WHAT WILL THE NEW MARKET IN HEALTH CARE MEAN FOR THE PROFESSIONALS WE EDUCATE? Sally Ruane

1. WHAT WILL THE NEW MARKET IN HEALTH CARE MEAN FOR THE PROFESSIONALS WE EDUCATE? Sally Ruane

2. Context: two political choices • Tackle the deficit primarily through public spending cuts • Undertake complex top-down reorganisation in this context

3. 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)

4. Implications • ‘Increase’ experienced as a cut • Cuts to services • Job insecurity • ‘Back office’, ‘front-line’, ‘management’

5. 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

6. 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?

7. 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?

8. Quality • Financial squeeze • New market will re-introduce price competition • Economic theory and empirical evidence • Safeguarding quality nationally? • NICE Quality Standards not mandatory

9. Quality (cont.) • Licensing arrangements for providers – exante regulation • Care Quality Commission – weak? • Locally set quality standards but with financial constraints • Performance management of contract - inadequate

10. Implications • Pressure on staff to reduce costs to compete on price • Accommodating a decline in standards?

11. 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)

12. Commercialism (cont.) • So commissioning will involve commercial actors and will be a culturally more commercial activity

13. 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

14. 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

15. Implications • skill-mix; • autonomy; • ability to share good practice and utilise professional networks to the best • Denial of treatment? • ‘Over-treatment’?

16. 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

17. 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

18. 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