Examination of Witnesses (Questions 60
- 79)
THURSDAY 2 NOVEMBER 2000
MR COLIN
REEVES CBE, MR
BILL MCCARTHY,
MR DAVID
WALDEN, MR
HUGH TAYLOR
CB AND MR
PETER COATES
Mr Burns
60. Moving on to general issues to do with the
NHS Plan. Some fairly ambitious targets have been set in the Plan,
like the waiting list time for someone to see a GP. Could you
tell us, briefly, how the targets were chosen, what work was determining
whether the targets are feasible, what sticks and carrots there
are going to be to seek to achieve those targets, and, finally,
how will the achievements be monitored?
(Mr McCarthy) Shall I pick that one up. I think it
is probably worth reminding ourselves of the process for putting
together the NHS Plan, which I think was if not unique certainly
a large step forward for the way we try to identify priorities
in the NHS. We had a number of Modernisation Action Teams, all
with representation from clinicians, patients, managers, other
staff in the NHS; their tasks were to point out to us what they
saw as important for the service, the sorts of changes they would
like to see come about in the service, and how ambitious they
felt we ought to be. Now during that process, naturally, there
was not a single message, a single point of view, which came from
everybody involved; indeed, as you might expect, some of the patient
representatives, for example, were looking for more ambitious
changes than some of the managers felt was deliverable, in the
short run. So there was a whole process of balancing the views,
most of which went in the same direction, but a very important
task which we had then of underpinning this with as much analysis
as we could, to try to make recommendations about what was achievable.
So that, if you like, was a process for trying to identify, from
patients, clinicians, what the service priorities should be. We
have for many years undertaken as much detailed analysis as we
can, within the Department, of capacity right around the system,
so we try to follow through demand that is coming through the
front door, we try to follow through the responses that the primary
care sector, the acute care sector, community services, need to
make, in order to respond to demand and achieve changes to both
standards of care and to waiting times, which I think we specifically
mentioned. So that sort of analytical capacity was used throughout
this process. Now I cannot pretend that this is an exact science,
it is constrained by the data we have, by the understanding that
all of us have, both in the academic world and within the Department,
of the influences on changing behaviour and changing outcomes
in health services. But we brought to bear the best information
we had available, and on the basis of that and on the basis, of
course, of the three-year settlement, which we knew about, because
that had previously been announced in the Budget, we were able
to make some judgements about stretching but, in our view, achievable
targets in the areas of priority which we had been told about
in the Plan. So that is how we arrived at the few targets. And
I think I would want to try to concentrate or direct us towards
Chapter 16, the Public Service Agreement real output, outcome
targets, if you like, around the NSFs, around achieving waiting
objectives. And then, certainly, throughout the Plan, we have
indications of our view of the extra staff numbers required, the
beds required, to support those sorts of service changes.
61. Can I move you on to the Modernisation Agency,
or one of your colleagues, whoever. I was wondering if you could
tell us how the Plan will be implemented; again, where does the
Modernisation Board fit in within the structure of the NHS, what
powers will it have, and the task force have, obviously, and to
whom will they be accountable?
(Mr Reeves) Yes, I could take this one, Chairman.
The Modernisation Board actually has met once, on 11 October,
indeed is chaired by the Secretary of State, with 33 members,
who are broken down into three parts; firstly, those representing
patients, those representing national organisations, like the
Royal Colleges, the Royal College of Nursing, and also people
working within the NHS. It is likely that the group will meet
on a quarterly basis to advise the Secretary of State. And, certainly,
if I had to say what the two major roles of the Board would be,
first it is to advise and monitor, almost, the implementation
of the Plan; and then, secondly, also, to produce annual reports
on progress of delivering the various PSA targets within the Plan
itself. So a very important role, certainly, for the Board, in
terms of the Plan, but not solely, there are other structures
within the Implementation Framework to ensure that we do implement
the Plan successfully over the next decade, and I could go on
to talk about the Modernisation Agency, the various task forces
that we have, the regional offices, and indeed the Implementation
Project Team. Not to mention, of course, the NHS Executive Board
as well. So it is quite a complex and matrix set-up, in terms
of taking forward this structure, but I would say the Modernisation
Board does have an important part to play in this.
