Chapter 5: GPs and the law on commissioning NHS services

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GPs and the law on commissioning NHS services.

 

This chapter contains:

 

1.          What is NHS commissioning?

2.          The legal duties on CCGs in the commissioning process.

3.          The legal duties on CCGs relevant to the commissioning process.

4.          The outputs from the commissioning process.

5.          Services that a CCG are legally required to commission.

6.          The CCG Healthcare Needs Assessment and joint strategic needs assessments.

7.          The CCG Annual Commissioning Plan.

8.          The development of CCG Commissioning Policies.

9.          Exception Policies and pick-up funding for clinical trials.

10.       The Individual Funding Request process.

11.       In year service developments.

12.       Public and patient involvement in the commissioning process.

 

 

1           What is NHS commissioning?

 

1.1           There are many definitions of the word “commissioning”.  The NHS Improvements Website describes commissioning the achievement of high quality and value-for-money services for the NHS. It states:

 

“Commissioning is a cycle of activities that includes assessing the needs of a population; analysing 'gaps'; setting priorities and developing commissioning strategies; influencing the market to best secure services and monitoring and evaluating outcomes. In other words, it involves buying in services from a range of health service providers (including GPs, dentists, community pharmacists, NHS and private hospitals, and voluntary sector organisations) to meet the health needs of local people, and monitoring how well they are being delivered. Commissioning is an on-going process that applies to all services, whether they are provided by the local authority, NHS, other public agencies, or by the independent sector”

 

1.2           The placing of contracts with a provider is thus the final act of the procurement stage of the commissioning process.  The contract is the last step in a long sequence of events that ought to take place before the decision is made by the CCG that the NHS ought to contract for any specific service.  However commissioning is a continuing process because, after the contract has been placed, the commissioner is then responsible for monitoring the performance of the contractor.

 

1.3           Hence commissioning process is thus complex.  This chapter describes some of the legal challenges which arise in the commissioning process.  It also contains an outline as to how NHS bodies are able to make lawful commissioning decisions.  The model will not be followed by every CCG in every case, but the steps which are set out below are the essential building blocks of a lawful commissioning process.

 

1.4           Commissioning is challenging for GPs who want to do the best for their patients because the demand for clinically effective healthcare treatment for individual patients (suffering from both common and rare medical conditions) vastly exceeds the ability of the NHS to fund such treatment.  NHS bodies have a finite budgets and this means that difficult choices have to be made about how services are organised and structured and, in the end, which drugs and other treatments can and cannot be provided to patients suffering from both common and rare conditions.  Once it is recognised that choices have to be made as to which treatments the NHS can afford to provide to patients, it is a legal necessity that the process of making those policy choices should be transparent and rational.

 

1.5           Section 1 of the National Health Service Act 2006 imposes a duty on the Secretary of State to continue the promotion of “a comprehensive health service”.   Some patients and clinicians rely on this section to argue that the NHS is obliged to provide them with a comprehensive service and so argue that rationing NHS services is inherently unlawful.  However inevitably it is not that straightforward.  Section 1(1) of the NHS Act provides:

 

“The Secretary of State must continue the promotion in England of a comprehensive health service designed to secure improvement—

 

(a)     in the physical and mental health of the people of England, and

 

(b)     in the prevention, diagnosis and treatment of physical and mental illness”

 

1.6           The Court of Appeal decided in Coughlan v North and East Devon Health Authority that the “duty of promotion” on the Secretary of State was not a duty to provide a comprehensive health service.  The Court accepted that budget considerations may mean that the Secretary of State could never in fact provide a service that was truly comprehensive, in that it provided services to meet all healthcare needs.  The court decided that the section meant the Secretary of State was required to use his or her powers to focus on providing as comprehensive a service as the NHS budget would permit, recognising that the NHS may never get to that state of healthcare nirvana.

 

1.7           In Coughlan the Court of Appeal was considering the wording of section 1(1) in the NHS Act 1977.  The only change since that time is that is the Health and Social Care Act 2012 changed the words in sub-section (b) from “illness” to “physical and mental illness”.  Illness” already had a wide definition in section 275 of the NHS Act which states that “includes mental disorder within the meaning of the Mental Health Act 1983 and any injury or disability requiring medical or dental treatment or nursing”.  This change accordingly appears to make no difference at all, save that it emphasises that the NHS has a duty to provide mental health services as well as services to meet physical illnesses.

 

1.8           So what is the legal effect, if any, of the duty on the Secretary of State to “continue the promotion in England of a comprehensive health service”?  The practical answer is that this section has little if any legal effect because it is difficult to imagine any set of circumstances in which the decision is required to be different because the Secretary of State has the section 1 duty.  There has been no court case concerning reorganisation of NHS services or access to NHS funded medical a treatment which (and there have been many) which, as far as I am aware, has criticised the Secretary of State for failing to discharge the section 1 duty.

 

1.9           The Court of Appeal in R (on the application of YA) v Secretary of State for Health noted that the Secretary of State has a duty to continue the promotion in England of a comprehensive health service.  The court then said:

 

“His duty under section 3 is subject to the qualification that his obligation is limited to providing the services identified to the extent that he considers that they are necessary to meet all reasonable requirements. He does not automatically have to meet all the requirements and in certain circumstances he can exercise his judgment and legitimately decline to provide them. In exercising that judgment he is entitled to take into account the resources available to him and the demands on those resources”

 

1.10        It is therefore clear that the Secretary of State does not have a statutory duty to deliver a comprehensive health service.  NHS commissioners are required to remain focused on the fact that the Secretary of State has a duty to promote the delivering of a comprehensive health service remains the ultimate aim of the NHS even if that is unachievable in practice. 

 

1.11        The real world of restricted budgets (which is fully recognised by the courts) means that lawful commissioning needs to focus on how decisions are made.  Commissioning is concerned with the process by which decisions are made in the NHS because, whenever a decision is made, there will be winners and losers.  There will be patients and clinicians who secure the funds for the services they have been seeking and there will be those that are disappointed (and often angry) and feel that the wrong decision has been taken.  The focus of this chapter will therefore be on the process of taking decisions and the challenges of ensuring that the decision making process is legally robust.

 

1.12        The NHS has a Constitution to which all NHS bodies, including Clinical commissioning Groups (“CCGs”) are required to “have regard to the NHS Constitution”:  see section 2 of the Health Act 2009.   The duty to “have regard” to the NHS Constitution during a decision making process means that the CCG is obliged to understand the terms of the NHS Constitution and act in accordance with the principles set out in that document unless it has a very good reason to depart from those principles.  The relevant part of the NHS Constitution on commissioning provides:

 

“The NHS commits to make decisions in a clear and transparent way, so that patients and the public can understand how services are planned and delivered.”

 

1.13        Hence, throughout the commissioning process, there is a need for CCGs to act in a clear and transparent way, and to ensure that they can defend their reasoning at all times within the commissioning decision making process.  It also ties in to the central importance of public participation in the commissioning process which is considered at chapter 11 below.

 

2           The legal duties on CCGs in the commissioning process.

 

2.1           Regulation 34(1) of the National Health Service Commissioning Board and Clinical Commissioning Groups (Responsibilities and Standing Rules) Regulations 2012 (“the 2012 Regulations”) imposes a legal obligation on every CCG to have “arrangements for making decisions and adopting policies on whether a particular health care intervention is to be made available for persons for whom the relevant body has responsibility”.  This legal duty means that the CCG must set up transparent processes which explain how it will go about making decisions in its annual commissioning round, who will be consulted, who will take the decisions and how these will be translated into contracts with its providers. 

 

2.2           The wording of the legal duty is to “make arrangements”.  This form of words is used in many other places in the NHS Act and in other legislation which imposes statutory duties on public bodies.  The nature of the duty to make arrangements gives a considerable amount of discretion to the CCGs.  Subject to other legal constraints (some of which are described below), CCGs are able to decide for themselves what decision making processes they should adopt.   However once the CCG has its “arrangements” in place the CCG comes under a public law legal duty to follow its own procedures when making commissioning decisions.

