Examination of Witnesses (Questions 120-139)
THURSDAY 6 FEBRUARY 2003
MS JOAN
ROGERS, MR
NIK PATTEN,
MS MOIRA
BRITTON, MRS
CHRIS WILLIS,
MR KEN
JARROLD CBE, MR
DAVID JACKSON,
DR IAN
RUTTER OBE AND
MR PETER
DIXON
Dr Taylor
120. Do you think there should be more freedoms
to become entrepreneurs? What sort of other freedoms might you
look for?
(Mr Jarrold) The key decision for all of this is the
balance between safeguards and freedom. It is very important to
provide enough freedoms to incentivise people, but it is very
important to provide the balance of safeguards to reassure the
public. I personally believe—I must not speak for my colleagues—that
the balance is right. If this policy proceeds and foundation hospitals
demonstrate their success, as I believe they will, then my personal
hope would be that over time the regulator would be able to give
them additional freedoms with the public being unconcerned about
that because they were able to see that many of their concerns
had not turned into reality. At the moment it is very important
for there to be safeguards for the public.
Dr Naysmith
121. One of the things which applies at the
moment is that if a foundation trust develops a venture which
is successful, then they keep the surplus which is generated.
I know the rules are a little bit vague, but that is the kind
of indication. If it fails and they fall into debt, then the local
primary care trust will presumably bail them out. Is that right?
(Mrs Willis) I do not think so.
122. That is a one-way bet is it not for foundation
trusts, they cannot lose on that?
(Mrs Willis) The contracts between primary care trusts
and foundation hospitals will be based on activities and you will
pay for the activity they carry out. They need to be very careful
that they have the revenue stream and we need to be very careful
that we get the activity levels right.
123. That argues very much for close integration
of the PCT and foundation trust in any new developments and ventures.
(Mrs Willis) Absolutely.
(Dr Rutter) It is not a one-way ticket. I was saying
earlier that it is very important for us to work very carefully
in partnership, very carefully together, but it does highlight
much more clearly our individual responsibilities. What has been
happening up until now, despite however many people we send to
Bradford Royal, is that potentially they may have to deal with
those because they have to hit their waiting list targets. Actually,
in this new world we are moving to, we need to be very careful
and very clear ourselves what we are commissioning, to make sure
that we jointly hit the waiting list times together. In terms
of clearly understanding the demand which has been placed upon
secondary care services it is a key part of our role and helping
to shape that demand with secondary care.
124. It has been suggested that this might encourage
inappropriate risk taking by foundation hospitals either way.
You do not think that is a real danger at all. You talk about
balance between safeguards and opportunities. Do you think this
is an opportunity and not something which needs to be guarded
against?
(Dr Rutter) One of the things I think we urgently
need to do as a clinician is move the emphasis away from the beds
and move it into diagnostics. One of the key problems we have
at the moment in the health service is that we have become fixated
on beds. One of the desperate things we need to do is really to
get into the issue of giving people appropriate, high tech diagnostic
services quickly and rapidly in the one-stop shop approach.
Chairman
125. And in primary care presumably.
(Dr Rutter) And in primary care.
126. Which is why I do not understand why we
are putting all this emphasis on the acute sector.
(Dr Rutter) I am not sure that we are. This is about
doing this together in partnership. I do think that the concerns
you have are true, if you do not have very sophisticated, well
developed PCTs. It is imperative to make sure that the PCTs, in
the areas in which these foundation hospitals come to be, are
given the support they need.
Dr Naysmith
127. What about the diagnostic and treatment
centres (DTC)? I know there is probably going to be another name
for them but the diagnostic and treatment centres are really part
of government policy. Will they be funded through foundation trusts?
(Dr Rutter) We are attempting to commission one in
Bradford North. We are commissioning it by identifying the level
and volume of activity which we require. That has now gone out
in the tendering arrangements which are laid down in that particular
system. We are working very closely with David to make sure that
this is an integrated approach across the whole health economy.
128. How does that fit in with the foundation
trust concept? Will your staff go there to do diagnosis?
(Mr Jackson) Certainly that is what we hope and that
is what we are working towards. What we want to avoid in Bradford
is a stand-alone facility which is not related to the rest of
the health economy. We are talking very seriously about having
common record systems, common clinical governance arrangements
and as far as possible common staff. There are very real benefits
to everybody if we can achieve that. You may be underestimating
the extent of the dialogue which goes on all the time now between
acute hospital trusts and primary care trusts. This notion that
a foundation trust will make a profit . . . What is it going to
do with that profit? Unfortunately, we cannot spend it on bonuses
for the chief executive. It gets ploughed straight back into services
and because the income streams come from the primary care trust,
they have to be services which primary care trusts want to buy.
The dialogue is there all the time and I really do not see it
as a danger. Foundation trusts will have to live very closely
with their commissioners. If that link is broken, the foundation
trust is lost.
