Examination of Witnesses (Questions 400-419)
TUESDAY 4 MARCH 2003
RT HON
ALAN MILBURN
MP AND MR
ANDY MCKEON
400. Well, you know as well as I do that if
a Chancellor of the Exchequer is not desperately keen on a policy,
he can strangle it at birth through the provision of public monies
from the Treasury and if one listens to some of the Chancellor
of the Exchequer's acolytes and some of his advisers, one gets
the impression that the Chancellor of the Exchequer's enthusiasm
for the benefits of this policy is not as marked as yours.
(Mr Milburn) Have you taken evidence from them?
401. No, but we do not need to because, as we
know from this Government, it is done through leaks and spin and
briefings to journalists.
(Mr Milburn) Well, now you are making a party-political
point which might tempt me to make one, Simon, and you would not
like that, so I suggest that you do not go down that road. Seriously,
let me just say on this that what you say just is not the case
at all. Everybody knows what the process of policy-making in government
is. You have been in government, and colleagues here are closely
acquainted with government and how it works. It is right that
we have discussions and debate and, listen, I have been a Treasury
Minister and I understand how important it is that the Treasury
has an input into decision-making. Indeed my view when I was Chief
Secretary, and I return that view today, is that unless you have
a strong Treasury, you have poor policy. That is my view and it
always has been, and we have got an agreed policy. This is the
policy of the Government and I am very pleased with it because
it is exactly what I have always wanted and what I want, which
is to ensure that there is equity in the system, that there are
national standards that apply across the piece so that cancer
patients in one part of the country can be assured that they are
going to get the sort of treatment that cancer patients in another
part of the country will get, not according to their ability to
pay or on where they happen to live, but according to their right
to treatment. I also know that if you are going to get improvement
happening in any organisation, and this is even more true in public
services where we rely upon the skill, the expertise, the know-how
and the commitment of staff to make changes happen, then what
you have got to do is to find a means of better engaging both
with staff and representatives of the local community. We talk
about a National Health Service and of course that is what we
want to have with national standards and fairness in the system
and appropriate means of inspection, but in the end these services
are delivered locally and unless we have the local community and
local members of staff better involved with the decision-making
process, we are not going to get, in my view, services that are
attuned to the needs of the local community and I think that would
be a fundamental mistake and I think actually in some ways it
has been for very many decades.
402. Let me pick up on local community because
it is an important point before we get back on to your European
experiences. As you will know, given your familiarity with Newcastle,
Sir Jeremy Beecham, who is the Labour Leader of the LGA, he cannot
see the benefits and he has described your proposals as unworkable
and he is fearful that they will cause fragmentation between health
and social care. Do you think his fears are justified?
(Mr Milburn) Well, what Jeremy wants is he wants the
local councils to run the local hospitals. Now, that may be what
others want. It has been David's position, I think, for very many
years, but it is not what I want. I think it would be very good
if local councils concentrated on running local services and making
sure that those local services provide the appropriate standards
to patients, the people that they serve. The NHS has got a slightly
different job of work to do. Now, how do we square the circle?
We square the circle because he makes one good point at least,
which is that health and social services need to work more consistently
together because otherwise—
403. But he thinks it will fragment their working
together.
(Mr Milburn) Well, I think he is wrong about that.
I think he is wrong to think that local authorities are the best-placed
organisation to run local hospitals. Hackney Council has a reputation.
It may be deserved or undeserved. The Homerton Hospital in Hackney
Council's area has, if I can put it like this, a slightly different
reputation. Homerton Hospital is a three-star hospital, it is
a very good hospital and I have been there on several occasions,
and I think it would be very, very good if the local people, as
distinct from the local Council, got an opportunity to have a
greater say over how services were provided, so that is why I
think Jeremy is wrong. Where he is right is that unless we can
get the Health Service and social services working more co-operatively
together, then we will have a problem. It will not be us, but
actually it will be the most vulnerable people in the community,
the elderly people, people with a mental health problem, people
with a disability who overwhelmingly rely not just on the Health
Service, but on social services and, for that matter, housing
services too. However, there are different ways that we can achieve
that. For example, the duty of partnership, although it is controversial,
the Delayed Discharge Bill that is currently going through the
House, I think is a means of ensuring that the Health Service
and social services each fulfil their responsibilities to the
individual patient. So I think Jeremy is wrong to propose that
the only way of getting the NHS and local government services
to work more closely together is by the one taking over the other.