 

2.3           Some guidance about the meaning of a duty to make “arrangements” was given by Underhill LJ in the first instance decision of R (Nash) v Barnet London Borough Council (Capita plc and others, interested parties [2013] EWHC 1067 (Admin).  The case was only a permission decision and so is of limited weight but it is a full judgment by a distinguished judge and was subsequently upheld by the Court of Appeal.  The Judge was concerned with a duty to make arrangements to secure best value under local government legislation.   However his approach may have relevance for understanding the nature of the duty on CCGs to make arrangements under section 14O of the NHS Act.  He said at paragraph 70:

 

“..  the reference to 'making arrangements' would make it clear that the duty was concerned with intentions rather than outcome. It may also be that the draftsman wanted to emphasise the need to build the fulfilment of the best value duty into authorities' plans and procedures. Or perhaps it is just circumlocution. But, whatever the explanation, the important point for present purposes is what the arrangements are aimed at, namely securing improvements in the way in which authorities perform their functions”

 

2.4           Thus the legal duty is to ensure that the way in which the CCG undertakes its commissioning functions is clearly set out in an overarching CCG policy.  The "arrangements" which the CCG is required to put in place under section 14O need to describe the commissioning process from its initial assessment of needs through to how the CCG takes commissioning contracting decisions.   In Tandy v East Sussex CC [1998] A.C. 714 Mummary LJ emphasised the width of the discretion on a public body which had a duty to make arrangements (in that case about the education of children with special educational needs).  He said:

 

“In the interests of fairness, consistency and administrative efficiency a local education authority is entitled to formulate a policy setting norms, standards and criteria to be applied in the consideration of the circumstances of individual children. Such a policy is lawful if it promotes the specified statutory purpose and is sufficiently flexible not to fetter the decision-making process in individual cases. Further, once a policy has been formulated, it is permissible (and advisable) to review it from time to time in the light of experience and of changing circumstances”

 

2.5           The importance of a CCG having a clear policy which formally guides decision making in this difficult area was recognised by the courts in North West Lancashire Health Authority v A & Ors [1999] EWCA Civ 2022 where Auld LJ said:

 

“.. it is an unhappy but unavoidable feature of state funded health care that Regional Health Authorities have to establish certain priorities in funding different treatments from their finite resources. It is natural that each Authority, in establishing its own priorities, will give greater priority to life-threatening and other grave illnesses than to others obviously less demanding of medical intervention. The precise allocation and weighting of priorities is clearly a matter of judgment for each Authority, keeping well in mind its statutory obligations to meet the reasonable requirements of all those within its area for which it is responsible. It makes sense to have a policy for the purpose - indeed, it might well be irrational not to have one …”

 

2.6           However the overall purpose of the arrangements must be borne in mind and the fact that, whatever arrangements the CCG sets up, they must achieve the aim of describing the commissioning decision making process of the CCG, thus ensuring that patients and the public have a clear understanding as to how decisions are made.   Speaking in the House of Lords in Tandy case Lord Browne-Wilkinson said at Page 747:

 

The duty is to make arrangements for what constitutes suitable education for each child. That duty will not be fulfilled unless the arrangements do in fact provide suitable education for each child”

 

2.7           Thus the arrangements made by the CCG must in fact deliver a proper system for decision making on commissioning matters within the CCG.

 

2.8           Once the CCG has settled on its commissioning arrangements, Regulation 36 of the 2012 Regulations provides that the CCG must publicise those arrangements.  It provides :

 

“Each relevant body must compile information in writing describing the arrangements it has made pursuant to the requirements in regulation 34 and must ensure that that information is—

 

(a)  published on the website of the relevant body; and

 

(b)  available to inspect at the head or main office of the relevant body”

 

2.9           Thus the “arrangements” that the CCG has in place which set out how it will make commissioning decisions, which lead to the decisions that the CCG makes about its  policies on whether a particular health care intervention is to be made available for persons for whom the relevant body has responsibility must be clearly set out on the CCG website.  A trawl of CCG websites in December 2013 (without naming names) suggests that relatively few CCGs have complied with this duty. 

 

3           The legal duties on CCGs relevant to the commissioning process.

 

3.1           The Health and Social Care Act 2012, which created CCGs, imposed a series of legal duties on the new NHS commissioning bodies.  These are in general, target duties which are required to guide and focus the CCG’s decision making processes.  GPs who play a part in CCGs therefore need to understand the nature and effect of the duties and to pay careful attention to each of the statutory duties imposed on the CCG within the commissioning process.  The audit trial of documents produced by the CCG needs to demonstrate that the CCG understands each of these duties and records the extent to which it is has focused upon each duty when making relevant decisions. 

 

3.2           The general legal duties imposed on CCGs are:

 

a)         A duty to act with a view to securing that health services are provided in a way which promotes the NHS Constitution:  see section 14P of the NHS Act;

 

b)         A duty to exercise the CCG functions effectively, efficiently and economically:  see section 14Q of the NHS Act;

 

c)          A duty to exercise CCG functions with a view to securing continuous improvement in the quality of services provided to individuals for or in connection with the prevention, diagnosis or treatment of illness:  see section 14R(1) of the NHS Act;

 

d)         A duty to act with a view to securing continuous improvement in the outcomes that are achieved from the provision of the services:  see section 14R(2) of the NHS Act.  “Relevant outcomes” for these purposes means outcomes which show—

 

(a)  the effectiveness of the services,

(b)  the safety of the services, and

(c)   the quality of the experience undergone by patients

 

e)         A duty to regard to any guidance published by NHS England on the discharge of their commissioning functions (see section 14Z8 of the NHS Act);

 

f)           A duty to assist NHS England in NHS England’s duty to secure that there is continuous improvement in the quality of services provided to individuals for or in connection with the prevention, diagnosis or treatment of illness and continuous improvement in the outcomes that are achieved from the provision of the services:  see section 14S of the NHS Act;

 

g)          A duty to have regard to the need to—

 

(a)  reduce inequalities between patients with respect to their ability to access health services, and

(b)  reduce inequalities between patients with respect to the outcomes achieved for them by the provision of health services:  (see section 14T of the NHS Act).

 

h)         A duty to promote the involvement of patients, and their carers and representatives (if any), in decisions which relate to—

 

(a)  the prevention or diagnosis of illness in the patients, or

 

(b)  their care or treatment (see section 14U(1) of the NHS Act);

 

i)           A duty to have regard to guidance published by NHS England concerning the duty to involve patients in decision making under section 14U(1) of the NHS Act (see section 14U(3) of the NHS Act);

 

j)            A duty to act with a view to enabling patients to make choices with respect to aspects of health services provided to them (see section 14V of the NHS Act);

 

k)          A duty to promote innovation in the provision of health services (including innovation in the arrangements made for their provision) (See section 14X of the NHS Act);

 

l)           A duty to promote research on matters relevant to the health service and the use in the health service of evidence obtained from research (see section 14Y of the NHS Act);

 

m)        A duty to promote education and training for persons who are employed, or who are considering becoming employed, in an activity which involves or is connected with the provision of services as part of the health service in England (see a combination of section 1F(1) and section 14Y of the NHS Act);

 

n)         A duty to promote integration between the services that the CCG commissions and other health and social care services (see sections 14Z1 of the NHS Act).

 

3.3           Each of these duties are legal obligations which are concerned with the way in which commissioning functions are undertaken and which impose duties on the CCG to have regard to particular factors when commissioning decisions are taken.  They do not require the CCG to make commissioning decisions (such as commissioning a specific service or keeping a specific hospital open) but are concerned with ensuring that CCG take into account defined factors when making these decisions.  It is difficult to describe precisely what each of these duties mean in practice in any particular circumstances because the relevance of each factor will depend on the circumstances of each commissioning decision.  However the following is general guidance which emerges from the observations of Aitkens LJ in R (Brown) v Secretary of State for Work and Pensions [2008] EWHC 3158 (Admin) which was concerned with the similarly worded duties under the Equality Act 2010:

 

a)         Decision makers in a CCG must be made aware of each of the above duties.  A CCG is likely to be in difficulties in asserting that it has followed its legal obligations in making commissioning decisions if those who have made the decisions were not aware of each one of the legal duties set out above;

 

b)         The mind of the decision maker must be focused on each of the above duties at some relevant point during the commissioning decision making processes.  Decision makers must have a “conscious approach and state of mind” which is focused upon the legal obligation when they are taking commissioning decisions;

 

c)          Each legal duty must be exercised in substance, with rigour and with an open mind;

 

d)         The duties are non–delegable duties;

 

e)         The duties are continuing duties throughout the commissioning process;

 

f)           It is good practice for those exercising public functions in public authorities to keep an adequate record showing that they had actually considered their duties and pondered relevant questions. Proper record-keeping encourages transparency and will discipline those carrying out the relevant function.

 

3.4           There is a specific legal duty to seek public health advice.  Interestingly, despite the myriad of legal duties on a CCG, there is no duty to seek legal advice.  In undertaking commissioning duties, there is a legal duty on a CCG to seek external advice in specific areas.  The wording of the duty is as follows:

 

“Each clinical commissioning group must obtain advice appropriate for enabling it effectively to discharge its functions from persons who (taken together) have a broad range of professional expertise in—

 

(a)  the prevention, diagnosis or treatment of illness, and

 

(b)  the protection or improvement of public health”

 

3.5           The reference to the requirement to seek advice from a “broad range of professional expertise” means that the CCG is required to seek advice from more than one person.  The CCG almost certainly will not discharge this duty of it only relies on the expertise of its own GP professionals because these individuals are potential decision makers.  It is to see that the duty is discharged if the CCG relies purely on internal expertise because that would mean that one or more persons would be acting both advisors and decision makers.   These appear to be incompatible roles.  NHS England has a power (but not a duty) to publish advice on how the CCG should seek advice in order to discharge this duty.  At this point (December 2013) no guidance appears to have been published by NHS England about how they recommend CCGs exercise this statutory duty.

