The surprising truth: NHS reform is interesting

The huge controversy that the introduction of foundation hospitals generated still seems inexplicable. Why was it that a policy so blandly sensible and progressive should be greeted with such hostility that in the homeland of the new Health Secretary it has been completely rejected?

Could it simply be that among the myriad changes set in motion across the National Health Service, this one, at least, was a fairly standalone change, easy to understand outside the context of the wider revolution spinning an intricate web through the entire system?

Foundation hospitals, I believe, got attention for the not very good reason that they were simple to comprehend. They got negative attention from backbench Labour MPs who suspect an agenda of creeping privatisation within the NHS, but are intimidated by the idea of going through the intricacies of jargon-led management-speak to work out where the real threat may come from.

Foundation hospitals got negative attention from the Opposition because its only real policy on the NHS is to keeping repeating that gargantuan amounts of money are being spent and nothing is changing. For them, foundation hospitals are a gift, a flagship policy that did not amount to much - just what the Tories would have us believe is the problem with all the Government's health reforms.

The truth is that a lot is changing, and that it is not in either the Government's or the Opposition's interests to draw too much attention to that. We all help them in their mission to keep us cloaked in ignorance, The general perception about NHS policy is that it is boring but important, too complex for us to begin to understand and better left to the feuding experts. The real shocker, though, is that it's not so very complicated, it is pretty fascinating and it is likely to bring about profound change in a matter of years.

A Mori poll conducted among the membership of the NHS Confederation will this week reveal that foundation hospitals rate at number 12 in the list of initiatives believed to be be of vital significance for the future of the NHS. This is a pretty solid indication that the furore over foundation hospitals was at worst sneakily diversionary and at best woefully mistaken.

Much more interesting are diagnosis and treatment centres (DTCs), barely discussed although 15 are up and running, a further 11 are due to open by December and 100 are promised within the next three years. It is these clinics, which will fast-track non-urgent operations, rather than foundation hospitals, that are expected to give a real kickstart to the idea that private-sector and foreign healthcare providers should be encouraged to undertake NHS work.

The private sector in Britain still complains that its services are not used enough by the NHS, and the reason given in response is that they are simply too expensive. DTCs, because of their narrower specialisms, should be able to cut costs. All of those being planned for this year will be run by private-sector companies. At a breakfast meeting for bidders early this year, those attending - including companies from as far afield as South Africa - got the distinct impression they were being told that this was their way to break into the British health market.

Tony Blair himself is keen to reassure NHS managers quietly that they need not feel threatened. He insists that "we are anxious to ensure that this is the start of the opening up of the whole NHS supply system so that we end up with a situation where the state is the enabler, it is the regulator, but it is not always the provider. The basic principles of the NHS will remain, but we will operate them... in a different way."

One different way of operating the system tilts it in favour of specialism rather than diversity of service. The flow of funding into the NHS is being overhauled, on lines that will benefit such organisations as DTCs and have a direct impact on the way things are done in individual hospitals (especially when they have achieved foundation status).

At present, primary care trusts negotiate their contracts in lumps, often regardless of the number of procedures a hospital actually carries out. Under the new proposals, all this will change. There will be nationally set tariffs for each procedure, and hospitals and other providers - such as DTCs - will be paid by results. This is almost certain to mean further specialisation, with hospitals achieving volume by specialising in a few procedures in order to achieve greater efficiency and lower costs.

This in turn feeds into the concept of patient choice. Patients can go to the hospitals or providers that offer the quickest treatment, rather than finding themselves on a huge local waiting list.

At the moment pilot schemes offer patients a choice of hospitals when they have been on a waiting list for heart or cataract surgery for six months. By this summer, all Londoners will get the same choice for any operation, and by summer 2004 choice will be extended to all patients waiting more than six months for surgery. By December 2005, all patients will be given choice at the point of referral by their GP.

There is much that is positive in this set of plans, although there is much that may be prey to undesirable and unintentional consequences. Much of the policy-making has focused on the measurable bogey of waiting lists, and it is hard to see how these changes will affect the NHS's core work of tending people with chronic illness.

One thing it may do is turn GPs into gatekeepers to a greater degree than they ever have been. Patient choice is a good thing of course. But making it work involves navigating people through their choices, and hard-pressed GPs cannot really be expected to take on the responsibility for pitching a comprehensive range of providers to every patient that they refer.

Another danger is that those hospitals and providers that do not take advantage of the new funding structure could find themselves left behind and unable to compete within this new, properly aggressive internal market. Failing hospitals, it has already been announced, will be handed over to private managers. But hospitals that fail merely because they need to avoid specialisation in order to serve properly the needs of a diverse non-urban community may too become vulnerable.

As for the spectre of "creeping privatisation", this aspect of the policy initiatives is the biggest political hot potato. In some respects, the left should simply learn to relax more about this aspect of NHS reform, because it is not necessarily sinister. Nigel Edwards, the head of policy at the NHS Confederation, has a good phrase to describe the initiatives: the Government has "constructed morally neutral machinery". He is cautious, though, about the unintended consequences of the new machinery, and also concerned about the lack of understanding and debate around it.

It is certainly true that at the moment there is not much beyond curmudgeonly kneejerk opposition, most of it focused on the idea that any sort of private provision in the NHS is to be avoided. But informed opposition is desperately needed, especially since some in the medical profession are suggesting that a few of the machinery's unintended consequences could be terrible.

Warren Glover, of the Chartered society of Physiotherapy, offers a nightmare scenario, which suggests that as the National Health Service liberalises, it could, if it is not careful, lose its exemption from WTO rules. How bitter it would be to turn round the health service only to find it facing a trade challenge. Such a prospect may seem far-fetched. But at least, in contrast to most opinion about NHS policy, it is not dull or boring.

d.orr@independent.co.uk