62. And accountability?
(Mr Reeves) Accountability, again, is manifold, in
the sense, obviously, the Secretary of State himself is accountable,
and, of course, we have had Accountability Frameworks within the
NHS, whereby, of course, every single manager in every single
health authority and trust is, indeed, an accountable officer,
through to Nigel Crisp, who is the Accounting Officer, who, in
turn, is accountable to the Secretary of State and to Parliament.
And there is no reason why that relationship of accountability,
which has existed very effectively, I think, over the last five
or six years, should not come into play in terms of the implementation
of the Plan. So the existing accountability range will certainly
exist, but, of course, obviously, the various groups I talked
about will have a major role in terms of taking forward specific
components within the Plan.
Mr Burns: Thank you. Can we now move on to the
funding of the NHS. This Committee has been supplied with a paper
by an outside adviser suggesting that NHS spending would need
to increase in real terms by 9.7 per cent over the next five years,
to meet the European average, which has featured quite frequently
in the last few months, from the Government. I was wondering if
you could tell us, is there a firm commitment by the Government
to match the average European spend on health care?
Chairman
63. Could I ask, before you answer that, Mr
Reeves, or whoever is going to answer it, do you accept the sort
of common definition of the sort of comparative data here, are
we comparing like with like, because I have always had some reservations
about whether, in our calculations of proportions of GDP, we are
comparing the same provisions? So do you accept the arena for
debate in this respect, are we comparing like with like, or are
we not?
(Mr Reeves) I am going to start with a caveat,
Chairman, to say the one thing that you must take account of is
variations in terms of definition between countries, and the OECD
has worked very hard in terms of trying to get some degree of
commonality around there. And I think particularly in terms of
the differentiation between public and private, that is where
there is quite an issue and a variation in terms of international
difference. But, certainly, we are keen, and I think the Prime
Minister made this clear initially, on the David Frost programme,
to ensure that we can at least compare ourselves in the future
with the type of expenditure on health care in European countries
and using the criterion of health care expenditure as a proportion
of GDP. And, I think, in terms of the current position, and by
that I mean 1997, we do compare unfavourably with Europe. Our
own health care expenditure as a proportion of GDP was 6.7 per
cent in 1998, and that compared with the overall, simple, European
average of 8 per cent, which is the latest information available.
Mr Burns
64. Sorry, can I just interrupt you there, just
so we do not get confused from the start. With the figures you
have just quoted for this country, does that include the private
sector as well or just the NHS?
(Mr Reeves) No, it is the overall position of total
health care. Private health care in the UK is approximately 1
per cent, and has been for some period of time, so it is an inclusive
calculation.
Chairman
65. It might be increasing after this week,
Mr Reeves, presumably?
(Mr Reeves) Yes, in light of the first and possibly
later questions as well, in this Committee, Chair, and there might
be some implications in terms of the relative difference between
the two. But, certainly, what I am quoting at the moment is the
aggregated figures, both in terms of private and public. And what
we are trying to do, as I said, is to move towards the European
average of 8 per cent. And, I think, in many ways, what has happened
in terms of the additional allocation resource is, this year,
what is also intended for the three spending review years, our
view is that on the basis of those figures, and we are talking
about an increase in growth, in real terms, in health, of 6.1
per cent in the UK, that compares with 6.3 per cent in England,
we believe that figure of 6.7 per cent will rise to a figure of
7.6 per cent, as compared with the European average of 8 per cent.
So the injection of monies we are having through this year and
the spending review is certainly going to be a tremendous assist
in moving us towards European averages, at least as regards this
particular calculation.
Mr Burns
66. Sorry, I missed on that, because I assumed
you were answering the Chairman's question. I did not get, unless
I have missed it, a firm commitment that the Government was going
to match the average European spend on health care?
(Mr Reeves) I think it is fair to say that the Government
is very keen to ensure that, as we start developing health care
throughout the UK, over time we do compare favourably with European
averages; and what I was saying was, and I was trying to answer
both questions, that over the next four years I do believe we
are well on the way to achieving that.