 

3.6           Unlike some of the target duties set out above, the duty to seek advice is clear.  A CCG will act unlawfully if it fails to seek appropriate advice within the commissioning processes.  There is no specific obligation in the NHS Act to require the CCG to publish the advice that it receives.  However the advice would not be covered by legal professional privilege because it is not legal advice.  It is therefore difficult to see any exemption under the Freedom of Information Act 2000 which the CCG could rely on refuse to publish any advice that it has received.

 

3.7           Regulation 34 of the 2012 Regulations provides that the arrangements that the CCG has in place for making commissioning decisions will ensure that the CCG funds Technology Assessment Guidance published by the National Institute for Health and Clinical Effectiveness (“NICE”).  The requirement to fund NICE TAGs is explored at chapter 5 below.

 

3.8           Regulation 34(2) also provides:

 

“(2) Arrangements under paragraph (1) must—

 

..

 

(b)  include arrangements for the determination of any request for the funding of a health care intervention for a person, where there is no relevant NICE recommendation and the relevant body’s general policy is not to fund that intervention”

 

 

3.9           Regulation 34(2) thus requires the CCG to set up an Individual Funding Request (“IFR”) process, the details of which are explored below.

 

4           The outputs from the commissioning process.

 

4.1           The ultimate question for the GP sitting in his or her surgery (and of course for the patient) is whether a local hospital will continue to provide a full A & E service, whether physiotherapy services will be commissioned by each GP practices or across a wider area and whether an individual patient will be funded by the NHS for a clinically appropriate treatment or intervention for that patient.  Each of the examples above is a commissioning decision which flow ought to flow from the annual commissioning process operated by the CCG.  At the level of an individual patient (which is often the issue facing a GP in his or her consulting room) the outcome of commissioning process is that a decision to approve funding for a patient to be provided with NHS funded treatment can be made by an NHS commissioners based on only one of 3 routes, namely:

 

a)         By applying the terms of an approved CCG or NHS England commissioning policy (funding through a “a Commissioning Policy Decision”);

 

b)         By making a decision that a patient is within a recognised exception to a CCG or NHS England commissioning policy PCT (funding through an “Exception Policy Decision”); or

 

c)          By making an individual funding decision outside of CCG or NHS England existing commissioning policies (“An Individual Funding Request ("IFR") policy Decision”).

 

4.2           A lawful commissioning decision referable to an individual patient is typically made at the end of a 4 stage decision making process which is adopted by most NHS bodies.  Every stage of the commissioning process is not undertaken every year because decisions referable to many treatment areas are rolled over from year to year but elements of the 4 stage process should be present each year as part of any rational CCG commissioning process.  The 4 main stages within the decision making process for those commissioning NHS care, and thus carrying the responsibility for managing NHS budgets, are as follows:

 

a)         The development of a healthcare needs assessment;

 

b)         Using the outputs of the healthcare needs assessment to construct an Annual Commissioning Plan;

 

c)          Setting commissioning policies for individual medical conditions; and

 

d)         Agreeing policies concerning In-Year Service Developments and Individual Funding Requests.

 

4.3           Thus the “arrangements” that the CCG is obliged to have in place in order to discharge its legal duty under Regulation 34 of the 2102 Regulations ought to describe the processes that the CCG will follow to go through each of the above processes, and thus allow patients to understand the decision making process which leads up to a final decision on whether the treatment they are requesting will or will not be routinely funded under a commissioning policy.  It should also describe whether funding could be secured through an Exception Policy and how the CCG Individual Funding Request process will operate.

 

4.4           Getting through the above procedures requires GPs to be involved in the difficult business of priority setting.  In conducting this exercise it is important for commissioners to bear in mind that it is potentially lawful for CCG to adopt a policy which provides that provides the NHS will not fund medically appropriate treatment even if this has the capacity to benefit a group of patients.  Commissioning involves making tough (and sometimes near impossible) choices.  GP commissioners are entitled to decide that their substantial but nonetheless limited financial resources should be used to fund other treatments for one group of patients in preference to another group.  That will inevitably leave disappointed patients and clinicians where clinically effective medical interventions are decided not to have a sufficient priority to justify funding.  These decisions will, almost inevitably, come under intense public scrutiny.  It is thus essential that they are taken in a transparent and lawful manner The primary duty on GP commissioners is therefore for take these decisions in a rational way by following a lawful procedure.  That procedure needs to ensure that the CCG complies with all of the legal duties set out above.

 

4.5           There are a large number of people who have either a legitimate or a commercial interest (and sometimes both) of having a say within the commissioning process.  These include:

 

a)         Patients (whose rights to be involved are discussed at chapter 12 below);

b)         The GP members of the CCG;

c)          Non-GP members of the CCG;

d)         Provider NHS Trusts;

e)         Other providers of healthcare services to the NHS;

f)           Universities and other providers of training for clinical staff;

g)          Persons who are engaged in clinical research which may be affected by CCG decisions;

h)         Clinicians;

i)           Drug companies and other organisations that  supply goods and services to the NHS.

 

4.6           A key part of that decision making process is recognising the right of everyone who has a proper interest in the outcome of the commissioning process to have their say during the process.  The CCG will remain the final decision maker but many of the above have the right to have an input into the process and to have their views properly considered by the CCG before final decisions are made.  The commissioning process thus involves a series of complex challenges which GPs need to surmount in order to be confident that CCG decisions are legally robust.

 

5           Services that a CCG are legally required to commission.

 

5.1           The Secretary of State has never taken on the role of deciding what medical treatment should be provided to specific patients.  The political realities of the NHS mean that it is virtually impossible for an elected politician to make the decision that a specific medical treatment should not be funded for a patient or group of patients.  Politicians need to get elected and, once in ministerial office, are understandably concerned to ensure they do not do anything which adversely affects their chances of being re-elected.  The NHS was therefore set up from 1948 to 2013 with a series of local decision makers who, acting on delegated authority form the Secretary of State, decided what services should be available in their locality to NHS patients.  Large capital spending was controlled from Whitehall but decisions about how to spend local budgets and hence what treatment was funded for what patient have always been matters for local decision making.

 

5.2            “Local decision making” creates the inevitability that different localities will make different decisions.  This is the origin of the common complaint against the NHS of “Post Code Prescribing”.  However the only logical way to remove Post Code Prescribing is to make resource allocation decisions at a regional or even national level.  That has 2 significant policy problems.  First, it means that the Minister comes much closer to deciding which patient gets which drug or medical treatment.  Second, it makes it very difficult to hold local NHS units financially accountable for the performance of the NHS in their area.  The local NHS can only be required to operate within financial balance if it is able to control where the money is spent.  But, on the other hand, Ministers have wanted to ensure that the “national” health service provides as equal a service as possible across the whole nation.

 

5.3           The Labour government of 1997 to 2001 recognised the tension between local decision making and post code prescribing.  Its solution was to create the National Institute for Clinical Excellence, later renamed as the National Institute for Health and Clinical Excellence, commonly known as “NICE”.   NICE’s function is to evaluate specific medical interventions and make “recommendations” to the NHS and local authorities about the intervention under consideration.  NICE describes its own functions as:

 

“NICE guidance supports healthcare professionals and others to make sure that the care they provide is of the best possible quality and offers the best value for money.

 

We provide independent, authoritative and evidence-based guidance on the most effective ways to prevent, diagnose and treat disease and ill health, reducing inequalities and variation

 

In other words, it is driven by the twin aims of producing guidance which recognises that NHS services should be both cost-effective and clinically effective.

 

5.4           Although NICE may not see it this way, GP commissioners can divide the guidance that NICE produces broadly into 2 types:

 

a)         Technology Appraisal Guidance (“TAGs”); and

 

b)         All other NICE Guidance.

 

5.5           The TAG process assesses the clinical and cost effectiveness of health technologies, such as new pharmaceutical and biopharmaceutical products, but also include procedures, devices and diagnostic agents. NICE suggests that its intention is to attempt to ensure that “all NHS patients have equitable access to the most clinically - and cost -effective treatments that are available”.  However that ambition would only be achieved if all medical treatments had been subject to binding NICE Guidance.  In fact only a tiny proportion of the medical delivered by the NHS is set out in binding NICE Guidance and so this ambition is still a very long way from being achieved.

 

5.6           In 2003 the Secretary of State converted NICE TAGs which “recommended” NHS commissioners fund a particular treatment for a particular patient group into a legal obligation by issuing directions to require primary care trusts to fund interventions in accordance with the relevant NICE TAG.  The directions required the PCT to allocate funding for recommended treatment for patients within the cohort described in the TAG within 90 days of the publication of the final TAG (unless the Secretary of State exempted the TAG from the scheme).  There were a few exemptions but in the vast majority of cases a decision from NICE by-passed any prioritisation process because it effectively top sliced an NHS commissioner’s budget by requiring funds to be made available for a particular treatment for a particular group of patients.