404. It does seem a little to be that you are
a bit like the young soldier marching on the parade ground whose
mother thinks that all the other soldiers are out of step with
him rather than the other way around because you seem to have
the significant part of your Party against you, you have got parts
of local government against you and, despite what you say, I think
most journalists would believe that you have the Chancellor against
you as well, but we will see what happens and move on to Europe.
(Mr Milburn) I think since you have made a point,
I should be allowed to answer.
405. No, we will move on now.
(Mr Milburn) Chairman, I will be as brief as Simon
was. I am Secretary of State for Health because I have certain
responsibilities to discharge and my responsibilities are to make
sure that we get the right policies for the National Health Service
and for the health of the country. I fundamentally believe that
there is a lot of money going into the National Health Service
now and it should have gone in very many years ago, but it did
not for reasons that we need not go into here. We have got the
right level of investment going in and that is important in tackling
the capacity gaps that still exist in the National Health Service
today. There is no doubt, in my view, that when you put resources
in, you get results back, but we have also got an opportunity
now to make sure that the way that healthcare is structured in
our country is appropriate so that we can get the best from that
money. I think unless you get these two things working together,
you will not get the sort of improvement in the services that
both patients and taxpayers want to see and that is why NHS foundation
trusts are an important part, not the whole part, of our policy.
There is an NHS Plan and a Delivering The NHS Plan which sets
out a ream of policies that we need to introduce in order to have
the radical reforms we want to see in the NHS. They are an important
part of that.
406. What quantifiable benefits have schemes
comparable to foundation trusts brought to other European countries?
Given the fundamental differences in capacity between the health
sectors in England and elsewhere in Europe, how applicable is
international experience to the NHS?
(Mr Milburn) Well, I think you could do some learning
from it, is basically the right answer on this, but it is true
that different countries have different healthcare systems for
a variety of historical reasons. As a federalist system of governance,
in Germany, for example, the Lander have control
over many local services and that is reflected in their hospital
structure too and it is true in some of the Scandinavian countries.
There is some interesting experience that I have seen personally
and I have heard from and indeed I have looked at international
evidence about how you get improvement happening in healthcare
systems. For example, as you know, when I visited Madrid a couple
of years ago and went to the Alcorcon Foundation just outside
of the City, that is a foundation hospital of sorts, not precisely
the model that we envisage here. For example, there is no democratic
accountability, so the hospital is run locally and I think the
local mayor and others are represented on the board and so on,
but there is no direct form of accountability. What was very striking
about Alcorcon when I went there was that it was a new hospital,
which obviously had certain advantages, but nevertheless its track
record in terms of service improvement was pretty startling. For
example, its average inpatient stay at the time that I visited,
though it might have changed now, was five and a half nights compared
to a national average of seven nights in comparable mainstream,
public sector, state-run hospitals. Its average waiting time for
an operation was 54 days compared to around 70 days and the interesting
thing that I learned in discussions with the clinicians, mainly
with the doctors, was that although it had a more severe case
mix compared to comparable mainstream, state-run, public sector
hospitals, nonetheless, both its outcomes and its waiting times
were better. Why? Because it had been structured in a particular
way, it had greater autonomy and so on. Now, I do not say that
the evidence suggests that autonomy by itself necessarily gets
you improvement. It is the combination of standards in place nationally,
autonomy at a local level, deciding how best to make change happen,
combined with, which is what we are trying to do, giving greater
choices for patients so that there is pressure in the system and,
finally, making sure that the money flows in the right way. Certainly
when we held our event, I think, in May of last year when we invited
colleagues from Spain, Sweden and, I think, from Denmark over
to talk to us about their experience with more autonomous, public
service hospitals, the evidence that they gave us, which was pretty
graphic in terms of their improvement and their comparative performance,
they attributed to the combination of these four factors, the
national standards, the autonomy, the choice for patients and
getting the money flowing in the right way. Now, if you get these
four things, and I do not say it makes a perfect system, but it
makes the likelihood of performance improvement that much greater.
