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PJ Online | News feature: Delivering the new NHS: what the Budget and the Wanless report mean

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The Pharmaceutical Journal
Vol 268 No 7195 p564-565
27 April 2002

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News feature

Delivering the new NHS: what the Budget and the Wanless report mean

Following the Wanless report and the Budget published on 17 April, the Secretary of State for Health (Alan Milburn) unveiled an update to the NHS plan. Jonathan Buisson looks at what these three documents herald for the NHS and for pharmacy

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The National Health Service is to be given about as much money as it can reasonably spend

Government funding for the National Health Service is planned to rise by around £40bn over the next five years, reaching £105bn in 2007?08, the Chancellor of the Exchequer (Gordon Brown) announced in the Budget on 17 April (PJ, 20 April, p522).

In making his spending plans, the Chancellor has clearly accepted the advice of Derek Wanless, a former chief executiveof NatWest Bank, that high and sustained investment in the NHS is necessary to catch up on decades of underfunding. In his final report to the Chancellor, published on the morning of the Budget, Mr Wanless recommends that spending should rise sharply for the next five years (reaching around £100bn by 2007?08).

"Over the next five years, ... average spending growth of between 7.1 and 7.3 per cent a year in real terms is projected," the report says, noting that such increases are "at the upper end of what could sensibly be spent" and that they represent "a very considerable management challenge". The Chancellor's increases represent a 7.4 per cent increase in real terms.

Mr Wanless goes on to recommend that real-terms growth rates should be eased back to about 5 per cent a year for a further five years to complete the "catch up" spending before falling back to a real-terms rate of around 2.4 to 3.5 per cent a year. Although the Chancellor restricted himself to the immediate five-year period in setting detailed spending plans, he did note in his Budget speech the assumption that spending would be tapered in later years.

What Wanless recommends for the NHS

The Wanless report spells out three scenarios for the future of the health of the public and the consequential spending necessary for the National Health Service. These scenarios are termed solid progress, slow uptake and fully engaged. Depending on how much responsibility members of the public take for their own health care, spending on the NHS could rise to between £154bn and £184bn by 2023.

Other recommendations made in the Wanless report include:

• Health care professionals should spend up to 10 per cent of their time on clinical governance matters (including giving advice on prescribing). [Para 2.64]

• NSFs should be rolled out to cover all areas of the NHS and should include information on the costs of implementing and maintaining treatments. [Para 2.33]

• The National Institute for Clinical Excellence should examine older technologies and practices to see which are no longer appropriate or cost effective. [Para 6.11]

• Spending on information technology should be doubled. [Para 6.21]

• Exemptions from prescription charges are "not logical, nor rooted in the principles of the NHS" and should be reviewed. [Para 6.75]

• Patients should be told more about how much treatments and appointments cost. [Para 6.86]

• Consideration should be given to charging for missed appointments. [Para 6.89]

• There should be a further review in five years' time. [Para 7.6]

Where will the money go?

For at least the next five to 10 years — about as far as it is reasonable to predict in Parliamentary terms — the NHS is to be given about as much money as it could possibly spend. What will it all go on?

On 18 April, the Secretary of State for Health (Alan Milburn) published a new update to the NHS plan for England, entitled "Delivering the NHS plan, next steps on investment, next steps on reform". This document was clearly prepared in parallel to the Budget as it contains all the spending figures revealed the day before.

The mantra for the NHS is that "investment + reform = results" based on taking forward the NHS plan using the new funding announced in the Budget. Managerial and budgetary responsibility will be devolved to primary care trusts and hospitals, while a slimmed down Department of Health will remain responsible for setting standards.

The increase in spending has generally been welcomed, but Matthew Young, author of a recent Adam Smith Institute report that called for Britain to adopt a social insurance scheme for health funding (PJ, 20 April, p523), sounds a note of caution: "The Government seems immovable on the idea of a tax-funded health service with money being cascaded down from the centre. This does not take us anywhere near where we need to get."

Around 70 per cent of all health spending goes on wage costs. Mr Young warns that inflated pay claims could easily account for all of the new spending. "This might make the people who work in the NHS happier, but there will be no obvious benefits for patients that might pursuade them that Labour has turned the NHS around."

Even the Department's funding role could be outsourced. An arms-length NHS bank is suggested, which would "invest capital from the budget settlement for long-term and innovative capacity growth and redesign. It will particularly focus on strategic shifts in configuration to more community and primary care based services."

While it would appear that this investment would be aimed at shifting some of the more routine aspects of care currently delivered in hospitals into primary care, it is possible that a good case could be made for investment to reconfigure the community pharmacy service towards delivering medicines management and pharmaceutical care rather just its current supply role. Investment in information technology, to link pharmacies to the NHSnet, could also come from this source.

Primary care trusts are to be given ever greater amounts of financial and commissioning responsibility, with freedom to commission services from the public, private or voluntary sectors as long as they can publicly account for how they have used resources. Clearly, pharmacists will need to work hard to influence PCTs and no opportunity should be missed to lobby for or acquire places on PCT boards or executive committees.