 

5.7           The Health and Social Care Act 2012 abolished PCTs and replaced them with clinical commissioning groups.  One key difference between PCTs and CCGs was that the Secretary of State was not given power by the 2012 Act to issue directions to CCGs.  The omission of the power for the Secretary of State to give directions to CCGs was not an error.  The then Secretary of State, Andrew Lansley, thought that the role of the Secretary of State was to set the strategic framework for the NHS and then allow local decision making to operate to run the NHS at a local level without being impeded by Whitehall.  It followed that CCGs were deliberately not included in the list of bodies to whom the Secretary of State could give directions in section 8 of the NHS Act.  On effect of this policy was that from April 2013, the legal requirement on local NHS commissioners to fund medical treatments set out in NICE TAGs could therefore not be enforced through directions.

 

5.8           The new mechanism to reduce Post Code Prescribing in the NHS is section 237 of the Health and Social Care Act 2012.  This allows the Secretary of State to make Regulations which replicate the former system which was enforced by Directions.  The relevant Regulations are the National Institute for Health and Care Excellence (Constitution and Functions) and the Health and Social Care Information Centre (Functions) Regulations 2013.  Regulation 7 provides:

 

“NICE may make a technology appraisal recommendation—

 

(a)  in relation to a health technology identified in a direction given by the Secretary of State;

 

(b)  that recommends that relevant health bodies provide funding within a specified period to ensure that the health technology be made available for the purposes of treatment of patients”

 

5.9           Regulation 7(6) then provides that a CCG must comply with a technology appraisal recommendation.  CCGs must also provide funding to support patients who could benefit from TAGs which were included in Directions to PCTs which were made prior to 1 April 2013 (see Regulations 34 and 34 of the National Health Service Commissioning Board and Clinical Commissioning Groups (Responsibilities and Standing Rules) Regulations 2012).

 

5.10        The remaining Guidance produced by NICE is hugely useful for CCGs in assessing whether a particular medical intervention or care pathway provides clinically effective and/or cost effective medical treatment.  However, other than TAGs, there is no legal requirement on CCGs to follow guidance issued by NICE.  Some NICE guidance is routinely followed by virtually all CCGs but other guidance is departed from by many CCGs throughout the country.  Hence, for example, NICE Guidance 156 recommends that CCGs should fund up to 3 cycles of In-Vitro Fertilisation for infertile women up to the age of 42.  There are relatively few CCGs which fund IVF to that extent.

 

5.11        However even though CCGs do not have a legal obligation to implement CCG Guidance, they have a legal obligation to look at the guidance, understand what it is recommending and to consider whether to implement it.  This was explained by Dyson J in R (on the application of Fisher) v North Derbyshire Health Authority [1997] EWHC Admin 675 who said:

 

“If the Circular provided no more than guidance, albeit in strong terms, then the only duty placed upon health authorities was to take it into account in the discharge of their functions. They would be susceptible to challenge only on Wednesbury principles if they failed to consider the Circular, or they misconstrued or misapplied it whether deliberately or negligently: see Grandsden & Co Ltd and another -v- Secretary of State and Another (1985) 54 P&CR 86, 93 – 94”

 

5.12        A CCG will act thus unlawfully if it does not consider relevant NICE guidance (or potentially other relevant guidance which it would be unlawful to fail to consider) when making a commissioning policy decision or if the CCG misunderstands the guidance or misapplies it.  In contrast the CCG will be acting lawfully if it considers relevant guidance as part of a decision making process but makes the decision not to follow the guidance for a good reason.  Allocating the medical treatment a lower level of priority than suggested by NICE is a potentially good reason.  See for example R (Condliff) v North Staffordshire Primary Care Trust [2011] EWHC 872 (Admin) and the same case in the Court of Appeal.  In order to ensure that the CCG can show that it has acted lawfully it is preferable if the document trail leading up to the commissioning decision shows on the face of the relevant documents that the relevant NICE Guideline has been properly considered.

 

6           The CCG Healthcare Needs Assessment and joint strategic needs assessments.

 

6.1           The development of a healthcare needs assessment for either a patient group (e.g. breast cancer patients) or a particular service area (e.g. rehabilitation services) is the first step in CCG deciding what medical services should be commissioned for its population.  Unless the CCG has a clear understanding of the needs of the local population for medical services it cannot carry out any meaningful priority setting exercise.  This was previously a task for NHS bodies alone but the need to integrate health and social care services means that this task is now very largely undertaken jointly by a CCG with the relevant local social services authority working, through the Health and Wellbeing Board.

 

6.2           Section 116 of the Local Government and Public Involvement in Health Act 2007, required NHS bodies to carry out joint strategic health needs assessments.  This legal obligation was effective from April 2008.  The legal structure of obligations around joint strategic health needs assessments was amended by sections 192 and 193 of the Health and Social Care Act 2012, and Health and Wellbeing Boards were created by section 194 of the 2012 Act.  The present legal structure is as follows:

 

a)         CCGs are required to work with the relevant local authority (which in a 2 tier local authority areas is the County Council) to prepare a joint strategic health needs assessment for the delivery of health and social care functions for the  Health and Wellbeing Board;

 

b)         There is a duty under section 116A(5) to involve the Local Healthwatch organisation and to involve the “the people who live or work in the area” in the preparation of that strategy;

 

c)          The joint strategic health needs assessment must be published by the local authority;

 

d)         Once the joint strategic health needs assessment has been prepared, the CCG have a duty to “have regard” to that strategy when exercising any of its functions (see section 116B(1) of the Local Government and Public Involvement in Health Act 2007).

 

6.3           The duty to “have regard” to a plan or set or assessment is a term of art in public law statutes.  It means that, when exercising relevant statutory functions:

 

a)         Decision makers in a CCG must be made aware of the joint strategic health needs assessment when making commissioning decisions.  A CCG cannot assert that it has followed its legal obligation to have regard to the joint strategic health needs assessment in making commissioning decisions if those who made the decisions were not aware of the relevant recommendations in the assessment document.  In practice this means that relevant decision makers must be focused on the recommendations of the joint strategic health needs assessment during the commissioning processes.  Decision makers must have a “conscious approach and state of mind” which is focused upon this particular legal obligation when they are taking commissioning decisions;

 

b)         The duty to have regard to the joint strategic health needs assessment must be exercised in substance, with rigour and with an open mind;

 

c)          The duty is non–delegable.  It rests on the key decision makers within the CCG and cannot be discharged by officers of the CCG alone considering the joint strategic health needs assessment;

 

d)         The duty to have regard to the joint strategic health needs assessment is a continuing duty throughout the commissioning process;

 

e)         It is good practice for the CG to keep an adequate record showing that they had actually considered this duty and pondered relevant questions. Proper record-keeping encourages transparency and will discipline those carrying out the relevant function.

 

6.4           However the CCG is not bound to adopt each and every one of the priorities in the joint strategic health needs assessment.  It can reach its own view about priorities provided, in doing so, it has properly had regard to the joint strategic health needs assessment.  The CCG does need to have good reasons to depart from the priorities set out in the joint strategic health needs assessment. 

 

6.5           The CCG healthcare needs assessment should  explain the need for health and social care of each particular patient group or service area, consider the options for funded treatment and explore the costs, benefits and priorities within the services that could be provided to that patient group or service area.  The healthcare needs assessment is only concerned with the needs of a particular patient group (or a particular service) but can offer a view on the options and priorities for investment for the development of services for that patient group or service area.

 

6.6           The healthcare needs assessment is often an “ideal” description of the service to be provided to a patient group or sometimes ends up describing an ideal healthcare service which is either impractical or unaffordable.  It is a common complaint that the cumulative cost to NHS commissioners of all the healthcare needs assessments vastly exceeds the resources available to the NHS Commissioners to fund all of the services in the assessments.  However the joint strategic health needs assessment feeds into the next stage of the CCG commissioning process, namely the preparation of an annual commissioning plan.

 

7           The Annual Commissioning Plan

 

7.1           The next stage for the GP Commissioners is to make decisions about which elements of which healthcare services for which patient groups are affordable for the CCG in the coming financial year. To do this NHS Commissioners are required to consider the relative priority to be allocated to the different proposed services for the coming financial year.  This process needs to be informed by the joint strategic health needs assessment.   This was formerly known as the annual commissioning plan process and is now largely known as the commissioning framework

 

7.2           In making choices between investments in different patient groups the GP Commissioners have a legal duty to consult patients, representative organisations, the local Healthwatch, the public, clinicians and key stakeholders such as the local Health and Overview Scrutiny Committee.  Further details about the duty to involve the public within the commissioning process is set out at chapter 12 below.

 

7.3           Decisions about the relative priorities of different calls on the CCG budget will be guided by a number of factors including:

 

·       Guidance from NHS England;

·       Legal requirements such as NICE Technology Assessment Guidance (where the NHS Commissioner is legally obliged to offer treatment and thus strictly the decisions sit outside a priority setting process);

·       The outcome of local consultations and any agreed local priories;

·       National NHS policy;

·       The CCG’s own policy on ethical decision making including the requirement to tackle health inequalities;

·       The evidence of the clinical effectiveness and cost effectiveness of the various treatments set out in the healthcare needs assessment; and

·       Where investment is presently provided, new opportunities for investment and where existing services should be reduced in order to fund new investment areas.