Chairman
129. So there are no chief executive bonuses
in the foundation trust concept.
(Mr Jackson) It may be in the fine print, but I have
not found it.
Chairman: Can we have that on the record?
Dr Naysmith
130. Services can be funded by the primary care
trust and what the primary care trusts want. Is the danger not
that you might develop services which are wanted by the private
sector for instance?
(Mr Jackson) Partly there would be a restriction on
that.
131. Will there be a restriction on that?
(Mr Jackson) Absolutely; we would have to get the
regulator to agree to that, as I understand the rules. I cannot
see any reason why in Bradford we would want to do that. We are
a NHS institution.
132. I am sorry, I should have directed that
to Mr Dixon, because there is a lot more private practice in the
London area than there is in Bradford, as I understand it.
(Mr Dixon) I am happy to answer it. We have a DTC
up and running within UCLH. The reason why we have managed to
get it up and running is that we have had a lot of support from
the London region and we have worked collaboratively with most
of the PCTs immediately around us who are now starting to commission
from it. Where it becomes difficult is what we are making out
of the London Patient's Choice programme in order to get
it up and running. It is difficult in some respects, because it
does mean that other trusts start getting retentive about their
waiting lists, because they can see their income streams getting
truncated. There is a difficult balance there, but the point about
having to convince your local PCTs that it is the right thing
they want is absolutely correct. If we cannot convince the PCTs
that we work with that they should be sending patients into our
DTC, they are not going to come. It is taking off quite slowly,
partly because of another issue which was raised earlier, that
people do not necessarily want to be treated that much more quickly,
if it is not local. The capacity of DTCs to destabilise in the
new regime is probably quite small. I would welcome more of them,
because the idea of further diagnostics rather than beds is great;
it is a short cut, a new way of working. I think we should be
encouraging these things to get off the ground. Irrespective of
foundations they are a great idea.
(Dr Rutter) The bigger worry is not to make sure that
we have detailed contracts. If we do not have detailed contracts,
the real worry is that you give a whole block of money and you
do not see any reward. The money has gone, you still have people
on the waiting list who need to be treated and you have no money
to spend to get that service delivered anywhere else. The real
key to this is to make sure that there is a requirement, which
is in here, that detailed contracts are in place.
Julia Drown
133. I should like to ask the PCTs their view
of the foundation trust keeping the surplus. If your local foundation
trusts do have their costs below reference costs, they will be
making a surplus and be keeping it and they might want to spend
it, for example, on experimenting with new hip prostheses or a
new research project which is about to be looked at by NICE and
you would rather wait for NICE to come out with a decision first.
But if you had that money you would rather spend it on mental
health services or something else. How do you feel about the fact
that one lot of your trusts might keep the surpluses and another
not?
(Mrs Willis) Personally I think it goes back to the
point Ken has made about this balance between incentives and regulation.
We do want some incentives for innovation because we want to maintain
that. Part of it is very sceptical of how much surplus they will
be able to generate, given the limited funding.
134. It depends what their actual costs are
compared with their reference costs.
(Mrs Willis) Yes, but in terms of the capacity there
is, in terms of our ability to work with them. Our approach is
to work together to identify the needs of the population and a
NHS contract would have to meet those needs. The developments
should be consistent with what the local population needs. There
is not usually a big divergence of opinion between primary and
secondary care commissioners about what services are needed, because
they are looking after the same people. It is something we want
to guard against and we would look to have close agreement with
them in terms of discussions about the use of the surplus. It
is as much in their interests that we are all doing our best for
the local people.
(Dr Rutter) The bigger issues is that between 8 and
15 per cent of illness is caused by medicine. The bigger concern
is what you are potentially incentivising is doing more things
which may be inappropriate rather than whether you keep surplus
or not. It seems to me we would have no problem about our trust
keeping a surplus because we would be in a dialogue and we would
see that as part of developing quality and the whole quality agenda.
More of a worry for us, which is again why the contracting arrangements
need to be very clear, is that there are many interventions that
we presently do which are on an evidence base shown not to be
particularly helpful to people, yet we are still performing large
numbers of these interventions throughout the UK. The real challenge,
it seems to me, is how we actually start to switch that off and
put people into different situations, where they get a more appropriate
form of help and support.
Jim Dowd
135. Is not part of the role of the PCT to prevent
foundation hospitals making surpluses? The dynamic surely is that
if they are making surpluses regularly, the PCT should be there
to renegotiate contracts and get more capacity out of that rather
than producing a surplus, given that that is the only source of
income.
(Dr Rutter) The real example which might happen is
that where you have a situation where you could improve your day
case rates, then you may have the opportunity to do more work
as a day case and therefore keep the difference between the longer
length inpatient stay and the day case. In order to make that
system work effectively, we are going to have to put in place
community services to support people in the community. It just
seems to me in our part of the world that we would have that sort
of agreement, partnership; in facilitating the acute hospital
to do more day cases we would have the partnership about how we
supported community care to support that development. It would
not go into the next bizarre fantasy trip which somebody dreamt
of.
