Sun, 09 Oct 2011
By Mike O'Brien
Sir David Nicholson, the NHS Chief Executive wants £20billion of savings to the NHS budget, about a fifth of the £104 Billion budget, to reinvest in innovation. At the same time government increases in annual funding will be restricted to 0.1%, which will feel like a cut. This means health managers will need to make very tough decisions about financial priorities and the rationing of health care.
Of course, health managers have always had to decide health priorities, but the new Health and Social Care Act will transfer legal responsibility from the Secretary of State to the new Care Commissioning Groups (CCG’S), which will have a major representation on them by GPs. Up to now GP training has predominantly been based on providing services to meet the needs of their individual patients. In future those GPs who are members of the CCGs (and this will be a very few of thousands of GPs) will need to make decisions on difficult spending issues involving millions of pounds, taken in the face of competing patient needs, public campaigns against health cuts and scrutiny by the popular press. The pressures will also increase on the NHS as a result of decisions of local authorities who are being forced to restrict social care budgets. CCG’s will also have fewer middle-managers to advise them and will come under intense focus from lawyers for patients who are ready to mount legal challenges by way of judicial review. NHS managers will therefore need to develop the capacity to survive such a perfect storm.
I would argue that NHS decision makers and local authorities can lawfully reduce expenditure, reallocate spending and prioritise treatments, but they need robust, clear legal advice to achieve it. They need to show a proper audit trail for such decisions in order to be able to withstand the scrutiny of a Judicial Review. This clear paper trail needs to carefully justify any decision. As there will be patients whose interests are prejudiced by almost every decision to ration resources, Judges will want to see a chain of clear reasoning in the original documents of the authority for each decision. Judges like GP’s understandably want to do the right thing for the vulnerable person before them, especially an NHS patient. If judges are to sustain a difficult health decision, it will be important to be able show why a tough decision has been made. It is a good exercise for a health manager to imagine themselves in the position of a judge at an end of a case, who has to explain in detail his decision to sustain a health decision in a way that is subject to public comment and may be scrutinised by the higher courts. He will need to logically explain how and why the decision was made. Therefore, the manager needs to provide the evidential base to enable the judge to do that.
This article provides some basic advice on making tough health decisions in a financially constrained climate.
1. Be open about financial restraints
The courts are generally reluctant to challenge assessments made by health and local authorities that make difficult decisions resulting in the rationing of NHS health care. The worst mistake is to pretend publicly that a financial constraint is not the primary reason for a decision, when it that is the case. NHS managers often feel instinctively that admitting financial pressures lay behind a decision causes legal problems. In fact the reverse is true – being open that finance is driving a decision provides considerable legal protection. The court will look at the paper trail and will want to see that the NHS body has been clear about the true reasoning behind the decision. The documents that support the process of making a decision are therefore very important.
Having said that, when making a decision the NHS body must also demonstrate that it has considered additional factors, particularly the impact of the decision on those patients who are adversely affected by the decision. It is not necessary to refer to the Human Rights Act (and it is probably bad practice to do so), but explicit reference ought to be made to the Equalities Act and, in particular, the needs of children and also people with mental health issues.
The courts know that public bodies have to balance their budgets. In the case of R v Cambridge Health Authority ex parte B  1 WLR 898, Jaymee Bowen, aged 10, was suffering from acute myeloid leukaemia. The doctors treating her decided that treatment by intense chemotherapy and bone marrow transplant was unlikely to succeed and would be too painful, so they refused those treatments. Her father who was understandably desperate to save his child, found a doctor in London who would carry out the treatment privately, but he could not afford the private fees and asked Cambridge Health Authority to pay. The Health Authority refused to sanction the expenditure so the father went to court to try to force the Authority to pay.
Initially, in High Court, Mr Justice Laws was concerned about Jaymee’s human rights and said the Health Authority should pay, warning that in cases like this, health authorities should “do more than toll the bell of tight resources”. They had to set out clearly how their priorities had led them to deny life–saving treatment because they had to show that interference in a patient’s human rights was justified. He found against the Health Authority who then appealed the decision to the Court of Appeal. There the Health Authority won.
