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Mr. Day : It is voluntary.

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Dr. Owen : No, it is not voluntary. The Government have so changed the other arrangements for general practitioners that they are giving a considerable incentive to go for practice opt-outs. This is what the Royal College of General Practitioners and the General Medical Services Committee object to. If it were a free choice--

Mr. Day : It is.

Dr. Owen : It is not. Hon. Members must look at the proposals carefully and, I suggest, talk to a few of their local general practitioners. They will find that the criticism of the proposal is not that they are allowed to take an "opt out" decision for their own particular practice. What GPs object to is that the structuring of general practice payments and arrangements makes it difficult for them not to go in that direction. There is not just an incentive but a stick pushing them in that direction. That is what they object to, and they are quite right to object.

It is in any case not the right direction. The right direction is to integrate the family practitioner committees with the district health authority, and to try to produce a system of incentives that will encourage preventive medicine and health maintenance. In keeping down the costs of hospitalisation of a patient, the GP works with the consultant and both have an incentive to keep the patient in hospital for as short a time as possible. That saves money for the district health authority, and they all benefit in consequence. That is not fragmenting care--it is integrating care. It is getting

cost-effectiveness through a much better provision of care by bringing hospital and home care together.

That is the direction in which the Secretary of State should proceed if he is wise. His problem is that overshadowing it all is the Prime Minister, who wishes to change the National Heath Service fundamentally. We should be under no illusions about this. The Prime Minister wants a two-tier health service, and she openly admits it in the House. She wants a system under which those who can pay private health insurance will do so. She thinks that it is quite right that the 40 per cent. of people who can afford to do so should operate within a broadly private health system. They would have a safety net so that if they were hit by a car on the M4 they would be taken to the local hospital. However, broadly speaking, the health care of such people will be taken outside the National Health Service. For the other 60 per cent. of the population, the Prime Minister accepts that there should be a safety net and a health care system that is as good as can be afforded. Her Government would not spend too much money on that because it will be public sector money. There is nothing new about such a system--it operated in this country in the 1920s and 1930s. It was rejected by the people when the National Health Service was created in 1948, and many of us are determined that it should not be reintroduced through either the front or the back door. Such a system underlies many of these proposals and it will be introduced unless they are rejected.

Sir Michael McNair-Wilson (Newbury) : Does the right hon. Gentleman think that consultants should opt to work in either the National Health Service or the private sector, or that the present position should continue?

Dr. Owen : I have reluctantly come to the conclusion over many years that we shall have to accept the Aneurin

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Bevan compromise in which doctors work in both the public and private health service, and we have a mixed provision of health care. Ideally, I should like doctors to work full time in the National Health Service, as I did. Had I stayed, I should always have worked full time in the NHS. However, we have to live with the system under which doctors cherish the right to practise privately part of the time. [ Hon. Members :-- "That is a two-tier system."] It is not a two- tier system at all. The private health care system that operates in this country is a small part of the overall health care system--a safety valve. It operates--and has done so under successive Governments--without serious detriment to the National Health Service.

If there was a serious attack on NHS waiting lists, they could be reduced, and then much of the motivation to expand the private sector would be withdrawn. There will always be some people who would like to have the freedom to choose their own doctor, but we cannot offer that choice to the whole population. It produces only a minor distortion of the system and, provided it operates at a fairly low level, it can be tolerated as part of the mixed health care system. However, that is not a two-tier system, or the one which we had before the National Health Service. Many of us are determined to ensure that it is not introduced.

Having listened to the debate I realise that a number of Conservative Members need to discuss these matters a bit more with some of their constituents if there are not to be many tears over the next few years. Nobody should underestimate the extent and depth of feeling against the proposals. The nursing profession is now almost more important than the medical profession to the successful running of the Health Service. There is a reasonable surplus of doctors, but there is an acute shortage of nurses, who have to be encouraged to return and stay in the Health Service. We cannot, therefore, dismiss the view of the nurses, let alone the views of the medical profession. Above all, we should not exclude the views of the patients.

The Government should be able to come forward with some level of support for their proposals from the people whom the proposals are meant to serve. If there is merit in them, it should be possible to point to patients who want them, but I have found no evidence of popular demand for any of the substantive proposals--which have been criticised--put forward in the White Paper.

Mr. Day : Does the right hon. Gentleman agree that while there is much feeling against the White Paper it is against the myths surrounding it rather than the actual proposals? The myths are largely created by organisations such as the British Medical Association.

