Issues affecting NHS foundation trusts
Breakfast Seminar - 30 September 2008

Speaker: Bill Moyes - Executive Chairman, Monitor 

The health reform agenda provides myriad opportunity for the private sector - but it's about knowing where to look, hear delegates at the first Care  Conversation.

The sheer speed of change in health reform meant that it was easy to lose track of what was going on in the sector, Dr Bill Moyes, Executive Chairman of Monitor – the organisation that regulates foundation trusts – told delegates at the inaugural Care Conversation event.

However, the Government was essentially trying to achieve four main shifts in direction, he said. The first was to depoliticise the hospital system in order to remove politicians as far as possible from hospital management. The second was to create incentives for innovation and higher productivity. While improvements in the latter had so far proved elusive, the introduction of the choice agenda now meant that the money followed patients. ‘So if you’re not efficient you start to lose money,’ he said.

The third shift was towards a much stronger focus on ‘what we get for the money rather than how we spend the money’. This was what underpinned the commissioning agenda – quality of care rather than simply paying more for the same thing would become the focus, encompassing safety, technical quality and patient-reported outcomes – the latter were ‘simple things, but things that are not usually measured,’ he said.

The final shift was away from centralised performance management towards increased accountability within the organisations themselves. The fact that this was a bipartisan agenda, with no fundamental differences between the positions of the two main parties, presented a ‘tremendous opportunity’, he told delegates.

So was the reform agenda delivering? The answer was yes, he said.  Hospital boards were improving and finances remained strong – although in the future they would inevitably need to become more profitable – and performance was also on an upward curve, with no significant anxiety in foundation trusts about delivering on targets.

On the negative side, however, the programme was slow, he said, with half of all hospitals yet to be included. Many trusts were overly risk-averse, and a ‘centralised feel’ remained. This was down to pervading pressure from Strategic Health Authorities – a kind of ‘hidden management’ remained in many cases, but it was also the responsibility of foundation trusts to assert themselves, he stressed. However the direction in the Department of Health was towards devolving responsibility, especially in conjunction with the commissioning agenda, and the ‘target culture’ should not necessarily be seen as a bad thing, he said. ‘I’m a fan of targets – they are promises to the public and the public has a right to know how the money is being spent. The question is can the government keep its hands off the system it funds?’

In terms of quality, there had been a good deal of activity but the impact was not yet clear. ‘We may find there are real political dangers,’ he said. The question was how Ministers would communicate what they wanted once all hospitals had become foundation trusts. ‘How do you transmit the message – is it through instructions to commissioners about who they should be buying services from?’ There was still much room for improvement in contract monitoring at local level, and a sense that commissioners were not realistic about the scale and pace of change, he said.

A potential key problem, however, was the fact that public understanding of these changes remained limited, raising the question of how Ministers would deal with a high profile negative event and how the public would react to it. ‘Could the system stand the stress?’ he asked. In the future the financial regime would inevitably get tougher, services would be concentrated together and some closures could occur as a result.

So what was the role of the private sector? Foundation trusts had enormous scope to enter into joint ventures, and this was a far more likely route for the private sector than the wholesale contracting out of services, he stressed. So far, however, there had been limited uptake on this.

The foundation trusts would very likely play a major part of the new rafts of ‘poly clinics’, and PCTs also would soon be under pressure to tender for more mainstream services. So the challenge here for the private sector would be to show that it could provide services that were of real benefit to patients and clinicians, as well as being financially competitive.