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Author Topic: Health Bill  (Read 2165 times)


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Health Bill
« on: January 22, 2011, 10:13:48 pm »

Read the Health Bill in Full

Health Bill maintains light touch on consortia
19 January, 2011 | By Dave West  HSJ

The health bill published today maintains a light touch approach to requirements for commissioning consortia, but appears to leave wriggle room for more prescription in future.

Consortia must be made up of two or more GP providers but no other minimum size is specified. The bill defines little about their governance or accountability arrangements.

If consortia wish they can pass their functions to committees which can include “persons other than members or employees of the commissioning consortium” – for example lay members or non-GP clinicians. However, this is not a requirement.

The duties consortia will have are only broadly defined. They include a duty of “effectiveness, efficiency etc.”; to “exercise its functions effectively, efficiently and economically”; to improve the quality of services; and to reduce inequalities.

Consortia will have to submit a constitution but there are few requirements about what must be in it, although it must include “provision for dealing with conflicts of interests of members or employees of the commissioning consortium”.

When practices apply to become consortia they must say which “area” they want to cover but it remains unclear whether all practice members will be required to be adjacent.

Although it defines few requirements for consortia, the bill appears to leave the door open for further regulations to set more rigorous details and an authorisation process.

It says future regulations may include any “factors which the [NHS commissioning] board must or may take into account” when it comes to authorise the creation of consortia, and how it will run the authorisation process.

Notes published by the Department of Health alongside the bill today say: “The intention is that consortia will generally have flexibility within the legislative framework to determine how they carry out their functions.

“There will, however, be a need to make further more detailed provision in secondary legislation regarding certain matters. These would include the circumstances where consortia have responsibility for commissioning services for persons other than those registered with the GP practices in the consortium, the constitution of consortia, and the process for establishment of consortia.

“Regulations would also set out matters such as the procedure that the board must follow before it can exerciser its power to intervene in the event of failure or the risk of failure.”

Emma Teale, lawyer at Beachcroft, said despite the lack of defined governance consortia would be considered public bodies and would be subject to the Freedom of Information Act, for example.

The bill appears to leave open the question of who will be responsible for health services for people in their area who are not registered with a GP practice. Consortia will be responsible for people who are registered with a member practice - although this can also be withdrawn “in prescribed circumstances”. Any responsibility for other people “who have a prescribed connection with the consortium’s area” would have to be ascribed to consortia in further regulations.

Coverage of people not registered with practices - who are more likely to include homeless, travellers and other vulnerable groups - is a major question in relation to health inequality.

Readers' comments (4)
Patrick Newman | 19-Jan-2011 10:00 pm

Lansley has been Secretary of State - shadow and real since 2003. Is this legislative sketch the best he can do?

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.Anonymous | 20-Jan-2011 9:08 am

Ambiguous, vague, confusing and unrealistic. And the Bill isn't much better either.

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.Anonymous | 20-Jan-2011 11:33 am

Given they're to spend £80bn & they are independent contractors what is the accountability framework to ensure the proper use of public monies?

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.Ian Bowns | 22-Jan-2011 10:06 am

On the PM programme yesterday a SALT asked who will commission their service - delivered in schools to the children who attend (often many different practices and, at least in Cities, different local authorities). I believe thinking (if that's what you'd call it) on his feet, he made policy on the hoof (nice mixed metaphor there) said that consortia wold commission those services from schools within their area. I don't think the laughable Impact Assessments have even spotted this, but might be wrong as I lost will to live long before I got to the bitter end. You've got to love his attention to detail!

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Bill could lead to 'dilution' of pensions benefits
20 January, 2011 | By Charlotte Santry

Monitor could push for the value of NHS pensions to be reduced under the terms of the Health Bill.

Documents released alongside the bill highlight inequities between the private and public sector that Monitor will need to consider as economic regulator.