Dr. Owen : The BMA is bound to be in conflict with the Ministers. I am reminded of the story of David Lloyd George, who went to the BMA when he was Chancellor of the Exchequer. When he came out of the meeting he said that he felt "like Daniel leaving the lion's den, the only difference being that those lions knew their anatomy." A mauling of Health Ministers by the British Medical Association is par for the course, but it is not par for the course for them to receive a mauling from the royal colleges of physicians, surgeons, general practitioners, obstetricians, gynaecologists and from the Royal College of Nursing. The degree of opposition that the White Paper

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has roused within and without the National Health Service, and the total lack of support from patients, is not commonplace.

When Aneurin Bevan had trouble with the BMA, at least he had the patients on his side. It is clear from this debate that nobody--apart from Tory Members--seems prepared to vote for the Government's splendid amendment to the effect that everything in the garden is fine. Here is an opportunity for Conservative Members to abstain--to disappear quietly so that they are not here to vote for the Government's self-congratulatory amendment. In doing so, they may do themselves a great service. In voting with the Government they will be doing the Opposition a great service.

5.7 pm

The Minister of State, Department of Health (Mr. David Mellor) : I beg to move, to leave out from House' to the end of the Question and to add instead thereof :

expresses full support for the proposals set out in the White Paper "Working for Patients" and believes that these will lead to a Health Service that is more responsive to the needs of patients, and will enable those hospitals which best meet the needs of patients to get the money to do so, will reduce waiting times, improve the quality of care, help family doctors to develop the services they provide for their patients, improve the effectiveness of National Health Service management, and ensure that all those concerned with delivering health care make the best use of the resources available to them.'.

I am glad that we have had the opportunity of debating this matter today. I wondered when an Opposition Supply day would be devoted to the topic. It is interesting that, whatever the Labour party may have to say about the White Paper, it has not been enthusiastic to table such a motion. Apart from the hon. Member for Peckham (Ms. Harman), who has to be here, there is only one other Labour Member in the Chamber. Admittedly, it is always a pleasure to hear from the hon. Member for Halifax (Mrs. Mahon) on these matters.

It may be that the Labour party lacks enthusiasm for a full-scale debate because it would not be long before its threadbare thinking on the need for positive change in the NHS would be revealed. Into that vacuum, in a rather unexpected way, has moved the right hon. Member for Plymouth, Devonport (Dr. Owen) and his motion. We heard a typically self-indulgent performance, expanding over 43 minutes, from the right hon. Member. Perhaps in future two-and-a-half-hour debates the right hon. Gentleman will use notes so that he might be able to deliver his speech a little quicker and more accurately. What he said was full of misconceptions about the White Paper.

One thing which could always be said of the right hon. Gentleman was that if he thought that the Government had a point--or even half a point--he was always prepared to acknowledge it. The interesting point about his contribution to this debate is the uneasy way--often resorting to making distinctions on the head of a pin--in which he seeks to distinguish between the Government's concept of an internal market in the NHS and the one that he claims to have popularised. I suspect that the right hon. Gentleman-- intoxicated, as his last remarks made clear by the thought that every man's hand was against the proposals, which is far from the case--has fallen into the trap of the lowest common denominator of Opposition. He would have done himself

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a greater service if he had acknowledged that much of the thinking in the White Paper reflects a number of issues that obviously occurred to him when he wrote his book and when the SDP published its document.

The best I can find to say about the motion is that it could have been drafted by the Labour party. The right hon. Gentleman used not to be pleased to hear such words. However, he knows full well that, in his book, he makes it clear that he is interested in a more consumerist NHS, wants an internal market to be developed and a national health authority with substantial autonomy. He makes it clear that he wants improved resource management with measures to improve the cost awareness of professionals. He makes it clear that he understands the case for management of the NHS to be much freer and at a lower level.

It is astonishing that the right hon. Gentleman should base his objections to the Government's proposals on the distinction between self-governing hospitals and semi-independent district health authorities. Bassetlaw may well have snookered him by producing proposals at which we are looking with great interest.

The right hon. Gentleman knows full well that the concepts set out in the White Paper reflect an awareness at which everyone except members of the Labour party must surely arrive : if the NHS is to meet the challenge of the next decade it must be more cost-effective in its delivery of services. The "Green Paper"--presumably the right hon. Gentleman not only wrote it but cut down the trees to pulp the paper, given its one-man-band nature-- states :

"The SDP believes that the introduction of an internal market into the National Health Service would yield a number of benefits. Firstly, health managers would be able to use resources in a more effective manner. They would be free to buy services from other suppliers who offered good value, and by careful investment of their own resources attract income from other health authorities. The move to an internal market would provide an incentive to develop a more sophisticated financial management and information system. It would also provide a strong incentive to review existing methods of service delivery Funding will in effect follow the patient, bringing an important transfer of power in favour of patients."

