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Scope and Scale of English Health Reforms Elicit Notes of Caution

As the coalition government ramps up its plans to reform the National Health Service (NHS) in England, the National Audit Office (NAO), England’s spending watchdog, published a report raising concerns about the plans’ potential short-term risks to health department costs and quality of health care services to patients.

The NAO noted that while Health Secretary Andrew Lansley estimated that the NHS reforms would cost roughly £1.4 billion to implement, though save money in the longer term, studies of previous major government reorganizations had found “recurring issues of weak cost control.” Moreover, the NAO warned that quality of services could suffer as GPs adapt to their new role commissioning services for their patients. It also observed that primary care trusts (PCTs), which are set to be abolished by 2013, could “cease to function effectively” before that time as staff leave for other jobs.

The NAO suggested that the massive scale of change, which includes possible abolition, creation, or wholesale revamping of more than 500 organizations directly involving upward of 90,000 staff, would be a major challenge to progress across the health system during the transition period. It also warned that effective management of the transition process would be crucial to avoid “undesirable results which follow from poor risk management: poorly thought-through plans, unrealistic timetables, weak controls, delays in delivery and wasted money.” 

At the same time, major U.S.-based health insurer Humana announced that it is pulling out of the United Kingdom. Humana entered the U.K. offering ways to improve care for chronically ill patients (including health IT and data support) in 2006, when the then Labour government opened the market for support to primary care trusts in commissioning NHS care.

As commissioning responsibilities in the NHS in England shift from PCTs to GP consortia, the Department of Health has made it clear that existing PCT staff must support the groups of GPs in commissioning care, leaving little opportunity for the private sector. Further, other major insurers including Bupa, Tribal, Aetna, and United Health have expressed concerns that few private sector providers possess the wide range of skills needed to support GP consortia. However, a “commissioning partnership” including U.S.-based UnitedHealth, auditing firm KPMG, law firm Morgan Cole, the National Association of Primary Care (a group of supporters of GP commissioning), and others won a contract across London to support the pathfinder GP consortia as they test out commissioning arrangements.

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