Select Committee on Health Minutes of Evidence

Examination of Witnesses (Questions 60-75)


Julia Drown

  60. Can I turn to productivity and efficiency targets, which we have raised at virtually every inquiry on an annual basis. The concern we have raised as a Committee has been that setting efficiency targets year after year, in the words of the Conservatives, has led to cuts slice by slice in different services which, as you pointed out earlier, penalises the better trusts more than it does the poorer trusts. What the figures you have provided to the Committee show is that actually that is now changing—and politically it sounds dreadful—and productivity is going down but it is creating what you have said is needed in the Service, which is some slack in order to deal with the peaks and troughs. So to be clear about that, productivity is going down because the money which is going in is greater than the increase in the actual activity which is got out at the other end.
  (Mr Milburn) I am not sure I would accept that proposition.

  61. It is there in the figures. It is partly to do with things like pay awards and so on.
  (Mr Milburn) It depends what you measure really.

  62. Okay, but those are the figures you provided us with. About two years ago I think you told the Committee that you were going to change the policy and set efficiency targets by trusts, so it is not across the board. We would be interested to know what the impact has been of that. Has that been successful? But also where does the line get drawn on this that it is not acceptable to have the same increases in efficiency that we have had in the past, in particular in the light of the targets in the NHS Plan? How do you move policy forward on efficiency which is sensitive to the needs but delivers the targets you have put out in the NHS Plan?
  (Mr Milburn) I will bring Richard in in a moment, who knows far more about productivity than I will ever know, but let me just say this. What we used to measure in the past, either through the purchaser efficiency index or the cost weighted efficiency index, both of which you are deeply familiar with, was some things but not everything. For example, they do not capture some of the reforms which are beginning to bite now. For example, we are seeing I think quite a big shift in many trusts now, in acute trusts, from in-patient work to out-patient work, things which used to be done in in-patients are now being done in out-patients. Within out-patients we are seeing a big shift too from doctors, consultants, who used to see every patient in an orthopaedic clinic, now towards physiotherapists undertaking quite separate clinics. None of that is captured. What we have a problem with, and this might be helpful for the Committee to know, is that the pace of change in the service is running well ahead of the measures we have. We have to find a better way of capturing activity than these figures. Richard shares this concern too. We have to find a better way of capturing efficiency and productivity than these figures are capable of doing. We are working on that right now. I would not want you to get the idea that somehow because we have moved away from the PEI, which was a perverse way of gathering information about how productive and efficient the National Health Service was, we are discounting all sorts of things which are good things and not counting them as an activity showing that somehow or other the Service is getting less productive. I have a simple test, if you ask most doctors and most nurses and physiotherapists out there whether or not they think their productivity is rising or falling, I suspect most of them would say their productivity is pretty high right now. That is true, they are working extremely hard, harder than ever. There is a big through-put of patients, we have people presenting now with a range of severity of conditions which with an elderly population we are going to have to get used to in the National Health Service. There are some profound doubts about the quality of the data you have in front of you and I have in front of me when I make some of these decisions. Richard might want to say a word or two more.
  (Mr Douglas) If I can pick up on a couple of those points. I do not accept, from the people I talk to in the NHS, that productivity is going down in the NHS. There are two main problems we have there, one the Secretary of State has mentioned is the type of activities we count. If we shift and change the things we do then we will appear as though we are less efficient. If we move to nurse-led clinics and phsysiotherapist-led clinics we will look more inefficient, which we have to change the data collection for that. The second point is there is no quality aspect to these figures at all, all we are doing is measuring a very, very simple unit cost. If we invest money in drugs to improve survival rates for cancer we will appear less efficient on this measure and if we invest money in ward budgets, in cleaning for hospitals, in hospital food we will look as though we are less efficient here. These are all the sort of things we are trying to do for government and patient safety agenda, but none of that is delivering activity but it is delivering improvement in the overall quality of care and overall patient environment. We have to change two things, we have to pick up activity better and we have to identify the extent to which we are investing quality here as well as just increasing throughput. On your first point around how we are revising targets to reflect this, what we tried to move towards this year is not to target trusts on the basis of who is the cheapest in all this. In setting efficiency targets what we set is who are the most efficient trusts within the top performing overall. We have looked at the overall performance indicators and said within the top 25 per cent of those we have to look at who appears to be the most efficient using reference costs work we have done and then say we will set those as the benchmark, so they are both lower costs and achieving quality and other targets. That is the way we tried to set the efficiency targets for this year. We still need to progress that further. There is still work to do but we are moving that way.