The Court of Appeal agreed that decisions had to be justified but believed the Health Authority had shown justification. It is worth reading the words of Lord Bingham in full. He said:
"I have no doubt that in a perfect world any treatment which a patient, or a patient's family, sought would be provided if doctors were willing to give it, no matter how much it costs, particularly when a life was potentially at stake. It would however, in my view, be shutting one's eyes to the real world if the court were to proceed on the basis that we do live in such a world. It is common knowledge that health authorities of all kinds are constantly pressed to make ends meet. They cannot pay their nurses as much as they would like; they cannot provide all the treatments they would like; they cannot purchase all the extremely expensive medical equipment they would like; they cannot carry out all the research they would like; they cannot build all the hospitals and specialist units they would like. Difficult and agonising judgments have to be made as to how a limited budget is best allocated to the maximum advantage of the maximum number of patients. That is not a judgment which the court can make. In my judgment, it is not something that a health authority such as this authority can be fairly criticised for not advancing before the court."
In recent months this approach has been endorsed by the High Court and the Court of Appeal in cases such as R (ota AC) v Berkshire West PCT and R (ota Condliff) v North Staffordshire PCT. In both these cases the Court accepted that the PCT had made a lawful rationing decision which meant that the patient did not get medical treatment that would, in the eyes of the patient, have been of considerable importance to that individual.
Therefore, the lesson is that to avoid the courts overruling a difficult decision, authorities should be open about budget constraints because the courts are more likely to be sympathetic to an authority making a tough decision. This advice is given knowing that openness about financial constraints may generate some adverse criticism from the media and the public. However, being open about financial constraints in media coverage can also result in a sensible public debate about resources, what can be funded and what cannot be funded, and thus assists to move the public debate away from an approach that assumes that the NHS has the capacity to meet every health need. It is better to be criticised for making a tough decision based on financial constraints than having a tough decision overturned by a court because the NHS body based its decision on documents which didn’t properly explain why the decision was being taken.
2. There is a reasonable degree of discretion in making decisions.
In a Judicial Review the judge will broadly ask 2 questions. First, has the decision been taken using a lawful process and secondly, was the decision “reasonable”. There is a wide range of decisions which could be “reasonable”. The test is whether the decision was so irrational that no rational, informed decision maker could have made it. The leading case on reasonableness had nothing to do with health, it was about cinema opening times, but it led to a series of much analysed decisions about when a court is able to interfere with a discretionary decision by a public body.
The case of Associated Picture Houses Ltd v Wednesbury Corporation  produced the important and much analysed concept of “Wednesbury unreasonableness”. The facts of that case concerned a decision by Wednesbury Corporation to restrict the opening times of cinemas on Sunday. The challenge was brought on the grounds that this decision was unreasonable, and it failed because the court decided that this was a decision that a reasonable local authority could have reached. In a series of further cases the courts decided that a public authority that has to exercise a discretionary power to make a decision, whether through a Minister or a health manager, should not normally have decisions overturned unless the decision can be shown to be:
i. Wrong in law;
ii. Made in bad faith – that is, dishonestly or improperly;
iii. Made under a process where the relevant issues were not properly considered;
iv. Based on irrelevant considerations; or
v. So “absurd” (or unreasonable) that no reasonable authority could have come to it.
So what does this mean for health care decisions? Let’s look at an example. In R (on the application of Rogers) v Swindon NHS Primary Care Trust and Anor  EWCA Civ 392 the Oncologist for Ms Rogers wanted her to have Herceptin for breast cancer. Swindon Primary Health Care Trust refused to fund this drug saying their policy was only to fund Herceptin in exceptional cases and this case was not deemed by them to be exceptional. However Swindon PCT was in financial surplus and hence was coy about saying that the decision was made on financial grounds. It sought to argue the case on other grounds which were, on proper analysis, rejected by the court. Ms Rogers therefore won her judicial review.
The PCT refused to say that the key issue was money and so presumably this decision was not about rationing. The court said that, if finance was not the key issue, the duty to promote a comprehensive healthcare system meant that all patients who had a clinical need for a particular medicine should get it. There appeared to be no clinical or personal reasons that could reasonably justify giving the medicine to some patients and not to others among the group of those for whom the medicine was clinically appropriate. Setting aside financial issues, a policy of funding specified medicines only in exceptional circumstances could not be lawful. In the Court of Appeal Sir Thomas Bingham MR said:
"The court may not interfere with the exercise of an administrative discretion on substantive grounds save where the court is satisfied that the decision is unreasonable in the sense that it is beyond the range of responses open to a reasonable decision-maker.
But in judging whether the decision-maker has exceeded this margin of appreciation the human rights context is important. The more substantial is the interference with human rights, the more the court will require by way of justification before it is satisfied that the decision is reasonable in the sense outlined above."
