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‘I think very, very few – if any – have got credible, realistic plans’

3 March 2017

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Chris Hopson, chief executive of NHS Providers, is not one to be concerned about speaking truth to power. In October, he told the Health Select Committee that regional plans to overhaul health and social care in England were at risk of ‘blowing up’ because the proposals were ‘vastly over ambitious’. Then last month, in a letter to The Sunday Times, he described it as a ‘shocking waste’ that managers, nurses and doctors are ‘kicking their heels’, waiting for beds to become available.

Chris Hopson, chief executive of NHS Providers, is not one to be concerned about speaking truth to power. In October, he told the Health Select Committee that regional plans to overhaul health and social care in England were at risk of ‘blowing up’ because the proposals were ‘vastly over ambitious’. Then last month, in a letter to The Sunday Times, he described it as a ‘shocking waste’ that managers, nurses and doctors are ‘kicking their heels’, waiting for beds to become available.

So Healthcare Leader asked him about his thoughts on where the process of implementing the sustainability and transformation plans is heading, how more funding can get to the frontline of mental health services and the results of implementing a new national tariff with a two year contract round.

You told the Health Select Committee that the STP process is at risk of blowing up. Is that still the direction you think it's heading now all the plans have been released?

We should start by saying it's a really important process and it's one that the NHS absolutely needs to make work. However, I think our members would say that the process was bumpy to start with. I think a number of them felt that they were being shoehorned into footprints that didn't necessarily work for them. I think there have been some governance issues, and fundamentally I think people are sceptical about whether they can really deliver the task that they're being required to meet, which is to hit ambitious 2021 financial targets, and told 'produce a plan; any plan' to deliver that. I think very, very few – if any – have got credible, realistic plans. So we just need to be sensible about what the process can deliver, recognise that it's important but just be realistic about what we're asking people to do. 

On the 2021 financial gap, you have mentioned that some providers don't believe the £30bn sum to be accurate. Is there a more accurate figure?

That's one of the things that we're calling for. There are a number of things that we’ve said have changed since that initial £30bn estimate was made. When the Five-Year Forward View was published in October 2014, it posited a gap of £30bn. We've had £8bn from the government over the spending review period, but there's a debate about whether it's eight or four and a half. Then there’s a real question then about where the rest is going to come from.

We know that three things at least have changed since that plan was done. First, we know that the provider deficit is a lot bigger, so the starting point is worse. Secondly, we know that social care is in a much worse position than that plan ever anticipated, and thirdly, we know that demand is going up much faster than the plan envisaged. So, I think there's a fairly widespread view that the NHS is not going to be capable of delivering the £22bn that was posited in the plan, so we need a re-plan. 

What pitfalls should health and social care leaders look for as STPs go through the consultation process and its implementation?

I think the two pitfalls that we would identify at the moment, is – the first is that we think there is a real danger that people are being very, very ambitious about some of the acute service reconfiguration in order to meet this very aggressive 2021 financial target, and our sense is that there isn’t the capital around to do the reconfiguration that is needed in many places but also, secondly, there won't be the political support to do it.

The second pitfall is that if we're going to change services and we're going to move to a bright new future, we have to take our clinicians, we have to take our local communities with us, but this planning process has not done that particularly well. But we must do it, because if we don't, you cannot change health services in any meaningful way without having the support of both your clinicians and your local population.

The STPs are asked to meet a wide range of targets. Is there anything that they will not be able to solve?

I think our fundamental view effectively is if the service is underfunded, and there is simply not enough money, then I don't see how an STP can solve that. A good example would be; we know that there are meant to be health and care STPs and we know that social care is underfunded. We also know the NHS is really struggling, so by definition, as Simon Stevens put it really very well, if you put two leaky buckets together, you just get a larger leaky bucket. You don't get a magically repaired bucket. We need to be realistic about the idea that STPs are going to solve that underlying funding problem, which is where I think we currently are – they're just not.

On the social care crisis, you mentioned the need for a long-term solution. What do you think that long-term solution should look like?

