Health: Power devolves to GPs in radical overhaul of NHS

New powers for GPs, giving them control of 90 per cent of the NHS budget were announced yesterday in a radical restructuring aimed at bridging the gap between hospital and community. Jeremy Laurance, Health Editor, looks at the White Paper set to shape the NHS into the next century.

It will be bad news for paper manufacturers, Frank Dobson, Secretary of State for Health, said. Changes to the NHS, switching the focus of the health service to primary care, will cut red tape by nine-tenths.

A White Paper, setting out the Government's plans, says that the "divisive internal market" of the Nineties will be swept away, but promises there will be no return to the discredited centralised command and control systems of the Seventies.

It says a third way can be found by preserving the best aspects of the market system - the split between the planning of hospital care (by health authorities and GPs) and its provision (by NHS trusts) - by putting control of the bulk of the NHS budget in the hands of the front-line staff - GPs and community nurses.

About 500 Primary Care Groups - teams of GPs and community nurses, covering populations of about 100,000, will replace the existing 3,500 GP fundholders who will cease to exist on 1 April 1999. They will also take over most of the functions of the existing 100 health authorities, which will be left with a monitoring and planning function, and will draw up "service agreements" with local trusts which will run for three years instead of one.

Ministerial advisers were yesterday claiming that the changes marked the end of the internal market. Competition between NHS trusts will be ended and they will be subject to a new legal duty of partnership which will require them to open their books and not to act in secrecy.

However, in the new scheme primary care groups will still be able, exceptionally, to withdraw service agreements and place them with another trust, but this will have to be justified to the health authority. To compensate for this greatly reduced market pressure, new managerial measures will be introduced to ensure NHS Trusts are kept up to the mark. All trusts will be required to cost their treatments and meet benchmark targets if they are spending above a certain level. Management costs will be capped and the NHS Executive will intervene directly to rectify poor performance.

It was being claimed yesterday that the reduction in commissioning groups and the switch to three-year contracts would together cut NHS paperwork to a tenth of its current level, yielding pounds 1bn in savings over the term of the current parliament. Examples of excessive bureaucracy under the Tory system cited in the White Paper include the GP fundholder with a pounds 150,000 contract who received 1,000 pieces of paper per year, and a health authority that spent 8 per cent of its budget processing 60,000 invoices.

The new Primary Care Groups, which all GPs will be required to join, will evolve in four stages from a role advising the health authority to taking full control of almost the entire health service budget for their area. Existing GP fundholders control only 20 per cent of the hospital budget covering routine surgery. The first groups will begin in April 1999 and ultimately will be able to apply to become Primary Care Trusts which will take over the running of local community hospitals and provide a low-tech alternative to the hi-tech services offered by the local NHS trust.

GPs and others who run the commissioning groups will be paid out of the existing pounds 140m management allowance currently paid to GP fundholders. To encourage efficiency, the commissioning groups and the NHS trusts whom they work with will get to keep any savings they make, to spend on patient care.

The White Paper acknowledges that the care provided by the NHS is uneven. It proposes new National Service Frameworks, which would set out best practice in a particular area, such as heart disease, and could be published at the rate of one a year.

A National Institute for Clinical Excellence will draw together evidence on best practice and issue it under an NHS imprint to ensure doctors know whether they are acting in accordance with guidelines.

To give the institute teeth - although it was being stressed yesterday that this is not about compulsion but about support - it will be backed by a Commission for Health Improvement which will monitor the extent to which guidelines are followed locally, and sort out problems. Ministers are known to have been concerned that, when disasters happen as with the recent scandals involving cervical screening in Kent and breast screening in Exeter, there was no mechanism for ensuring that the lessons learned were spread throughout the NHS.

No timetable for the completion of the changes, which will begin next year, is set in the White Paper. It says there will be "evolutionary change rather than structural upheaval".

The main points

Abolition of the internal market - more or less.

3,500 GP fundholders to be scrapped from April 1999.

500 Primary Care Groups of GPs and community nurses to take control of the bulk of the NHS budget, beginning in April 1999.

pounds 1bn of savings from cutting paperwork over the next five years to be ploughed back into patient care.

Ultimately, Primary Care Groups will be able to take control of local community hospitals and will be set up as Primary Care Trusts to provide alternative care to acute NHS trusts.

New services for patients, including a 24-hour telephone helpline, quicker test results and booking of out-patient appointments via the health service's own computer network. There would also be a guarantee of an appointment with a specialist within two weeks for suspected cancer patients.

Two new national bodies - the National Institute for Clinical Excellence and the Commission for Health Improvement - to issue guidelines and ensure that best practice is spread throughout the NHS.

NHS trusts to cost their treatments and high spenders to be set targets for reducing them.

Management costs to be capped in primary care groups and health authorities. Continuing pressure to reduce costs in NHS trusts.