Plans to give GPs the bulk of commissioning, phase out primary care trusts and strategic health authorities and introduce value-based pricing form part of the most radical shake-up of the National Health Service since its birth in 1948.

Health Secretary Andrew Lansley certainly made his mark yesterday with the publication of the new white paper Equity and Excellence: the Liberation of the NHS, which lays out a new vision for the NHS that will, broadly speaking, be achieved through the devolution of power from Whitehall to healthcare professionals and securing a greater focus on treatment outcomes.

Through the white paper the coalition government has cemented its promise to make the NHS more accountable to patients and free staff from “excessive bureaucracy and top-down control”, by putting patients in charge of their care, instilling a “relentless focus” on clinical outcomes, and empowering healthcare professionals to make decisions on what they feel is best.

As part of this, all 152 Primary Care Trusts and 10 Strategic Health Authorities across the nation will be abolished by 2013, in a bid to simplify the system and slash NHS management costs by more than 45% over the next four years.

As expected, general practitioners working together in groups will be handed commissioning powers - and control of a budget said to be worth up to £80 billion - for the bulk of health services (except specialist and dentistry).

Under the plans, every GP is to be a member of a ‘shadow consortium’ as early as next year, which will take on increased delegated responsibility from PCTs in preparation for the formal establishment of consortia in April 2012 and securing contracts with providers by 2013.

In terms of accountability, the new independent NHS Board - which will be free from day-to-day political meddling - will hold overall responsibility for NHS resources and, as such, will allocate budgets to consortia, which they then will be held to account for.

Further down the chain, an ‘accountable officer’ will be installed in each commissioning consortium, which will hold its constituent practices responsible for how the cash is spent, creating a clear flow of accountability to ensure that decisions can be tracked and, where necessary, problems identified. “There will there will be no bail-outs for organisations which overspend public budgets”, the government has warned.

Payment by results
Crucially, providers will be paid according to their performance, reflecting outcomes as well as activity, and progress on outcomes will be supported by quality standards developed for the NHS Commissioning Board by the National Institute for Health and Clinical Excellence. NICE will “rapidly expand its existing work programme” to create a comprehensive library of standards – 150 over the next five years – that will inform the commissioning of all NHS care and payment systems, and thereby provide a powerful benchmark for inspection.

On the consumer side, patients are to be given a greater degree of information and choice to help them make better informed healthcare decisions, largely though the creation of a new organisation, crowned HealthWatch, which is tasked with collating and providing performance data. In terms of choice, practice boundaries are being dismantled so that patients will be able to register with any GP in the country.

On the hospital side, the government said it plans to “create the largest social enterprise sector in the world by increasing the freedoms of foundation trusts and giving NHS staff the opportunity to have a greater say in the future of their organisations, including as employee-led social enterprises”. Furthermore, it said it expects all NHS trusts to achieve foundation trust status by 2013.

Current FT watchdog Monitor is to be established as an economic regulator, and will promote competition, regulate prices and safeguard service continuity, while the Care Quality Commission will see its role strengthened “as an effective quality inspectorate across both health and social care”, according to the white paper.

Switch to VBP
Marking the most significant change for the pharmaceutical industry, the government has also announced its intention to replace the current Pharmaceutical Price Regulation Scheme with a system of value-based pricing when it expires in 2013.

“This will help ensure better access for patients to effective drugs and innovative treatments on the NHS and secure value for money for NHS spending on medicines,” the government said. In the meantime, a new Cancer Drug Fund will become operational from 2011 to help patients get access to those drugs recommend by their doctors and not the cost watchdog.

Response to the plans for reform have been mixed.

According to Hamish Meldrum, Chairman of BMA Council, the proposals will have a substantial impact on the NHS and patients. In support of GP commissioning, he said “doctors are ideally placed to help determine the health needs of their local population,” but cautioned that, elsewhere, “plans to link outcomes to NHS funding will need to be carefully thought through to ensure that any payments are a true reflection of the activity and cost involved”.

Also a strong advocate of GP commissioning, NHS Alliance Chairman Michael Dixon said it presents “a unique opportunity for frontline GPs and the managers and other clinicians who work with them to make a real difference to the health of their patients, the services they receive and make the best out of limited resources”.

But James Gubb, director of the health unit at independent social policy think-tank Civitas, stressed that “considerable resources will need to be devoted to the restructuring by: creating new organisations; laying people off in PCTs and recruiting new staff at GP consortia; working out the right blend of risk and reward for GP consortia; creating new accountability frameworks; and implementing new formulas for distributing resources”.

Moreover, he said he thinks it unlikely that the move will cut management costs by 45%; “with 500 commissioning organisations replacing 152, transaction costs, for one, will almost certainly increase”.

Also critical of the move, David Furness of think tank the Social Market Foundation said “giving control of NHS funds to GPs is like asking your waiter to manage a restaurant. They might know what you want to eat but they won't necessarily be any good at ordering stock, designing a menu or controlling the chef,” and he warned that GP commissioning “risks handing real control of the NHS to vested interests on the provider side as GPs simply won't have the muscle to drive through change”.

On a different note, the ABPI has welcomed the greater focus on outcomes. But director-general Richard Barker stressed the need to ensure that the “new era of commissioning builds in the intelligent prevention, early diagnosis and timely treatment necessary to halt the burden of chronic disease that threatens the financial future of the NHS”, particularly as the health service “spends more on unplanned hospital admissions for chronic diseases than it does on medicines that, if used appropriately, could prevent them”.