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The Health and Care Bill – what does it do and how will it affect the life sciences industry?

The Health and Care Bill had its Second Reading in the House of Commons on 14 July and is expected to become law in early 2022. It has four main purposes:

  • to integrate NHS and local government social services and allow for greater collaboration between NHS agencies and services
  • to give greater powers to the Secretary of State and to NHS England (NHSE)
  • to reduce bureaucracy in the NHS
  • to ease NHS competition rules.

The following consequences are relevant to the life sciences industry:

  • These integration reforms are of major importance involving the formalisation of the integrated care systems (ICSs) that were first introduced by the NHS Long Term Plan in 2019, giving ICSs statutory footing. Given the current and growing pressures on the NHS and social services as a result of the COVID-19 pandemic, attention to other major matters can be expected to go to the back of the queue.
  • The abolition of clinical commissioning groups and their replacement with new integrated care boards (ICBs) may cause some disruption (but perhaps not too much) among GP practices and their administration of prescriptions. The new powers given to ICBs in the Bill to work closely with local authorities by forming integrated care partnerships (ICPs) is positive. The purpose of ICPs is to ensure a more joined-up approach in the provision of health with social services, public health and preventive care.
  • The Bill has an interesting new clause which empowers the Secretary of State to require NHSE to commission certain specialised services that they deem appropriate and to disregard the financial implications for CCGs. This power would presumably be used sparingly and most likely where there is considerable political and public pressure to act speedily, effectively overriding the National Institute for Health and Care Excellence (NICE) and NHSE. The government’s Explanatory Notes to the Bill anticipate that it would be used for patients with rare cancers, genetic disorders or complex medical or surgical conditions.
  • NHS Digital will be able to collect a wide range of information about the use of medicines and medical devices and their effects on patient safety in the UK. The Medicines and Healthcare products Regulatory Agency (MHRA) will be able to use this information to establish and maintain comprehensive UK-wide medicines and medical device registries to improve market surveillance on the use of medicines. Registries will only be established where there is a clear public need and after the MHRA’s independent expert advisory body has made such a recommendation.

Background to integrated care

Since its creation in 1948 the NHS has operated as a separate organisation from local government social services – the former was heavily centralised, with its own funding coming almost entirely from central government and with its own standards and culture; the latter was run locally, with its own finances (via rates and central grants) and staff structures. At the heart of the proposed changes is the desire to remove these historic divisions and enable a coherent approach to patient care – too often these divisions have often resulted in many people receiving disjointed care. This matter has long been discussed, with NHSE encouraging local cooperation and partnerships on an ad hoc basis, allowing the design and implementation of integrated care to be locally led. Hence there are significant differences in the size of systems and the arrangements that they have in place as well as wide variation in the maturity of partnerships working across systems. However, NHSE and the government have taken the view that, since health and care organisations have been increasingly working together since 2016 through the sustainability and transformation plans (STPs), integrated care needs to be formalised and laid down in law, as it has been in other parts of the UK. It is important to recognise that legislation has its limits. Collaboration and coordination of local services require changes to the behaviour, attitudes and relationships of staff and leaders. For example, Croydon Council and CCG took four years to reach an agreement on shared approaches, overcoming a history of poor relationships.As a result, the Bill rightly aims to avoid a one-size-fits-all approach and leaves many decisions to local systems and leaders.The White Paper ‘Integration and Innovation: working together to improve health and social care for all’ (Feb 2021) set out the measures which, with some changes, are now in the Bill. (Access MAP’s White Paper analysis here). One of the main issues has been one of timing. Such a major reorganisation will be especially difficult at a time when the NHS is under great pressure. The Health Secretary has admitted that the 5.3 million people waiting for treatment, itself a record high, could rise to over 13 million in the coming months (Press Interview 10 July 2021) at a time when the entire NHS workforce is exhausted from dealing with the COVID-19 pandemic. This rise alone will put enormous strain on staff and hospital finances.No NHS reorganisation has ever saved money and the government has abandoned any claims that it will. The costs of re-employing staff, the expected demand that those working in social care should have to pay rates closer to those in the NHS and the extra administrative costs involved, alongside the calls for NHS staff to receive a fair pay rise will all add to the pressure on NHS finances, as the integrated care budget will be managed by the NHS. The last major reorganisation, implemented in 2013, took some years to bed down and cost an estimated £1.5bn to £2bn. It also diverted ministerial and departmental officials away from their other priorities. This reorganisation is not as great but, coupled with the rise in hospital waiting lists and the need to resume normal acute care services, it is difficult to see the Department of Health being able to focus on any other pressing health-related challenges as we come out of the pandemic. The Bill has to go through both Houses of Parliament, and there is likely to be prolonged discussions and many amendments, particularly in the House of Lords. However, given the government’s parliamentary majority, it could, at the earliest, receive Royal Assent in the current parliamentary session. Although the Bill leaves open the date of its implementation, this is expected to take place either from April 2022 or no later than April 2023.