The lesson is that there needs to be clear statements about why a discretion is being exercised. The phrase “margin of appreciation” is also important here. In essence, where human rights are engaged in a decision making process, the NHS retains a wide measure of discretion in making the decision. However where there human rights are engaged in a decision the court will look at the decision making process with great care to ensure that the public body has taken account of those rights before the decision is made. It is important that authorities ensure they can show they have stayed within the proper margins of their discretion, and this shows that there needs to be clarity about how the impact of the decision is considered by the authority.
And also it is clear that there needs to be clarity about how a decision is made in order to understand why it is made. In R (on the application of Eisai Ltd) v National Institute for Health and Clinical Excellence  EWHC 1941 the national advisory body on approvals of medicine was not clear and open about how its decision making took place. NICE lost the case in the Court of Appeal because the court could not assess whether it had made a rational decision or not. The paper trail needs to be clear. Openness is important.
3. Be clear about the criteria of who is funded and who is not funded.
In the Swindon case the PCT lost because, having refused to accept that its decision was made on financial grounds, it could not explain any rational basis for a policy which said some patients would get the treatment and others would not.
An NHS body is entitled in law to have a policy which stipulates that the treatment is provided to some categories of patients and refused to others. However it needs to have a rational basis for defining the group that will be funded from the group that will not be funded. It also needs to provide reasons for that decision. The reasoning will often be that the PCT has allocated a budget to support this treatment and therefore adopts a policy which seeks to identify the group of patients who will most benefit from the treatment, agreeing routinely to fund those patients. This will be lawful even if it departs from non-mandatory NICE guidance and even if the excluded group of patients could show clear clinical benefits for them if they were provided with the treatment. See R (ota Condliff) v North Staffordshire PCT.
4. Adopt policies which recognise the needs of patients and do not amount to a blanket ban.
Most PCTs adopt policies which apply to the generality of patients and then have an Individual Funding Request process to consider applications for funding from patients outside these general policies. This is a lawful approach and will ensure that an NHS body never entirely rules out funding treatment.
The need to keep the door open to funding any treatment was identified by the Court of Appeal in the case of R v NW Lancashire Health Authority ex parte A (2000) 1 WLR 977. In that case 4 gender identity dysphoria patients sought funding for gender reassignment surgery (colloquially called a “sex change” operation). The Health Authority policy said it would not routinely fund such operations because they said there was no evidence that the operations were clinically beneficial. However their policy indicated that they would be prepared to do so in exceptional cases. It was nonetheless clear that the evidence of the senior officers of the Health Authority showed no case would ever be funded in practice because the doctor leading the decision-making process did not really accept that gender dysphoria was a genuine medical condition.
The Court held that the Health Authority had acted unlawfully on three grounds:
1. In practice the Health Authority operated a funding ban, but would not say so;
2. Individual cases were not being considered on their merits and ought to be; and
3. The Health Authority failed to acknowledge that the operation was a recognised treatment for the condition, something which was widely accepted by the medical profession.
Directions issued by the Secretary of State in 2009 require all NHS bodies to have arrangements in place to consider funding the patient in individual cases where a general policy does not permit the treatment to be funded. NHS bodies need to be clear that IFR panels never approach an individual application in a way that amounts to a blanket ban. However such panels are entitled to apply tests which require the patient to show that the requested treatment will be both clinically effective and cost-effective. In practice this may mean that some extremely expensive treatments or treatments where there is no proper body of evidence to support their clinical efficacy may never be funded. The NHS body will be acting lawfully if he goes through a process to consider each application even if it appears that the result is almost inevitable.
5. It may be “irrational” not to have clear policies about which treatments or care options will be routinely funded and which will not.
It is lawful for a PCT to decide that an expensive cancer drug would be likely to be of marginal benefit for a service user, that it is not a cost effective treatment, and so will not be provided as part of NHS care. But a clear paper trail of reasoning is essential for the decision.
In R v North West Lancashire Health Authority ex parte A  1 WLR 977 Lord Justice Auld said, "… it is an unhappy but unavoidable feature of state funded healthcare that … health authorities have to establish certain priorities in funding different treatments from their finite resources… The precise allocation and weighting of priorities is clearly a matter of judgment for each authority, keeping will in mind its statutory obligations to meet the reasonable requirements of all those within its area for which it is responsible."
So have priorities and exceptions, but set out the criteria clearly. In practice this is carried out by the annual plan process under which PCTs (and it must be assumed CCGs once they are formed) determine the policies which drive the annual expenditure by the NHS.
