NHS Review (March 2005)
NHS Foundation Trusts

NHS Foundation Trusts (continued)

(Published 1st February 2005)

The ideas around foundation trusts largely fell out of document Shifting the balance of power with its emphasis on giving local health communities more responsibility and accountability in delivering local healthcare. The idea was for FTs to be controlled and run at a local level by people from the local community and from the Trust itself and not at a national level. FTs however will remain part of the NHS, subject to NHS systems of inspection and will treat patients according to NHS standards. See the DH's website section on FTs at http://www.dh.gov.uk/PolicyAndGuidance/OrganisationPolicy/SecondaryCare/NHSFoundationTrust/fs/en.

The first thing worth noting about Foundation Hospitals is that their birth has not been controversy-free! While they were being established many questions were asked such as: will they lead to a two-tier service? Is the NHS to be privatised? And for NHS managers, how much financial freedom would they really have? In fact, during parliamentary debate on FTs in 2003, nearly 50 rebel Labour MPs, led by former Health Secretary Frank Dobson, defied the government and voted against plans to introduce the new Trusts. And written evidence from the NHS Confederation and the NHS Alliance submitted in 2003 to the Health Select Committee's inquiry on FTs showed that these two organisations were particularly worried about the level of attention on the role of the acute sector at the expense of PCTs. "The principle that people get much more freedom from central control is absolutely right. However, if it is right for some, it is right for all. There is no point just developing the hospital end of the system, said Nigel Edwards, Confederation Policy Director. So Nigel is talking here about the possibility of Foundation PCTs …. The Commons Health Select Committee then published a highly critical report on foundation hospitals. (http://www.parliament.uk/parliamentary_committees/health_committee.cfm.

And early applicants found that a three star rating was not quite enough to guarantee Trusts foundation status with aspiring candidates having to face a round of tough assessment to ensure their high performance was sustainable. The Treasury was also concerned that the new 'public interest companies' might engage in a borrowing free-for-all, leading to possible bankruptcies so it was agreed that a new independent regulator would be set up (now called Monitor).

The DH's A guide to NHS foundation trusts (http://www.dh.gov.uk/assetRoot/04/06/30/00/04063000.pdf) is a useful easy-to-read overview on foundation trusts and this is a must read for hospital teams. The ten key points are interesting. Foundation Trusts will:

- Be firmly part of the NHS and subject to NHS standards
- Be established as independent Public Benefit
- Be democratic
- Prevent privatisation of the NHS
- Operate within a clear accountability framework
- Be there to treat patients, not to make profits or to distribute them
- Be at the cutting edge of the Government's commitment to devolution
- Not be about elitism
- Work in partnership with other NHS organisations
- Be able to direct their services more closely to the communities they serve

But FTs remain a thorny issue for New Labour and there seems to be a real tension at the heart of this policy. On the one hand, the government has presented the new Trusts (especially to managers) as independent entrepreneurial organisations, whilst on the other hand, they have been sold (especially to sceptical MPs and the public) as a new form of local representative organisation. Please note that the King's Fund has produced a useful independent briefing on FTs at www.kingsfund.org.uk/pdf/briefing8sept03.pdf.

Professor David Hunter, Professor of Health Policy and Management at Durham University, has heavily criticised FTs. He has said, "The closer one looks at the policy on foundation hospitals the more it resembles the Swiss cheese model of policy making. It is riddled with holes. Not that this has ever stopped policy-makers imposing their cherished schemes on a sometimes reluctant NHS." Also see In place of Bevan? http://www.catalystforum.org.uk/pdf/foundation.pdf] for a detailed analytical and highly negative critique from Professor Allyson Pollock and her team at University College London. Here it is argued that the latest reforms pave may even herald the end of Anearin Bevan's vision for the NHS - a major 'policy reversal' by New Labour…..

Note that the new Trusts are run on a two-board model, with the main board supplemented by a local stakeholder council (a Board of Governors) of around 20-30 local people representing community interests and staff. But Professor Rudolf Klein has argued strongly that membership of the governing boards will be unrepresentative and skewed towards those with intense, possibly atypical, views about the NHS and will reflect the organising activities of pressure groups. And the 'democratic mandate' of the first wave has also been slammed by some following seemingly widespread apathy over the Trusts' board of governor elections. Apparently around 20% of the publicly elected seats were uncontested, or have been left vacant because no candidates came forward.