Social care

One much noted omission from the Bill is any provision for social care – which includes support in people’s own homes, care homes and nursing homes, and services to help people regain their independence. This issue bears fundamentally on the work of local authorities and integrated care and needs to be resolved. The government has undertaken to bring forward proposals for adult social care reform by the end of 2021.

Integrated care proposals

Role of the Health Secretary and NHSE

The Chief Executive Officer of an ICB will be appointed by the Secretary of State and cannot be removed without his consent, even if the Board loses confidence in him. This second point may be contested during the passage of the Bill. Other members must include as a minimum one representative from hospitals, one from General Practice and one from local government, all to be appointed by the Chief Executive Officer.NHSE can impose financial requirements on ICBs in relation to their management or use of financial or other resources. These may include limits on expenditure or resource use.NHSE can direct an ICB to exercise any of NHSE’s relevant functions, and to make payments or give directions regarding the exercise of these functions.

Replacing CCGs with ICBs and ICPs

Since April 2021 the number of CCGs has been reduced to 42, and these are expected to represent the new integrated care system areas. However, the boundaries of a number of these areas have been criticised by MPs, and the Secretary of State has indicated that he is willing to amend the boundaries in the Committee Stage of the Bill, although the overall number is expected to remain the same. On implementation of the current legislation, CCGs will be abolished and replaced by two new bodies. The ICBs will have duties and powers to commission hospital and other health services. They will be responsible for everyone who is provided with NHS secondary and primary care services and everyone who is usually resident in England and living in the geography of the ICB. NHSE will retain a limited role in the oversight and discharging of functions that can be most effectively exercised at a national level.ICB functions will include:

  • securing integration
  • promoting the NHS Constitution
  • securing continuous improvements in service quality
  • reducing health inequalities
  • promoting patient involvement.

The provision of pharmaceutical services can be delegated from NHSE to ICBs, presumably on the same basis as CCGs.ICPs must be established by ICBs and local authorities. Membership will include one member appointed by the ICB, one member appointed by each local authority and others appointed by the ICP. Its functions will not be set out in legislation, which will provide for local flexibility. Each ICP will prepare an integrated care strategy addressing health, public health and social care needs, paying particular regard to guidance issued by the Secretary of State. As the King’s Fund has pointed out:‘This dual structure is a new development. It attempts to overcome the concerns that [integrated care systems] would struggle to act as bodies responsible for NHS money and performance at the same time as acting as a wider system partnership. There are major questions about how this will work in practice, particularly how the two bodies will relate to one another and what dynamic will emerge between them.’ (Integrated care systems explained: making sense of systems, places and neighbourhoods, May 2021).

Greater powers for the Secretary of State

The previous Health Secretary had long criticised the right of NHSE to be semi-independent, as set out under the Health and Social Care Act of 2012. Given that the NHS is funded almost exclusively by central government and that Ministers are answerable to Parliament for the NHS in England, it is not surprising that this arrangement was seen as anomalous and that a clear line of authority to Ministers was needed.The Bill gives the Secretary of State power to:

  • give directions to NHSE in relation to its functions
  • require NHSE to commission certain specialised services that are deemed appropriate and to disregard the financial implications for CCGs (see above)
  • appoint the Chief Executive Officers of ICBs (see above)
  • through NHSE, set capital and revenue resource limits for NHS Trusts, NHS Foundation Trusts and ICBs
  • require reconfigurations, which involve changing the way local NHS and hospital services are delivered to patients, to be referred to the Secretary of State instead of being dealt with locally
  • transfer by regulations the functions of arm’s length bodies – these are public bodies with a role in the processes of government but are not part of it, and accordingly operate to a greater or lesser extent at arm’s length from Ministers.

There has been concern expressed in Parliament and outside about the operational and clinical independence of NHSE and when exactly Ministers can and cannot intervene. Some specific assurances may need to be given during the passage of the Bill.

Easing NHS competition rules

The Bill confirms the repeal of existing regulations on procurement, patient choice and competition thus ending compulsory competition in the NHS for clinical hospital and community services. The Bill also provides a power to create a separate procurement regime for these services. This is being developed to ‘reduce the need for competitive tendering when it adds limited or no value.’ (Government Explanatory Notes on the Bill)There has been a mixed reaction to this proposal. In its July briefing to members, the British Medical Association believes that the reforms are insufficient to fully protect the NHS and that they could allow contracts to be awarded to private providers without proper scrutiny or transparency; the King’s Fund has welcomed the removal of ‘cumbersome’ competition rules and has pointed out that ‘in reality, the role of competition has been significantly reduced in the NHS’ (9 March and 6 July 2021).This issue is likely to be pursued rigorously during the Committee Stage of the Bill.

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