 

7.4           The assessment of relative priorities ought to involve both new investments and existing services and treatments.   There should be no assumption that, as a matter of law, an NHS treatment which is provided in one financial year will be continued in subsequent years.  A commissioner could take a lawful decision to cease a service or a treatment for an individual patient which did not have sufficient priority to justify the continuance of the treatment or service.  Funding will be released either by efficiency savings or by stopping a low priority treatment or service.  A process for doing this is programming budgeting.

 

7.5           NHS commissioners often decide that a medical treatment may be clinically effective but decline to fund the treatment because they conclude that it is not “cost effective”. Cost effectiveness is central to commissioning because CCGs have duties to exercise their functions effectively, efficiently and economically (see section 14Q of the NHS Act) and also have a strict legal duty to balance the books at the end of the year:  see section 223H of the NHS Act.  CCGs not entitled to spend more money that the government gives them each year (although there are so many “fiddles” when NHS organisations are going through hard times that this legal duty is not as absolute in practice as it seems in theory).  That means that CCGs will have to make choices about how to use their resources to deliver the most benefits to the most patients.

 

7.6           Hence a key issue is whether a proposed treatment delivers value for money or, in the language of the NHS, is cost effective.  But how can you compare money spent on cancer treatment, GP surgeries or stop smoking campaigns?  All are intended to deliver health benefits and all are funded out of the same budget, but commissioners need a system to compare one investment against another.  NICE use a scheme for assessing cost effectiveness called the “Quality Adjusted Life year”.  For details see NICE’s website but the following is an adapted version of their explanation.

 

7.7           Although one treatment might help someone live longer, it might also have serious side effects.  For example, it might make them feel sick, put them at risk of other illnesses or leave them permanently disabled.  Another treatment might not help someone to live as long, but it may improve their quality of life while they are alive (for example, by reducing their pain or disability).  The QALY method helps NICE measure these factors so that they can compare different treatments for the same and different conditions. A QALY gives an idea of how many extra months or years of life of a reasonable quality a person might gain as a result of treatment (particularly important when considering treatments for chronic conditions).

 

7.8           A number of factors are considered when measuring someone's quality of life, in terms of their health. They include, for example, the level of pain the person is in, their mobility and their general mood. The quality of life rating can range from negative values below 0 (worst possible health) to 1 (the best possible health). Having used the QALY measurement to compare how much someone's life can be extended and improved, NICE then consider cost effectiveness - that is, how much the drug or treatment costs per QALY.  This is the cost of using the drugs or other interventions to provide a year of the best quality of life available - it could be one person receiving one QALY, but is more likely to be a number of people receiving a proportion of a QALY - for example 20 people receiving 0.05 of a QALY.

 

7.9           Cost effectiveness is expressed as ‘£ per QALY'.  Each drug is considered on a case-by-case basis. Generally, however, if a treatment costs more than £20,000-30,000 per QALY, then it would not be considered cost effective.  It gets more complicated if the drug only delivers benefits for a proportion of the patient population.  Even where the patient population for a drug can be identified carefully by reference to clinical factors, the drug may still only have beneficial effects for 1 in 3 or even 1 in 20 of the population.  That affects the cost effectiveness because all of the patients in the group need to be started on a treatment in order to see who will benefit.  Thus the “cost effectiveness” calculations need to take account of the costs of treating all the other patients who have not shown a positive reaction to the drug.

 

7.10        CCGs do not have the resources to undertake comprehensive cost effectiveness calculations for every treatment that they fund.  However they should be guided by these principles in reaching decisions as to what to fund and, crucially, what not to fund.

 

7.11        It is likely that investments in the services presently funded will have been developed as services have developed over several years.  However the fact that funding has been provided to a service in the past should not create any necessary presumption that funding for that service should continue in future years.   Funding for new investments planned for the service ought to compete with existing investments and the need to make efficiency savings, with the NHS body attempting annually to determine how to expend monies in the most effective way for the cohort of patients it serves.  This annual process determines the pace of investment and also the order in which investment in any particular service are made.

 

7.12        Until April 2013 it was good practice for a primary care commissioning body to prepare an annual commissioning plan.  This is now a statutory duty under section 14Z11 of the NHS Act 2006.  This provides:

 

(1)     Before the start of each relevant period, a clinical commissioning group must prepare a plan setting out how it proposes to exercise its functions in that period.

 

(2)     In subsection (1), “relevant period”, in relation to a clinical commissioning group, means—

 

(a)     the period which—

 

(i)     begins on such day during the first financial year of the group as the Board may direct, and

 

(ii)     ends at the end of that financial year, and

 

(b)     each subsequent financial year.

 

(3)     The plan must, in particular, explain how the group proposes to discharge its duties under—

 

(a)     sections 14R, 14T and 14Z2, and

 

(b)     sections 223H to 223J.

 

(4)     The clinical commissioning group must publish the plan.

 

(5)     The clinical commissioning group must give a copy of the plan to the Board before the date specified by the Board in a direction.

 

(6)     The clinical commissioning group must give a copy of the plan to each relevant Health and Wellbeing Board.

 

(7)     The Board may publish guidance for clinical commissioning groups on the discharge of their functions by virtue of this section and sections 14Z12 and 14Z13.

 

(8)     A clinical commissioning group must have regard to any guidance published by the Board under subsection (7).

 

(9)     In this Chapter, “relevant Health and Wellbeing Board”, in relation to a clinical commissioning group, means a Health and Wellbeing Board established by a local authority whose area coincides with, or includes the whole or any part of, the area of the group”

 

7.13        Each CCG must therefore publish a commissioning plan before the start of each financial year.  This must explain what services the CCG proposes to commission in the coming year and in particular the commissioning plan must cover:

 

a)         How the CCG proposes to exercise its functions with a view to securing continuous improvement in the quality of services provided to individuals for or in connection with the prevention, diagnosis or treatment of illness;

 

b)         How, in the exercise of its functions, the CCG proposes to have regard to the need to:

 

                           i)            reduce inequalities between patients with respect to their ability to access health services, and

 

                         ii)            reduce inequalities between patients with respect to the outcomes achieved for them by the provision of health services;

 

c)          How the CCG proposes to undertake its patient involvement duties under section 14Z2 (as to which see below);

 

d)         How it proposes to discharge its functions in order to stay within its revenue resource limit and thus comply with its statutory duty under section 223H of the NHS Act; and

 

e)         How it proposes to discharge its functions in order to ensure that its capital expenditure does not exceed the limit set by NHS England and thus comply with its statutory duty under section 223J of the NHS Act.

 

7.14        The commissioning plans that CCGs are under a statutory duty to publish in advance of April each year will have considerable legal consequences for CCGs.  A failure to publish a commissioning plan would be an unlawful act by a CCG which can be challenged by way of a Judicial Review.  Equally publishing a plan which fails to comply with the above requirements could be challenged by way of Judicial Review.  Once a plan is published the CCG will be required (as a matter of public law) to make decisions in accordance with the plan unless the CCG has good reasons for departing from the plan.  In such a case, in order to ensure that the CCG can take lawful decisions, it would be advisable for the CCG to publish amendments to the plan during the year to take account of changes that happen after the plan is published. 

 

8           The development of CCG Commissioning Policies.

 

8.1           Once the annual commissioning plan has been agreed, the precise details of the services that are to be commissioned for each patient group or specialised service need to be formulated in Commissioning policies, which must also be informed by the joint strategic health needs assessment. These policies set out agreed care pathways and define clinical criteria which set out which patients are entitled to NHS funded healthcare for each medical condition.  Once a policy has been agreed, patients are entitled to expect that the CCG will routinely agree to fund the medical treatment set out in the policy patients who fulfil for the stated clinical criteria.  Patients whose clinical criteria are outside the policy will not be routinely funded even if the medical treatment has the potential to benefit an individual patient.  However there is always the possibility of the CCG making an individual decision to depart from its own policy.

 

8.2           Regulation 35(1) of the National Health Service Commissioning Board and Clinical Commissioning Groups (Responsibilities and Standing Rules) Regulations 2012 imposes a duty on the CCG to give reasons for its decisions in favour or against funding any particular healthcare intervention.  It provides:

 

“(1)  A relevant body must—

 

(a)  publish on its website a written statement of its reasons for any general policy it has on whether a particular healthcare intervention is to be made available for persons for whom it has responsibility; or

 

(b)  where it has not published such a statement, provide a written statement of the reasons for any such policy when any person makes a written request for such a statement.

