A new operating model for health and care
A complex operating context
The government is running an intensive process to develop a ten-year health plan. [2] This will deliver the government's reform agenda: to shift from “hospital to community”, from “analogue to digital” and from “treatment to prevention”. [3] However, the government announced a significant NHS reorganisation programme, while nearing the end of this process. [4]
The aim of the reorganisation is twofold: decentralise power within the NHS and reduce bureaucracy and duplication. The government will abolish NHS England, integrating its functions into the Department of Health and Social Care (DHSC) and cutting its combined workforce by 50 per cent. This is happening at the same time as 50 per cent cuts to integrated care boards’ (ICBs’) running and programme costs and NHS providers’ corporate cost growth.
We expect the ten-year health plan to set out more detail on the wider system architecture and clarify the role and accountabilities of trusts, systems and the centre of the NHS
NHS England has confirmed that the ten-year health plan will detail these changes as part of a new operating model that is “rules-based, provides earned autonomy and incentivises good financial and operational performance”. [5] The changes will then be formalised through primary legislation. [6]
We expect the ten-year health plan to set out more detail on the wider system architecture and clarify the role and accountabilities of trusts, systems and the centre of the NHS. At the time of writing, though, it is unclear how functions will change, especially those held by neighbourhood teams, place-based partnerships, primary care at scale, trusts and integrated care partnerships (ICPs). Work is underway, led by NHS England regional directors and Richard Barker in his new national role, to define a ‘model region’, which will also shape the future role of DHSC nationally. [7]
With a view to laying the foundations for delivery of the ten-year health plan, NHS England’s new chair, Dr Penny Dash, undertook some rapid work with a group of ICB chairs and chief executives to define the future focus, role and functions of ICBs. The first iteration of the Model ICB Blueprint is an important first step towards greater clarity. [8] It reiterates the system leadership role ICBs have as strategic commissioners, working to improve population health, reduce inequalities and improve access to more consistently high-quality care. It also introduces new ‘neighbourhood health providers’, which will sit between ICBs and neighbourhoods in driving delivery of a neighbourhood health service.
ICBs should be pioneers of reform through strategic commissioning
Strategic commissioning must serve as a turning point in the relationship between commissioners and providers – a relationship that has historically been difficult to get right. Traditionally, the relationship has been transactional, with individual providers contracted for specific episodes of care, and assurance based on activity rather than patient experience or outcomes.
If ICBs are to be the ‘pioneers of reform’, strategic commissioning must embody a new approach within the future operating model. Rather than organisation-based deals, the unique convening role of ICBs must be leveraged to harness the collective power and expertise across the system to contract for specific health outcomes across entire pathways.
Crucial to this transformation is the capability of ICBs to understand their population’s health needs, co-produce a system strategy, and manage contracts with providers to deliver the outcomes they have been commissioned to achieve and maximise the value of available resources. The latter must be done while empowering providers, including neighbourhood care leaders, to make the tactical decisions about how to achieve those outcomes.
The future of place-based-partnerships has been thrown into question by cuts to ICBs’ budgets and, at the time of writing, it is unclear whether it will exist as a distinct geographical layer or become synonymous with neighbourhoods. Given that systems are likely to take different approaches to integrated working at place and neighbourhood level, a flexible approach should be taken to support the models that works best locally.
In the framework that emerges, system partnerships and collaboration must be front and centre, especially between the NHS and local government (including mayoral strategic authorities). If it is to successfully deliver the government’s three shifts and a neighbourhood health service, the NHS needs to become a better partner and move beyond a purely medical model.
The operating context has become incredibly complex. Healthcare leaders urgently need more clarity about how they are being expected to – and will be empowered to – deliver recovery and reform. The consequences of this lack of clarity have been highlighted in several government reviews, including by Dame Patricia Hewitt and Lord Darzi. [9], [10] These reviews also highlighted the burden of a top-down ‘command and control’ system in which the centre (including regulators) micromanage delivery, distracting healthcare leaders from delivering recovery and transformation.
With local government embarking on its own significant reorganisation and devolution programme, alignment is more important than ever.
The Secretary of State for Health and Social Care has described his ambition “to lead an NHS where power is moved from the centre to the local and from the local to the citizen. Morrison meets Bevan.” [11] This means making the healthcare service more accountable outwards to the communities it serves, not just upwards to Whitehall. Better integration with local government services is crucial to driving this change (as well as with community safety partners and the voluntary, community and social enterprise – VCSE – sector). Historically, local government has been overlooked in the NHS operating model – partly as it has sat outside of NHS England’s remit. However, the reabsorption of NHS England in DHSC’s wider remit offers an opportunity to remedy this. And with local government embarking on its own significant reorganisation and devolution programme, alignment is more important than ever. [12]
Learning from the past
Recent history suggests that it can be difficult to translate a new operating model into practice – particularly in the context of extreme operational and financial pressures and the time-consuming and disruptive structural reorganisation that often follows.