It is regrettable that the right hon. Gentleman has failed to accept that such notions--whether they embody his own concept of an internal market, which no doubt he would be bound to admit was less than fully argued through in his book and presented very sketchily today, or our kind of concept--start from a common root of recognition that unless the NHS becomes more consumerist and is managed more effectively lower down the scale--unless there is some freedom for finance to cross the arbitrary district boundaries that now inhibit the proper delivery of care--we shall not meet the challenge of the next decade. It is regrettable that the right hon. Gentleman has seen fit to kow-tow in this way, notably in the article that he produced in the Daily Express on Saturday. I do not know whether any other hon. Members have read it.

Although the article went on at some length, no one reading it would have dreamt for a moment that the right hon. Gentleman had ever thought about internal markets. Of course, it contained much good advice. It called my right hon. and learned Friend the Secretary of State "insouciant", and told him what wise heads would do--

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which, in the light of the right hon. Gentleman's political career, is a bit like King Farouk telling people how to run a kingdom.

Mr. Nicholas Soames (Crawley) : Or Roy Jenkins.

Mr. Mellor : The right hon. Gentleman says :

"when you are in a hole, stop digging."

Who better than he to formulate such advice?

The right hon. Gentleman knows only too well that when he was in office he was not deflected by opposition from groups that he considered to be standing up for more vested interests than for progress. He has conceded in most of his subsequent writings that what he proposed then was wrong. But the idea that the doctors, or indeed any other group within the NHS, should be the final arbiters of a change in what is actually the patients' service strikes me as a further retreat from the principle of which the right hon. Gentleman should be less than proud.

Let me make a positive case for the concepts in the review. I shall do so as briefly as possible, so that the maximum number of hon. Members will have an opportunity to speak--more than 40 minutes having been taken, quite unnecessarily in my respectful judgment, to open the debate.

The first crucial point is that the past 10 years have been years of expansion for the NHS, in which funding has increased considerably. Had we merely continued the level of funding that existed 10 years ago, this year the NHS would be spending just under £19 billion at 1989-90 prices. In fact, it will be spending more than £26 billion. We know that nearly 1.5 million more in-patients a year are being treated by the NHS than were treated 10 years ago, while 3.25 million more out-patients and 500,000 more day cases are being dealt with.

Those statistics are familiar ; I need not go over them. However, the expansion of the NHS has not, in truth, made the service any easier to run in 1989 than it was in 1979. If we had dared to predict such expansion 10 years ago, people would have thought first that a tripling of cash expenditure within a decade was not possible, and secondly that if it were possible--imagining that signing a large cheque is the fundamental way of dealing with the NHS--we would be in an easier position. We are not. The job of balancing priorities will become more rather than less difficult in the years ahead. The reason is clear : demand for the NHS is growing, and will continue to grow inexorably. That is partly for demographic reasons : we are an aging population, and, important and good though that is, it imposes large costs on the NHS. Secondly, the frontiers of medical science are being continually pushed forward, mostly into expensive, high- technology developments. Thirdly, people are no longer content, for instance, to wear a body support for a hernia or a surgical stocking for varicose veins ; they require an operation. People's thresholds for seeking treatment are being constantly lowered, which is not unreasonable. The service is there and people want to use it. Finally, people are no longer content for the NHS to be simply a service for sickness. They want it to be a service for health. They want more prevention techniques, and they want the full benefit of primary health care to go to those who think that they are healthy but who may not be, so that they can be screened for conditions that can be dealt with at an early stage. Such things are possible in this decade. They were not possible in the decade during which

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the right hon. Gentleman had custody of the NHS, because he spent most of his time having to argue that the NHS could not be protected from funding problems.

I know that what I am saying is not palatable to the right hon. Gentleman, but I listened to most of his speech, and I feel that he could at least do me the courtesy of listening to mine. The right hon. Gentleman is not always alone in having a valuable contribution to make to a debate, and having started this one he should, I think, listen to what the rest of us have to say.

The right hon. Gentleman knows that in the current decade the 20 per cent. increase in the number of general practitioners, and the 50 per cent. increase in the number of support staff for them--including the doubling of practice nurse members--have made possible primary care teams that could not have been dreamt of in the 1970s. As a consequence a great gap has been opened between those who are providing that full range of services and those who are not. The task of Government is not to sit back and say, "Chacun a son gou t ; let any doctor do what he chooses", but to try to ensure, through the contract and in other ways, that health care reaches high standards everywhere, and that the contract not only rewards effort but stimulates further effort. To my mind there is not too much difference between that kind of consumerist approach and that which, until it became politically expedient not to do so, the right hon. Gentleman supported.

