care, as announced in the spending review. It will also enable local services to respond to pressures this winter.

This money will be spent on reablement services. That is, it will be used to prop up social services who will suffer huge damaging cuts from Pickles axe. The short term Pickles cuts will result in people spending more time in hospital because they cannot be discharged without the social care in place. Cuts in local authority funding means that social care is being devastated. This £162m is vital to stop the NHS costs rising rapidly.

Where does this money come from? The Press Release says:

The Department has made efficiency savings by applying the controls over central spending on consultancy, IT, administration and advertising common across all of Government.

I keep a close eye on announcements from the department, but this is the first time I have heard of this "efficiency saving" and the Press Release does not say where the money comes from. However, I do notice the phrase "common across all of Government" at the end of that sentence.

Is this a lifeline from Osborne thrown to Lansley? Is the Chancellor trying to help out the beleaguered Health Secretary by giving him a smidgeon more?

The most important issue of 2011

This is my response to Anthony Painter's column on  Labour List today. In my opinion, 2011 will be the year that the NHS collapses and here I want to outline the political effect.

So far Lansley has been rather clever, and rather dim.

Take the "dim" first. The NHS is a very large organisation to run. It is particularly difficult to run when the money is short. Lansley has taken the attitude that he does not want to run it. He's refused to pay any attention to the financial issues in the service. What's worse is that his attitude is that it is nothing whatsoever to do with the government or the Department of Health. He takes the attitude that the financial problems are the problems of PCTs, NHS trusts, Foundation Trusts and GPs: he gives them money and if they generate a deficit that is their problem. (Of course, it is not their problem, it is our (patients') problem, but I don't think Lansley ever thinks about patients.)

The NHS will face a financial crisis later this year. It will be one of the worst crises the service has ever faced because the NHS has never before faced a 4% cut year-on-year while having to re-organise itself. A 4% cut is bad enough, but the re-org is the real problem. You simply cannot increase productivity and efficiency when there is the disruption of a large scale re-organisation. Do one or the other, but not both. Since the financial situation is the most important it is vital to minimise any other disruption. Lansley, however, has to go ahead with the re-organisation because it is his vanity project, he knows that it is the policy that will put his name in the history books.

The historical precedent from its 60 year history shows that in the four other times the NHS had a financial crisis the only way to get the NHS working again was to raise funding. In those four cases the funding raise was between 8% and 12%. [I will give the details in another post.] Can you imagine the effect on Lansley's reputation of pleading with Osborne for another £10bn to save the NHS from collapse?

This incompetence on Lansley's part has not gone unnoticed at No 10. This makes Lansley very vulnerable, and if there is a cabinet re-shuffle after the May elections Lansley will be top of the list. My prediction is that Dorrell will be the next Secretary of State. As the chair of the Health Select Committee he's made satisfying noises about the importance of focussing on the finances rather than Lansley's vanity re-organisation.

Where has Lansley been clever? Well, announcing in July last year that PCTs and SHAs will be abolished, and then telling PCTs that they must prepare immediately for that event. Without any legislation, without Parliamentary approval, Lansley has already implemented GP Commissioning. That's clever. PCTs are in meltdown and it is a one way process: you cannot revive them now. The first 52 GP Consortia pathfinders are already in place and are commissioning for one quarter of the people in England, this will rise to half of England by the summer.

GP Commissioning is here. Lansley's vanity project has been implemented, and it will be extremely disruptive to reverse it (see my comments above - disruption must be avoided). The problem is the cost: it has contributed to, rather than mitigated for the financial crisis later this year.

The NHS financial crisis will be a terrible thing, but it will be an opportunity for Labour. For a start, it will finally convince the public that the Tories can never be trusted with the NHS: never again will a Tory leader be able to tell the British public "the NHS is safe with me". The problem is whether there will be any NHS left for a future Labour government to protect. The other problem is that GP commissioning is here and it cannot be removed and Labour attacking GP commissioning will be a losing battle. I am not saying that Labour should not oppose the plan, just that it should not expend too much energy on it. Instead, Labour should concentrate on Lansley's plans for providers. The plans to take all NHS hospitals out of public ownership; the plans to mandate that a fixed proportion of NHS paid work must be provided by the private sector; the application of competition law; the whole "any willing provider" policy. These are the areas where Labour must attack Lansley. They must attack these policies because they are wrong, and because the majority of the public are against them.

And one final point. Ed Miliband must pledge that Labour believes that hospitals and community health services should be publicly owned. Drop the "mutuals" idea because this is too close to Lansley's "social enterprises" idea. NHS hospitals should be publicly owned, publicly run and publicly accountable. Is that a simple enough message for Ed to understand?

Big Society

We all know that the Big Society is all about cuts and reducing the state, but how does this work? Well here is a simple example that shows how we will be expected to pay for public services from our pockets rather than out of our wage packets.

We are a maritime nation with a long history of sea trade. We are also a nation with some of the most treacherous seas on the globe. In such a situation you would expect that it would be a basic public service to protect the vessels that supply us and are used to export the good we make. Yes, we have the Coastguard. The Maritime and Coastguard Agencyprovide the following service (from their website)

The Maritime and Coastguard Agency implements the government's maritime safety policy in the UK.and works to prevent the loss of life on the coast and at sea. We provide a 24-hour maritime search and rescue service around the UK coast and in the international search and rescue region through HM Coastguard and inspect and survey ships to ensure that they are meeting UK and international safety rules. We also provide certification to seafarers, register vessels and respond to pollution from shipping and offshore installations.

Clearly they are there to make sure that in an emergency ship passengers and sailors will be rescued. They currently have 19 stations around the country. These are paid out of taxation, that is, a little bit of your wage packet goes to pay for the Coastguard whether or not you live near the sea or ever go on it.

Let me now introduce you to the Royal National Lifeboat Institute. This is what their website says that they do:

The RNLI is the charity that saves lives at sea. We provide a 24-hour lifeboat search and rescue service around the coasts of the UK and RoI, as well as a seasonal lifeguard service on many of the busiest beaches in England and Wales.

The RNLI have 235 lifeboat stations and 444 lifeboats. They are funded entirely by public donations. They do not get a penny from the government (British or Irish). The public pays for this service out of their pockets. Some donors may live by the sea, but others don't. The organisation depends on the generosity of ordinary people.

Notice some overlap between what the RNLI does and what the Coastguard does? One is paid by public donation and the other from taxation. One is subject to spending cuts, the other feels it has a moral duty to provide the service.

The Conservative government has decided to cut the number of Coastguard stations from 19 to 8 as part of its spending cuts. The reason why they can do this is that they know that the RNLI will always provide search and rescue, even if the UK government decides that it won't. This is the Big Society.

This is how we will find the Big Society will be used to implement the cuts. The government will cut a service and concerned citizens, or existing charities will feel that in a civilised society someone must provide the service. The government will remove itself from providing public services and so will not have the cost. The ultimate aim is that the government will be able to reduce taxes. The alternative provider, the concerned citizens ("social enterprises") or charities cannot provide the service with no funding. So consequently we will dip into our pockets to support them.

This is the Big Society.