 

(2) Where a relevant body—

 

(a)  makes a decision to refuse a request for the funding of a health care intervention for a person; and

 

(b)  its general policy is not to fund that intervention,

 

the relevant body must provide that person with the reasons for that decision in writing”

 

8.3           These are potentially onerous responsibilities because they require the CCG to formulate reasons as to why it funds or declines to fund a particular healthcare intervention.  There is a considerable amount of caselaw on the duty to give reasons which is beyond the scope of this guide.  However the general principle is that reasons was explained by Lord Brown in South Bucks DC v Porter (No2) [2004] 1 WLR 1953 as follows:

 

The reasons for a decision must be intelligible and they must be adequate. They must enable the reader to understand why the matter was decided as it was and what conclusions were reached on the "principal important controversial issues", disclosing how any issue of law or fact was resolved. Reasons can be briefly stated, the degree of particularity required depending entirely on the nature of the issues falling for decision. The reasoning must not give rise to a substantial doubt as to whether the decision-maker erred in law, for example by misunderstanding some relevant policy or some other important matter or by failing to reach a rational decision on relevant grounds. But such adverse inference will not readily be drawn. The reasons need refer only to the main issues in the dispute, not to every material consideration

 

8.4           If the CCG fails to give proper reasons for a decision then the decision itself may be unlawful because it will not be clear whether the CCG has properly understood the statutory function that it was undertaking:  see R (on the application of Ermakov) v Westminster [1995] EWCA Civ 42.  There are however occasions on which an NHS body is entitled to give supplementary detail to support initially inadequate reasons and may then, as a whole, be held to have acted lawfully.

 

8.5           Once the CCG has decided what it will and will not fund, the next step is to incorporate the policies into the schedules of the Acute Services Contracts between the CCG and its providers. 

 

9           Exception Policies and pick-up funding for clinical trials.

 

9.1           Commissioning policies define what care will be funded by the NHS for defined cohorts of patients.  However there are always a minority of patients whose circumstances do not precisely fit the general pattern and thus are entitled to be treated separately from other patients.   CCGs routinely develop exception policies to apply to such patientsThe essence of an exception policy is that a patient who comes within the policy will be provided with NHS funding to support a medical treatment even though the other patients with the same clinical presentation are denied funding for the same treatment.  

 

9.2           The formulation of exception policies is problematic but they are used to over situations where the NHS has decided that particular circumstances justify making a different decision for one group of patients in comparison to other patients with a like condition.  The CCG needs to formulate the justification for exception policies very carefully in order to avoid challenges by other patients who are denied the relevant treatment.

 

9.3           The following are examples of areas where exception policies have been developed:

 

a)         Funding can be agreed for patients who have taken part in an NHS sponsored clinical trial of a new drug or medical treatment and have shown a capacity to benefit from the treatment; and

 

b)         To continue NHS funded medical treatment which has been commenced by another NHS commissioner and now falls to the CCG as a result of the patient moving from one CCG area where a treatment is funded to an area where it is not routinely funded.

 

9.4           The limitations on funding for trial pick-up costs is a hugely contentious area.  NHS commissioners can come under considerable pressure from patients, clinicians and drug companies to continue to fund the treatment after the trial has been completed.  However the policy position adopted by most NHS commissioners is that funding will only be provided to support successful treatment if an agreement to fund was obtained before the trial began.  Funding for trial pick up costs should be rarely (if ever) agreed by NHS commissioners where funding has not been agreed in advance of the trial because it ought to be unnecessary.  Every clinical trial is required by the Medicines for Human Use (Clinical Trials) Regulations 2004 to operate in accordance the Helsinki Declaration published by the World Medical Association.  The requirement to identify a source of funding to allow the treatment to continue for patients who have a capacity to benefit is part of the present version of the Helsinki Declaration.  It provides:

 

“In clinical trials, the protocol must also describe appropriate arrangements for post-trial provisions”

 

9.5           There is an argument that the version of the Helsinki Declaration referred to in the Regulations does not include this wording.  However the spirit of the Regulations is that the Helsinki Declaration should be followed and thus Medical Ethics Committees ought only to give approval for a clinical the trial if those running the proposed trial have identified the source of funding for post-trial treatment for successful patients at the outset. 

 

10        The Individual Funding Request process

 

10.1        The vast majority of NHS patients ought to be provided with medical treatment or refused NHS funded medical treatment in accordance existing commissioning policies.  However Regulation 34(2)(b) of the National Health Service Commissioning Board and Clinical Commissioning Groups (Responsibilities and Standing Rules) Regulations 2012 requires the CCG to have:

 

“arrangements for the determination of any request for the funding of a health care intervention for a person, where there is no relevant NICE recommendation and the relevant body’s general policy is not to fund that intervention”

 

10.2        The reference to a “relevant NICE recommendation” is a reference to those NICE recommendations where the CCG has a duty to fund the treatment.  Thus CCGs must have an Individual Funding Request (“IFR”) policy which explains how decisions will be made in cases where the general approach of the CCG is not to fund a particular drug or other treatment generally or outside a defined patient population.  IFR policies vary from one PCT to another but they generally provide that NHS funding should only be provided for drugs or other medical treatments which lie outside established policies where:

 

a)         That patient can show that the application is supported by an NHS referring clinician.  If the patient does not have a clinician who is prepared to provide the treatment for the patient then the CCG should not entertain the application because the NHS does not generally fund medical treatment which is not recommended by clinicians;

 

b)         The patient is able to demonstrate exceptional clinical circumstances;

 

c)          The patient, supported by his or her clinician, can show that the requested treatment is likely to be clinically effective;

 

d)         The patient, supported by his or her clinician, can show that the requested treatment is likely to be cost effective;

 

e)         The circumstances are such that there are not likely to be other patients in a clinically similar situation.  If there are other patients then the CCG should respond to the request by devising a policy and/or considering the request as an “in year service development” but should not process the request as an IFR case.

 

10.3        The NHS Confederation has produced an excellent guide to the IFR process.  That Guide was specifically approved by the Court of Appeal in the R (Condliff) v North Staffordshire Primary Care Trust [2011] EWCA Civ 910.  Commenting on the requirement to show exceptionality, the Court approved a statement in the NHS Confederation Guide saying:

 

"Exceptionality is essentially an equity issue that is best expressed by the question: On what grounds can the PCT justify funding this patient when others from the same patient group are not being funded?"

 

10.4        The reason that NHS bodies have traditionally operated an IFR process is that, within a patient group with the same disease, there may be clinical situations which are so unusual that a decision to deny funding to a patient is inequitable.   The patient may, for example, have a genetic condition which means that the patient cannot tolerate the treatment which is usually provided to patients with that medical condition.  If another treatment is available, even if it is more expensive, then it would be equitable to permit the patient to have that more expensive treatment.

 

10.5        However it is almost impossible to define what is meant by “exceptional clinical circumstances”.  The Courts have said that it is permissible (and perhaps preferable) to leave the term undefined.  In  R (AC) v Berkshire West Primary Care Trust & Anor [2011] EWCA Civ 247 Lord Justice Hooper said:

 

“The use of the phrase "exceptional circumstances" tells the decision maker that the number of persons who will succeed under the proviso is expected to be a small minority. It does not otherwise provide a helpful legal test for the decision maker (see Huang v. Secretary of State for the Home Department  [2007] 2 AC 167 paragraph 20)”

 

 

10.6        Overall the IFR process is intended not to be an appeal on the merits of an individual case.  Funding can almost always be justified on an individual basis.  The IFR process exists to preserve a measure of flexibility to ensure the equitable distribution of NHS resources in the competition between patients.  Whilst the individual clinical circumstances of each patient are, of course, unique, only very few patients are likely to be able to show that they genuinely have exceptional clinical circumstances.

 

10.7        It follows that challenges to decisions of IFR Panels are almost always based on an attack on the decision making process adopted by the IFR Panel rather than a challenge to the reasonableness of the decision.

 

11        In year service developments.

 

11.1        During the lifetime of the annual commissioning plan there can be new unanticipated developments in the form of new drugs or medical treatments which emerge as options for CCG funding during the year.   If there is insufficient evidence that a new treatment is clinically effective then it is highly likely that the new treatment will not be supported with CCG funds (unless it is funded as an experimental treatment).  However the fact that there is evidence that a new treatment is likely to be clinically effective should not, of itself, be sufficient to justify funding because the annual CCG budget for commissioning healthcare will be fully committed.  In contrast there will be the occasional new treatment which is so stunningly good (i.e. It is highly clinically effective and cost effective) that a responsible commissioner ought to fund it straightaway rather than waiting for the treatment to compete for funding in the next annual plan, and thus not being funded until the following April.

 

11.2        Each CCG therefore needs to have a policy which sets out how it will respond to requests for funding for in-year service developments.  Policies usually provide that any such applications need to go through an in-year prioritisation process to determine:

 

a)         the evidence base to support a case that the treatment is likely to be clinically effective;

 

b)         the evidence base to support a case that the treatment is likely to be cost effective;

 

c)          what level of relative priority should be applied to the new proposed treatment in comparison to the other treatments that are already funded; and

 

d)         what services should cease to be funded (i.e decommissioned) in order to redirect funding to any new investment area that has been viewed as a high priority.

