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Health policy review

Summer 2006

Issue 2: Different approaches to reforming health services

Devolution: a map of divergence in the NHS - Tom Smith and Eleanor Babbington

• Introduction
• Mapping divergence
• The political context
• Strategic direction
• Organisational environment
• Changing financial environment and incentives
• View of health professionals
• The implications of a map of divergence under devolution
• Conclusions

Introduction
This report provides a broad overview of changes in the NHS since devolution, focusing on doctors’ working environment. It draws upon academic accounts of the impact of devolution, policy analyses of divergence as well as discussions between HPERU and BMA representatives across the UK.

The United Kingdom (UK) [go to note 1] has always had differentiated policy processes because of separate administrative structures in the four nations. But the creation of national Assemblies for Wales and Northern Ireland and a Parliament for Scotland has accelerated these differences by bringing greater political autonomy across a range of competencies as well as new opportunities for nations to pursue differing priorities [go to note 2]. These differences have been shaped by varying political debates and informed by different policy communities.

At the point of devolution, commentators believed that there would be little impact on health policy. The first analysis of the impact of devolution on health policy in the UK by the Nuffied Trust, noted that structures allowed for ‘differences of approach’ but that ‘these are differences of emphasis at the margin’ [go to note 3].

The authors did suggest, ‘this judgement might be wrong’, however, because it may assume more commonality [across Labour administrations] than actually exists, and it may under-estimate the political dynamic of devolution’.

By 2001, the same authors’ annual report, monitoring the impact of devolution, noted that Richmond House ‘is now seen much more clearly as pursuing an English agenda’ and the devolved administrations were working to prevent that ‘distorting their own plans and priorities’ [go to note 4]. By 2004, the authors had come to the view that devolution had led to radical differences. These were set out in a report entitled: Four Way Bet: how devolution has led to four different models for the NHS [go to note 5].

Table 1: Institutions managing UK policy and areas of devolved government

Table 1	UK	England	Scotland	Northern Ireland	Wales
Parliament	House of Commons (646 members: 529 English, 59 Scotland, 40 Wales, 18 Northern Ireland	None though English affairs dominate the House of Commons	Scottish Parliament - 129 members	Northern Ireland Assembly - 108 members	National Assembly of Wales - 60 members
Population	59 million	48 million	5.1 million	1.64 million	2.9 million
Transfer of powers	The areas listed to the right have been ceded to national administrations across the UK	Addressed through the UK parliament (Scottish, Welsh and Northern Irish members vote on English matters)	Agriculture, fisheries, forestry, economic development, education and training, environment, health, home affairs, local goverment, sport and the arts, statistics, transport	Agriculture and rural development, environment, regional development, social development, education, enterprise, trade and investment, health, social services and public safety	Agriculture, economic development, education, environment, health, social services, local government, arts, culture and the Welsh language

(adapted from P Norton 'Tackling the devolution bug' King Hall paper no 6 London 1998)

This paper outlines distinct policy approaches to create more efficient and effective health services and an overview of change in the UK since the Welsh and Northern Ireland Assemblies and the Scottish Parliament took responsibility for health.

Despite significant change, surprisingly little attention has been drawn to the consequences of divergent policy for the professionals working within the system and the patients that use it. This is perhaps because devolution is often seen as an event rather than the ongoing process it is with divergence increasing as time goes by.

Mapping divergence
It is worth noting that if 1998 provides the baseline for departure from the UK NHS, it is England that has moved furthest. It has been the most active, having been through several phases of reform; firstly concentrating on standards under Frank Dobson, on targets and governance under Alan Milburn before a turn to competition, markets and choice under John Reid. Now under Patricia Hewitt, the focus is on reconfigurations and changing the way patients relate to health services.

Superficially, it could be argued that the aims in England are the same as those in Scotland and not dissimilar to stated ambitions in Wales and Northern Ireland. All wish to streamline the acute sector and provide more care in community settings. There is recognition of the need to make more anticipatory interventions, for example, by casemanaging individuals with longterm conditions. But while there are clearcommonalities in broad policy objectives across the UK, these aims are being pursued within different political contexts and policy communities. Each is employing entirely different levers and philosophies. For example, Scotland has merged trusts into single health systems, while England is encouraging competition to produce more responsive care. These differences have implications for the ways doctors work and are represented within systems.

In this report, we have mapped the terrain of devolution according to differences in the political context, strategic direction, use of organisation, changing financial flows and incentives, and varying views of professionals. The following sections look at these areas, firstly considering UK arrangements before then examining national differences.

The political context
Health policy is fundamental to the interests of individuals and society as a whole and involves high economic stakes; it is considered a volatile area for any political system [go to note 6] and the political context is a crucial determinant of health policy and differences point policy in different directions.

One of the earliest and most important changes has been the narrowing focus of UK politicians and the Department of Health into an Anglo-centric approach; this has increased over time and both reflects and fuels an acceleration of policy differences. In England the prominent debate has proceeded along a left-right access. Politicians have argued over the rights and wrongs of allowing private providers to deliver NHS care, over the theory of competition and patient choice.

