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Unfamiliar territory Pharmafocus January 2006

The proposed reconfiguration of PCTs and SHAs will require the pharmaceutical industry to once again change its sales force strategies, says John Chater.


At this year’s NHS Confederation conference in June, the most debated corridor question was whether or not there would be an announcement about a dramatic cut in the numbers of primary care trusts (PCTs) and strategic health authorities

(SHAs) in the future.


In his address NHS chief executive Nigel Crisp set out the need for yet further change, saying: “…I am also very clear that we need to improve the commissioning of services and help PCTs to develop in much the same way as we are helping NHS trusts become foundation trusts…We need to define clearly what are the functions of PCTs in the future and follow this up with a ‘fitness for purpose’ review in each area…This in turn will lead to a smaller number of PCTs able to operate effectively in the new world.”


From which it might be deduced that PCT commissioning had not achieved its desired ends and that there were too many organisations, with confused functions, that were unable to meet the needs of the reform agenda.


The comparison with foundation trusts was an interesting though not unexpected one. Many NHS pundits argued from the outset that the foundation trust model was much more suited to PCTs. After all, they commission services from trusts, not the other way around, and more closely interact with the local health community, making synergies with other care providers more practical.


A ‘drastic’ reconfiguration


Speculation as to when the long-discussed PCT and SHA mergers were to happen continued for a few weeks until the DH revealed its hand in July. As part of its NHS Improvement Plan and Creating a Patient- Led NHS the number of PCTs is set to fall to about 150 by October 2006 and the number of SHAs to about nine by April 2007.


‘Drastic’ might be the adjective of choice to describe the proposed reconfiguration – not so much a modification as a reinvention. Those who remember the days of eight regional offices serving 95 health authorities might be forgiven the ironic raising of an eyebrow.


The change reflects the DH’s desire to move the NHS away from a ‘provider driven’ to a ‘commissioning driven’ service, and it is for this reason that the system is being changed yet again: to improve the delivery of healthcare, specifically via commissioning agreements.


The mantra is again to give service providers as much say as possible in healthcare provision, by directing commissioning funds to the now hackneyed

‘front line’, the aim being to improve service delivery and deliver efficiencies. We have heard it all before: about five years ago when PCTs first came on the scene.


At the end of the round of changes it is proposed that, wherever possible, PCTs will mirror the 150-odd social services departments, better integrating services with those provided in social care, helping the DH achieve its public health agenda.


Some might question the logic of health boundaries reflecting those in social care. Though England will mirror the rest of the UK, where such co-terminosity is already the model, whether this will deliver up the long sought after seamless interchange between the two remains to be seen.


It is worth observing that care trusts seem to have made little inroads into this problem, and that the Health Act 1999 had already made it a duty for providers to work together effectively.


It is not only the cynical who might observe that such a change may serve economic as much as health needs.


PCTs will also, wherever possible, withdraw from the direct provision of services, which will fall to other local providers. Their role will move as far as possible to promoting health and managing commissioning arrangements.


The idea underpinning the withdrawal of PCTs from service provision is to improve ‘contestability’ in community based services and therefore improve patient choice. It is anticipated that contestability – a euphemism for competition – both in the private and public sectors (underpinned by initiatives such as Choose and Book and Payment by Results), will improve options and services for patients.


Whether ‘choice’ in provision or sector has ever led to an improvement in services remains a moot point.


Services currently provided by PCTs will be outsourced to the local NHS by way of commissioning arrangements. GP practice based commissioning is a good example of the way the DH intends this to work, with the PCT retaining responsibility for placing and managing commissioning contracts, as well as supporting the commissioning process (which will be implemented by the GP practice).


The role of the PCT will therefore be more administrative and managerial than has so far been the case. They will also focus on performance management with all service providers, including those in the independent sector. PCTs will still be accountable to the Health Secretary, via the SHA.


With PCTs no longer directly providing services (with an assumed concurrent reduction in responsibility for budget), it becomes increasingly difficult to separate their function from that of the SHA, which begs the obvious question: ‘What is left for the SHAs to do?’.


Strategic health authorities


The role of SHAs leans increasingly to that of managing the local NHS public health function, working closely with the regional directors of public health in the

government offices of the regions. They will therefore commit much of their time to working to improve public health and reduce health inequalities. The proposed final number of SHAs – nine – would of course match the number of government offices, and it is not too difficult to envisage both organisations merging at some not too distant date.


SHAs are also responsible for ensuring the successful delivery of local services, through performance management of PCTs and strategic planning, and will work to take their NHS trusts to foundation status (by 2008, according to the current deadline).


In the face of yet another round of structural changes it might be supposed that a collective groan arose from PCT boards and executive committees. As what is occurring is not so much an evolution as a recreation based upon many new health initiatives, there is no reason to suppose that the new system will be any less problematic or time consuming to set up than the existing one.


It is likely, therefore, that at a time of great change when many new systems are being implemented across the NHS, all affecting the provision of services, a root and branch restructure was probably less than welcome.