Dr Taylor
407. Moving on, a lot of us are concerned about
the reliability of the star-rating system and you yourself have
said this morning, and I think I get you right, that star ratings
could be right, wrong or indifferent. Does that mean that you
are using them as a rather arbitrary method of selection?
(Mr Milburn) I think I used the word "if"
before that, Chairman.
408. Say it again please. You put in the word
"if", did you say?
(Mr Milburn) Yes, I think so. I think I said to this
Committee before, so if I am repeating myself, I am sorry, but
I think, to be candid about it, the star-rating system is not
perfect, but it is getting better. I think I have said to this
Committee on a previous occasion that I think that it will only
get better and outcome measures in particular will only get better
when the Service and the Department both realise that there is
significance invested in them. I think you have to get the sort
of cart and the horse the right way around, so it is only, in
my view, when you start to publish information that people then
say, "Oh well, hold on a minute. If you are publishing it,
that's fair enough, but let's make sure we get the information
absolutely right", because otherwise, and I think there has
been this culture, to be blunt about it, in the National Health
Service and we discussed this in relation to local communities,
but I think there has also been a culture sometimes of secrecy
within the NHS which for a public service just cannot be right.
You find this in all of these cases where we have had terrible
problems, whether it is at Bristol or in other places, there has
been a culture of secrecy and the NHS cannot operate on that basis
because it is a public service and it has got to be accountable
to the public. All that star ratings do is make transparent what
I think most people know, which is that there is a variation in
performance across the Health Service. Now, there might be different
reasons for that, but it is very easy sometimes to shelter behind
excuses rather than real reasons and what the star-rating system
does is expose all of that and it says to the public and crucially
to members of staff, "Look, this is how you rate according
to a uniform, universal system of assessment. This is how we think
you rate. You know that you want to improve your services",
because that is what everybody working in the Health Service wants
to do. Nobody comes to work to provide a poor service. Everybody
comes to work to try to improve their services and what the star
ratings do is give an opportunity for them to do that and also
give us some information as to how best we can help make improvement
happen.
409. I think one of the great weaknesses is
that they concentrate on the key targets and the other 28 performance
indicators are rather pushed into the background. Now, I know
you do not like us quoting the papers at you, but The Observer
on Sunday did say that the trusts that have applied are going
to be assessed in six key areas. The first one was their responsiveness
to patients. Now, the patient focus is the bit of the star ratings
that really concerns me because there are six questions in the
patient focus and if you look at the ones that have applied for
foundation status, four of those score extraordinarily badly on
the patient focus. Some of them do extremely well. Can we take
it that those sort of measures will be considered when you are
deciding which to shortlist and which to go ahead with consultation
for?
(Mr Milburn) I think what would be difficult and probably
and invidious is to sort of set up two parallel sets of assessment.
We have got one set of assessment now and incidentally, as you
know, in future it is not the Department of Health that is going
to be doing the formal assessment, but it is going to be the Commission
for Health Improvement and in time, providing of course Parliament
agrees to the legislation, the Commission for Healthcare Audit
and Inspection, the successor, so an even more independent body
will be doing this, so we have got a star-rating system that looks
at some of this. Now, in broad outline, the thrust of what you
are saying may well be right, that we have got to improve the
measures, and that is what we are trying to do and we are working
with CHI to improve the measures. We have a particular problem,
as you know, with regard to outcome measures because in the end
what most people care about, and they may well be very interested
in how many doctors and how many nurses the hospital is employing
and how many extra they have recruited, but what they really care
about is the quality of the treatment they are getting, but traditionally
the National Health Service really has not invested anything in
getting appropriate outcome measures. Now, it is relatively straightforward,
but not easy, to get an outcome measure for heart surgery, as
you know, because, by and large, after heart surgery the patients
survive or they do not, so we can look at mortality and we can
risk-adjust mortality rates according to the severity of case,
but it is more difficult to assess how well diabetes services
are providing services according to outcomes or dermatology services.