In England, the political challenge to government has come mainly from the right whereas in other nations it tends to be from the left. Outside England, there is perhaps greater consensus on left-right issues and little appetite for marketorientated solutions.

Devolution has little bearing on English consciousness. During the last UK election, Tony Blair chose to emphasise English achievements in the health service by contrasting them with waiting times in Wales, which was particularly embarrassing to Welsh Labour colleagues.

Over the last 18 months there have been frequent reports in the Welsh and Scottish press that the UK government is frustrated by the lack of reform in the devolved nations [go to note 7]. This has created an intra-UK competitive dynamic with devolved nations under pressure to defend their approach.

There are unresolved tensions in the UK government operating on an English-only basis, when there is a requirement to perform UK-wide functions and maintain quasi-federal responsibility. The Lothian question has not been a major political issue of late, though there has been concern that the parliamentary vote to introduce foundation hospitals was carried through by Scottish politicians whose constituencies were not affected. There are signs that this debate may be reopened. Although Lord Baker’s recent bill in the House of Lords, which would limit votes on English laws to English representatives, is unlikely to be successful, it will raise the issue higher in the nations’ consciousness.

England
The House of Commons, its Health Select Committee and Department of Health are each primarily focused on England.

Since the election of David Cameron, the Conservative leadership has swung behind the Blair agenda for radical reform: mixed provision, competition for patients (and tariff payments) and a service that is free at the point of use. This political consensus will not make life easier for ministers because the Conservatives will urge faster reform. There is, however, a growing internal challenge from the left, which is uncomfortable with the direction of health policy, particularly decisions to award contracts to private providers and the use of competition to ‘shake-up’ service provision. The government is being squeezed between these two perspectives

The formal devolution agenda for England has faded somewhat following the rejection of the idea in the north-east referendum. However, the policy direction does promise considerable change at a local level, due to more autonomous foundation trusts, varying commissioning models with the centre playing a slightly different role in regulating healthcare, and an agenda to reconfigure services.

It is suggested that the Blair government will want the period of turmoil brought by service change to be complete by the time of the next election. It is doubtful whether this can be achieved.

Academic, Scott Greer, believes that the aims to try to design the NHS into being a machine that will go by itself, ‘mechanically taking hard decisions about services and process’, via the market’ and the notion this can proceed without political intervention are naïve. Both are likely to be undermined by a complexity and range of unintended consequences that will tend to drag the centre in yet further [go to note 8].

Given the great change that is promised in health services, it is likely that local health discussion will become increasingly politicised. Local MPs will be under pressure to defend local institutions and win public support. Local Authority Overview and Scrutiny Committees are likely to be inundated with requests to review plans and refer them to the secretary of state, which is in their power.

Scotland
The Scottish Parliament has full legislative power for health in Scotland, except for professional regulation and abortion. Although Scotland has the power to raise a small amount of taxes it has yet to use it. Funding comes from HM Treasury via the Barnett formula and is allocated by the Scottish finance minister.

The political machinery is in place to operate independently of Westminster: the minister for health and community care is accountable to the Scottish Parliament for the running of the NHS; the Parliamentary Committee can call to account the Scottish Executive Health Department’s chief executive and the chairs of all the NHS boards.

As with all nations, health is highly politicised. A large number of the members of the Scottish Parliament and Welsh Assembly list health as a special interest. (Scotland, Northern Ireland and England have each elected members with ‘save my local service’ manifestos.)

As in England, a key aim of policy is to reconfigure services. The aim is to centralise specialist services while increasing the capacity for other services to be delivered in the community. Unlike in England, there has been consultation over service reconfiguration. Politicians were forced into this by protests across the country as locally generated plans earmarked institutions and services for closure. The subsequent discussion has secured a loose consensus on the plan to make the best use of limited resources by concentrating specialist services in fewer acute centres and providing more care outside hospital settings. However, when specific institutions/services are threatened, campaigners may unfurl their banners again.

A key difference with England is that the Executive’s plan to redesign services – and the policy approach generally has been supported by the profession. Sir David Carter’s review of services in 1998 was the first step towards this aim. More recently, when public disquiet threatened plans, Professor David Kerr (a Scottish doctor, based at Oxford) undertook a second review and played a key role in winning public support for the change and communicating the case for change. His subsequent report, based on a number of meetings with the public and professionals, has informed subsequent public debate and broad support for the direction of travel.

Although Scottish policy has a clear direction, when institutions are under threat and begin to close it is likely that Scottish ministers will reignite debate.

The main pressure for the government comes from the left, but control over government is unlikely to change in the elections next year.

Northern Ireland
Since 2002, the Northern Ireland Assembly and Executive has been suspended and since then responsibility for Health and Personal Social Services (HPSS) has rested with the Northern Ireland Office (NIO). The NIO comprises of ministers who direct and manage the Northern Ireland Departments, and support the Secretary of State. There is a dedicated minister who deals with health, social services and public safety in Northern Ireland.

Health has been designated as an area of cooperation with the Republic of Ireland.