For example, NHS England’s operating framework – published in October 2022 – sought to translate changes introduced in the Health and Care Act 2022 into practice, by empowering and supporting local systems to deliver on their responsibilities. [13] The framework acknowledged that:
“This requires a cultural and behavioural shift towards partnership-based working; creating NHS policy, strategy, priorities and delivery solutions with national partners and with system stakeholders; and giving system leaders the agency and autonomy to identify the best way to deliver agreed priorities in their local context.”
The centre and healthcare leaders broadly accept that this operating framework has not been embedded. The reasons for this are threefold. Firstly, between July 2022 and May 2024, NHS England underwent an extensive reorganisation, [14] including cutting 36 per cent of staff, devolving functions and merging five arm’s-length bodies.[i] Secondly, there was a large-scale reorganisation of, and cuts to, local commissioning over the same time period, which hugely impacted the pace of frontline change, integration and efficacy of partnerships. Thirdly, providers and systems faced significant operational and financial challenges. These included increased demand in primary, mental health and urgent and emergency care and a large elective backlog, which were exacerbated by inflation, industrial action and a 30 per cent reduction in ICBs’ running costs in 2023/24. [15] These combined factors led to retrenchment into the status quo command and control structure.
With the merger of NHS England and DHSC and cuts to ICBs, questions arise about the future of numerous functions currently held by NHS England and ICBs. Many of these functions require highly specialist technical expertise (such as training, implementation and safety, and security management for digital and data functions, including artificial intelligence) and which have significant implications for quality and safety (for example, formal regulation and oversight of trusts and ICBs). It therefore seems likely that the reshaping of NHS national bodies has only just started. [16]
To succeed where previous attempts have failed, the new operating model must do two things:
- Provide a high-level articulation of the overall function of bodies operating at each of the health and social care system’s geographical footprints– not just NHS bodies.
- Leave sufficient scope for local determination about exactly how services are delivered and by whom.
[i] Including NHS England, NHS Improvement, NHS Digital, NHS X and Health Education England.
A model of change
The government’s 2025 mandate to NHS England made clear that a new operating model is needed to support its reforms and to improve performance. [17] The mandate describes a future end state for the health and care system in which:
“The top-down centralised model of control will, over time, need to give way to a more devolved system where ICBs and trusts have greater freedom and flexibility and where patients have more choice and control.”
The government’s change model for the health and care system must therefore aim for an end state in which functions are devolved locally, supported by greater autonomy of local systems, organisations and patients – akin to the Hewitt review’s description of “self-improving systems”.[18] Implicit in this description is an increasingly hands-off, ultimately smaller role for the centre.
This approach can be described as rebalancing the drivers of change in the system. The Human Learning Systems model of public service reform acknowledges that achieving positive outcomes, personalisation of services and best use of resources requires a shift from a focus on control to a focus on fostering collaboration, learning and adaptation as the core drivers of change. [19] This ultimately allows public services to respond to the complex realities of people's lives in a more flexible and ‘human’ way – offering both a better service to users and better value for taxpayers’ money.
In the context of the health and care system, top-down policy needs to be coordinated to effect change in complex systems. Those systems need to sustain learning and mutual support through lateral working with peers. And services need to be co-created with, and accountable bottom-up to local citizens who use them to become human-centred.
The role of the centre changes in the context of a health and care system which is driven more by bottom-up and lateral drivers of change.
Model 1: Rebalancing drivers of change in the health and care system
1. Top-down policy Incentives
Alignment of national policy and incentives including oversight, regulation, financial incentives and targets.
2. Lateral Improvement
A self-directed improvement model and learning system.
3. Bottom-up accountability
Strengthened local accountability and scrutiny and meaningful public involvement in system, place, provider and neighbourhood working.
The role of the centre changes in the context of a health and care system which is driven more by bottom-up and lateral drivers of change. DHSC, NHS England and other national and regional bodies will need to increasingly shift from central priority-setting and delivery towards supporting and enabling local organisations and systems to deliver change and to create the conditions that enable them to do so. For example, most activity relevant to ‘transformation’ should be delegated to ICBs and providers. It will also need to focus on functions benefiting from aggregation, such as digital infrastructure and models of procurement.
Some changes will be needed to ensure the health and care system is set up to deliver this new model. But first, it is important to consider what objectives the health and care system has been set up to achieve.