Dr Taylor

  63. I am sure, Secretary of State, you share the concerns about the Whipps Cross Inquiry, this recently highlighted one of grossest of inefficiencies of the NHS, that is the use of agency nurses, quoting from it, "An average of 13.75 whole time equivalent agency nurses every week in August. Four to five agency nurses per shift, many of whom were not actually A&E trained". If you look back even at some of the scandals I reported in Worcestershire those occurred when agency nurses have been on. If you look back at the costs in 1995 to 1996 £130 million went on agency nurses and in 1999 to 2000 £360 million went on the cost of agency nurses. How do you plan to reduce that when you recognise that an agency nurse has fixed hours, much less responsibility for a ward and higher pay?
  (Mr Milburn) There is a very simple thing that we need to achieve, 1) we need to set that as our objective, which we have. It is perfectly clear in terms of continuity of care and quality of care that it is far more preferable to have a lower reliance on agency nurses than the NHS has right now and 2) to change the mind set. When I discuss this, particularly with colleagues in London, where there is a higher rate of agency workers than anywhere else in the country, even in Worcestershire, I find it slightly bizarre because what the trusts say to me are, "basically the agencies have us over a barrel". Wrong, the National Health Service has the agencies over a barrel, for the very simple reason, the National Health Service is the purchaser, we have the money. What we have to get is St Thomas' and Guys working collaboratively with trusts in Jim's area and trusts in other parts of the country so that they come together and use their purchasing muscle to get the right sort of deal in the first place. The second thing we have to do is look at why it is so attractive for nurses to go with an agency. Part of the reason, frankly, is around pay and part of the reason is around flexibility of working hours. As you are probably aware, one of the things we recently introduced as a new part of the NHS is called NHS Professionals, which is, if you like, the National Health Service running its own nursing agency. It is phenomenally successful. In some parts of the country we are getting huge sign up from nurses, paying decent rates but looking after their career prospects too. The one thing the agencies cannot do is give the nurses continuing professional development, they cannot make sure that childcare is there for them when they need it. We can do that in the NHS. The starting point has to be for local NHS employers to have some courage and come together to collaborate as NHS professionals with means of doing so to ensure that. Of course there will always be a reliance, as we have, within individual NHS trusts on bank nurses, there will always be that, whether or not there is a shortage of nurses for a whole variety of reasons, through sickness, family reasons, and so on. We have to have some sort of safety net that is outside the normal continuity arrangements. I profoundly think based on the early work that NHS Professionals have been able to take we can be pretty successful here. Providing, this goes back to what I said earlier, we can recognise in the labour market where there are shortages the person selling their labour is in poll position rather than the person buying their labour, in this case the National Health Service. Providing we recognise that we can make some changes. That means that the NHS has to get much cuter at how it employs people. It means child care arrangements, it means annualised hours so that nurses can begin to choose when it is most convenient and appropriate for them to work rather than being set a set shift. What I find, as I travel around London particularly, is that when I go to neighbouring trusts, I went to a trust in Lewisham, as Mr Dowd will remember, and one of the things that really struck me there is that certainly the morale of the ward sisters that I spoke to was pretty good. It was good for one reason, it was good because they really had a trust that bothered about them, that took their interests into account. As far as both the male and female ward sisters were concerned it provided really quite outstanding child care facilities. If that can happen—I know it is a simple proposition that Dr Naysmith talked about - in Lewisham what we have to do is learn the lessons from that. Back to the point that Sandra made earlier, what we have to do is have the means of spreading that sort of good practice around the system. It is basic, simple and good employment practice.

  64. I do hope you can do that extremely quickly because at the moment the agencies do have nurse managers over a barrel, faced with an emergency situation. Many hospitals have banks which work really well but they still need agencies to top it up. If you can force through a much wider arrangement with bank nurses that would be excellent.
  (Mr Milburn) I can send you details round NHS Professionals and how successful they are. I am very happy for people to see that, it is a very, very interesting example of how the NHS gets it act together and is prepared to have some courage and it can get on and make some profound changes in the interests of not just patients but staff.

