Select Committee on Health Memoranda

3.  NHS Resources and Activity (continued)

3.6  EXPENDITURE ON PRESCRIBING

3.6.1  Could the Department please update the information provided in table 3.6.1 response to last year's questionnaire regarding total NHS expenditure on pharmaceuticals for the past four years, including a breakdown by sector and by generic/branded drugs. [3.6.1]

  1.  Total NHS net expenditure on medicines and listed appliances in England in 2002-03 was £8,355 million. £6,342 million of this total relates to prescriptions dispensed in the community and £2,013 million relates to medicines supplied in a secondary care setting. In 2003-04 the total spent on prescriptions dispensed in the community was £6,946 (please note this is a provisional figure and has yet to be finalised).

  2.  In cash terms, total NHS net expenditure on medicines and listed appliances relating to prescriptions dispensed in the community in England in 2003-04 was £6,799 million (please note this is a provisional figure and has yet to be finalised). Cash figures for HCHS 2004-03 expenditure are not available.

  3.  Historical NHS Drug Bill expenditure figures, broken down by sector, for the financial years 2000-01 to 2003-04 is provided in the table below:

Year (Cash)	Total NHS net expenditure relating to prescriptions dispensed in the community (£m)	Total NHS net expenditure relating to medicines supplied in a secondary care setting (£m)	Total NHS net expenditure on medicines and listed appliances (£m)
2000-01	5,161	N/A	N/A
2001-02	5,552	N/A	N/A
2002-03	6,209	N/A	N/A
2003-04	6,799	N/A	N/A
Year (Resource)	Total NHS net expenditure relating to prescriptions dispensed in the community (£m)	Total NHS net expenditure relating to medicines supplied in a secondary care setting (£m)	Total NHS net expenditure on medicines and listed appliances (£m)
2001-02	5,707	1,723	7,430
2002-03	6,342	2,013	8,355
2003-04	6,946	N/A	N/A

  4.  For prescriptions dispensed in the community in England, a breakdown between branded medicines, generic medicines, dressings and listed appliances for the financial years 1993-94 to 2003-04 is provided in Table 3.6.1. The table shows both the cost (expressed in terms of net ingredient cost) and the volume (number of prescription items) for each category. In 2003-04, branded drugs dispensed represent about 72% of the total net ingredient cost (inc. the cost of dressings and appliances). In 2003-04, the share of prescription items written generically was 76%, and the share of prescription items dispensed generically was 55%.

Table 3.6.1

NUMBER AND NET INGREDIENT COST OF GENERIC AND PROPRIETARY PRESCRIPTION ITEMS DISPENSED IN THE COMMUNITY 1993-94 TO 2003-04

England	Drugs dispensed generically		Drugs dispensed as proprietary		Dressings and Appliance
	NIC	Prescription items	NIC	Prescription items	NIC	Prescription items
Financial Year	(£m)	(m)	(£m)	(m)	(£m)	(m)
1993-94	351	169	2,680	264	190	14
1994-95	402	186	2,881	262	205	14
1995-96	457	201	3,066	259	216	15
1996-97	516	214	3,328	258	228	15
1997-98	651	230	3,574	260	240	15
1998-99	703	240	3,845	261	251	15
1999-2000	1,049	254	4,116	265	270	15
2000-01	1,077	284	4,283	261	291	16
2001-02	1,079	300	4,886	275	316	17
2002-03	1,397	325	5,275	282	346	17
2003-04	1,799	359	5,488	282	378	18

Notes:

1.  Source: PCA, PPA, England. Figures are for prescription items dispensed by chemists and appliance contractors and dispensing doctors including items personally administered in England, for financial years April to March. Note that in addition to prescriptions written by GPs in England, this includes those written by nurses, dentists, hospital doctors, (and, up to March 1994, armed services doctors and dentists) provided they were dispensed in the community. Also included are prescriptions written in Wales, Scotland, Northern Ireland and the Isle of Man but dispensed in England. The data do not cover drugs dispensed in hospital or private prescriptions. Please note data for 2001-02 in the previous HSC was incorrect due to errors in Prescription Cost Analysis (PCA). The data has now been revised

2.  The net ingredient cost (NIC) is the basic cost of a drug. This cost does not take account of discounts, dispensing costs, fees or prescription charge income. All figures are expressed at outturn prices.

3.  Generic dispensing covers drugs that are prescribed and available generically and the dispenser is reimbursed at the Drug Tariff or generic price. It is possible in some circumstances for a branded drug or parallel import to be dispensed against the prescription.

4.  The Department collects data on secondary care prescribing through NHS Trust and Health Authority financial returns. On an annual basis, these high level aggregate returns enable it to monitor the pressure faced by local NHS organisations and the aggregate cost to the NHS as a whole. More detailed information is available to Trusts at a local level from hospital pharmacy IT systems. This is primarily used to monitor local spending on pharmaceuticals together with adherence to local policies aimed at ensuring the cost effective use of medicines.

5.  "Pharmacy in the Future", the modernisation programme for pharmacy services in England made a commitment to implement a self-assessment tool for medicines management in NHS hospitals. The tool was developed by the Office of the Chief Pharmacist, at the Department of Health, with the support of the Regional Directors of Performance Management and Public Health and Regional Pharmaceutical Advisers. It was introduced to NHS Trust hospitals in England through a roll-out programme managed by the Regional Office (RO) network.