Following the suspension of the Assembly, there has been limited reform of the health system. There is a broad plan to reconfigure services, but it is difficult to see how this will proceed because it demands a political processes. Although health policy is not pressing for politicians – it tends not to be a primary interest of Assembly Members and although service redesign is needed, politicians are unlikely to want their areas to lose out and to oppose change.

There have already been a series of impassioned campaigns over hospital closures. There has been a complicated debate about lack of resources for acute care in the southwest (Tyrone/Fermanagh). Greer (2006) explains ‘the question was where to put the single hospital, and the two country towns put on excellent campaigns to get the facility. The minister ran out the clock, commissioning consultations and reports, while both counties then elected Sinn Fein MPs and thereby guaranteed that the party would avoid a decision. That ensured it would be a direct-rule minister who would make the decision: a PFI in Fermanagh (Greer 2006).

The recent review of public administration (in November 2005) signals significant change. It reduces the number of trusts by more than half and produces regional commissioning bodies that are co-terminous with local authorities, with links to local commissioning groups that will include clinicians. This may result in change in a decision-making structure that could pursue the reconfiguration process that Northern Ireland has so far avoided. A committee has been set up to consider the administrative changes in relation to health.

There will be political discussion of the changes as legislation is needed to reduce the number of councils and health authorities.

While Northern Ireland has been characterised as relatively inactive, the recent arrival of Shaun Woodward as minister responsible for health and social care is resulting in a period of activity.

Wales
The Welsh Assembly adopted the powers of the old health authorities when they ceased to exist in April 2003, but the close relationship has resulted in a change to health services.

The Health and Social Care (Wales) Act 2003 provided for a range of powers to take forward policies in NHS healthcare, social services, dental and medical services. Much more so than in England or Scotland, policy is concerned with health rather than healthcare and there is greater emphasis on public health. Political rhetoric has been directed against the causes of ill health in society with less attention played to the management of the system.

This has reflected the political philosophy of the Labour administration. First Minister, Rhodri Morgan has talked of creating ‘clear red water’ between Cardiff and London.

As in Scotland, the mental health strategy has been significantly different from that in England (and Scotland). Other significant examples include free prescriptions for all by 2007 (85% are already covered), free breakfasts for primary school children, Children’s Commissioner, and the retention of Community Health Councils. These moves are articulated as taking a more integrated approach to health policy.

The Liberal Democrat partners of Labour in the Welsh government have had little appetite for market style reforms. However, if waiting times refuse to fall perhaps political pressure to change will grow.

Strategic direction
At the point of devolution, national decision-makers inherited similar problems. All, but Northern Ireland, made an immediate move away from the internal market and there was a political will to increase resources, though this was delayed for the first two years because of the commitment Labour made to stick to Conservative spending plans.

Each of the devolved nations has its own political dynamic and policy communities that point health policy in quite different strategic directions. They have approached issues quite differently.

Scott Greer has given labels to these distinct approaches. English policy is characterised by markets and management, Scottish by a new-professionalism, focusing on networked clinical management. Welsh policy is described as primarily ‘localist’ while Northern Ireland is labelled ‘uneventful managerialism’ – though, as noted above, this is beginning to change. It is worth noting that as the least changed of the four systems, Northern Ireland is consequently quite different.

England – markets and management
The NHS Plan [go to note 9] claimed to be the most fundamental and far reaching reform of the NHS since 1948. It was issued in 2000 and at least two other reforms have been described in the same terms since. The priority in England has become waiting times. Unlike in other countries, England is happy for its policy to be gauged this way because to date, it has been flattered by comparison.

New Labour came to power committed to abolishing the internal market, but has now come full circle and is implementing a more radical version of it. The language of English policy includes talk about ‘informed consumers’, ‘incentives’, ‘competition’ and ‘responsiveness’, words that tend not to appear in other nations. Policy initiatives, collectively known as ‘system reform’, support the development of a market with a mixture of private and public providers.

The English approach reflects a dominant political view that the NHS is a self-serving institution. Policy aims to expose the NHS to patient pressure by forcing providers to compete for referrals, based on the view that a more responsive, ‘patient centred’ service will occur. Policy priorities include developing more points of treatment and better information to judge services, which will both aid consumer-style choice.

The English health policy community is unique in nurturing many more pro-market, pro-management ideas than any other in the UK. There are numerous think-tanks, academic departments and professional bodies creating a whirlwind of debate. The main body of the policy community is generally supportive of the direction of change. There are, however, different views on the depth and speed with which observers believe the reform agenda should be progressed.

Scotland New – professionalism
The think-tank world in Scotland is smaller and more closely linked to universities. The Scottish health-policy community is based on a large and well-organised set of medical and professional elites: three royal colleges, four university medical centres and a respect among policy-makers for professionals in social life and the health services often lacking elsewhere.

The last five years have seen Scotland take significant steps toward the distinctive policy it now espouses; a direction heavily influenced by its policy community. The strategic direction has been developed by senior doctors, Sir David Cater, and latterly, Professor David Kerr. Another key architect is NHS manager and former academic, Dr Kevin Woods, who is now chief executive of NHS Scotland.

