Health and Social Care Bill

My Lords, my name is added to Amendment 103 and other amendments in the group. Amendment 197E, which is a new amendment relating to commissioning, also stands in my name. Some of the points that I will make are similar to those made by the noble Lord, Lord Warner, but I have a slightly different way of looking at tariffs. I see them more from a clinical or patient care pathway point of view than that of integrating services. It is true that tackling the financial physiology of the NHS is critical to enabling the more influential and focused commissioning of integrated care. The payment by results tariff was designed by the previous Government to support the introduction of choice and competition, and specifically to create incentives for providers to increase elective activity to bring down waiting times for treatment and reward them for work undertaken. As the noble Lord, Lord Warner, has just said, that has been a bonanza for some of the acute trusts. The tariff has played its part in that process with the consequence that access to planned care has improved significantly. Progress in elective care has enabled—or should enable—attention to turn to other priorities, such as providing high-quality care for people with long-term conditions where continuity and co-ordination are key objectives alongside access. This includes shifting unplanned care from secondary to primary care settings, where this will help deliver improvements in efficiency. As currently designed and operated, payment by results does not appear to be well suited to support the implementation of these priorities, and there is a need to develop incentives that will facilitate integrated care for people with long-term conditions and for other services where this approach is likely to bring benefits. Experience in the United States offers valuable learning in this regard, but it is not the only place, particularly in the development of new forms of payment that go beyond fee for service and case-based reimbursement. The idea behind episode-based payments—something that my noble friend Lord Warner also referred to—is to remove incentives to deliver increasing volumes of care by bundling together payments for a range of services relating to a particular episode of treatment. One example from the United States is the ProvenCare programme of the Geisinger health system under which a global fee covers the entire cost of cardiac care from pre-admission and surgery to follow-up for up to 90 days after surgery. Episode-based payments are designed in part to improve the quality of care by placing the responsibility on providers for avoiding and correcting errors. You do not get paid if you make a mistake and it takes the patient longer to recover. This encourages care to be done right the first time, and hence offers a more co-ordinated and positive experience for patients. Capitation payments on the other hand go much further than episode-based payments in potentially covering all the costs of care for a defined population over a certain time period—a year, for example. Integrated healthcare systems such as Kaiser Permanente in California have pioneered the use of capitation funding—or pre-paid group practice as it was originally known—as a way of creating incentives to support prevention and primary care and to avoid the inappropriate use of specialist care. Kaiser Permanente sees acute care as a cost centre, but it sees community care and primary care, particularly for long-term conditions, as where the costs should be maintained and the quality driven. It monitors the performance of the providers of that care more intensively on a one-to-one basis than it does for acute care. Although capitation funding has a long history, there has been renewed interest in it. In the NHS, various options could be pursued. These include combining payments to cover an episode of care or a care pathway, taking forward the idea of the year of care that has been tested in three national pilots for diabetes—I say this to the noble Baroness, Lady Young—and exploring how it might support integrated care; contracting with local clinical networks of primary and secondary care clinicians or foundation trusts to deliver integrated care for a specific population—some of the foundation trusts are experimenting with this and are quite innovative; and, lastly, accelerating work on personal health budgets to enable patients to commission care packages for themselves, with support from carers and families. In practice, it is likely that all these options, and others, will have to play a part, and a period of active experimentation and evaluation is now needed to work through the consequences. All healthcare systems use a mix of payment systems related to the service that is provided, such as episodic or long-term, and where care is provided, such as primary or secondary care. The NHS is no exception and attention is needed for the way in which financial incentives can be developed to support integrated care where it will bring benefits to patients. The prospect of four years in which the NHS budget will only increase in line with inflation underlines the urgency associated with this work and the need to focus on improving the quality of care and not simply incentivising extra activity at a time when resources are not available to do this. As my noble friend Lord Warner said, it will require tariff flexibility, even tariff bonuses for providing care quicker and of a higher quality. What is needed is system leadership and innovation, which we expect the NHS Commission to deliver boldly, in tariffs for integrated care, with the explicit promotion of systems of integrated care. My Amendment 197E relates to clinical commissioning and clinical commissioning groups. We had a debate about the role of senates, which did not get us very far. One of the issues is that the creation of additional bodies after the listening exercise has confused the state as to the role of these bodies and how commissioning groups can be independent. I know that the Government have given the assurance that these bodies will not have the power to veto these commissioning plans. A recent letter to NHS chief executives from Dr Kathy McLean, chair of the Future Forum group on clinical advice and leadership, also sought to allay these fears when she said: "““They are not intended to be another layer of bureaucracy or be a structure to ‘interfere’ with or constrain clinical commissioning groups. Senates may provide part of the way for clinical commissioning groups to meet their proposed statutory duty to secure advice from a wide range of health professionals, but they will not have a right of veto for plans or proposals””." Although this is the case, there needs to be provision in the Bill that protects the ability of clinical commissioning groups to lead on commissioning. The second reason is that appropriate advice for one CCG might be inappropriate for another. We hear there will be 15 senates, and these will have to provide advice to over 300 commissioning groups. It is unclear whether the advice for each will be different. If it is the same, how will this reflect the fact that clinical commissioning groups vary immensely? For example, the Redhouse Group pathfinder commissioning group in Hertfordshire has a population size of 18,000, whereas the Oxfordshire pathfinder group has a population of 672,000. If the advice is given by region, there may well be commissioning groups within the regions that are atypical, meaning that any commissioning advice given on this basis is very likely to given without reference to the local context. This regional commissioning advice may not pay regard to the fact that a commissioning group is in a particularly deprived urban area, for instance, or has a higher proportion of older people. Commissioning groups need the freedom to make the decisions for their own population. They must not be hamstrung by ever-increasing levels of complex bureaucracy that impede decision-making. My amendment therefore seeks to clarify in the legislation what the Government have already said about where the ultimate commissioning responsibility lies so that clinical commissioning groups can truly lead in providing a service for their local population.