The impact assessment says: “Independent providers of healthcare may have been deterred from entering the market for NHS services because they perceive that incumbent NHS providers are given certain advantages – for example an affordable pension scheme – which mean that they cannot compete on a fair playing field.”

It says Monitor, as independent economic regulator with a duty to promote competition “could help address these issues over time”.

The impact assessment also states that it is the NHS that benefits from “the majority” of the “quantifiable distortions” within the healthcare market, for example in terms of tax, capital funding and staff pensions.

It says these “distortions” result in private sector acute providers facing costs that are around 14 per cent higher than an average NHS provider.

HSJ has teamed up with the NHS legal experts Beachcroft to provide exclusive legal and technical analysis of the bill.

Beachcroft partner Rachel Heenan said the wording of the bill effectively marked out a government “placeholder” in the discussions around the market distortion created by the NHS pension scheme and by the current agreement that NHS staff transferred to other employers are given a comparable pension.

The involvement of Monitor could result in the “dilution [or] abolition of the Fair Deal requirement to provide a broadly comparable pension scheme to the NHS pension scheme for staff transferring out of the NHS,” she said.

However, it could also mean “a reduction in the value of NHS pension scheme benefits accrued in the future.”

Before Christmas, NHS chief executive Sir David Nicholson said in a letter to managers that commissioning consortia would have “NHS employing authority status”, meaning transferring NHS staff would retain access to the pension scheme.

However the bill seems to leave this open.

It states that a commissioning consortia “must pay its employees such remuneration as it may determine and employ them on such other terms and conditions as it may determine.” This includes pensions.

Ms Heenan said: “It’s not necessarily assumed that there will be access to the NHS pension scheme” for consortia staff.

« Last Edit: January 22, 2011, 10:20:49 pm by roger »


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Re: Health Bill
« Reply #1 on: January 22, 2011, 10:18:59 pm »

Commissioning transition to cost £1.2bn
19 January, 2011 | By Simon Lewis

The transfer of commissioning to consortia and the NHS commissioning board will cost £1.2bn in the next two years, according to the Department of Health’s impact assessment of the Health and Social Care Bill.

The DH estimates that “the future cost of commissioning will be £1.3bn less than existing costs”.

The expected savings mean that the benefits will outweigh the costs of transition by 2012-13.

An additional paper to the impact assessment says that the reforms will lead to at least 15,800 redundancies across PCTs, strategic health authorities, arm’s length bodies and NHS leadership and the DH. The total cost of the redundancies is estimated at £772m.

The assessment predicts that there will be an average of £1.06bn of annual savings made over 10 years due to the reduction in the cost of commissioning.

The DH factors in no costs or benefits for this year, but around £600,000 will be spent on the transition in each of the next two financial years.

The DH estimates existing costs for primary care trusts commissioning arms as £1.93bn for staff costs and £2.01bn for non-staff costs. While it expects that the annual “commissioning budget running costs” will fall to £2.63bn by 2014.

Non-staff costs for the transition to commissioning consortia are estimated at £323m, or £2.1m per primary care trust. This includes £950,000 per PCT for the transition of IT and £650,000 on double running costs during the changeover.

The impact assessment also outlines the key risks of the reforms to commissioning. 

These are: “GP consortia not having the capacity and capability to engage with and deliver clinical commissioning; Potential conflicts of interest between GP consortia as providers and commissioners of patient care; Potential higher transaction costs as we change the number of organisations commissioning services; The ability of GP consortia to manage risk; The ability of GP to deliver the potential financial savings outlined above.”

An impact assessment for the establishment of the new role for Monitor as an independent economic regulator estimates that this transition will cost £29m.

Readers' comments (8)
Anonymous | 19-Jan-2011 9:41 pm

GPs cost less?Money well spent? I don't think so.... In 30 years of NHS management I have never seen such a brain drain of talent being paid to leave the sinking ship. I wonder how many will need to be re hired to sort out the future mess. Why are Ministers so arrogant to ignore the views of the vast majority. It beggars belief.All I can say is I am glad I am at the end of my NHS career and not the beginning. I have always been an optimist but I am now a retireing cynic!