Dr Naysmith

  65. It is interesting a few moments ago, Secretary of State, we were discussing efficiency and productivity in the National Health Service and depending on what you measure you can get different results up or down. That brings us to a point we want to talk about, key targets for trusts, and so on. You know that clearly there it depends on what you measure whether you get a good result or a bad result. Before we start, you dropped the idea of using a traffic light indicator system in favour of the staring system, can you explain what the difference is between a traffic light system and the staring, apart from the fact that one has three levels and one has four?
  (Mr Milburn) There is not a material difference. We listened to what the NHS had to say to us, I think the NHS Confederation made quite strong representations to us, they felt that the traffic light system was more pejorative than the staring system so we went with that. Materially there is not a huge difference, presentationally there is.

  66. Okay. Do you think a patient would be justified in refusing to be treated in a hospital which has received no stars at all?
  (Mr Milburn) I do not. I think it is very important, not withstanding Mr Amess's concerns about this, it is very important to take some perspective and get some proportionality into this debate round star ratings. As I said at the time we did the star ratings we accepted that the data we used in the system was far from perfect, it is the first time we have done it. In a no star trust or in a one star trust there can be perfectly good, and sometimes outstanding facilities, in certain parts of the hospital or the organisation. It is not that people are not working very hard and the staff are not doing a good job, they are, but what the star ratings show is that there are real problems which are not about how hard the staff are working but which are about levels of performance management and organisation. You know it and I know it that when you go around the National Health Service, or if you go around any large organisation, what makes or breaks the organisation is the capacity of the organisation and the capability of the management. It is about time we recognised that. The reason I have done that, and incidentally I will continue to do it and do even more of it, is because we have started with the hospitals, next year we will go on to extend that to community health trusts and to primary care trusts, so the Chairman should feel absolutely assured that the PCTs are going to be as actively monitored in as visible a way as any acute hospital is as from spring next year. What we have never done in the National Health Service under successive governments is a very simple thing, and that is to recognise there are differences in performance. Of course, how you measure makes a material difference and of course hospitals and PCTs are complex organisations, but there are some pretty basic things which patients want to know about their level of care. They want to know their hospital is clean, that the waiting lists are not all that long, that if you have cancer you will be seen relatively quickly. These are pretty basic things. We have measured that for the first time and provided that information to the NHS for the first time. I said this at the time we launched it but just for completeness, two months before we drew up the star ratings, before I had any information available to me, I made a secret list and tried to guess which hospitals would come at the bottom. I got ten right out of twelve. Why did I get ten right out of twelve? Because each and every week Epsom and the St Helier Trust, the Brighton Trust, the JR in Oxford and others—where people are working really hard but there are some profound management and organisational problems—have come across my desk. I just do not think it is fair that in the end I know that information, the people in the service know that information and the BBC know that information because they went to film at the JR even before they knew what the results of the star ratings were, the only people who did not know hitherto were the public. The National Health Service is a public service, it belongs to the public.

  67. I accept that but some of the information you talk about was made public. I hate to mention the community health trusts but some of that information was available and in summary was made available to the patients.
  (Mr Milburn) Let me deal with that point because it has never ever been made available in this sort of way.

  68. I agree with that.
  (Mr Milburn) We have never learnt to look across the piece at what a hospital does on its main basic indicators. That information might have been available in some parts of the country, it might have been available in some parts of the NHS, but it certainly has not been made available to the public. The starting point, to get back to Sandra Gidley's point, is if we are going to get more choice into the system, which I profoundly think we need to do, you have to have decent information so the patient and the GP can make the appropriate decisions.

  69. I am 100 per cent behind that and am in favour of information but this is rather limited information in a number of areas, which you yourself admitted a few minutes ago. What real use is it to the patients at the moment?
  (Mr Milburn) From the patients' point of view, it will provide them with certain information about standards in the local hospital and in neighbouring hospitals, and they can always exercise the right with their GP to demand they go elsewhere if that is what they want to do. But I think the more important thing which the star ratings actually do is empower change within the National Health Service. In parts of America for very many years, in parts of New York State for example, a patient needing a heart operation has been able to go into the local library and look at which heart surgeons get best outcomes. If you are going to have a heart operation, probably that is something you want to think about, as you know. By and large what has happened in terms of changes in behaviour in America, and I suspect here too, is that patients have not actually exercised a huge degree of choice based on that information. Where behavioural change has come is in the organisations which came down the league table rather than at the top. It is one of the very important things to recognise about public services, people are really motivated to be better. People do not come into the NHS, whether managers or clinicians, or cleaners or porters for that matter, to make a mint, they come in to improve care. That is what they are really motivated by. It is important that they are faced with some of the lapses in quality and some of the problems which exist in their organisations. My sense is that what will happen in those organisations which have not done well this time round is that there will be real effort to get better for next time round, and that will make a big difference to the patient.

