Commissioning: further issues - Health Committee Contents

Written evidence from Professor Christopher Newdick (CFI 36)


—  GP Consortia may have different commissioning duties by comparison to PCTs because they will be composed of GP practices with strong private interests. Arguably, they may be "hybrid" authorities.

—  "Hybrid" authorities have private interests recognised in law. By comparison with PCTs, they may be subject to less control both under judicial review and the Human Rights Act. If correct, this could dilute their legal accountability to patients, especially with respect to commissioning NHS care.

—  Will patients' rights be affected under the new NHS regime? To remove doubt, the private interests of GP Consortia should be made explicit in the Health and Social Care Bill.

1.  This is my own submission to the Health Committee in response to the question raised on NHS accountability in the inquiry, Commissioning: follow-up. I consider whether GP Consortia will have the same duties as PCTs. In particular, will GP Consortia be subject to the Nolan principles, especially the commitment to "selflessness"?


2.  The question is crucial for the following reason. PCTs are public authorities. They have no existence outside the NHS Act 2006 and their sole function is to serve public interests. They have no private agenda and those that serve PCTs are subject to the Nolan principles of public life of "selflessness, integrity, objectivity, accountability, openness, honesty and leadership." PCTs have no competing private interests when they commission NHS care. Priority setting can be sensitive and controversial, but these difficult decisions are made without regard to private interests.

3.  GP Consortia will be different. They will be composed of GP practices. GP practices are not created by statute. They do have a private existence. Although GP Consortia will be governed by statute, GP practices are businesses which provide services to the NHS. Arguably, given their composition, GP Consortia may be "hybrid" authorities because, in addition to their public duties, they will have distinct private interests of their own. Would it be lawful for a GP practice to compromise patient care in order to protect its private interests, or those of the GP Consortium? If so, would patients have a right to know about it?


4.  Current guidance does not permit GPs to make savings at the expense of patient care. The following statements explain how the balance between financial control and patient need has been struck. Although each recognises the need for savings where reasonable, prescribers are placed under a consistent duty to respond to patients' clinical needs:

(i)  The General Duty to Prescribe Medicines

5.  GPs have had a consistent prescribing duty in their contract with health authority commissioners. The duty has always insisted that GPs prescribe on the basis of patient need. Subject to medicines on the "black" and "grey" lists, current regulations state:

… a prescriber shall order any drugs, medicines and appliances which are needed for the treatment of any patient who is receiving treatment under the contract by issuing to that patient a prescription form (GMS (Contract) Regs 2004, sched 6, para 39). (The same principle also applies to PMS and APMS practices.)

(ii)  Generic Prescribing and "Switching" Medicines

6.  Generic drugs should be prescribed whenever it is possible to do so without harming the quality of care. Conversely, when a generic drug will not provide satisfactory care, the "Hippocratic," needs-based duty prevails. The Department of Health has stated:

… the Department of Health will introduce generic substitution in primary care. This will enable pharmacists and other dispensers to fulfil a prescription for a branded medicine by dispensing an equivalent generic medicine. Provision will be made to allow the prescriber to opt out of substitution where, in his clinical judgment, it is appropriate for the patient to receive a specific branded medicine. In these circumstances, the named brand must be dispensed (emphasis added)(Pharmaceutical Price Regulation Scheme 2009, para 7(6)(ii)).

7.  A similar approach is recommended in respect of the switching of patients to less expensive drugs. The balance between community and individual need is explained as follows by the BMA and NHS Confederation:

2.3  … switching patients to less expensive drugs usually within a therapeutic class is generally appropriate where there is no contra-indication and where there is evidence of equal or greater efficacy. This may release cash within the system that can be invested in additional and different care for patients. Patients should be informed of the rationale for these changes, for example via patient information handouts.

2.4   Switching significant numbers of patients' drugs within a therapeutic class (eg either by changing the brand or by changing the drug) should only be undertaken where the predicted NHS saving is expected to be sustained and provided there is no clinical disadvantage for the patient…

2.6   It is appropriate that doctors and health professionals have the clinical freedom to switch individual patients to higher priced drugs (branded or otherwise), or to alternative drugs, for clinical reasons (emphasis added) (Revisions to the GMS Contract (BMA and NHS Confederation, 2007), Annex 8).

(iii)  Incentive Schemes

8.  Incentive schemes may be used to encourage clinically and cost-effective prescribing, but they may not create conflicts of interest between GP and patient and may not be used to compromise patient care. In Strategies to Achieve Cost-Effective Prescribing (DoH, 2010), the Department of Health recommends that:

4(ii)   Health professionals should base their prescribing decisions on individual assessments of their patients' clinical circumstances, eg patients whose clinical history suggests they need a particular treatment should continue to receive it…

It continues:

7(iii)   … Payments or any other inducements to good practice must not reward prescribers or their practices simply for blanket prescribing of particular named medicines (ie without consideration of the individual circumstances of patients).

9.  These regulations and guidelines all give a consistent message, ie that GPs should reduce expenditure wherever it is reasonable to do so, but patients should always be treated on the basis of clinical need. The cost-consequences of these guidelines do not undermine GPs' "Hippocratic" commitments. Efficiency savings must, therefore, be made from the "supply-side" (ie the NHS) not the "demand-side" (ie the patient).