The gravamen of the right hon. Gentleman's charge when the debate was announced was his hostility to the "commercialisation" of the NHS, whatever that may mean. But unless the NHS is prepared to use the techniques of cost -effectiveness that have been so successful elsewhere it will be incapable of meeting those demands, even within the rising budget that we all want. Let us take, for instance, competitive tendering. I do not know whether in his present mode the right hon. Gentleman would consider that commercialisation, but we have saved nearly £110 million simply by not accepting that the way in which things have always been done is the way in which they should be done in the future.

Interestingly, 85 per cent. of the contracts that were reconsidered went in -house, showing that there were savings to be made if only people could be bothered to try. All that £110 million has gone back into the service. To put it another way, the equivalent of one and a half Great Ormond street hospitals have been saved by the service tightening up on washing and cleaning costs.

Mrs. Alice Mahon (Halifax) rose --

Mr. Mellor : If the hon. Lady does not mind I will not give way : I am trying to be quick.

The same is true of a range of other efficiency savings. Some £740 million has been allocated elsewhere in the system. A tighter view has been taken of prescribing. Most people now admit that all the fuss over the limited list was based on two entirely false premises--damage to patients and that savings would not be made. We said that £75 million a year would be saved, and £75 million has been saved for four years now. Some £300 million that was being spent on over-priced branded cough mixtures on prescription is now going into the "front end" of patient care.

Mr. Michael Latham (Rutland and Melton) : I hope that my hon. Friend will concede that at the end of the

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consultation period the limited list was three times longer than it was at the beginning of the consultation period, because his predecessors listened to hon. Members on all sides of the House. I hope that he will assure the House that he will do the same in regard to the doctors' contracts.

Mr. Mellor : Another unfairness in the speech of the right hon. Member for Devonport was that he suggested, by distorting phrases ripped out of context from my speeches and those of my right hon. and learned Friend the Secretary of State for Health, that we were seeking to ram those changes willy-nilly down the throat of the profession. My right hon. and learned Friend the Secretary of State has made it clear that the Government have a duty to set the direction in which the service should go. The publication of the working papers, the intensive discussions that are taking place and the invitation to co-operate that lies at the heart of all our proposals are designed to work with the grain of the system. Of course, as we receive representations, whether they are about details of the contract or suggest ways in which we can better apply the financial principles in the resources management initiative, their voices will be heard and we shall not hesitate to change our minds. That is what we have been saying throughout the process. I am glad to say that the media who first wanted to report war-war have belatedly become interested in jaw-jaw and are reporting passages from my speeches saying that the proposals were not tablets of stone. We are looking for a genuine dialogue and we are only too ready to alter course and change practical details if that is required. We have a duty to lay down the basic thrust of the proposals and to carry them forward because they are right.

The right hon. Gentleman's house was built on sand. He based his case on the fact that we were compelling GPs to have practice budgets and hospitals to become self-governing. But only general practices of a certain size are being invited to apply for practice budgets, and those who do not wish to do so do not have to. Pilot schemes are a practical way of testing whether budgeting will work. The practices concerned will open negotiations--and plenty of them are ready to do so--if the negotiations flourish they will accept the budget and if the negotiations are unsuccessful they will walk away. No one is being compelled to take a budget. If the system works it will grow, and if it does not, as I said on the radio, it will be consigned to history. What could be fairer than that?

The same applies to self-governing hospitals. Of course we are entitled to say that we hope that the majority of acute hospitals will follow up but it is entirely their choice and there is no shortage of interest. What is meant by self-governing hospitals? Far from the right hon. Gentleman's uncharacteristic sloppiness in suggesting that the proposal was carried across from the education reforms, we have never used the words "opting out". We are saying that in the interest of good Health Service management it should be reduced to the lowest level consistent with being able to develop the best patient care. Given the calibre of people interested in becoming involved in special health authorities in London, the attractions of self-governing hospitals with the politics removed--attracting the best people from the community and the best managers to deliver the best service --are clear.

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Mr. Brian Wilson (Cunninghame, North) : In referring to opting out or self-governing hospitals, the Minister repeatedly said, "It is entirely their choice." To whom was he referring?

Mr. Mellor : The hon. Gentleman knows well that the White Paper makes it clear that it is for various interested groups to come forward with proposals, and for the Secretary of State to determine whether those proposals should be implemented. I have told the hon. Gentleman what the White Paper states on that.