We can suppose that the various fitness-for-purpose style reviews of PCTs which have taken place in the last few months within SHAs have not been without friction. Less is not necessarily best and fitting together organisations which at their inception might have mirrored naturally occurring health boundaries cannot have been easy.


In addition, the expectation that with fewer organisations there will be a cost saving and the comment of one PCT board member comparing the headlong rush to reorganise yet again to the stampede of the Gadarene Swine, clifftop approaching fast, is perhaps understandable.


The DH expects PCTs to reduce their management and administration costs by around 15% per annum – in line with its objective to trim £250 million off the budget – no mean feat for organisations that have, since their inception, been measured as much for economic efficiency as health provision.


One could be forgiven for believing the reform agenda to be in something of a dilemma. So many components of it appear, in narrow or oblique ways, to depend upon each other for success and all are underpinned by a complex electronic information exchange system.


Other factors challenging PCTs and requiring them to better accommodate the wider modernisation agenda include:


Mobile electronic patient records – which, if successful, will create true patient mobility

The widening of prescribing into the community (pharmacists and various allied health professions) – again providing patients with greater flexibility and choice

Choose and Book – a new electronic service that allows patients to choose their hospital or clinic and book an appointment with a specialist, specifying the place, date and time for their first outpatient appointment

Payment by Results – The new hospital payment system under which hospitals that do more elective surgery will get more money as part of the government’s aim to increase the amount of work hospitals do. Roll-out began in April 2005


Key to the success of so many of these components is the increasing role of

GPs. If PCT commissioning was not broke, there would be no need to fix it by reform. The move to wholesale GP commissioning by 2008 is a tacit recognition that the PCT commissioning model was not delivering the efficiencies desired.


GPs now find themselves in an enviable position, with the authority and budget to determine bespoke commissioning arrangements, as well as the benefits of a new contract settlement that has, for the first time, put average GP earnings over those of consultants.


The learning curve continues for pharma


The latest structural changes will be foreshadowed by some consternation from those supplying products and services to the NHS. The pharma industry, especially, now used to working in healthcare territories, will need to reconfigure its market analysis and sales strategies yet again. The learning curve for the industry has been a steep one (from primary care groups in 1999 and non-stop to the present) and shows no signs of abating.


It is not just the matter of face-to-face contact that will need to be addressed, but also the mechanics of customer relationship management systems, the identification of new trends and responsibilities, and mailing services.


The affect of the latest changes on prescribing is of paramount importance, especially the tagging of and communicating with new formulary setters and commissioners.


Paradoxically, the focus must initially shift back to the individual GP practices – at least until the effects of practice based commissioning can be properly assessed.


It is likely that new roles will be created in GP surgeries to facilitate GP commissioning. New formularies will arise and managers will need to be appointed to coordinate emerging ‘localities’ (practices can join together to form ‘locality’ groups, to share and jointly manage commissioning resources). The pharma industry must swiftly learn the new rules of the game.


It would also be short-sighted to presume that we have reached the nadir of reform. We ought to consider that the consequence of accessible electronic patient records and new commissioning patterns is that the patient is freed from the need to see a particular doctor at a particular practice. Indeed, the philosophy behind such initiatives is to give the patient the option to be mobile – the money will follow the patient.


In the face of such developments the current system of health boundaries appears increasingly anachronistic. Why, if the individual patient, rather than where they live, determines treatment, will it be necessary to draw lines in the sand around patient groups? It certainly throws an interesting light on the current debate about the future of PCTs and SHAs and also brings into question the entire system of commissioning relationships across the NHS.


At the very least, such considerations indicate that we have in no way arrived at the end of the restructuring agenda, which is as increasingly driven by technological advances as by philosophy.


Players in the pharma industry seek with Grail-like dedication to establish a unique angle that will deliver an advantage with healthcare providers. Helping overburdened medical practitioners understand and cope with endless reform has been an easily identifiable way of doing this.


Now, supporting the formation of new formularies and the setting up of commissioning localities seems as good a place as any to start.


As tempting as it is at this stage, when the boulder of reform is being pushed up

the hill yet again, they might not be wise to follow the example of Robert Louis Stevenson’s drunken hero of the Wrong Box, Michael Finsbury.


Asked, in an emergency, if there was anything he could do to help, he responded with typical English aplomb: “Nothing but sympathise”.


PCT and Strategic Health Authority timetable for change


By mid-October 2005

SHAs bring forward their plans to include:

• Proposals for future organizational configurations (covering PCTs and


• Proposals on changes to PCTs

• A plan for the roll-out of Practice Based Commissioning

• A business continuity plan to ensure financial balance

• Evidence of effective consultation


By end November 2005

• Department of Health will test proposals and the aim is to agree with each SHA that they may proceed to consultation – or where this is not necessary, that the plan can be implemented


March 2006

• All of the above consultations must be concluded


October 2006

• All PCT reconfigurations to be completed


April 2007

• All SHA changes to be completed December 2008

• All changes to PCT service provision to be completed



John Chater is online development manager for Binley’s. For more information please e-mail: john.chater@binleys.comor tel: 01268 495650


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