10.  At present, the financial burden of these guidelines is placed on PCTs, not GPs or their patients. However, when GP consortia become the "supply-side" (ie commissioners), may the burden ever transfer to patients? Will these "needs-based" principles survive when the Bill becomes law? On this question the Bill is unclear. Although it states that GP consortia, "must… make provision for dealing with conflicts of interest" (page 227, sched 1A, para 4(2)), it does not explain how patients' public rights will be balanced against GPs' private interests. Such a question could never arise in respect of PCTs. The Bill should state in effect whether the commissioning duties of GP Consortia will change patients' rights to care.


11.  There is also a related legal issue. Since 1999, PCTs have been subject to demanding standards of judicial review. Will the same legal standards apply to GP consortia? Because PCTs are exclusively public bodies, judicial review is not diluted by private interests. By contrast, the position of GP consortia is ambiguous. They will be statutory bodies and, therefore, subject to judicial review. However, because GP consortia will be composed of GP practices with their own private interests, the extent of judicial review may differ. Therefore, it may be argued that they are "hybrid" statutory authorities performing both public and private functions. If so, how will judicial review accommodate their private interests when GP consortia perform their statutory functions?

12.  Case-law suggests that their legal duties may not be identical to those owed exclusively by public authorities because GPs' private rights also merit protection. If this is correct, then patients' rights to judicial review, or under the Human Rights Act, will be different. The nature of the ambiguity in the Health Bill is illustrated in R v Northumbrian Water Ltd, ex p Newcastle and North Tyneside HA [1999] Env LR 715. A private water company refused to fluoridate its water supplies despite the request of the NHS health authority that it do so. The issue was (a) whether a privatised water company was subject to judicial review and (b) the extent of the review available. The court confirmed that judicial review was available because the private company was clearly involved in providing a public service. However, the extent of the review was limited because the company had legitimate private interests of its own. The court said that the company was entitled to balance its own private interests against the public duties imposed upon it by the statute. This lengthy extract from the judgment describes the point. Collins J said:

It is perfectly clear that as a commercial organisation the respondent company cannot be said to possess powers solely in order to use them for the public good. It has its commercial obligations to its shareholders. It must exercise its powers in accordance with those obligations. Equally it must comply with any statutory duties imposed upon it by Parliament. It must also exercise any discretion that it may be given within the scope of the statute which confirms it…

Thus a water company is entitled to say no [to fluoridation], even though it has no reason to doubt that it would be in the interests of the health of its customers, that its customers want it, that the health authority wants it and that it is in accordance with the policy of the government. It is entitled to say to itself "it would involve us in expense. It will involve us in potential liability if things go wrong, and it is quite impossible to say to be sure that there will not be a mistake made by an employee which creates a liability in those circumstances. We are very sorry but we do not think that we wish to take the risk."

… that would be a perfectly proper approach for a water company to take and that is because it does not have the same duty that a public body, which is not a commercial undertaking has. It is entitled to look to the interests of its shareholders and that is something which is inevitable, as it seems to me, when privatised bodies are given control of matters such as the provision of water, and something which no doubt Parliament has recognised. If Parliament wishes to ensure that a discretion is exercised on particular principles, then it must set out those principles in the statutory provisions.

The Bill does not state whether similar reasoning could be applied to GP consortia. By analogy, the rights of patients also cry out for clarification.

13.  This demonstrates how private interests may minimise the impact of judicial review. What is the position of statutory authorities composed of small businesses with private interests (eg GP consortia)? Will the Nolan principles, especially "selflessness," apply to GP consortia as they do to PCTs? This goes to the heart of the duty to commission NHS care for patients. Current constraints mean that complaints about NHS priority setting are likely to increase. The rights and duties of patients and GP consortia should surely be spelt out clearly in the Health and Social Care Bill.

14.   This question will become more common as we engage private businesses to provide public services. A similar problem arose with the previous Health and Social Care Bill in 2007 in respect of the rights of residents funded by local authorities in private residential homes. Were they protected by the Human Rights Act 1998 when the home wished to exclude residents from a home, or close it down completely? The matter had to be resolved by litigation and in YL v Birmingham City Council [2007] UKHL 27 the courts decided that, given the status of private nursing homes, residents had no human rights protection in these circumstances. The government reversed the impact of the ruling by changing the Health and Social Care Bill. Thus, care home providers may now be subject to the Human Rights Act because section 145(1) of the Health and Social Care Act 2008 was specifically included to have this affect.


15.  Similar uncertainty exists in the current Health and Social Care Bill. The Bill fails to explain how GPs' private interests (and patients' rights) will be affected under the new regime. It is unacceptable that a question of such importance should remain unsettled. As in 2007, the current Bill should make the new position clear. Much better to clarify things clear now rather than waste time and resources asking judges to do so after the Bill becomes law.

Christopher Newdick
Professor of Health Law, University of Reading, and
Special Advisor to the South Central Priorities Committee

February 2011

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Prepared 5 April 2011