The White Paper is based on concepts which every patient and everyone concerned with the NHS wants--quality, responsiveness and value for money. As the Institute of Health Services Management has made clear in regard to the present funding of the NHS hospital service, a good unit that gets through its list and carries out more operations than average, runs into financial difficulties nine or 10 months into the financial year, while a unit that coasts along and does not extend itself is funded on exactly the same basis for ever and a day and, of course, does not run into financial difficulties. With money following the patient, something that the right hon. Gentleman used to advocate--well might he hold his head in his hands-- those units that are good are allowed to reach their proper level. Surely that is in the best interest of patients.

We want a more consumerist Health Service. We are beyond the point at which, after the great battle to establish the Health Service, it was possible for the profession or anyone else to say that the NHS was doing the public a favour simply by allowing people to pass through its portals. It was regarded as deeply radical by some general practitioners that there should be an appointments system, but now it is accepted. Why should hospitals not be the same? Why should patients turn up at 9.30 and be seen at 12.30? Why should the conditions for many out-patients be so disgraceful?

Mr. Simon Hughes (Southwark and Bermondsey) : Because of the lack of funding.

Mr. Mellor : I have already mentioned the increase in funding. The problems to which I referred often relate to priorities and attitudes rather than money. The idea that everyone should be acquitted of any dereliction of duty by the parrot cries about funding is typical of how spurious NHS debates often become. We all know that it relates to attitudes. We all hope that when cash follows the patient, NHS patients will become as valuable commodities to the medical profession and others as private patients. That day is long overdue. Finally, I turn to value for money. Given the demands on the Health Service in the next decade, unless we can deliver health care efficiently and effectively, we shall not meet the increased pace of demand. Sometimes the argument is satirised as if it is simply a matter of making cuts or signing a large cheque, but the argument is about providing a quality of care that meets the demands of patients. Even within an expanding budget it will be a struggle. Value for money--a good quality of care at a sensible cost--is the way forward. We all know that there are hospitals capable of carrying out operations on a day care basis. I visited one in Burton where 50 per cent. of the operations were carried out on a day care basis. In many other parts of the country people are in-patients for two to three days. Conducting operations on a day care basis is not selling the patient

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short. Most patients do not want to stay overnight in hospital and do so only because the present system demands it. Our proposals are based on straightforward concepts that have been carried through to beneficial effect elsewhere in the economy. The NHS must not become a mausoleum to outdated managerial practices. The NHS is in the forefront of medical advance and should be in the forefront of financial and other management if we are to have the NHS that we need.

It will be interesting to hear other speeches in the debate and to find out whether any other parts of the House are capable of yielding up positive proposals such as those in the White Paper. People should be concerned not merely to stir up easy points by suggesting that the profession is against one proposal and the public are worried about another, but to find some way of ensuring that we deliver health care more effectively. At the moment, only the Conservative party is rising to that very real challenge.

5.27 pm

Ms. Harriet Harman (Peckham) : It is highly significant, and will be greeted with dismay by the public and the professions outside the House, that the Minister failed to address any of the very real concerns that have been raised about the White Paper. He did not address any of the concerns that were well articulated by the right hon. Member for Plymouth, Devonport (Dr. Owen).

When will the House have a full debate on the White Paper? While I welcome the opportunity provided by this brief debate to begin discussion on the White Paper, it is quite wrong that the country should be discussing the White Paper yet the House has not had the opportunity to have a full debate. It is particularly wrong because the Government are already progressing with their plans, and have even gone so far as to appoint finance managers to run hospitals which have yet to opt out under system which has yet to be debated in the House. I should have thought that the Secretary of State should come forward urgently to discuss those plans in the House. The House is the only place in which the Government are likely to hear any support for their proposals, largely thanks to the Government Whips. It is in keeping with the way in which the review has been dealt with from the outset that we have not had a chance to debate it fully in the House. The review was not, of course, a response to public concern about the shortage of resources in the Health Service. The original idea of the review was to give Ministers a breathing space and to sweep the issue under the carpet. It gave Ministers something to say when, week by week, day after day, they had to respond at the Dispatch Box to the concerns about lengthening waiting lists and cancelled operations.

But away from public involvement and any professional advice, the review has unfortunately mutated into a monster which aims to inflict on us the same chaos and misery that the American health care system inflicts on the American people. If there had been any public or professional consultation during the review process, it is inconceivable that the Government could have come up with the commercialisation of the National Health Service.

There is a broad and deep consensus about the Health Service, which only the Government stand outside. People understand that the commercialisation of health care will drive down the quality of health services, drive up costs by saddling the Health Service with a monstrous bureaucracy

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and undermine the doctor-patient relationship by putting a price tag on each patient's head. It is clear to everybody that the Government are interested not in a healthy patient, but only in a healthy bank balance.

