WHAT WILL THE NEW MARKET IN HEALTH CARE MEAN FOR THE PROFESSIONALS WE

EDUCATE?Sally Ruane

Context: two political choices

• Tackle the deficit primarily through public spending cuts

• Undertake complex top-down reorganisation in this context

Financial environment

• Promise of real terms increase plus protected funding

• 0.1% p.a. real terms rise• £15-20bn ‘efficiency savings’ (5% p.a.)• Reorganisation costing £2-3bn• Transfer of £1bn out of NHS to LAs for

social care (not ring-fenced)

Implications

• ‘Increase’ experienced as a cut

• Cuts to services

• Job insecurity

• ‘Back office’, ‘front-line’, ‘management’

Financial aspects of GPCCa

• GP Commissioning Consortia (GPCCa) must bear financial risk

• But patient populations are small and funding formula may not work

• General financial squeeze

Financial aspects of GPCCa (cont.)

• High admin costs of health systems run as markets:

• 6% budget (‘70s); 14% (2003); 15-20%?? 2010;

• Proliferation of 500+ consortia – even higher admin costs?

Implications

• Financial viability of some consortia at risk

• Pressure of financial risk and constraints will ripple out to staff in primary care and in other sectors of health contracting with GPCCa

• Mergers?

Quality

• Financial squeeze

• New market will re-introduce price competition

• Economic theory and empirical evidence

• Safeguarding quality nationally?

• NICE Quality Standards not mandatory

Quality (cont.)

• Licensing arrangements for providers – ex ante regulation

• Care Quality Commission – weak?

• Locally set quality standards but with financial constraints

• Performance management of contract - inadequate

Implications

• Pressure on staff to reduce costs to compete on price

• Accommodating a decline in standards?

Commercialism

• GPCCa – a misnomer?

• Commissioning is a largely commercial activity

• Involvement of ex PCT staff; out of hours provider companies; large insurance companies operating under FESC (Framework for the procurement of External Support for Commissioning, 2007)

Commercialism (cont.)

• So commissioning will involve commercial actors and will be a culturally more commercial activity

Commercialism (cont.)

• Provider side of market:• Tilt market towards more commercial and non

NHS providers• Regulator will prioritise rules of competition• ISTCs; private hospitals in Extended Choice

Network; take-over of NHS hospitals

Commercialism (cont.)

• Commercial providers will:• Seek profitable activity• Jealously guard innovations and slow

dissemination of good practice• Seek to reduce costs – staff numbers; staff skill

mix; staff autonomy• Perform to contract (and no more)• Prioritise the interests of shareholders

Implications

• skill-mix;

• autonomy;

• ability to share good practice and utilise professional networks to the best

• Denial of treatment?

• ‘Over-treatment’?

Market

• Will the rules of competition become paramount?

• Dynamic or instability? • Failure regime for NHS hospitals etc which

cannot remain financially solvent• Hollowing out of NHS• FTs allowed to charge for health care

Implications of market

• Job insecurity and prospect of transfer to non NHS employers

• Triple tier workforce• How much professional energy and

resources diverted to profitable activity with paying patients?

• Organisational fragmentation will vitiate professional networks

Conclusion

• Professionalism in UK health care has developed for over half century in a context of public service and divorced from the profit motive

• Emergent commercialism will more significantly shape the professionalism of the future