 

11.3        The assessment of new treatments therefore is a process of re-evaluating the overall priorities for a new service.  Even if a new service is considered an important priority, the service development still has to compete with other potential investments from other services in the annual commissioning process.  Occasionally a treatment may be considered so important that it should be funded immediately (an in-year service development).   Usually can only be done if reserves are available or if funding can be released from elsewhere to fund the investment.

 

12        Public and patient involvement in the commissioning process.

 

12.1        One of the biggest challenges for commissioners in the NHS has been securing public involvement in the commissioning processes.  The NHS is paid for by the public through their taxes and the public are the “customers” of our services.   NHS services are almost all free at the point of use (see section 1(3) of the NHS Act) but that does not mean that the public are not using their hard earned monies to meet the costs of NHS hospitals, ambulances, GP services and the myriad of community health services that the NHS provides.   The public hold the NHS very close to their hearts.  The former Conservative Lord Chancellor, Rt Hon Nigel Lawson MP (now Lord Lawson), said the NHS was "the closest thing the English have to a religion". 

 

12.2        However despite the warmth which the public have for the NHS, senior NHS managers and senior clinicians do not have a great record for involving the public successfully in decisions about the shape of NHS services.  Part of the reason for the NHS’s appalling record of effective patient involvement may be that the high level of attachment that the public have for their health services.  This level of attachment and loyalty to local services makes it very difficult for NHS managers and clinicians to persuade the public that changes to local health services are necessary, sensible or even desirable.  NHS managers always fear that a “save our hospital” campaign will emerge, run by local politicians or aspirant politicians making life a nightmare for the local NHS.  Thus there has been a tendency for NHS managers to keep their heads down to duck the flack they foresee whenever changes are proposed to NHS services.

 

12.3        Some patient engagement exercises have been successful but far too often the experience of those dealing with the NHS is that decisions are made by professionals first, without any patient involvement and the decision is only put out to public consultation after all the effective decision making has been completed. 

 

12.4        The NHS had established practices of consulting with patients over changes that affected them and with the public generally before taking major reconfiguration decisions.  The law in this area was considered in R (Coughlan) v North and East Devon Health Authority [2001] QB 213.  This case confirmed that whether consultation of interested parties and the public is a legal requirement, if it is embarked upon it must be carried out properly.  Hence an NHS body can act unlawfully (in a public law sense) by purporting to carry out a consultation but not doing the consultation in a lawful manner.  The Coughlan case also confirmed that the local government rules for consultation, which were developed by the Court in R v Brent London Borough Council, Ex p Gunning (1985) 84 LGR 168, applied to NHS bodies.  The Gunning case established 4 broad rules for a lawful consultation, namely:

 

a)         To be proper, consultation must be undertaken at a time when proposals are still at a formative stage;

 

b)         The body undertaking the consultation must provide those who are consulted with sufficient reasons for particular proposals to allow those consulted to give intelligent consideration and an intelligent response;

 

c)          Adequate time must be given for this purpose; and

 

d)         The product of consultation must be conscientiously taken into account when the ultimate decision is taken.

 

12.5        These rules continue to apply to any consultation exercises undertaken by the NHS.  It follows that if NHS managers “decide first and consult afterwards”, the consultation will be unlawful because it will breach the first of the Gunning rules, namely that consultation must be carried out at a time when proposals are still at a formative stage.  However that does not mean that there is a duty on an NHS body to consult on more than one option, particularly if there has been substantial public engagement on the options prior to formal consultation.  In R. v Worcestershire Health authority ex parte Kidderminster and District Community Health Council [1999] EWCA Civ 1525 the Health Authority considered 7 options for reorganising acute health services in Worcestershire, and undertook considerable public engagement about those options.   All but one of the options were dropped and the Health Authority went out to consultation on just one option.  The High Court and the Court of Appeal held that was lawful.  Auld LJ said:

 

Having reached the stage of retaining just one proposal under consideration, albeit in a formative state, the authority was entitled to proceed to consultation ..”

 

12.6        The first statutory duty on NHS bodies to engage with the public in the commissioning process emerged in section 11 of the Health and Social Care Act 2001.  It provided:

 

“It is the duty of every body to which this section applies to make arrangements with a view to securing, as respects health services for which it is responsible, that persons to whom those services are being or may be provided are, directly or through representatives, involved in and consulted on—

 

(a)  the planning of the provision of those services,

 

(b)  the development and consideration of proposals for changes in the way those services are provided, and

 

(c)  decisions to be made by that body affecting the operation of those services”

 

12.7        The section 11 duty was imposed on Health Authorities, Primary Care Trusts (which were just then coming into existence and NHS trusts.  This legislation was passed before the creation of NHS Foundation Trusts.  Although the legislation has been amended since it was originally passed, the origin of the present duties of public involvement arise from this section.  The National Health Service Reform and Health Care Professions Act 2002 added Strategic Health Authorities to the bodies under the public involvement duty and then NHS Foundation Trusts were added by the Health and Social Care (Community Health and Standards) Act 2003. 

 

12.8        The statutory duty is a duty to make “arrangements” to involve patients.  The legal obligation is thus not directly a duty to involve patients but a duty to adopt a policy which explains how patients will be involved at each stage when the NHS body carries out a relevant function.  The legal consequences of a duty to make “arrangements” are explained at paragraph 2.2 above and are not repeated here save to say that once the NHS body has a policy which explains how the public are to be “involved”, this is likely to raise a legitimate expectation that the NHS body will follow through its own policy when undertaking relevant functions.  Thus the NHS body may well be acting unlawfully if it attempts to force through changes to NHS services without properly following its own policy about patient and public involvement.

 

12.9        The public involvement duty was then included in section 242 of the National Health Service Act 2006 and the ambit of the duty was slightly changed by the Local Government and Public Involvement in Health Act 2007.   The new duty to involve members of the public in how NHS health services were provided was as follows:

 

“Each relevant English body must make arrangements, as respects health services for which it is responsible, which secure that users of those services, whether directly or through representatives, are involved (whether by being consulted or provided with information, or in other ways) in—

 

(a)  the planning of the provision of those services,

 

(b)  the development and consideration of proposals for changes in the way those services are provided, and

 

(c)  decisions to be made by that body affecting the operation of those services”

 

12.10     The government published guidance to assist NHS bodies in discharging their duties under section 11.  An iteration of the Guidance was published in 2008 called “Real Involvement:  Working with people to improve health services”.  This Guidance set out the rationale for engaging with patients as well as the formal statutory duties.  It explained the outcome of a proper engagement process as follows:

 

Commissioners act on behalf of the public and patients. They are responsible for investing funds on behalf of their communities, and building local trust and legitimacy through the process of engagement with their local population. In order to make commissioning decisions that reflect the needs, priorities and aspirations of the local population, world class commissioners will engage with the public, and actively seek the views of patients, carers and the wider community. This new relationship with the public is long term, inclusive and enduring, and has been forged through a sustained effort and commitment on the part of commissioners. Decisions are made with a strong mandate from the local population and other partners”

 

12.11     The Guidance explained that:

 

Good involvement practice:

• happens early and continues throughout the process;

• is inclusive;

• is informed;

• is fit for purpose;

• is transparent;

• is influential – it makes a difference;

• is reciprocal – includes feedback; and

• is proportionate to the issue”

 

12.12     The Guidance also explained the different stages as which users must be involved at different parts of the commissioning cycle, as identified in the separate parts of the statutory duty.  It said:

 

Under a), users must always be involved when the provision of health services is being planned. For example, this may follow a needs assessment or a strategic or service review. Planning the provision of services can take place at:

 

• strategic level, for example the reconfiguration of mental health services across

an SHA or PCT area;

 

• service level, when plans are being developed for the configuration of a service or services, for example maternity services; or

 

• NHS trust or NHS foundation trust level, for example when planning to provide

a service from a different site.

 

Under b) and c), users must only be involved if the implementation of the proposal

or the decision, if made, “would have an impact on –

 

a) the manner in which the services are delivered to users of those services, or

 

b) the range of health services available to those users”

 

Users must be involved not only in the consideration of proposals to change services, but also in the development of any proposal that will change the manner in which a health service is provided or the range of services offered.

 

For example, users must be involved in the development of a range of options for the way community services could be provided within a PCT area, not just asked for their opinion on a model that has been developed behind closed doors by health professionals and managers.