Dr Naysmith: May I just say that the answer
to Dr Rutter's question about inappropriate interventions is to
greatly expand NICE and refer a lot of these interventions to
NICE and get reports back and suggestions that that thing should
be removed from the treatment schedule.
Chairman: That is not necessarily the collective
view of the Committee.
Dr Naysmith: No, it is mine.
Dr Taylor
136. A question about bureaucracy. Foundation
trusts are going to have to keep the same sort of records that
ordinary trusts have to do, the same CHAI inspections. They are
also going to have two-yearly licence reviews. Does this mean
there will be more bureaucracy, or do you see chances of less
bureaucracy? Who would like to start?
(Mr Jackson) It all depends on the regulator and we
do not know much about the regulator yet. There is clearly a danger
of jumping from the frying pan into the fire. I have to say that
the current bureaucracy is very, very stifling of initiative in
the NHS. One of the attractions of foundation hospital status
is that it offers the possibility of escaping from some of that
useless, unnecessary, stifling bureaucracy. It will depend on
the detail and the role of the regulator and how the regulator
behaves in practice and we just simply do not know.
137. Any additions?
(Ms Rogers) There is a slight addition. This is why
I think again there should be added value. It is a small thing
and you are going to get some additional bureaucracy possibly
to do with contracts, which is just inevitable, rather like when
we were in the purchaser/provider split years ago. Then we spent
a lot of time with contracts managers gathering the last ten physiotherapy
interventions for the local primary care practice because it mattered,
because that was where you got your money. There is a danger of
doing that. There was a small danger, but I personally think it
is a danger which the public should be cheering about because
if you get away from the big bureaucracy you can spend some money
on small bureaucracy. If you have 370,000 members, as in our case,
and a board of governors and you really try to communicate, you
have to try to service that and there is a legal requirement to
communicate in new ways and that will have a cost. The civil servants
we are working with have calculated the cost roughly. People could
say what a waste of money. My chairman's view is that we should
have been communicating better for years and if we actually spent
three times more on that, it would be a good thing. The contracting
could be a dangerous bureaucracy. The freedom should lessen the
top level awful bureaucracy and the bureaucracy which comes from
servicing the trusts properly is something we shall be cheering
about.
Dr Taylor
138. May I go to the details of the licence
and ask you a bit about that? One of the features of this is the
clinical services the foundation trust must provide to the local
community and that is all the detail we have. Are you phased by
having to keep emergency services, having to keep research and
teaching? How are those sorts of things going to be covered in
the licence? Do you think they should be and will they be?
(Mr Dixon) They are going to have to be for an organisation
like mine. We get something like £80 million a year in non-patient
based income from various levy streams, research, teaching and
all the rest of it. That has to be an important part of the continuing
arrangements for governance as far as we are concerned. I concur
very much with what Mr Jackson said about bureaucracy. We need
to have less of it in terms of useless form filling from the middle
and there is quite a lot of that. I am rather more worried about
the bureaucracy which may be associated with the democratic accountability,
because you can put an awful lot of effort into that, for fairly
limited returns. There are other ways of making sure that we are
accessible and accountable to our localities without trying to
run an electorate in excess of £1 million for us. If we are
going to take it that seriously, it is going to require an enormous
bureaucracy. It either becomes "going through the motions"
or it becomes very complicated. If the regulator himself is regulating
just on the health service issues for organisations like big teaching
hospitals, it is not clear how that impacts on our other roles.
Somehow or other it has to. I think there are dangers in us having
jumped out of the frying pan into the fire, as you rightly suggested.
We just have to make sure that does not happen, because if that
is the way it is going to be, people are not going to do it.
(Mr Jarrold) All that we know about the licence is
what is in the guidance and the licence is clearly designed to
cover a huge range of things: the services to be provided; the
application of clinical and service quality standards; the duty
of partnership with NHS and social care; financial duties and
providing information. It does sound a very comprehensive licence,
but clearly we do not know the detail yet. May I take a slightly
different view from the previous speaker? There is a tendency,
is there not, to describe as bureaucracy things you do not approve
of and to describe as appropriate investment things you do approve
of? I do not think I would describe investment in communication
with the public and with your stakeholders as something bad which
we associate with bureaucracy. Democracy has to be paid for and
I would welcome additional money spent on greater democracy in
the NHS.
139. I could not agree more. Just going back
to emergencies very briefly. Do you think there is any risk that
the emergency services can be squeezed down or squeezed out by
the easier to manage more lucrative elective side?
(Mr Jackson) No.
(Ms Rogers) No.
(Mrs Willis) There is a lot of potential in terms
of the communications with the wider populations we serve, by
working together. Every PCT has to send a patient prospectus to
every household once a year and in being joined up, we can do
that much more effectively.
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