The decision today to give Greater Manchester responsibility for a £6bn health and social care budget is a game changer in the pursuit of better care and more efficient use of care spending.
To put this into context, the Better Care Fund sought to encourage Clinical Commissioning Groups and local authorities to pool only some £3.8bn across the whole country. The Manchester scheme does almost double this in just one sub-region.
Our forthcoming report, Putting Patients in Charge: The future of health and social care, suggests that the task of government now is threefold: to be clear that risks and accountability are actually being devolved, to develop a structure to pursue the Manchester principle rapidly across the country and to ensure that we see innovation in commissioning at the same time.
Why it matters
Currently, health and social care are separately-funded, separately-commissioned and separately-accountable. NHS England is accountable for NHS services through the mandate to the Department of Health which is then accountable to Parliament, whilst local councils are responsible for statutory social care services. Over time, different cultures and different commissioning and regulatory practices have developed across different disciplines.
This fragmentation causes massive confusion for the patient and family carers, poorer quality care and huge inefficiencies. Each small part of the system is responsible for narrow objectives, and providers are typically paid per activity. There is insufficient incentive for organisations to prioritise expenditure on preventative services, because the financial gains are not felt by the organisation (or commissioner) making the investment. This misalignment of incentives is costly. For instance, in 2013, the National Audit Office estimated that one in five hospital admissions could be managed effectively in the community.
Therefore, combining health and social care funding at a local level and giving commissioning responsibility across health and social care is a necessary first step to develop more integrated care and to overcome the problems set out above. But, the announcement today poses three huge tasks for government from here:
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Ensuring that responsibility is actually handed down to Greater Manchester
Successive governments have spoken warmly about devolving control for health and social care. Actions have been much weaker than words. In large part, this stems from the fact that putting accountability at the local level necessarily undermines the ‘N’ in the NHS. If it didn’t then there wouldn’t be any point devolving responsibility. One might as well centralise it all.
Integrated care relies on discretion for the commissioner to select the best intervention for its population. National health policy will have to adjust over the coming years with less prescription of care activities so that local commissioners have the flexibility to innovate and spend money where it is needed – which is likely to be the home rather than the hospital.
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How to take the Manchester approach to all other localities
While each local area will have different governance arrangements to oversee spending and commissioning in health and social care, the Manchester principle should follow elsewhere. In most places the Health and Well-Being Board will be the logical organisation to take responsibility for commissioning. So how do we get the cash there? Two things in particular would help:
- As we suggest in our upcoming report, the next government should legally mandate that by 2020 all spending on health and social care is handed over to the Health and Well-Being Board (or other local governance arrangement). This would steer commissioners on a clear path in the coming years to set their sights on integrated care and to start incorporating their budgets.
- The Government should offer a clear financial incentive for local areas to pool their budgets over the next five years. The Better Care Fund has set the bar too high in terms of the savings that are achieved from the initiative (£1bn in double-quick time) and set the bar too low for the volume of money that must be pooled. A simple financial incentive for them to pool budgets would be much more straightforward and more likely to overcome the institutional protectionism that so often hampers integrated care.
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How to stimulate innovation in commissioning at the same time
The third big question is how these integrated care services will ultimately be commissioned once they are devolved. It would be wrong simply to replicate our national state-dominated healthcare services at a local level. Handing this money down will not be enough to ensure integrated care. In contrast, evidence we provide in our forthcoming report Putting Patients in Charge: The future of health and social care shows that, when designed correctly, the market can offer the means to integrate care. National government needs to take an active interest in stimulating innovative commissioning practices.
The SMF’s upcoming report advocates two principal models that the government should promote: ‘All-Out Care’ and ‘Patient First Budgets’. Under a ‘Patient First Budget’, the patient would receive a comprehensive budget to meet the costs of their health and social care needs. He / she would use this – following advice from professionals – to purchase the mix of health and social care services to meet their needs from a market of public, private and third sector providers. The market would be forced to coordinate itself around the needs of the individual.
Our ‘All-out Care’ proposal by contrast involves a move to outcome-based commissioning and may have some resonance in Manchester. Rather than (as currently) tasking providers with carrying out specific episodes of care or care activities, the commissioner targets broader outcomes – such as the health and well-being of a group of patients and then hands cash and responsibility over to providers to achieve these outcomes to cover a period of time. Interestingly, this is an approach which is starting to be explored in Salford (one of the Greater Manchester boroughs). In adopting this approach, real clarity is needed on which risks are being handed over to providers and ensuring that providers are properly accountable for achieving the outcomes.
Just as national government must be clear that it is handing accountability and risk to local commissioners, so local commissioners must be clear about whether or not they are handing risk over to providers and that the providers can be held to account for these risks. Otherwise the whole thing is an illusion and quite possibly worse than our current set up.