  70. There is a lot of data behind the summary tables produced and published, do you intend to make that data public?
  (Mr Milburn) I think we have put it on the website.
  (Mr McKay) Much of it is available on the website.[1]

  (Mr Milburn) At the time we published the summary data we put it on the Department of Health's website, so there is quite a lot of background information. If it is helpful, there is no problem about you having that information if you would find it helpful.

  Chairman: Right.

Siobhain McDonagh

  71. Most of the elderly and very vulnerable of my constituents go to St Helier Hospital. What they have felt about the new star ratings is that at last somebody had listened and acknowledged the problems. What I felt as the local MP is that somebody had finally acknowledged the problems because how ever often we went to the hospital, how ever often we said to the chief executive, "This hospital is dirty", you could never get it through; nobody listened. I hold the reverse of your feeling about it because for my constituents somebody knows and somebody cares and somebody is saying that the experiences they have had are right and they do exist. Nobody up to date is refusing to go there but what they hope is that this will be the beginning of real improvement. Up until that point they felt they were being ignored and nothing was ever going to get better there. You experience a lot more humility at that hospital than you certainly used to. For St Helier the problem was two-fold. We got a no star rating and then we had the CHI report which really slammed it and that, in its own way, is actually more useful in terms of detailed work. I know you have amended the star ratings because of CHI reports, does that mean you have more confidence in the CHI reports and how are you going to link the two together?
  (Mr Milburn) Just to deal with your first point, let me acknowledge from the outset that this has been a pretty painful process to have to go through. It must have been pretty painful for the people working in Epsom and St Helier but it is the right thing to do. Unless we get through the pain barrier, we will not get improvements. I think you are right, and I think it is true too for staff. People have said to me, as Mr Amess did, by publishing information which showed some hospitals were doing less well than others, it would have a detrimental effect on staff morale. I think what has the most detrimental effect on staff morale is for staff to feel that nobody is dealing with the problems they have to deal with day in, day out. Why should people have to work hard inside a system which cries out for change and improvements in organisation and sometimes in management too? I think it is the right thing to do and I think that what you will see as a consequence of the star ratings is improvements rather than a deterioration in service. Secondly, it is very important that we break the log-jam in the NHS. We have to stop treating the NHS as if it was purely a monolith because as we all know, and you recognise yourself, services differ and there is variation in performance, and what we have to get is the incentive regime in the National Health Service differentiated too. If people are doing well, in most organisations they would get a reward. If people are doing badly, something will happen as a consequence. In the NHS it has been the other way round until now. From my point of view, sitting at the top of this huge organisation, I take a great deal of comfort from the fact that if there are three star organisations doing well I do not have to worry so much about them. But if there are no star organisations and one star organisations which are doing less well, I do have to worry about them and they need extra help, extra support, sometimes some changes in organisation to get better. The organisations which did well should have more freedom and should be able to do a simple thing, if the good are good we should give them the freedom to get better. That should be as true, in my view, for schools as it is for hospitals. That is where we need to get to. On the third point you make about the relationship with the Commission for Health Improvement, I want to get to a position where over time, and I hope we can begin this next year, what we give in terms of measurements and what the Commission for Health Improvement does in terms of measurements gel together, so we have one set of reporting in the National Health Service. I know people are concerned about the performance management arrangements, the inspections which are taking place, and we need to rationalise that, so we are producing one set of performance information based on what CHI do and based on our performance management assessment rather than two disparate sets of information. The other thing we need to do is to make sure we get in as much focus on clinical outcomes as possible in the future. That is a raw and tentative science but we need to get better at it. As I have said to the Chairman in previous hearings, my view about this sort of thing is that we will only get better in terms of publication of clinical outcomes once we start having the guts to publish clinical outcomes. The science will lag behind the publication. I think we have made a start with that, we need to do more next year and the years that follow on to give a better and more rounded picture of how our NHS is doing.

