How "Integrated Care Boards" will hurt the NHS

In April 2023 a new payment scheme will be introduced which will determine how services in the NHS are financed and structured. At the same time as service providers are being instructed to make a 4% cut, this new scheme will further limit the provision of all services which come under the new Integrated Care Boards (ICBs).

According to the Keep Our NHS Public campaign, this new scheme aims to control total expenditure through a single pot of money for each Integrated Care Board (ICB). The payment scheme, to be published by NHS England, will result in a postcode lottery with different prices for the same treatment or service in different places, a patient lottery with different prices for different types of patients, and a provider lottery with different prices for different providers supplying the same treatment or service.

Each ICB will draw up a forward plan for NHS services in their area. The allocation from NHS England to the ICB is intended to cover the cost of their plan, and the plan must be adjusted to fit within the cost. NHS England will force ICBs to stay within budget.

The ICBs will be advised in this budgeting by private companies. Of the 57 firms accredited by NHS England for this, 14 are based in the heavily private-profit US health system.

One example of those companies’ approach to the NHS reforms comes from IQVIA. They have $13.87bn annual revenue, were awarded major Covid contracts, and have 13 accreditations. In January 2021, they said the following about the new payment model then mooted:

“A new payment model has been created, which can be considered as a hybrid that combines a capitated population budget, an improvement payment scheme and a gain/loss share arrangement. NHS England and NHS Improvement have made it clear that they want ICSs to have financial accountability, with a ‘single-pot’ which provide the funding for health and social care services which are commissioned at a System level.

“Capitated payments are lump-sum and not linked to how much care is provided. Providers have the flexibility to spend money on services they think will secure the best outcomes for their respective patient population. Commissioners will set the outcome measure and tender to select the best provider to deliver services.”

If activity goes above plan, the provider will receive 75% of tariff prices for the increased activity, whilst if activity falls below plan, payment will be deducted at the 75% rate. This provision is to pressurise providers to stick to budget.

As Keep Our NHS Public report:

“The 2006 Dental Contract, still in place, illustrates the problems with rigid fixed funding and ill considered local variability... Back in 2006, the government imposed a controversial contract based solely on the number of units of dental activity (UDAs) achieved by dentists. The new target-driven contract has had a corrosive impact on the way dentistry is delivered to patients, and on how dentists feel about providing services for the NHS.

“It brought in a fixed budget for NHS dentistry because dental practices were limited in the amount of NHS care they could provide patients, depending on how many UDAs they were commissioned to deliver in their contract. If a dental practice were contracted to say deliver 1,200 UDAs over the year, the expectation would be that these will be spread out evenly over the year.

“If the practice reaches its quota — and spikes do happen! — sometimes dentists are forced to turn away patients, regardless of need, for fear of breaching their contract... Senseless targets without any regard to patients’ needs. Dentists receive financial penalties when they don’t hit targets, receive no compensation when they exceed them, and have no scope to take on new NHS patients, even when they have spare capacity.”

This new financing model will further reduce access to NHS services and increase the role of private companies in health provision and in the organisation and design of health provision.

The changes also lay the ground for a break-up of national pay bargaining. Services in different areas will get differing budgets, so the argument that local population needs, varying costs of living and budget constraints should mean variable rates of pay, will be strengthened.

The health trade unions and the labour movement need to organise co-ordinated industrial and political campaigns to oppose and resist these changes.