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.SJ Burnell | 20-Jan-2011 11:33 am

No doubt, SHA's & PCT's became too costly with too much 'Waste" & are a step too far from Patients but they have many talented Assets to be lost. I'd be amazed if the above figures are proven to be accurate estimates. What about the costs to the taxpayer of redundant staff not getting new jobs quickly? No way will the private sector hire 16,000 more staff? What about the then idle fixed assets like buildings, computers, etc? What about the costs of GP's going along a steep learning curve (experience = failures + extra costs)? I guess its so dramatic because the politicians know that only a crisis will deliver their agenda (not manifesto). But, if its going to happen, then we have no choice but make it work as well as it can as quickly as it can.

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.SJ Burnell | 20-Jan-2011 11:43 am

BTW: looks like a lot of angst for £1billion p.a. out of cost of Commissioning over 10 years (<1% of NHS) if it does not also produce far, far bigger savings from the cost of Delivery. Will it?

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.calum paton | 20-Jan-2011 1:56 pm

Is the DoH unaware of the high school-level concept in economics of 'opportunity cost' What is the 'opportunity cost' of implementing these reforms? And what is the opportunity cost of re-inventing the wheel of strategic planning/commissioning, when it is discoveered that GP groups need their heads banged together?...and so on...and so on...

He who is ignorant of history is condemned to repeat it....

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.Anonymous | 20-Jan-2011 2:27 pm

It is hard to be charitable towards AL, when as a tax payer I see a chunk of my hard-earned NHS salary being recycled into my NHS colleagues' redundancy pay-offs and unemployment benefit.

Maybe we should all buy shares in IT? -- from the figures for each PCT stated above, it looks likely that they will be the winners.

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.Anonymous | 20-Jan-2011 8:46 pm

PCTs cost £1.9bn. Commissioning is only part of this cost so how can this REDUCE BY £1.3bn with 300-400 consortia? It doesn't add up.

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.Anonymous | 21-Jan-2011 10:23 am

Before pulling down a fence, it's a good idea to find out why it was put up in the first place!

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.Anonymous | 21-Jan-2011 1:09 pm

The figures also fail to take into account the loss of potential savings that might have been achieved were it not for the next premature reconfiguration of the NHS!



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Re: Health Bill
« Reply #2 on: January 23, 2011, 09:46:10 am »

NHS reforms 'risk patient backlash'
21 January, 2011 | By The Press Association

An influential health think tank has warned that the proposed radical changes to the NHS could turn patients against GPs because doctors are likely to start receiving “unpalatable” cash bonuses.

According to the Nuffield Trust, the government runs the risk of a patient backlash if they decide to give income incentives to GPs - who earn an average annual salary of £105,300 - because people might believe that money meant for healthcare is enriching doctors at the expense of patient treatment.

Under the new proposals, GP consortia will be charged with the task of commissioning healthcare, but they could end up alienating their patients if they offer doctors financial incentives to send fewer patients to hospital, the Nuffield Trust added.

The trust has submitted a report that raises fears about emerging tensions in the relationships between doctors and patients once GPs become responsible for spending £80bn of the NHS budget in the new era of GP-led commissioning in 2013.

It also believes that the NHS needs to learn from the US where, for 20 years, groups of doctors have been working in ways similar to how the future GP consortia in Britain will operate.

The Nuffield Trust discovered that income incentives were used routinely by the four groups of doctors they studied in California to reward them for delivering the best possible care, and warned similar incentives for family doctors will be needed in the NHS after 2013.

Readers' comments (1)
Patrick Newman | 21-Jan-2011 1:51 pm

There is plenty more to crawl out of the woodwork before the reforms are fully detailed. One wonders if the government have fully grasped the implications of the beast that they have created.