The priority in Scottish policy is to create an integrated health system with close connections between different components. The aim is to develop care pathways by building on clinical networks between specialist acute services and primary care. As Scott Greer notes:

Since devolution, a coherent Scottish policy direction has been developed (the definitive work is Woods and Carter 2003). Its broad tone was professionalism: trust in the professionals who run the system, and lack of trust in, or even antipathy towards, the markets and managers who have been called in, in increasing numbers, to reform the English NHS. Now under the slogan, ‘partnership’, Scotland has restored its planning capacity and sharply reduced the role of managers while eliminating the purchaser-provider divide and the market manipulating policies that English policy makers use to try and create competition [go to note 10].

Scotland is seeking to centralise the most complex high-end services and move care out into the community even beyond district general hospitals to clinics and the primary care sector. Greer says that the move toward more community provision ‘clearly stems from both the solid political bases of Scotland’s health service organisation and the fearsome political consequences of the hospital closures that would be required without new thinking about service delivery.’

Greer suggests, ‘the question in Scotland is whether the demands for reform will crowd out other decisions that need to be made, and whether the Scottish health system will be able to continue to settle down to its innovative model of using professionals to ration and design the system rather than working against them’.

Northern Ireland – Policy suspended
A lack of change in Northern Ireland meant ‘the internal market continued much longer in Northern Ireland than elsewhere; according to Greer, ‘the policy problem lay in identifying a replacement system that would work’.

There is, however, a lack of interest in health policy in the politics of Northern Ireland, which reduces any incentives to develop or implement policies. Plans have been developed to reduce the number of hospitals, but with the Assembly suspended, there are no political mechanisms to debate the direction of policy, even if there was a will to do so.

Although Greer says ‘inertia rules’, even in this unique political context policy differences have emerged. Legislation differs with respect to mental health and death certification. There has been no foundation hospitals, NHS Direct, PMS or PCTs.

Two developments in Northern Ireland suggest that change is on the horizon. The recent review of public administration is likely to change the shape and number of acute trusts. It may also change commissioning and there is talk of adopting practice-based commissioning. This future direction has elements of Scottish redesign, Welsh localism, and English emphasis on devolved commissioning.

Wales – New Localism
Like Northern Ireland, Wales is changing its strategic direction, though it is slightly further ahead in its thinking and has the political machinery in place to move faster toward it.

The policy community is different in Wales from that in England or Scotland. This is perhaps due to the lack of a traditional medical elite and a dedicated academic ‘commentariat’. The crisis in services has prompted an attempt to develop a policy community. The BMA has been involved in discussions with the NHS Confederation and the RCN to focus on solutions to Welsh problems. The University of Glamorgan, under Morton Warner’s leadership is keen to draw together interested individuals into some form of Welsh health policy observatory.

At the outset of devolution, the Welsh Assembly has sought to closely align the NHS with local authorities. Local health boards were established to plan and commission services, while an all Wales body commissioned specialist hospital services.

Wales has sought to change the health agenda considerably since devolution. Wales has shifted focus away from maximum productivity towards changing the social determinants of health and integrating democratic politics and community to the heath system. The public health agenda is prominent and there is an emphasis on preventing ill health and reducing health inequalities in policy. Policymakers had adjusted the way resources are allocated in the NHS to take account of the needs of disadvantaged areas and have created an ‘Inequalities in Health Fund’. The Assembly government has also introduced a phased elimination of copayments for prescriptions for all over a five-year period that began in 2004.

Greer (2006) does however note that there are signs that the emphasis on public health policy ‘shows signs of drift'. This is because of public disquiet over the comparative neglect of health services.

Back in 2004, Tony Calland and Richard Lewis called for a root and branch solution, seeking to lead a debate on the redesign of services:

Hospitals throughout Wales were not built to a grand master plan. Service configuration – to use an NHS buzzword – was not thought of when Caerphilly Miners’ Hospital or Breconshire War Memorial Hospital were built. Gone are the days when you could be treated by the hospital on your street corner. We are in danger of spreading the jam too thinly on our bread. It is impractical to have every piece of equipment at the University Hospital of Wales replicated in our other hospitals across the country. Should some hospitals specialise in planned operations and others on emergency admissions? [While] it would certainly mean travelling a greater distance to get treatment, patients would be guaranteed the very best Wales could offer [go to note 11].

Calland and Lewis end their article by saying, ‘These are radical thoughts, but Wales has a fine tradition of radical thinking… let’s start a national debate’.

The recent strategic plan, Designed for Life, is considered to be the first step in changing services. A series of three year plans, starting with a focus on service design and allocation has been proposed.

Organisational environment
There seems to be an emerging UK consensus that acute services should be streamlined, more services delivered in community or non-specialist settings and greater emphasis should be placed on anticipatory or preventative interventions.

The four UK health systems all face similar challenges, but the approaches they have adopted to deal with them are quite distinct. As Greer argues, ‘the divergence in specific policies and organisations reflects not just different assessments as to what will solve a particular problem; it reflects different understandings of ends and means’.

England and Scotland are undertaking distinct experiments in organisation. Wales and Northern Ireland have yet to move beyond the stating of ambition.