  Chairman: I know you needed to be away by 6 o' clock I have two colleagues who want to ask very brief questions

Dr Taylor

  72. One of the concerns about the non-clinical indicators is put into a very few words in the Whipps Cross Inquiry, "The imperative to avoid a 12 hour wait for a bed is an overriding driver behind bed management to the detriment of good clinical care".
  (Mr Milburn) We have to make sure that people are not waiting too long for a bed. I hope that every clinician, every politician and every member of the public share that view.

  73. What this is getting at, Secretary of State, is that people who have been waiting eleven and a half hours are seen, perhaps, before people who have been waiting a shorter time who may be more urgent?
  (Mr Milburn) I would much prefer if people did not wait eleven and a half hours. As you know in the NHS plan we have targets to get the waiting times down. People should not be waiting 12 hours on a trolley, people used to wait for 24 hours and 36 hours, so that is moving in the right direction. The only way you can do this, with respect, is you that you cannot move from a position where some people are waiting 24 hours on a trolley and get back down in one swoop to four hours. We do have a stage process here and it is important that we get rid of 12 hour waits and then in time we get rid of 10 and eight, and so on, so that people are not waiting too long.

  Chairman: What I think may be the final question.

Mr Amess

  74. I am going to write to you on the hotel star rating because I cannot speak publicly about why morale is so low but it is obvious that we have staff working at other hospitals who have been rated differently. It simply is not the case that we rate one star, I do not want to talk about it publicly. Last year the Audit Commission carried out an investigation into disability equipment. Their report, this is about audiology services, "Nowhere is the cost versus quality debating public services provision better exemplified than in the provision of hearing aids. Millions of people could benefit from reduced waiting times and the provision of more modern hearing aids". On the basis of such strong support for increased investment in audiology services why can the Government not make a decision to roll out digital hearing aids throughout the whole of the National Health Service and ensure that millions of hard of hearing people could hear better, particularly this wonderful story that the Government has to tell us about the management of our National Health Service?
  (Jacqui Smith) Because I think it is right that we evaluate the 20 pilot trusts that we have already put in place, which have been operating, I think, less than a year. That we ensure that we have not just in place the capital necessary in order to deliver digital hearing aids but we also consider some of the issues around the staff that are going to be necessary, around the sort of processes that we want in order to make sure that our audiology services in general are effective. That is the reason why we set up the pilots. We need to look very carefully at those in order to determine what the best way is to develop the services. We set up those pilots because we recognise some of the arguments. It is right that we consider the implications and what will be necessary if we were to be able to go further than we have done.

  Mr Amess: You are going to wait and see.

Jim Dowd

  75. To round off the star rating system, Lewisham, as you know, managed to get two stars and their ambition is to achieve a third one quite simply and they are keen to do that. Sometimes when you set systems on performance criteria what you develop is an expertise in meeting the measurements rather than improving the performance. There is no mention, for example, of delayed discharges, even though I fully understand it is not wholly within the individual institutions' competence to deal with that. Are you satisfied that this is broad enough? Will you be refining the criteria in time?
  (Mr Milburn) Absolutely. We were pretty candid about this at the time and I think I said in the press release that this was far from perfect, which is unusual for any Government press release to acknowledge. I thought it wiser to do that really. It will be refined and it will get better. Last week I was in Washington, as you know, and while I was there, apart from dealing with some of the obvious issues, I was at an international conference on quality of care and how we make improvements, how we manage what information we get out, what the combination of incentives and inspection is that you need across the world. The representatives and health ministers were from America, Canada, Mexico, New Zealand, Australia and elsewhere, and one of the striking things I found is that amazingly enough they are looking to us and what we are doing because we are at the leading edge of this internationally in terms of how you measure performance and how you use the measurement of performance to lead improvements in performance. We need to get better at it, we need to integrate the Commission for Health Improvement, but I think the star ratings we have produced thus far are a prime step in the right direction and mark quite a decisive break from the past where we have not differentiated performance in a way which is clear enough, either to people working in the service or most importantly for the people who use it.

  Chairman: Secretary of State, I thank you and your colleagues for your attendance today. We look forward to seeing you again this time next week.

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