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Re: Health Bill
« Reply #3 on: January 24, 2011, 06:53:37 pm »

Your essential guide to the Health Bill

HSJ Review

Analysis of this week’s Health Bill by HSJ and lawyers Beachcroft has shed further light on the direction and nature of health secretary Andrew Lansley’s NHS reforms.

It will create the new NHS Commissioning Board - which the July white paper promised would be “lean and expert” - and hand it what appear to be “surprising” and “draconian” powers over commissioning consortia - including setting standards for their creation, directing them, having them taken over and abolishing them altogether. The board will be able to hire and fire their accountable officers, as well as having extensive leeway to bail them out.

In relation to commissioning consortia - which will take on responsibility for the majority of NHS services - the bill includes few requirements for how they should be run or governed. They will have none of the defined independence from the government enjoyed by foundation trusts, but there is no requirement for them to have a board, or patient representatives, for example.

The bill also adds detail to consortia relationships with council-led local health and wellbeing boards, and the makeup and power of those boards.

It further develops the government’s plans for freedoms for NHS providers and greater competition. The removal of the cap on foundation trusts’ income from private patients could leave them open to competition law challenges, according to Beachcroft, while Monitor could challenge NHS staff pension on the basis of an “unlevel” playing field between NHS and private providers. Foundation trusts will be given further freedoms, including to more easily merge with and acquire each other.

However, those concerned by the impact of the market could be assured by provisions for oversight of the “taxpayers’ investment” in foundation trusts to be retained in a banking function “established by the DH”; and for tribunals to rule on whether NHS services should be “protected” from closure. The bill sets out how providers will contribute to a fund to maintain these essential services in the event of failure.

Mr Lansley has said his reforms will limit his own power and, according to Department of Health notes accompanying the bill, they will end health secretaries’ “general power of direction” over the NHS. However, Beachcroft say health secretaries will be able to significantly shape the NHS through areas left to future regulations. They will also retain specified extensive levers including directing Monitor - and through it providers; deciding what is commissioned by the NHS Commissioning Board; and directing local authorities’ over public health.

The Department of Health’s long awaited impact assessment for the reforms - showing the estimated cost, benefit and risk - includes the admission that the transition could mean NHS staff losing focus on patients. It also reveals the reforms are expected to cost £1.2bn in the next two years; the average redundancy cost per manager is expected to be £48,000; and planned management cost cuts would be at risk if consortia are too small.


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Re: Health Bill
« Reply #4 on: January 28, 2011, 06:01:06 pm »

Bill may open up bank lending market to NHS hospitals
Government plans to make it easier for foundation trusts to use their property as loan security may open up a market for private sector lending to NHS hospitals, lawyers say.

But the risk of “controversy” if a hospital’s assets were sold off to pay loans may mean that banks’ appetite for lending to foundations will remain low, they caution.

Law firm Beachcroft say planned reforms in the Health and Social Care Bill will remove two of the “major obstacles” which have prevented the development of a “proper lending market” for foundations.

The Bill proposes to remove section 45 of the NHS Act 2006, which prevents foundations from disposing of any “protected property” without the regulator’s approval. At present a foundations assets can be protected if they are involved in the delivery of any NHS services or to any healthcare research or education.

In a related move the bill also proposes to extend to foundations most of the insolvency rules that apply to companies.

Jocelyn Ormond, a corporate partner at Beachcroft, said that could open up a market for lending, but he added: “There remains a risk that the appetite of banks to lend significant amounts to the FT sector will remain low, given the controversy that enforcing their security over FT assets may provoke.”

The market would also be constrained by plans in the bill to “designate” certain services which would restrict the ability to use assets involved in such services as collateral in loans.

Mr Ormond continued: “[The government] mean this to be approached on a service by service basis. The problem is, as a lender wanting to take collateral over a bit of a hospital, if a facility is being used to provide ten different services and one of them is designated, you may hesitate to take collateral on that facility.”