England
Over the last few years the NHS has undergone considerable change. Since 1997 structures have changed on average every 18 months.

The headline change since devolution is the introduction of competition, which goes beyond the internal market of the early 1990s, as it is open to entrants from the independent sector.

The government has said it anticipates 15 per cent of NHS activity being delivered by the private sector. It has provided 2 per cent at present, with the first wave of independent sector treatment centres.

In England, the line between public and private is likely to be blurred in relation to the provision, management and commissioning of health services.

The theory behind the move to a competitive environment reflects a view that organisations are not responsive to their users. By encouraging competition between providers, each will be paid a tariff for each procedure they perform meaning that hospitals will face incentives to make services more attractive to patients.

This change may have significant repercussions for NHS hospitals. Whole hospitals could be destabilised. Either an entire institution will transfer to new management, possibly in the private sector, but more likely, the departments within a hospital will cease to be viable. If departments do not attract enough patients (and money) to pay for the overheads opportunities to cross-subsidise departments may also be limited.

Some hospitals have been awarded greater autonomy, to determine organisational strategy in a market. It is the aim that all hospitals will have foundation status by 2008, though it is not clear whether this will be achieved. In previous years, a hospital deficit was met by any surplus in region. Now hospitals will be liable for their own debt and could go out of business, although in practice this is more likely to mean a takeover of management.

Monitor is the regulator of foundation hospitals and is principally concerned with financial and organisational governance and will play a bigger role as more trusts receive foundation status.

It has been difficult to anticipate the organisational strategy of more independent organisations. One possibility is the development of a boutique model. Foundation trusts, and others, might wish to manage departments in other hospitals. Moorfields Eye Hospital, for example, has explored the possibility of franchises on other sites.

The government has yet to define ‘market failure’ but it is likely it will lead to a change of management. It is already the case that doctors stay within institutions longer than managers, but this tendency may be increased. Market failure could also lead to private firms being awarded contracts to manage public facilities. This could lead to quite different relationships between doctors and employers.

The other key external agency is the Healthcare Commission which is responsible for monitoring healthcare standards and efficiency in England. Trust boards are required to self-certify compliance with core quality standards. The Commission is setting in place a framework that will cover public and private providers as well as half-way providers that may develop.

In the face of an ongoing government review, and changing policy, there is some uncertainty about the future of regulation.

There are signs that the NHS will place much more emphasis on commissioning. This is seen as a tool to manage the market, move decision making closer to clinicians and to move outpatient care from hospitals into the community. In recent years, care services have mainly been purchased by PCTs, although the procurement of independent sector treatment centres was a central process. The recent white paper announced an intention to provide more care in community settings and, to help achieve this, a plan to devolve most commissioning to practices by the end of this year.

In the face of so much change, there is uncertainty amongst NHS management who, in primary care, are fearful for their jobs, and in the acute sector, worry the NHS will struggle in a more volatile environment.

Policy in England is designed to cause ‘creative discomfort’ based on a view that new incentives in the system will force innovation and improvement.

Scotland
Scotland places more emphasis on regional and central planning.

In October 2001, 15 NHS boards were created in Scotland (12 mainland and three island boards), to manage local healthcare organisations, give strategic direction and provide clinical governance. The boards are increasingly operated by medical professionals, through managed clinical networks or as a response to a decline in managerial control. The boards are responsible for allocating funds, developing local health plans (in association with local hospitals, GPs and NHS bodies) and taking part in regional and national planning. Each NHS Board receives professional advice from the Area Clinical Forum, which comprises of a chief executive and seven Area Professional Committees (each representing a specific field such as medical, dental, nursing and midwifery etc).

Scotland has shaped its organisational environment in almost the opposite direction to England. The purchaser-provider split has been dismantled and trusts have been dissolved and both are now part of boards and within a ‘single-system’.

In May 2004, the Scottish Parliament passed the NHS Reform (Scotland) Bill, which gave a legislative framework to organisational and management changes and continued to enforce the new professionalism model.

On a smaller scale to England, Scotland has used private sector capacity. The employment of the private sector appears to be part of a transition process by supporting acute care and managing waiting lists, while secondary and primary sectors are reconfigured. In England, private providers are set to become a permanent part of the landscape.

In Scotland the focus is on the use of networks and partnerships, with existing and new primary and secondary care organisations working together with allied professions to deliver the service. In England the focus is on market forces and associated financial incentives to provide efficient services through competition and a separation of commissioning and provision. Scotland is aiming to forge united health systems, breaking down structural barriers.

Northern Ireland
The Northern Ireland health service is unusual in the UK because it integrates health and social care in a single structure. The Department of Health, Social Services and Public Safety is responsible for the overall planning and regulation of the health service.

As stated earlier, the freezing of the political machinery has made it difficult to proceed with organisational change. The recent review of public administration has important implications for health and may create a structure by which plans to change services might develop. If accepted and implemented they will:

• merge the four existing health boards into one regional health authority
• reduce the number of councils from 26 to seven
• the regional health authority will have appoint an officer in each council
• the number of trusts will be reduced from 18 to five.

