The NHS improvement plan: putting people at the heart of public services (2004)

The NHS improvement plan was published on 24 June 2004 and set out the priorities for the NHS for the period between 2004 and 2008. In it, the government confirmed there would be continued investment in order to increase capacity across the system.

The plan asserted that the health care system needed to develop in order to accommodate the use of financial incentives and that the use of payment by results (PBR) would be extended to non-hospital services and would be based on a single national tariff. The plan outlined new contractual arrangements that would be available to primary care trusts (PCTs) to commission primary care more flexibly, such as the introduction of the Alternative Provider Medical Services (APMS) contract, which would provide opportunities for new entrants into the primary care market.

Development of PCTs
The plan outlined the need to focus more attention on PCT development to ensure PCTs would be able to realise the potential of commissioning. The plan explained that the Department of Health had considered the option of making PCTs more ‘contestable’ to their local population by allowing patients to choose their PCT. This was rejected on the basis that the assignment of a population to a PCT area would be more likely to ensure coverage for vulnerable or highly dependent patients.

Practice-level commissioning
The department also recognised the important role that GP practices played in commissioning services for their patients and local populations, noting that:

‘Consistent with the principle of greater devolution of responsibility, the department recognises the important role that GP practices play in commissioning services for their patients and local populations. Practice-level commissioning models may include profiling and peer review, indicative budgets, real budgets with PCT-facilitated collaboration between practices, partial real budgets or fully devolved practice budgets.’

It committed to developing models of practice-level commissioning with SHAs, PCTs and GPs, and stated that by April 2005 all GP practices would be able to ask for indicative budgets. This was intended to give GPs additional incentives to manage referrals appropriately.

On the provider side, the government set out its expectation for all trusts to apply for Foundation Trust status and outlined its expectation that by 2008, the independent sector would be providing up to 15% of NHS services. The white paper outlined that the newly established Healthcare Commission would inspect all providers, whether in the NHS or in the independent sector. The Commission would also have responsibility for developing criteria for assessing provider quality and would take on responsibility for the annual assessment of NHS providers via performance ratings.