6. Local Councils have duties too.
The new CCG’s will work closely with Local Authorities who have some important responsibilities for health and social care. Councils have duties to people under different laws, particularly the National Assistance Act 1948; however, the outcome is similar. In R (on the Application of Barry) v. Gloucestershire C.C. and Anor  UKHL 58 Lord Lloyd said, “[a] person's need for a particular type or level of service cannot be decided in a vacuum from which all considerations of cost have been expelled”. In other words local Councils have to manage their budgets too.
That said, it will be interesting to see how the new duties on the NHS and local authorities to cooperate in the new Health and Social Care Act will be interpreted by the courts. In the past a lack of cooperation by the NHS and local councils has sometimes led to inadequate care for people leaving hospital. The new law seems to be vaguely expressed and it will be up to judges to decide the gloss that they put on the obligations the NHS and Councils have to meet.
7. Consider any special responsibilities toward a child or a person with mentally incapacity (such as an aged person with dementia)
The Mental Capacity Act 2005 requires decisions to be made in patients “best interests”. But In re J (A Minor) (Child in Care: Medical Treatment)  Fam 15, 28 Lord Donaldson said, "…the sad fact of life is that health authorities may on occasion find that they have too few resources, either human or material or both, to treat all the patients whom they would like to treat in the way in which they would like to treat them. It is then their duty to make choices."
This raises the extent to which, in law, a person who lacks legal capacity is entitled to a greater share of tax-payer provided resources than a person who has capacity. The answer is that the courts generally think there is no automatic entitlement to more resources. But nor is such a person be provided with less resources because he or she lacks capacity. Such decisions would probably be unlawful discrimination under duties in the Equality Act 2010. That does not prevent individual needs being taken into account. People will need different things and those needs must be weighed in the balance of any decision. The point is that it seems there is no automatic right to greater provision. The courts have not directly addressed this issue but it was referred to in passing in A Local Authority v MA and Ors  EWHC 2942 (Fam) where Mr Justice Munby explained, “[i]t is now clear, in my judgment, that the court exercises what is, in substance and reality, a jurisdiction in relation to incompetent adults which is for all practical purposes indistinguishable from that for children. The court exercises a 'protective jurisdiction' in relation to vulnerable adults just as it does in relation to wards of court”
Therefore, when making “best interests” decisions the court can only make the decisions which were open to the protected party to make for themselves if they had capacity. The court in these situations is acting as a substituted decision maker for the individual. They are not sitting in the position of the government allocating resources. In Re D (A Minor)  1 WLR 1400, Lord Justice Woolf said, “[t]he… court must limit the exercise of its jurisdiction so as to avoid coming into conflict with the exercise by the local authority of its statutory powers and duties.”
This approach has recently been approved in a slightly different context by the Supreme Court in Holmes-Moorhouse v Richmond upon Thames  UKHL 7. The Magistrates Court made an order that the children should live with both parents but their father did not have the means to acquire a house. He therefore applied to the local authority and asked for a residence which was large enough to accommodate both him and the children. The local authority used resource constraints to refuse to provide him with such a property. The father challenged the decision and the challenge was rejected.
Baroness Hale said, “[w]hen any family court decides with whom the children of separated parents are to live, the welfare of those children must be its paramount consideration: Children Act 1989, s 1(1). This means that it must choose from the available options the future which will be best for the children, not the future which will be best for the adults. It also means that the court may be creative in devising options which the parents have not put forward. It does not mean that the court can create options where none exist.”
Hence the choice for the court was to choose between “available options”. Baroness Hale added that court orders “…are not meant to be aspirational statements of what would be for the best in some ideal world which has little prospect of realisation. Ideally there may be many cases where it would be best for the children to have a home with each of their parents. But this is not always or even usually practicable. Family courts have no power to conjure up resources where none exist. Nor can they order local authorities or other public agencies to provide particular services unless there is a specific power to do so... No doubt all family courts have from time to time tried to persuade local authorities to act in what we consider to be the best interests of the children whose welfare is for us the paramount consideration. But we have no power to order them to do so.”
In conclusion, health authorities such as PCT’s and the new CCG’s, should be able to make decisions about budget allocation and exercise reasonably wide discretion, provided they ensure when they make a decision that it is openly arrived at; if it involves rationing health care because of financial constraints then the paper trail ought to be honest about it; the criteria for any exceptions to funding are clear; individual applications for exceptional treatment are properly considered; and that the human rights and equality laws are given due weight. Contrary to popular myth, judges do live in the real world and know that difficult decisions have to be made. They just need to be made properly and lawfully.