These plans could mean that health policy is given sharper focus. However, even if commissioning succeeds in planning service changes, a political process will be needed to progress them.

Wales
In Wales, there is a considerable emphasis on local NHS bodies and local authorities working together to meet local needs. The onus on localism means that there are fewer opportunities to focus on all-Wales healthcare.

In Wales there are 22 local health boards in each of the local authority areas. The boards are responsible for commissioning primary care. Secondary care is commissioned by local health boards and delivered by NHS trusts and, when it comes to specialist services, Health Commission Wales. There are 14 NHS trusts in Wales and they manage about 135 hospitals.

NHS Wales, the executive department that manages the NHS, has continued to operate on a similar basis as it did pre-devolution. Power is concentrated into local health boards who are focused on local issues. This has resulted in less capacity to make all-Wales decisions. The fragmented nature of localism has also limited the power of health boards to shape large and powerful acute trusts.

Wales has less input from the private sector than other devolved nations. The private sector is unlikely to play a role in the delivery of NHS services. Although there seems to be some recognition of the need to change, there is no clear organisational plan to do this.

Changing financial environment and incentives
The NHS is mainly funded through general taxation; direct taxes, value-added tax and employee income contributions, with local taxation providing further funding for social services. NHS expenditure for the devolved nations is determined by a ‘block grant’ for each of the nations, which incorporates funding for various public service programmes, including health.

The UK as a whole faces financial pressures from 2008 when the rate of growth in the NHS budget will slow. The proportion of UK general taxation divided among nations is decided by the Barnett formula. The proportionate slow-down will be the same across the UK. As yet this formula has yet to be challenged, although there is some disquiet among the English right who believe it overcompensates Scotland and Northern Ireland. There have also been some complaints in Wales and Scotland that more funds should be channelled their way. In Scotland, Lord Sutherland believes that the policy to provide free personal care has saved the Treasury money, by making the invalidity benefit redundant. This is money he believes should be transferred back to Scotland.

England
In England, budgets for healthcare are set every three years through negotiations between the Chancellor of the Exchequer and Department of Health. In the rest of the UK, the devolved administrations set budgets separately. The central government uses a weighted capitation formula to allocate funding to the main purchasers of health, health boards and primary care organisations.

System reform in England is likely to create tensions for clinical collaboration between primary and secondary care. There are incentives for the primary and secondary care providers to fight over a blanket of funding. Hospitals will try to increase referrals, to boost income. General practitioners, who will hold commissioning budgets, will face incentives to reduce referrals and to save money. The recent white paper aims to shift outpatient appointments to community setting to reduce hospital referrals, visits and emergency admissions. This approach is based on assumptions that this will be more productive and cost effective.

England's market approach could risk raising costs by incentivising treatment and a wider range of access points because they will be paid per case.

Scotland
Scotland will avoid the transaction costs of the English market. Scotland is adopting some private sector provision, but these are at the margins of activity. There are plans to introduce tariffs for some elective procedures to provide incentives to increase activity.

Some of Scotland’s decisions have reduced available funding, for example, paying for personal care from general taxation. The Treasury made no provision for extra resources for countries or local authorities wishing to deviate from UK government policy. Scotland must, therefore, find the money from within its current funding allocation or use tax raising powers.

A recent report from Audit Scotland said NHS Scotland had much more to do to show how resources were being employed. The accounting mechanisms between different parts of the system were not transparent and it was difficult to account for money spent.

It is thought that this difficulty will be increased by the direction of Scottish policy. The aim of redesigning services is explicitly motivated by making better use of available resources and a recognition that there is not enough doctors and nurses to provide identical services in health economies. There are complex barriers to demonstrating this achievement, there are no accounting mechanisms able to gauge what policy aims to deliver and there are no financial measures to quantify savings made by anticipatory care initiatives.

Northern Ireland
Historically Scotland and Northern Ireland have received a higher annual share of UK general taxation per head than in England.

John Appleby, chief economist at the King's Fund, has recently undertaken a review of health and social care in Northern Ireland. He urges more efficient use of resources and noted that productivity is 19 per cent lower than the UK average, for example, hospital activity is 26 per cent lower than in England, per available bed. Appleby suggests some form of separation between service providers and funders in order to sharpen incentives, but warns against the introduction of competition.

Not only has Northern Ireland been better funded than the UK, but due to the difficult political context, direct-rule ministers have avoided closing hospitals that are unlikely to have remained open had they been situated elsewhere, in a bid to avoid conflict. There is a widely held view that a devolved Northern Ireland needs to address management structures and rationalise acute services.

There is likely to be a new emphasis on commissioning, in part as a way of changing service patterns.

Wales
The ‘localist’ mindset in Wales encourages a view that each area should offer uniform services, which may not be the most efficient or cost-effective way of providing services.

Wales is facing particular service difficulties at present in the form of very long-waiting lists and a lack of resources to increase capacity. It is difficult to change hospital services because acute trusts are extremely powerful while health boards are smaller and fragmented.