John Austin
67. But would you accept that a system which
is very much based on the private sector is bound to be a much
more expensive way of providing service than one which is basically
free at the point of delivery, financed out of taxation?
(Mr Reeves) Again, in terms of the calculation, I
am combining private and public, and you will see, in terms of
the respective contributions of public and private throughout
all European countries there is quite a difference, and we tend
to be quite low in terms of that proportion of private as opposed
to public health care.
68. Would you agree that some of those countries
which rely on the private sector and insurance are actually providing
a much more expensive service and a less efficiently financed
one?
(Mr Reeves) Yes, that is absolutely right. If you
go beyond Europe as well and we go into countries like the United
States and Canada,—
69. Where you get less for your money.
(Mr Reeves) Exactly; where you are getting up to,
what, 14 or 15 per cent, in terms of the United States,—
70. And no health care for a vast proportion
of the population.
(Mr Reeves) Predominantly focused on private health
care. And my own personal view, for what it is worth, is, not
as efficient as our own system of health care.
Chairman
71. In respect of the calculation again, you
referred to the fact that within our calculation of our percentage
of GDP we include private health care, and you mentioned 1 per
cent, or whatever; does that include private nursing home care
and residential care, do you know?
(Mr Reeves) Yes. I will check back and come back with
a note, but I think the answer is yes.
(Mr Walden) Presumably, insofar as it is NHS expenditure,
and there are relatively few people supported in nursing homes
wholly by the NHS, but that proportion, I am sure, is in the figures.
72. So do we have an in-built incentive to get
the Prime Minister off the hook of Mr Frost, to shove people into
the private nursing home sector via intermediate care who are,
effectively, NHS patients?
(Mr Reeves) No.
73. If we expand that usage, does not that increase
the sort of proportion?
(Mr Walden) No, because those patients are still going
to have to be NHS paying for them, regardless of their location.
74. So it makes no difference?
(Mr Walden) No.
(Mr McCarthy) I think, Chairman, it is in the figures
that Mr Reeves has quoted, getting up to 7.6 per cent by the end
of the spending review period. The assumption within that is that
the private care contribution does not expand beyond 1 per cent
of GDP, but we have not relied in achieving that 7.6 figure with
any expansion beyond the GDP growth in the private health care's
contribution.
75. But if we have got people who are currently
occupying acute beds in the NHS, and we are being given this figure,
and they would normally go out somewhere else, and they go out
as NHS patients occupying non-acute beds in the independent sector,
that does expand the amount of . . .
(Mr McCarthy) (It depends?) who is paying for the
place.
76. You are using more beds, otherwise they
would have gone out into the community, or somewhere?
(Mr McCarthy) I think it is sources of funding, Chair.
Any care, as long as it is funded by the NHS, when we are doing
the sums, if you like, the full spending review settlement is
included in the NHS contribution to proportion of GDP. Now already
some part of NHS spending is used to secure care in the private
sector, some residential care, in particular, for example; that
still counts as NHS care because it is funded and is the responsibility
of the NHS.
77. But if a person is self-financing, in such
a setting, it would not count; clearly, it would not count?
(Mr Walden) It would not count, that is private expenditure.
(Mr McCarthy) That is private expenditure.
Dr Brand: But, Chairman, we surely are transferring
the social services funded people in nursing homes to NHS funding,
and the majority of people in nursing homes are paid for by the
state when their resources have run out, so the nursing element
of that is going to be transferred directly from a non-NHS budget
into an NHS budget.
John Austin: That is my point, as far as the
European statistics are concerned. If there are countries which
do not make a distinction between health and social service budgets,
it is possible that in some of those European countries social
care is being included in the figures, whereas social care would
not be included in the figures in the UK.
Dr Brand
78. The Danes do not include it, and that is
why they look, actually, paradoxically, low in their percentage
expenditure on GDP.
(Mr Reeves) And The Netherlands is the reverse, because
they do include it, yes.
Mr Burns
79. But it is not national social services funding
because it comes out of the Department of Health budget, surely
it must be part of the NHS figure?
(Mr Walden) It is part of DETR's allocation to local
government. We have a policy responsibility but the funding comes
under the local government finance settlement, it is part of the
local government finance settlement overall.
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