Doctors', nurses' and health workers' unions have all warned that the White Paper proposals will cut down patient choice, not increase it, and will reduce our chance of developing preventative health services. The proposals will hit hardest those who need help the most--the chronically sick, the disabled and the elderly. The fact that the weight of public opinion is overwhelmingly against the proposals and that the weight of professional opinion is unanimously against them must be a grave disappointment to the Government, especially as they have invested a great deal of public money-- more than £1.25 million--in a shameful attempt to mislead the public and health professionals about what the proposals constitute. I challenge the Minister to name even one reputable, independent organisation that knows anything about the issue which supports the proposals. There is none.

Sir Michael McNair-Wilson : Seven million pounds has been spent in opposing the White Paper. Does the hon. Lady think that the British Medical Association should use general practitioners' surgeries as a way of putting across its propaganda to the sick and the elderly?

Ms. Harman : It is for the British Medical Association to decide what it does with its members' money. What the Government do with taxpayers' money is a matter for all of us. It is a pity that the hon. Gentleman cannot tell the difference.

The Secretary of State and his Ministers have become angry about the fact that they have not been able to buy public or professional opinion, so they have resorted to smear tactics : they have said that the doctors are simply reaching for their wallets and that the nurses are merely a vested interest who must be overridden. The Government remain determined not to listen to argument, not to consider the evidence and not to respond to public concern. Nothing in the Minister's speech suggested that he has listened to the points made so strongly.

The evidence is clear : we need more resources in the Health Service. It seems that even that message has not got through to the Minister. We spend less per head on health care than most other European countries and only a little more than half what Americans spend for an inferior system.

The other important piece of evidence to which the Government do not want to listen is that competition actually drives down quality. When hospitals compete, they cut corners so that they can cut costs, and that increases the mortality rate. The fiercer the competition, the higher the mortality rate. Evidence of that has been established clearly in the United States, even when dealing with not-for-profit hospitals. I am not talking about profit driving down quality, but the fact that competition for patients results in a lowering of quality. That was reported in The New England Journal of Medicine. Ironically, people were safer being treated in a small town where there was only one hospital than in a big city, where many hospitals were competing for patients, and therefore cutting costs and corners. Yet that is what the

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Government's proposals for opted-out hospitals competing with each other will mean. Standards will be driven down and mortality rates will rise. The internal market would also drive up administrative costs.

Mrs. Mahon : Before my hon. Friend comes on to competition, will she agree that the competition introduced through the tendering of services has been damaging to the quality of the Health Service? Most of us regularly see headlines about that in our local press. I have here an article describing how food inspectors have told a local authority to clean up and to improve hygiene standards in the hospital in which I worked for 11 years. It was a very clean hospital until it was forced to accept the in- house tender, which cut domestic services in half and reduced the standard of hygiene, leading to a dangerous situation.

Ms. Harman : My hon. Friend's example is a testimony to the Government's obsession to cut the cost of public services and never mind the quality.

When the Secretary of State gave evidence to the Select Committee on Social Services and was asked about the effect of the internal market on administrative costs, it was extraordinary that he could say that he had no idea of what the extra administrative costs would be. He was unable to give even the roughest estimate. When one considers that he is going headlong into proposals which, by all other estimates, will have considerable expenditure implications, it is extraordinary that he has no estimates or pilot scheme. Resources will be diverted from patient care in a veritable paper chase of bills and billing procedures. Bills will go from hospital to hospital, from district health authority, to hospital, from GP to community service and from GP to one district health authority or another. That is what happens in the United States already and it is a pity that we cannot learn from the experience there, instead of simply recreating the mistakes. If one has a hospital appointment there for 9.30 am, one often has to turn up at 6 am to complete three hours of paper work before being admitted to hospital, so complicated has the system become. It is no wonder the American administrative costs are about 20 per cent., whereas ours in the Health Service are far lower.

I hoped that the Minister would deal with a number of important points of criticism raised outside the House and by the right hon. Member for Plymouth, Devonport (Mr. Owen). First, there is the question of patient choice. At present, a GP can refer patients either within the district or outside it, and within or outside the region. We have a genuinely national Health Service in that respect. If we look at the figures for cross- boundary flow, we can see that we do not need an internal market to free up the system and to enable patients to cross district boundaries. They already have the freedom and cross boundaries as a routine matter. The only impediments to that cross-boundary flow are spending restrictions, which have led some major hospitals to say that they will not treat out of district patients. That is a resource problem, not a problem of the system. Therefore, the Government are making a completely bogus offer when they say that they are offering us a White Paper so that patients can travel across district boundaries, because GPs already have the opportunity to refer their

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patients to wherever they and the patient think that the treatment is best and most convenient for that individual patient.