NHS Wales is unlikely to adopt English style competition, however, as with Northern Ireland, commissioning may provide a mechanism to change the movement of finance around the health system and to begin to debate service reconfiguration.

View of health professionals
Professional regulation remains a UK-wide issue. At present, there are no moves to change this. Whether this remains will be influenced by the extent to which regulation is seen as an area that disables the implementation of national policy, so far these questions have not been raised. In every country, those running the system would wish doctors to work differently and in line with different visions for health systems.

Across the UK, there are different views of doctors, with the biggest contrast being between Scotland and England.

England
England is focusing on incentives and a view of professionals as ‘knaves’ In line with a move to patient choice, competition and market levers, there is greater emphasis on incentives as a way of changing the behaviour of doctors. Doctors are seen as resistant to change unless it is of material benefit to them.

Julian Le Grand, the former adviser on health policy to the prime minister, is an academic who has written widely on incentives. His view is that policy has historically seen doctors as ‘knights’, valiant defenders of patient interest and promoters of altruism. Policy has floundered on this assumption and policymakers need to understand doctors as ‘knaves’ who are, in part, motivated by their own self-interest. Another former advisor to the Prime Minister, Simon Stevens, has said that the GP contract has demonstrated that incentives can be used to shape clinical behaviour. He laments the lack of a similar change in the acute sector.

Once all trusts have foundation status, they will be able to operate independently. With an emerging focus on productivity, management are being urged to use the flexibility in Agenda for Change and the job planning process for consultants to change ways of working.

The working environment could quickly change in England with a greater number of potential employers from different sectors, opportunities to undertake extra work in treatment centres, or in PCT commissioned clinics. Some doctors are moving to form collaborations which can bid for NHS work.

There is some concern that payment by results encourages acute centres to undertake more procedures, which will cost more. To counter this, general practitioners are being given incentives to provide care in local settings in order to provide less costly treatments and care in community settings. This is likely to lead to tensions between primary and secondary care.

Scotland
In Scotland, doctors were seen more as more ‘knightly’, primarily concerned with the quality of the system rather than their own position in it. The policy agenda has been shaped by senior medics and doctors are seen as central to developing the policy agenda.

The royal colleges in Scotland and the BMA have supported the reconfiguration agenda. More than two years ago, the BMA briefed members of the Scottish parliament that ‘the BMA believes that now is the time to hold a rational and sensible debate on this matter which reflects not only public concerns but also the important issue of safety and quality of health services for the people of Scotland’ [go to note 12].

The implications of a map of divergence under devolution
This paper has so far concentrated on detailing some of the political, philosophical and policy differences that account for divergence in the NHS. This section draws out some implications for UK doctors.

Health policy in the UK differs according to two dimensions: ‘leftright’ and ‘unionist-nationalist’. Figure 1 illustrates that the political context guides the operational focus of the health system toward different ends. This means doctors in the UK face different incentive structures and working environments.

Figure 1: The lack of a UK focus in health policy


























The arrows are intended to show the general direction of policy in different countries. England is to the right of other systems, and moving further in that direction. UK structures are employed to manage the English health system, but not that of others. Scotland is showing some move to the right, in permitting some mix in provision, but it is also becoming more nationalist, forging its own unique policy direction. Wales and Northern Ireland are each developing more local policies.

The unionist-nationalist dimension has become an important dynamic during devolution. While Northern Ireland is the most unionist, governed by direct rule, it has not followed the English agenda. England itself has become more introverted and a key implication of this is that there is very little explicit UK focus on health policy.

Relating to four political systems and policy communities
The fracturing of political and policy communities has four key implications for doctors.

With no UK focus for health policy, UK-wide institutions have no choice but to represent and pursue medical interests in four administrations. Both the broad direction and particular detail of policy is increasingly nationally driven. Secondly, administrations have developed different characteristics, requiring different relationships. England has continued the formal Westminster process of access to politicians, but outside England political villages are smaller and relationships with government less formal and adversarial. Political villages afford more influence, which could be further capitalised upon. Thirdly, there is a need to review relationships with key agencies. Administrations have set up a number of agencies and regulators that are crucial determinants of doctors working environment. Given the importance of the policy community in influencing political direction there is a need to review relationships with the policy communities in each country and consider how these could be further developed.

A fourth implication is a broader point. Policy is becoming as important as negotiations in promoting medical interests. Doctors have in the past, gauged their representational efforts according to access to ministers, senior civil servants and the influence of negotiations. The map of devolution suggests that policy, with a focus on clinical management and organisation, will become an equally important tool to influence doctors’ working environment.

Positioning doctors in relation to four strategic directions
Policymakers across the UK have established a direction of travel, but are not clear about the precise mechanics of implementation. They are heavily dependent on doctors to play a leading role in the process. In England, for example, practice-based commissioning depends upon innovation from GPs. In Scotland, as in England, moving services to community settings will require new ways of working across primary and secondary care.