All I would say about this is that we will not get that happening,
in my view, until you actually have the courage to start publishing
the information and that is why I think although the star-rating
system is not perfect, it provides a means of assessing in an
open and transparent way what most people know about the Health
Service. What I find is that when these star ratings are published,
of course there will be the occasional local howl of protest,
but, by and large, it confirms what most people think about the
state of their local health service. That is what it does. Most
people know whether they have got a really good health service
or whether they have not, but that cannot be information that
is for a privileged few, for us who are on the inside track, but
it has got to be available to the public and, equally importantly
in my view, it has got to be made available to the staff because
otherwise they have no benchmarks or comparisons they can make
about how well they are doing in relation to others.
410. I have a question about specialist trusts
and star ratings. I note that one two-star specialist trust has
crept through, which is the Royal National Hospital for Rheumatic
Diseases. Now, was it thrown open to all two-star specialists
because this one obviously crept through because it does not do
any surgery, so it could not get into the key targets? Now, was
foundation status thrown open to all two-star trusts that do not
do the full range of things which mean that they cannot acquire
the right scores in the key targets?
(Mr McKeon) There was an error in the calculation
of the figures for that hospital and when that was identified
and put right, it was regraded to three star.
(Mr Milburn) I think we subsequently published a correction
to that.
411. So it was not because it does not do surgery?
(Mr Milburn) No.
(Mr McKeon) No, it was an error in the original calculation.
(Mr Milburn) Just on your two-star point, obviously
there are the 32 here that I have mentioned to the Committee and
I will circulate all the details of those to you in due course,
if that is okay, the 32 who have expressed an interest. What I
am also intending to do is to write to existing two-star NHS trusts
this week and say to them that if they too want to begin working
to NHS foundation trust status, then it is perfectly reasonable
that they should do that. Now, clearly in order to get beyond
expressions of interest and to get to the first wave of applicants,
those existing two-star trusts in your list of star ratings will
need to become three star in the summer star ratings, but I think
it is right that we give existing two-star trusts that opportunity
and due notice now if our policy is as it is, to encourage all
hospitals to exercise the opportunities which will be available
to them.
412. You did make another slightly sweeping
statement, that most people in an area know whether their hospital
is good or bad. Is there actual evidence for that or is it hearsay?
(Mr Milburn) We have not sort of polled everywhere,
but what I have been very struck by really are two things when
we published the star ratings, first of all, that, by and large,
in the local community, reflected often in what local Members
of Parliament say incidentally and in the local hospital, there
have been no great surprises, to tell you the truth. Secondly,
where a hospital has got a three-star rating, that has given staff
an enormous boost and where there has been a zero-star rating,
staff have not got an enormous boost, to be candid with you, and
have felt pretty down, but overwhelmingly what they have done
is rolled up their sleeves with their local managers, and sometimes
we have had to replace the management and we will continue to
do that where we think there is a problem, and they have got on
and been determined to prove that the hospital is better than
the star rating seems to concede that it is, and I think that
is in large part the reason why three-quarters of the zero-star
trusts that we zero-star rated the first time around are now either
one-star or two-star hospitals. I think, in other words, it is
beginning to have quite a motivational impact on performance improvement
in the NHS.
413. What happens if a foundation trust hospital
falls below the three-star standard?
(Mr Milburn) Well, then the independent regulator
would need to take that into account. As you are aware from the
guide, it is our intention to give the independent regulator various
powers of intervention, so it may well be that if, for example,
and one's expectation is that this will not happen since these
are hospitals that are performing well, but obviously things can
change, that if they drop down when they are star-rated, the independent
regulator will want to take that into account and there might
be a variety of things that he or she would want to do. In
extremis, if, for example, the hospital has become very poor
and is no longer capable of providing services according to the
licence conditions under which it is being regulated, the independent
regulator in extremis will have the right to withdraw foundation
trust status.
