Labour health plans raise big concerns

We have finally heard some major steps today on what the future of the care service under a Labour Government would look like. They weren’t in Ed Miliband’s speech they were in Andy Burnham’s. Two points in the #labnhsplan stand out.

The first is Burnham’s claim on the Today programme this morning that the Labour Party will “re-set” the NHS in England as the “National Health and Social Care Service”. This would see an emphasis on the home and the community, as much as the NHS hospital or GP surgery.

The second is the method by which this would be accomplished. Burnham proposes that health and wellbeing boards will be made accountable for ‘year of care budgets’. These would provide them with resources to cover the ‘health and social care needs’ of those ‘at the greatest risk of hospitalisation’. He wants them to work towards a single health and social care commissioning budget locally.

Let’s be clear: this is a big move and it’s the right move. All the evidence on patient-centred care suggests that care needs to be highly personalised and that provision is not going to – and should not – look uniform across the country. Commissioners and providers need flexibility. Burnham’s plan would give them this.

But, beyond the top line, three big concerns jump out:

1. The ‘N’ in the NHS may win out

Of course, the inevitable consequence of devolving responsibility to Health and Wellbeing Boards (HWBs) is that care will look different locally. Accountability for HWBs is locally to elected councillors (amongst others) not nationally to NHS England or the Secretary of State. Putting NHS and social care money in their hands would be the first unpicking of the ‘N’ in the NHS – the letter which just a few years ago was the one to which Burnham said he was most attached.

The ‘local vs. national’ agenda has been an inherent tension throughout the evolution of the Labour Party’s Whole Person Care vision. That friction has already surfaced today: while Burnham speaks of local commissioning, his leader details specific activities that central policymakers will put in place: some extra care workers tasked with particular jobs here; some additional risk assessment there.

There isn’t a middle path here: either have accountability central and stipulate what you want nationally or have accountability local and don’t.

2. The banishing of the market will undermine innovation and will probably lead to bail outs for trusts and foundations

The Labour Party has continued to harden its stance towards the market and competition. Today Burnham argued that: “Labour is calling time on the involvement of the market in our NHS”. He suggests that HWBs would commission NHS preferred providers to provide the new care services. NHS providers would ‘go on a journey’ and evolve from health specialists to employ social care staff.

This is concerning for a number of reasons.

First, market structures – if properly designed – offer a framework within which providers have strong incentives to respond to demand and to innovate. Given the scope for innovative techniques to improve care – think of digital technology or adaptations in the home – it has significant scope for generating new care pathways and efficiencies. ‘Year of Care’ budgets would be a perfect route to involve external private and third sector providers as they do with good result in Spain and the USA.

Second, the Labour proposals will put a huge weight on providers in the internal market, a significant number of which already receive bailouts. A report late last year from the National Audit Office showed that the Government had paid out £1/2bn to trusts and foundations that had gone into financial difficulty in carrying out their activities. Burnham’s plan seeks to put additional risk on these providers – but would they able to bear it? How do we avoid moral hazard?

Finally, where does this move to monolithic care providers stop? Will they take over all health and social care services?

3. The real funding question has been totally ducked

The Labour Party has gone to great efforts to explain how it would raise the additional £2.5bn to pay for the additional GPs and nurses it has promised. But, that doesn’t address the major funding question: how to give a dementia patient the same entitlement to free care as we give to someone with cancer. Which services under the new “National Health and Social Care Service” would be provided free-at-the-point-of-use? Just traditional NHS services and the social care services that Miliband has decided should be free? Or all of them?

That is quite aside from the minimum £8bn that is needed to prop up the NHS by 2020. At some point, the Labour Party has got to grasp this nettle. Only once it has done will we really be on the path to a ‘National Health and Social Care Service’.

The SMF is currently undertaking a project addressing many of these issues, Future scenarios for Health and Social Care, which will be published in March. For more information on this project contact Nigel Keohane.


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