I think it's something that we need a debate about as a nation. We believe that, if you look at the long-term likely growth in need, it's very difficult to see how we can meet that need with the current amount of our national wealth that spend on health and care. The figures are relatively well known and everybody talks about them a lot. So between 1948 and 2010, NHS spend grew by 3.5% a year, which broadly matched the 4% increase in cost and demand, which tends to happen every year inside the NHS. We made up the gap by efficiency savings. We've now gone through – or we will go through if the envelope for the rest of the parliament is fixed – 10 years of a 1% funding increase. It doesn't take very many years of a 1% funding increase versus a 4% cost and demand increase for that 3% gap to really show up. I think exactly the same is happening on the social care side.

Julie Wood, chair of NHSCC, said: "Mental health trusts provide invaluable and critical services but mental health service provision is wider than this and it is the overall picture of mental health services which matters." Why is it important that mental health trusts still receive a large portion of funding destined for mental health services?

We can see CCGs under huge amounts of pressure. But we are getting increasingly frustrated about the fact that we seem to be having a counting argument year after year, where effectively, our trusts are quite rightly saying the Prime Minister, the Secretary of State, Simon Stevens have made commitments that this increase will be delivered, and then year after year our members are consistently seeing nothing like the level of increase. Part of the argument that CCGs probably rightly use is that it’s being spent in other places: in primary care, with private providers. The frustration from our members' end is they feel that is not fully transparent; they feel it's not possible to have the debate because there isn't the evidence out there, and they feel that CCGs are basically trying to have their cake and eat it and actually they're not doing what they should be doing.

Is achieving parity of esteem dependent on mental health trusts getting more funding?

It is one of the conditions but it's not sufficient in itself. There's a whole bunch of other stuff that needs to change. One of the valuable points that was made in the Prime Minister’s speech on mental health at the Charities Commission was just the very clear recognition this isn't just about the NHS. Effective provision of mental health care services is not just about what the NHS does. It's about a whole bunch of other different things; and that employers have got a role, other public services have got a role. The argument applies to physical health as well. Both physical health and mental health depend upon a wider set of determinants.

How are the national tariff currency changes affecting trusts?

We know they've caused problems on the commissioning side of the house. We have moved to HRG4+, which effectively is designed to get a better handle on the costs of high-quality, specialist treatment. But we now have various groups of our members that are saying this is completely flowed against us and is now giving us a real problem. The issue is that when you make changes in particular tariffs, which specialist trusts are particularly dependent upon you can absolutely knock one of those providers for six. And it's pretty clear to us that actually the changes to the orthopaedic tariff have caused a serious problem for a small number of specialist orthopaedic providers.

What kind of problem?

What they're arguing to us – and I'm convinced by what I've seen – is that they changed the tariff costs for particular treatments, which now mean those treatments are uneconomic to provide. So there's potentially a group of patients for whom there is a danger that because the costs are not fully recognised and trusts would lose significant amounts of money if they provided them, that's really quite difficult. To be fair, NHS Improvement have identified there's a potential problem and they will adjust. But the whole thing revolves around the ability to accurately capture the price. We're being told there are certain treatments on the orthopaedic side that actually cost a minimum of £15,000 to provide, and they're currently priced at £5,000. 

Did implementing the two-year contracting round achieve what it set out to for providers?

I think what it did do is it made people think about two years. I think we have a much quicker process this year, which I think is good. Certainly we detected lots of benefits from people having sat around STP tables together. There was a quality relationship there that perhaps hadn't been there previously. I think on the minuses, in lots of places the second year has effectively fallen by the wayside, because people have had some really big difficulties in getting the first year sorted out. I think the whole thing was really underpinned by this basic problem of the fact that NHS funding increases for 2017-18 and 2018-19 are now dropping.

Are we seeing an increasing number of block contracts? What will be the effects of this? 

Yes, we are seeing more block contracts. I think, again, you can see arguments, pros and cons. I think the pro is it's perhaps a move towards a more collaborative risk share, where effectively people are saying 'Look, we recognise the money's really tight, we recognise that demand is going up, we should share that risk and the best way of sharing that is through a block contract'. I would make the observation that the downside, though, is that if that means a massive shift of risk to providers, and the CCGs are trying to say 'If the demand goes through the roof, it's your problem – you sort it out'. And we know that won't work. Then it's a very short-term dangerous thing to do. So our view is that a simplistic, crude, risk-shift contract is not helpful, but a more sophisticated, perhaps capped and collared, where there is a genuine risk-share block contract, probably is quite helpful.