414. Will he really be independent?
(Mr Milburn) Yes, absolutely. For example, I will
have no power of direction over the independent regulator.
Sandra Gidley
415. Is it not more likely though that you are
hinting because there are three hospital trusts which went down
from a three-star rating in 2000-01 to a one-star rating the following
year? Now, either that is a problem with the ratings or you have
a problem there in how you choose the hospitals.
(Mr Milburn) That may well happen and that is why
the independent regulator has got to take that into account. Again
I think we should not sort of establish a hard-and-fast rule that
says, for example, that if in one year when, for example, you
might have a major reconfiguration going on in the local area,
or you might have new services coming in, whatever, in that one
year if it moves from three to two, at that stage automatically
they lose foundation trust status as I do not think that would
be a good rule to establish. I think it is right that the independent
regulator has discretionary powers to decide what is necessary
and, remember, he or she will be under an obligation to uphold
the licence conditions under which the NHS foundation trust is
operating. Now, as I say, it has also got to be right that there
is a series of graduated powers that the independent regulator
will have. For example, he or she could have the power to do simple
things. They could have the right to write publicly and overtly
to the NHS foundation trust expressing concern and asking for
an action plan to improve performance. They could decide that
various special measures need to be put in place. They could invite
an external organisation to come in and help turn round performance
or in extremis, if there were lamentable governance failures,
for example, if there were corporate governance failures, the
independent regulator would have the right, for example, to dismiss
the management team or part of the management team. Therefore,
I think it is right to give the regulator powers of discretion,
but with the very real expectation that those powers of discretion
are exercised appropriately because, otherwise, we will be back
into precisely the sort of heavy-handed regulation that very often
people in the Health Service complain about.
Dr Naysmith
416. I really want to ask you a little bit about
socially-owned organisations. We had some very good evidence last
week from the Chief Executive of Greenwich Leisure, but I will
just put that on the side for the moment and come back to that.
First of all, I would just like to pick up something you said
about foreign hospitals and foreign experience. When we were in
Sweden, we met informally, though we were not taking evidence
on the subject, two of the directors of two of these foundation
hospitals which are said to be okay. One of them was very enthusiastic
about what was going on in his hospital, but other one was not
and he thought it was a bit of a disaster and in fact was thinking
about moving out of that area altogether. You mentioned the Spanish
experience particularly, a Spanish foundation hospital, and you
thought they were having some information which enabled you to
judge that the performance was better. Is it possible that we
could get access to that information and particularly whether
or not the Spanish hospitals that were performing better were
in fact the ones that have been hand-picked because they were
performing better and then compared with the Spanish average as
it would be good to get that information?
(Mr Milburn) We can do that and I have got information
on another of the foundation hospitals, although this one is constituted
differently again from the Alcorcon one outside of Madrid. This
is one in Valencia which again has got a very good track record
of performance, shorter waiting times, lower average length of
stay, greater efficiency, average costs per annum—
417. It is important what they are being compared
with.
(Mr Milburn) Well, actually in this case they are
comparing it with public hospitals in the rest of the Valencia
province.
418. But if they have been selected already
because they were state hospitals, it would not be—
(Mr Milburn) I understand that, but if it is helpful
I can let the Committee have that.
419. The other thing was about Greenwich Leisure
and we were very impressed, I think, by Mark Sesnan who was obviously
a very punchy, up-front individual. He was very careful in what
he said and he was supportive of what the Government's policy
is. He thought it would be a good idea if some of these foundation
trusts were piloted and he did not think it was a good idea to
do what you are suggesting or suggested earlier on. In The
Times report of 21st February, it says that there could be
as many as 50 trusts possibly all at once. What do you think of
that? I know we have touched on this already, but why did you
not run two or three pilots to see if they would work?
(Mr Milburn) I think in a sense I suppose we are in
the sense that the only alternative I can think of to this which,
as I say, some advocate, but I think it certainly carries substantial
risks was that you would do it all in one fell swoop.
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