Although the right hon. Member for Devonport talked about what he regarded as the internal market, I did not see anything of the market in what he was saying. He said that we should have freedom of cross-boundary flows, which we already have, and activity-based budgeting. I do not see anything wrong with that, but there is nothing of the market in it.

Under the White Paper, the freedom of GPs, together with their patients, to make the choice about where the patient will be treated, will disappear. Instead, the decision will be made on a block basis at the beginning of the year by managers, by people who have no contact at all with patients, let alone with the individual patient who is seeking treatment. The decision will be made to place the contract and spend the money where the service is cheapest, not where it is most convenient for the individual patient, not where the service or the treatment is best, let alone where the individual patient chooses. The decision will be made not in response to individual patients as at present--the decision now rests with the GP and the patient- -but on the basis of contract negotiations at the beginning of the year.

A major problem with that is that managers do not have accurate measurements of outcome and quality. All they have are accurate measurements of costs. Therefore, a powerful incentive is being put into the system for managers to negotiate contracts on block bookings for patients where the service is cheapest, rather than where the service is best. At this stage, medical audit does not help us, because the science of medical audit is still underdeveloped in terms of giving indications of outcome and quality.

At the moment, the people who know most about the quality of service in different hospitals and the effectiveness of the treatment and its outcome are the GPs who see their patients coming back from hospitals, and the hospital doctors who see the patients in hospital. However, they will not be consulted. They will not be the ones to make the decision on each individual patient. That decision will be made by means of a block booking by managers who know everything about cost, but nothing about quality and outcome.

That is why it is a travesty to continue to say that the White Paper will extend choice. Choice will be taken away from the patient and the GP and given to managers. It is true that in one respect more choice will be given --more choice will be give to the managers. It will be they who will benefit from more choice ; it will certainly not be the GP or the patient.

The Minister said that GPs will not be forced to hold their own budgets. However, they will be forced to do so if that is the only way in which they can save referral rights for themselves and their patients. That is the stick to which the right hon. Member for Devonport rightly referred. The only way in which GPs can keep choice for themselves and their patients is if they opt to hold their own budgets.

However, when GPs do opt to hold their own budgets, they will be going out of the frying pan into the fire. Although they will have the choice of where to refer their patients, when they consult a patient, they must think not

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only about what the patient needs, but about what their practice's budget can afford. That is why GPs are, justifiably, so angry about the proposals and that is why the public are justifiably afraid.

Mr. Day : On what basis does the hon. Lady justify the implication that the budgets for such practices will be under-funded--because that is the implication of what she is saying?

Ms. Harman : At the moment, the proposals are that the region will decide on the budget for particular GPs. If the hon. Gentleman had read the working papers, as I have--I suspect from his question that he has not--he would have seen that they state that the region will not underwrite too high referral practices. It is clear that GP's budgets are part of an attempt--a blunt instrument--to hold down referral rates, not to make sure that referrals are appropriate when they are made and that when they are not made that, too, is an appropriate decision, because overall the Government want to see referral rates and spending on prescribing go down, irrespective of the effect on the quality of care and irrespective of the effect on the patient.

Having seen the effect that spending restrictions have had on hospitals, surely the effect that such restrictions would have on GPs is obvious to anybody. In the debate on the Health and Medicines Act 1988 it was clear that the Government wanted cash limits on GPs because they thought that GPs were spending too much money. Wherever one looks, the Government's true aims are self-evident.

The second point that I was disappointed that the Minister did not deal with was the question of the number of patients that each GP has. The trend, supported by successive Governments, has been to reduce the number of patients of each GP. There is good reason for that. The idea is to improve the quality of care ; to be able to give each patient more time to make a better diagnosis ; to discuss more deeply with their patients the treatment and effect ; and to increase the opportunity for preventive work and screening. Increasing the capitation element of GPs' pay is a direct incentive for GPs to increase their number of patients. It is a direct disincentive and financial penalty for those GPs who want their patient list to reduce.

I turn now to the opting-out proposals. Again, the Minister tried to fudge this issue. Why does he not come clean and admit that it is the Secretary of State who will decide whether a hospital opts out? Indeed, it will not have been necessary for anybody at local level to have been interested in the proposals. A hospital can be selected by the region without consultation with anybody, and it can be offered up as a sacrifice to the Secretary of State. It is absolutely clear in the White Paper that the Secretary of State will decide and that the region will recommend. No account need be taken of the views of the community which depends on that hospital or those of the people who work in it.