 

Users must be involved where a decision will change the way a service operates if the change affects the manner in which those services are delivered or the range of services offered; for example, the time a family planning clinic is open or when an NHS trust plans to provide a service from a different hospital/site”

 

12.13     The most significant part of this guidance is perhaps the statement that “users must be involved in the development of a range of options for the way community services could be provided within a PCT area, not just asked for their opinion on a model that has been developed behind closed doors by health professionals and managers”.  It is inevitable that initial proposals and options for possible change to local health services will be worked up by clinicians and NHS managers without a large degree of public input at that stage.  However the Guidance makes it clear that NHS bodies cannot lawfully leave public involvement to a late stage when all the main features of the new configuration have been agreed between professionals.  The very least that the public are entitled to receive is “information” about the proposals and thus the right to feed their views into the planning process on receipt of that information.  Leaving public involvement to the later stages when all the key decisions have de facto been taken is highly likely to lead to an NHS body being in breach of their legal duties.  This view of the nature of the duty of “involvement” was set by Mr Justice Collins in R (Smith) v North Eastern Derbyshire Primary Care Trust & Anor [2006] EWHC 1338 (Admin) who said:

 

Thus 'involved in' really means no more than informed and able to express a view (which adds little to 'consulted on'). What is important is that the public must know what is proposed or what changes are to take place or how the services which affect them are to be operated and must have the opportunity, at least through a representative body, to comment on such matters. Their views must be obtained”

 

12.14     However to every minute change in NHS services comes within the public involvement duty.  Section 242(1C) and (1D) provide that the duty is only engaged if it is likely to result in changes to the services that a patient will receive will change either “the manner in which the services are delivered to users of those services”, or “the range of health services available to those users”.  Thus the public do not have a right to be involved every time a GP retires or a new GP is appointed.  However if the new appointment will lead to changes in the way that the services will be provided (or may be provided) the public involvement duty is triggered.  This issues was examined by Collins J in R (Smith) v North Eastern Derbyshire Primary Care Trust & Anor [2006] EWHC 1338 (Admin) who said:

 

“Thus I accept that a change of personnel or of contractual terms or of the form of a contract may not of themselves be covered by s.11. But the background is highly relevant. The need to replace a failed service should mean that the reasons for the failure are addressed and that may well, as was the case here, lead to a need to consider whether any different arrangements to deal with any problems which have manifested themselves are required. Thus public input may assist the PCT and will certainly help to allay concerns”

 

12.15     The next step in the legislative maze was the Health and Social Care Act 2012 which created CCGs.  It would have been possible for parliament simply to have added the new CCGs to the list of bodies to whom the section 242 duty applied but the government decided that greater public involvement duties were required.  The original text of the Bill (where it is clause 22 which introduces a new section 14P into the NHS Act 2006) made several significant changes to the section 242 duty.  The new wording was consistent with the numerous statements made in parliament about the desire of the government to strengthen public and patient involvement in the delivery of NHS services.

 

12.16     The public engagement duty on CCGs are now in section 14Z2 of the NHS Act 2006 (introduced by section 26 of the 2012 Act).  The duty is as follows:

 

“(1) This section applies in relation to any health services which are, or are to be, provided pursuant to arrangements made by a clinical commissioning group in the exercise of its functions (“commissioning arrangements”).

 

(2) The clinical commissioning group must make arrangements to secure that individuals to whom the services are being or may be provided are involved (whether by being consulted or provided with information or in other ways)—

 

(a)  in the planning of the commissioning arrangements by the group,

 

(b)  in the development and consideration of proposals by the group for changes in the commissioning arrangements where the implementation of the proposals would have an impact on the manner in which the services are delivered to the individuals or the range of health services available to them, and

 

(c)  in decisions of the group affecting the operation of the commissioning arrangements where the implementation of the decisions would (if made) have such an impact.

 

(3) The clinical commissioning group must include in its constitution—

 

(a)  a description of the arrangements made by it under subsection (2), and

 

(b)  a statement of the principles which it will follow in implementing those arrangements.

 

(4) The Board may publish guidance for clinical commissioning groups on the discharge of their functions under this section.

 

(5) A clinical commissioning group must have regard to any guidance published by the Board under subsection (4).

 

(6) The reference in subsection (2)(b) to the delivery of services is a reference to their delivery at the point when they are received by users”

 

12.17     There is one notable difference between the wording of the duty on NHS bodies under section 242 and the wording of the duty under section 14Z2.  The 242 duty can be discharged by setting up arrangements which provide that users can be involved either “directly or through representatives”.  The option of discharging this duty to setting up arrangements to involve “representatives” of patients has been excluded from the duty on CCGs.   A CCG therefore cannot discharge its patient involvement duty by selecting a handpicked committee of representative patients to whom information is provided, often on a confidential basis.  It is highly unlikely that such an approach would have been consistent with the Guidance published under section 242 (as set out above) but, regardless as to whether that remains a lawful option for NHS bodies, that is not a course that a CCG can take.

 

12.18     NHS England has published guidance about the way in which CCGs should set up their patient and public involvement arrangements.  It is called “Transforming Participation in Health and Care:  The NHS belongs to us all”.  It starts with the following statement of principle:

 

“The NHS is a cherished national institution. Its founding principle is to provide healthcare which is free at the point of delivery, to anyone who needs it, regardless of their circumstances. The NHS must be more responsive to the needs and wishes of the public, all of whom will use its services at some point in their lives.

 

NHS England will ensure that public, patient and carer voices are at the centre

of our healthcare services, from planning to delivery. Every level of our commissioning system will be informed by insightful methods of listening to those who use

and care about our services.

 

12.19     The Guidance then provide practical guidance as to what a CCG should do in order to involve patients in its decision making.  It explains how the duty to involve patients links in with other duties on a CCG, including the duty to tackle health inequalities.  The Guidance explains:

 

“The Marmot Review, Fair Society health Lives (2010) clearly demonstrated the difference in life expectancy between socio-economic groups. At a local level, Joint Strategic Needs Assessments (JSNAs) tell a similar story. If we are to truly address these inequalities, all our activity should start from the stance of those who experience the greatest inequality, whether in the individual’s own care, or as part of wider public participation in health and care. We should take an asset based approach to working with and empowering communities.  To understand what is and is not working for patients and communities we need to ensure that:

 

·       all participation activity reaches communities and groups with distinct health needs and those who experience poor health outcomes.

 

·       people who have characteristics that are protected under the Equality Act 2010 are integral to all participation and measures taken to enable patients to participate in their own health are designed in a way which meets the individual needs

 

·       we consider how to reach people that experience difficulties accessing health services or have health problems that are caused or affected by their socio- economic circumstances.

 

·       People who lack capacity are protected and empowered and that the provisions of the Mental Capacity Act 2005 are met”

 

12.20     The section of the guidance

 

“Evidence suggests that engaging and involving communities in the planning, design and delivery of health and care services can lead to a more joined-up, co-ordinated and efficient services that are more responsive to local community needs. Public participation can also help to build partnerships with communities and identify areas for service improvement. NHS England will work with partners to identify any further evidence and disseminate it widely”

 

12.21     There is one paragraph which perhaps explains in a pithy way why merely rely on professional opinions as to what works within the NHS is insufficient.  It states:

 

“Insight gathered from the public helps to improve services and outcomes as well as potentially helping to spot failures.  Listening to and using the voice of patients and the public were never more forcefully presented than in the Francis report”

 

12.22     The Guidance then goes on to explain what steps individual CCGs should take to involve patients at all stages of the commissioning cycle.  Whilst there is a measure of discretion for CCGs to decide the way in which they will set up their own patient engagement processes, CCGs have a legal duty to “have regard” to the NHS England Guidance and therefore need to think carefully before devising engagement systems which depart from the Guidance to any material extent.

 

12.23     The duties on NHS bodies to consult have been considered by the courts in a number of cases.  The majority of these cases have been complaints that a consultation process to make changes to a local hospital was inadequate.  The courts have looked at the consultation processes and generally backed the lawfulness of the consultation process.  An example of this is R (Bullmore & Anor) v West Hertfordshire Hospitals NHS Trust [2007] EWHC 1636 (Admin).   A flawed consultation exercise is not always so procedurally unfair as to be unlawful. In R (Greenpeace) v Secretary of State for Trade and Industry [2007] Env LR 29 Mr Justice Sullivan (as he then was) said

 

“the true test is whether the consultation process was so unfair that it was unlawful…"

 

12.24     However where there is a duty to involve patients, a decision taken without involvement can be quashed by the High Court on an application for judicial review.  Equally if decisions have been taken, public and patient involvement after those decisions are taken does not remedy the earlier unlawful actions.  The Court of Appeal explained this in Smith v North East Derbyshire Primary Care Trust [2006] EWCA Civ 1291 where May LJ said:

 

The simple fact is that the defendants had a duty to consult and they did not properly perform it. Mobilising the patients' function after the decision had been taken without proper consultation was no remedy. The possibility that the Patients' Forum might have been mobilised before the decision was made, when it was not, neither provides a remedy nor relieves the defendant from their breach of duty”

 

12.25     Duties of public engagement are therefore required to be woven into every part of the commissioning cycle.  A CCG will not discharge its legal obligations if it only “consults” the public at the end of the commissioning process after all of the key decisions have been taken.

David Lock QC

David Lock QC is a barrister at the Landmark Chambers.

180 Fleet Street
London, EC4A 2HG
DX 1042 (London)

He was called to the Bar in 1985 and was appointed Queens Counsel in 2011.

David Lock QC is Head of the Administrative & Public Law Group and the Judicial Review & high Court Challenges Group at No5 Chambers. - See more at: http://www.no5.com/barristers/barrister-details/137-david-lock-qc/#sthash.PcnGl1Eh.dpuf

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