Different strategic directions will necessitate different ways of approaching policy. In England, doctors will need to get to grips with the quasi-market and how choice and payment by results affects the quality of care and ways doctors work. While doctors are broadly supportive of the main policy goals, there are some questions about how they will be achieved. In Scotland, the medical profession has a key role in reconfiguration and the sustenance of clinical networks, not least in the public domain and the on-going debate about levels of provision. In Wales, some doctors are seeking to start a debate on the locations of service and coordination between them. More so than Scotland, doctors have been kept at the margins of reform. In Northern Ireland, doctors will be looking to engender and focus a debate on the aims and trajectory of health policy.

The contours of debate will vary from country to country, and consequently doctors will relate to the discussion in different ways, but the headline issues are remarkably similar. Unwittingly, devolution has produced a natural policy experiment and, as Scott Greer puts it, four ‘different bets’ on how to best achieve some common aims.

Different working environments for doctors
Comparing the strategic direction and organisational context, it is worth asking, to what extent does the NHS remain a national health service? It is no longer directed at the UK level and has become four national health services.

This clearly has implications for the way that doctors are represented in policy debates, as discussed above. The consequences of differing policy directions in terms of working environments are potentially farreaching.

Reforms mean that English doctors may not be as NHS focused in the future. There may be a wider choice of employers in England and competition in England may create a turbulent employment environment. In addition, the move to create more services outside of hospitals could see hospital doctors directly contract with commissioners. Some doctors are forming limited liability partnerships in order to directly contract for services.

In England, as organisations develop more autonomy, there may be a more localised approach to incentives and contracts.

Changing incentive structures in one UK country will invariably impact on others. Initiatives like practice-based commissioning will be closely observed in regard to effectiveness and changing service patterns.

To date there has been little divergence in the ways that doctors are paid. Differences are, however, emerging and there is potential for more change as nations try to align incentives toward central objectives. The consultant and GP contracts have resulted in some variations in terms and conditions for hospital doctors. Coupled with differing directions for policy, there is potential for the devolved administrations to seek to steer job plans towards different aims, meaning, in time, there could be quite different ways of working. This potential is stronger in primary care. The Global Income Guarantee is calculated centrally and sent to the four countries and then on to PCOs for distribution. These monies may be linked to payment mechanisms in different ways, as countries pursue differing priorities [go to note 13].

Across the countries there is likely to be interest in productivity in the future. England is likely to maintain its focus on incentives and more transparent financial flows, Scotland and England may employ incentives in different ways to encourage general practitioners to develop more community services. Inevitably, there will be comparison between the different approaches that have been taken across the UK. Currently, with waiting times seen as a key measure, English policy appears to be most successful. If waiting times continue to dominate political discussion and media headlines, it may be difficult for countries to sustain different directions.

Scott Greer argues against using England as a benchmark.

The cardinal error of analysing devolved policies is to take England as a base-line. There is no reason to do so; different politics, debates, values and histories all conspire to mean that there is no reason to expect the four systems will line up nearly on some scale of achievement. Perhaps England with its recent large spending increases does some things better it certainly has reduced waiting lists for elective surgery but there is always the possibility that achievement, will be counterbalanced by some other cost, a cost other systems are not willing to bear.

Scottish doctors may want to defend the policy direction pursued by the Executive, one in which they have been heavily involved in forming, but to do this will require some exploration of what measures could indicate progress against stated policy aims.

Across the UK, a key objective is to redesign services by working differently across primary and secondary care, this will inevitably have an impact on skill-mix. What measures will indicate success in this area?

Developing a local view within a UK focus for medicine
With radical change on the agenda for Scotland and England and on the horizon in Wales and Northern Ireland, doctors have been unable to avoid being brought into a debate about how to change services. If they have little to say, there is a danger they will be marginalised from discussion and planning; change will be done to them rather than by them.

There are opportunities for doctors to take the lead in how policy should be shaped, but because of the different organisational contexts, some key issues may be approached variously. These range from pensions to the handling of patient complaints.

In England, for example, even the most senior of policy analysts are not clear about how different parts fit together. It is likely that the jigsaw of reform will be increasingly shaped at a local level. The precise configuration of payment by results, choice and plurality is likely to vary between areas.

It will be important to develop a picture of change, while maintaining a UK focus on policy. The broader UK focus could be provided by focusing on the overall policy objectives, such as changing relationships across primary and secondary care, disease and case management initiatives, changes in commissioning and the ultimate goal of UK systems, service redesign.

There are opportunities to capitalise on devolution by drawing on best practice initiatives in different countries, and pressing for national implementation.

The BMA has an important policy role by filling the vacuum of a UK policy perspective. For some UK issues, the bodies in each country do not clearly overlap.

Conclusions
This report provides a policy-signpost that is pointing national health policy in different directions. Since devolution, nations have moved away from one another in key areas of health policy.

Across the UK, radical change is on the agenda. All countries are facing common challenges, the concentration of acute services and wider provision of services in community settings: the development of pathways: the search for greater productivity and improving anticipatory care and the case-management of people living with long-term conditions. Different nations have placed ‘different bets’ on how best to achieve this.

Doctors cannot avoid being drawn into a conversation on these issues, having little to say will risk marginalising the medical voice in policy debates and implementation planning. Doctors may approach different strategies in various ways, according to the national context, but will share overall goals.