So where are we now? Well coming right up to date, it is worth noting that some Foundation Trusts are already beginning to say that they are failing to see the benefits of their new found status with a few Chief Executives complaining of 'unfair' treatment from the DH and interference by SHAs - and FTs were supposed to be the vanguard of a policy shift promising greater autonomy for NHS organisations! And the new policy has run into significant problems in Bradford, where the new Trust quickly got into the red. This led to a special investigation by Monitor and the exit of the hospital's Chairman…. Many folk expressed surprise that Bradford Teaching Hospitals NHS Foundation Trust (one of the very best organisations under the old regime) was suddenly and completely overwhelmed by the challenges it faced as a new FT - after all the majority of pressures on it were being shared by many other Trusts the country over (implementation of the new consultant contract, NPfIT, etc). So if this near 'meltdown' can happen to a highly regarded three-star organisation like Bradford, then it might happen anywhere! This has to be a stark and urgent warning for the DH/NHS going forward.… The failure seemed to be particularly down to really poor financial management and some have thus suggested that NHS financial management is actually not 'fit for purpose' in the new era of FTs and PbR. FTs will thus have to get a much better handle on what is happening to their costs. So note that the Audit Commission has just formed a financial management advisory group to try and raise the quality of financial management, chaired by Jennifer Dixon from the Kings Fund. And Monitor will now likely put any new FTs applicants through even more stringent financial analysis, particularly looking at the effectiveness of the non-executive directors over hospital financial governance.….

However note too that there has been some criticism of Bradford's treatment since in terms of financial governance it seems to have been treated more like a plc and unfairly measured against commercial financial standards and new governance now operating in the corporate world following the Enron collapse - stuff like the measurement of 'short-term liquidity' when really the hospital is not a company but government agency! The Bradford debacle also seemed to demonstrate 'rampant gaming' and adversarial health politics between the PCT and the Trust (in terms of invoicing) and so yet another DH initiative being established is a tough new NHS constitution being drawn-up to prevent health economies sliding into bitter 'Bradford-style' warfare in this new era of FTs and PbR…..

What does all this mean?

For companies some judgement may be needed here as to the real likely impact of these new hospitals on the business. For hospital sales teams working FTs, some awareness on this new policy initiative is crucial as local prescribing policies may be subject to change. Foundation Trusts will also be getting involved in local marketing initiatives and there may well be opportunities here. So it would be well worth folk having a look at www.nhsft-regulator.gov.uk as there are direct links here to each of the expected 35 Foundation Trusts to be in place by April 2005. Public consultation documents are available on all applicants and these should be invaluable to both local hospital representatives and NHS influencers. The information here should allow some 'fine-tuning' of local account management plans.

Some other areas of interest this month
As well as a main feature each month, we will also be picking up on a few other areas for you.

Back to LTC

LTC is such an important area for companies to track and so we return to it again this month.

Is the new LTC model evidence-based?

The Evercare model of intensive care management for the vulnerable over-65s came under fire last month with independent research from both the Universities of Manchester and Sheffield appearing to show that the 10 English pilots seem to have had little effect so far on cutting emergency hospital admissions. The study found that the use of the model of case management developed by US company United HealthGroup had only cut hospital admissions by less than 1% amongst the elderly population targeted. See www.npcrdc.man.ac.uk. But coming back on this, Richard Smith, Chief Executive UHG Europe, said that the important question was not 'Does case management work?' but rather 'How can it be made to work optimally?" And Health Minister John Hutton said, "Evercare is just one of a range of different models that we are learning from. We are confident that our model is the right one for the NHS." Also please note that the 'official' evaluation interim report results on the Evercare pilots have also now been published by NatPaCT. The report (Evercare evaluation interim report: implications for supporting people with long-term conditions) discusses all the Evercare pilots in the UK and how they have worked, and looks at some alternative models. The report includes the policy implications of the findings so far and should be useful for account management plans related to these pilot PCTs. Also see NatPaCT.

Nurses & LTC

But improving care for people with long term conditions will remain a priority for the government and one in which nurses will play a central role. So please note that also published last month was Supporting people with long term conditions: liberating the talents of nurses who care for people with long term conditions. This supplements Supporting people with long term conditions: A Social & Healthcare Model described in the last issue. It summarises what government policy for LTC means specifically for nursing - for example community matrons will be able to directly refer patients to hospital consultants if necessary and order diagnostic tests. Also see a useful NHS Confederation briefing paper on community matrons at www.nhsconfed.org/publications.

EPP

The Expert Patients Programme (EPP) will now be 'mainstreamed' and the DH has called for all PCTs to manage the local delivery of the programme. See mainstream phase of EPP and a letter from the CMO to PCT Chief Executives at DH publications. And a self care manual with lots of practical examples has also been published. This compendium sets out to draw together evidence from service models in the UK to consider how self care support models might be more widely transferred and used. Also see DH publications.

New Pharmacy Contract

New NPA Materials

The new pharmacy contract will fundamentally alter community pharmacy practice and will thus likely have a significant impact on companies. The National Pharmaceutical Association (NPA) has recognised that getting the very best from the new contract will be a considerable challenge and so has launched a range of new materials. These include a distance learning training course From Prescription to Patient, which aims to prepare pharmacists to meet the competencies required to provide advanced services under the new contract. The NPA has also launched New Directions - the complete NPA guide to the new pharmacy contract. And further, NatPaCT's primary care contracting team has released two new resources on the new community pharmacy contractual framework.