Opportunities for pharmacy

For the forseeable future, there can no longer be an assumption that the National Health Service does not have sufficient money to implement new services. There is also an assumption in the NHS plan (and the pharmacy plan) that services will be changed so that patients will benefit.

Mike King, head of professional development at the Pharmaceutical Services Negotiating Committee, says that the funding increase provides "fertile ground for pharmacy — there are opportunities we can grasp". It will make a useful backdrop to the PSNC's negotiations for a new contract for community pharmacy.

Community pharmacies are currently paid (in the main) to dispense medicines. If additional funding is to be obtained, the service will have to be redefined in terms of what the Government wants to achieve. This will probably involve a greater emphasis on medicines management and pharmaceutical care for patients in line with national service framework guidelines. Proper medicines management will be made possible by the Government's recent proposals on supplementary prescribing for pharmacists (PJ, 20 April, p521) which will allow them to adjust patients' medication.

Sue Sharpe, chief executive of the PSNC, says: "We hope we can get proper funding for the pharmaceutical service so that pharmacists can deliver what they are capable of, but we know that getting money from the Government will not be easy."

A lot of medicines management could take place at the 750 proposed one-stop primary care centres, with prescribing undertaken by practice or consultant pharmacists. However, with the current shortage of pharmacists, there might either have to be a reduction in the number of dispensing pharmacies in order to release more pharmacists for prescribing or community pharmacists will have to be released from the immediate supervision of dispensing so that they can attend more closely to patients. These issues, along with the associated discussion about skill mix in pharmacies and greater use of technicians, are currently exercising all pharmacy bodies.

Matthew Young of the Adam Smith Institute says that reinvention of job roles and innovation in service delivery are needed across the health service. "People have got to start doing things differently, otherwise there will not be any obvious changes. Reinvention and innovation are how big businesses respond to changes in the market place."

Nigel Graham, the Royal Pharmaceutical Society's head of practice, welcomes the increase in health funding, but he says that more detail is needed.

"We want to know how health outcomes will be targeted over the next 20 years and what will be the priority areas for Government policy development."

NSFs for everything

In his report, Mr Wanless says that national service frameworks should be extended to all areas of care under the NHS. The report indicates that the Department of Health is intending to roll out around two NSFs a year for the next few years.

As The Journal reported last week (p528), NSFs are having a huge influence on primary care prescribing (PDF* 50K). Pharmacists will need to tailor the services they offer in future to take into account these new "tablets of stone".

Prescription charges

Mr Wanless recommends that patients should be told more clearly what their treatments cost. He also recommends that the current system of prescription charge exemptions should be reviewed.

"Recognising the political sensitivities and the limited amount of money which might be raised, this may not be a priority for attention," the report says. "However, the present structure of exemptions for prescription charges is not logical, nor rooted in the principles of the NHS. If related issues are being considered in future, it is recommended that the opportunity should be taken to think through the rationale for the exemption policy."

One way of reconciling these two objectives might be to introduce greater patient co-payments linked more directly to the cost of any medicines supplied. The Royal Pharmaceutical Society has been calling for many years for an overhaul of the prescription charge system, and recent changes in Wales have exposed problems where the English and Welsh services meet.

Overall, it is clear that the Treasury has taken on board most of what Mr Wanless has recommended and made its spending plans accordingly. The update to the NHS plan offers less clarity about how all the new funding will be spent, but it does show that the Department of Health is serious about implementing the NHS plan. New money offers opportunities for pharmacy, but only if it can reinvent itself for the new NHS.

Delivering the NHS plan

The latest update to the NHS plan takes into account the additional funding announced in the Budget on 17 April. It promises greater freedom for primary care and acute trusts that meet Government targets, including payment by results and the achievement of "foundation" status. New audit and inspection bodies for health and social care are to be established.

Other announcements in "Delivering the new NHS" include:

• Around 750 one-stop primary care centres to be established (see p559). These will include specialist GPs, nurses and pharmacists. [Para 3.8]

• A new system of payment by results with incentives to reward good practice "so that cash for treatment goes with patients". [Para 4.8]

• Standard tariff for treatments using Health Resource Group benchmarks to avoid price competition. [Para 4.10]

• More choice for patients over who provides their treatment. [Para 5.3]

• PCTs to provide patient prospectuses covering local health services. [Para 5.8]

• Private Finance Initiative to be extended to include substantial investment in new primary care facilities. [Para 6.4]

• Negotiations over employment contracts to be devolved from the Department of Health to NHS employers collectively. [Para 7.2]

• Running of strategic health authorities to be franchised out. [Para 7.3]

• Arms-length NHS bank. [Para 7.12]

• Cross-charging between NHS and social services to reduce both bed blocking and emergency readmissions. [Para 8.10]

• New contracts on rights and responsibilities for patients. [Para 10.22]

Copies of the document can be obtained from the Department of Health's website or from the Stationery Office on 0870 600 5522 (Cm 5503, ISBN 0 10 155032 4, price £11.15).

  * PDF files on PJ Online require Acrobat Reader 4 or later.

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Jonathan Buisson is on the staff of the Pharmaceutical Journal

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