Doctors to control health service billions

Billions of pounds are to be transferred to local groups of family doctors in a fundamental shake-up of the health service. Jeremy Laurance, Health Editor, reveals an ambitious plan to break down the barriers between hospitals, GPs and community services.

An overhaul of the NHS more radical than expected is proposed in a government White Paper due for publication before the end of the year, details of which have been leaked to The Independent. As well as ending the internal market and abolishing GP fundholding, the White Paper will begin a process of reshaping the NHS to reflect modern health needs.

The drivers of the new service will be local collectives of GPs, which will control over 90 per cent of the NHS's pounds 34bn annual budget. Each collective will number around 50 GPs serving about 100,000 population and will hold a single budget for hospital, primary and community care.

The single budget will mean the GPs can decide whether to hire more community nurses so people can be cared for in their homes or spend more on prescribing rather than sending patients to hospital.

Ministers believe a model is provided by the strategy for improving cancer services drawn up by Sir Kenneth Calman, the chief medical officer, in 1995, which aims to ensure all patients have access to high-quality specialist services.

The aim is to break down the "Berlin walls" which separate health and community care, in Secretary of State for Health Frank Dobson's phrase, whose separate budgets mean patients cannot easily be transferred between them. This has led to hospital beds blocked by patients who should be cared for at home. No timescale is put on the changes which are seen as evolutionary, not revolutionary.

The GP collectives, which will function as mini-health authorities, will vary in size according to local geography and need. They will have service agreements with local hospitals - contracts by another name - and may switch them if the service provided is not up to scratch. They will replace the existing system of GP fundholding, under which individual practices hold their own budgets, which has been blamed for increasing inequity in the NHS.

Existing health authorities, whose number is likely to be cut, will be left only with the budget for "tertiary" services - specialist treatments such as heart transplants - which account for less than 10 per cent of total NHS spending. They will be given a new role devising health improvement programmes with locally-agreed targets as part of the Government's public health strategy.

The abolition of the internal market and the loss of competition between NHS trusts removes an important lever to efficiency in the NHS. In its place, the White Paper envisages tighter management from the centre based on measurements of hospital performance. Tough questions would be asked where hospitals deviated significantly from the norm.

An example cited is the Government's response to the Exeter breast-screening scandal, in which mammograms were misread and some women developed cancer that should have been detected.

A National Institute for Clinical Effectiveness is also proposed to mastermind a drive to improve quality and ensure doctors are kept up to date with latest developments.

Leading article, page 20