The right hon. Member for Devonport was right in saying that, when a hospital opts out, it will become a self-interested institution. It will be dislocated from the community that it should be serving. It will not be possible to plan services when a whole load of competing institutions are all trying to keep their heads above water in a dog-eat-dog situation. That is the very opposite of the

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integration of the services and the planning for future services which, hitherto, everybody agreed was so important.

The way in which the Government have gone about the process of trying to spur people into being in favour of opting out is disgraceful. There has been a mixture of threats and promises. To doctors who are desperately worried because of the years of under-funding, the Government have said, "If you're good boys and girls and if you're one of the first to opt out, we'll see you all right"--with a nudge and a wink. I advise those who are being cajoled in that fashion to be careful, because, although it might be part of the Government's plan to ensure that the first opters out survive and that they, the Government, have successful examples to hold before the public at the next general election, the Government do not plan to carry on like that. The Government will then cut those hospitals loose with their enormous debts of interest charges. Rather than a dash for freedom, opting out might end up as financial suicide. The right hon. Member for Devonport said that it might be very nice for teaching hospitals to opt out. Well, it will not be very nice for teaching hospitals in London, because of the value of their sites and buildings. If, as the Government plan under the capital charges White Paper, St. Thomas's hospital had to pay interest charges on its sites, it would have to pay an extra £40 million a year. Guy's hospital, which is just a stone's throw down the river, would have to find an extra £27 million per year to service its huge interest charge. Therefore, those hospitals will have to compete for patients to bring in the resources to service their enormous capital debts. They will end up doing what the private sector does to make money--more and more cold surgery.

Therefore, the teaching base and the centre of excellence will be lost in a war of attrition between hospitals which are on sites of high value and are close together. At the end of the day, when one of them goes bust, the Government will say, "It's not our fault ; it's the market. There must have been over-provision." I warn those in the teaching hospitals to be careful, because a trap is being laid. I believe that many of them understand that.

What the Government must explain most of all--what the Minister failed to mention--is the tax subsidy to commercial medicine. That is an extraordinary way to allocate public money. It is unfair, because it goes to only those who can afford private medical insurance or to those who can get someone else to take it out on their behalf. It will not go to those who have the greatest need. The point about private medical insurance is that it is about insurance and not about medicine. The insurance companies want to insure a healthy person who is unlikely to claim, not a sick person who is likely to claim. Why should the Government subsidise private medicine? The Government appear to be in a lather of enthusiasm for private medicine, but they have no idea what is happening in the private sector. When I asked a series of questions about activity rates and bed occupancy in the private sector, the Government's answer was, "We haven't a clue." Therefore, my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith) conducted a survey of the private sector, and we are grateful for its response.

The survey showed that the private sector has a lower bed occupancy and has higher administrative costs. It costs more to do operations and it is being increasingly

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taken over by the Americans. Why are the Government pushing us towards a system where the well-off will get treatment that they do not need, because it is profitable for doctors, but poor sick people will not get the treatment they need, because they will not be able to get insurance?

No one believes that the National Health Service is perfect. Of course we need more emphasis on community services, a better complaints procedure, a better system for compensating for mistakes and a reorientation of management and of those who work in hospitals towards the people who are using those hospitals. We need to develop the as yet primitive science of measuring and comparing the quality and outcome of the service, to further integrate acute and community services and primary services ; and we need more resources to get the waiting lists down. No one is saying that the National Health Service is perfect, but what everyone is saying, apart from the Government, is that it is the best possible base on which to build.

The Government are trying to browbeat everyone by saying--the Minister denied this today--"Whatever you think, we shall go ahead with these plans, so you might as well shut up and learn to live with them." I do not believe that. Public and professional opposition remains enormously important. Because the plans are unjust as well as unworkable, the aim of everyone with any sense is to be part of a campaign to ensure that those plans remain plans and are never put into practice.

When will we receive the Government's response to the Griffiths report? It was rumoured before Easter that it would be soon after Easter. However, when giving evidence to the Select Committee, the Secretary of State said that he did not know when it will be. It appears to have drifted off the political horizon altogether. It is more than a year since Griffiths reported. There has been a huge increase in public spending on private care. It has increased by more than 8,000 per cent. since the Government came to power. Many people have grave reservations about the appropriateness of the sort of care and the standards of care that are being provided at public expense in the private sector. When will the Government get their act together and take hold of the situation? Or will they simply let the situation drift and leave thousands of frail, disabled and vulnerable people in the lurch, as is happening now?

5.53 pm

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