6.  The self-assessment tool recognised that achieving clinical and cost-effective medicines use is an organisation-wide issue on which managers, prescribers and pharmacists need to work together. The self-assessment tool provided an opportunity for hospitals to examine their arrangements ahead of the Audit Commission's review of medicines management in Spring 2001.

7.  Regional Offices organised meetings with Trusts in Autumn 2001 to ensure action plans were in place to improve performance.

8.  The Audit Commission published their report "A Spoonful of Sugar" in December 2001. The report complements the Department's medicines management performance framework.

9.  Work is in hand to develop the next stage of the framework. The next wave will focus on implementation of action plans and the greater use of automation and IT. The central aim is to ensure that clinicians, pharmacists and financial planners work more closely together across local health economies.

  3.6.2  Could the Department please update the information provided in response to last year's questionnaire in Table 3.6.4 regarding the likely costs of NICE recommendations for the current financial year? [3.6.2]

Table 3.6.2

ESTIMATED COSTS OF NICE GUIDANCE (As at 13 August 2004)

Title of guidance		Date of issue	Estimated full-year costs (England, £m)	Comment
Completed appraisals
1	Wisdom teeth	March 2000	-4.7
2	Hip replacement	April 2000	-7.6
3	Taxanes for ovarian cancer	May 2000	6.6
4	Coronary artery stents	May 2000	n/a
5	Liquid based cytology	June 2000	n/a
6	Taxanes for breast cancer	June 2000	15.1
7	Proton Pump Inhibitors	July 2000	-42.5
8	Hearing aids	July 2000	n/a
9	Rosiglitazone for Type II Diabetes	August 2000	0	Original estimate was 14.5, but this was in effect superseded by the later estimate for the two glitazones together in the pioglitazone appraisal.
10	Inhaler systems for under 5s	August 2000	n/a
11	Implantable cardioverter defibrillators	September 2000	26	This assumes an offset of £15-20 million to gross costs of £45 million
12	Glycoprotein IIB/IIIA inhibitors	September 2000	28.6
13	Ritalin for ADHD	October 2000	19.8	NICE made separate estimates of the year 1 drug and associated running costs, and of the cost of initial assessment of potentially eligible patients."
14	Ribivirin and interferon alpha for Hepatitis C	October 2000	17.3	£55 million spread over three years to clear the prevalent cases, then reducing to £5 million pa."
15	Zanamivir for influenza	November 2000	6.6
16	Autologous cartilage transplantation in knee joints	December 2000	n/a
17	Laparoscopic surgery for colorectal cancer	January 2001	n/a
18	Laparoscopic surgery for inguinal hernia	December 2000	n/a
19	Donepezil, rivastigmine and glantamine for Alzheimer's	January 2001	39.7	This is the long-run annual cost—NICE expected a slow build-up over several years
20	Riluzole for motor neurone disease	January 2001	4.7
21	Pioglitazone for Type II diabetes	March 2001	-11.3	See comment on rosiglitazone above.
22	Orlistat for obesity	March 2001	9	£6 million for drug costs and £3-4 million for overheads
23	Temozolomide for brain cancer	April 2001	0.9
24	Difficult to heal surgical wounds	April 2001	n/a
25	Gemcitabine for pancreatic cancer	May 2001	1.8
26	4 drugs for non-small cell lung cancer	June 2001	9	These are the short-run costs—NICE comment that take-up may increase in the longer term.
27	Cox II for osteoarthritis and rheumatoid arthritis	July 2001	23.6
28	Topotecan for advanced ovarian cancer	August 2001	6.6
29	Fludarabine for B-cell chronic lymphocytic leukaemia	September 2001	0	Estimated to be broadly cost neutral—no detailed costings given.
30	Taxanes for breast cancer—review	September 2001	0	Earlier guidance unchanged
31	Sibutramine for obesity in adults	October 2001	18.1	Year 3 figure
32	Beta interferon and glatiramer for MS	January 2002	n/a
33	3 drugs for advanced colorectal cancer	March 2002	35.3	NICE estimate £21 million for 1st line and £20 million for 2nd line use. They indicate that costs in 2nd line use could be "considerably lower", but do not give a lower bound. The £33 million is an MPI estimate.
34	Trastuzumab for advanced breast cancer	March 2002	16
35	Etanercept for juvenile arthritis	March 2002	2.8
36	Etanercept and infliximab for rheumatoid arthritis	March 2002	59
37	Rituximab—non-Hodkin's lymphoma	March 2002	1.2	NICE do not attempt a quantative estimate, but information in the guidance suggests a figure of around £1.2 million.
38	Inhaler Systems for children 5-15 years	March 2002	0.9
39	Nicotine replacement therapy and Zyban	March 2002	38.7
40	Infliximab for Crohn's disease	May 2002	1.6	NICE estimated £2.5 million for the first year costs. They expected lower costs in subsequent years but did not quantify.
41	Routine anti-D prophylaxis	May 2002	3.8
42	Human growth hormone in children	May 2002	34.7	Upper bound is NICE estimate, lower bound based on NICE with additional assumption by MPI.
43	Atypical antipsychotics	June 2002	104.8
44	Metal on metal hip resurfacing	June 2002	1.9	NICE say cost is more likely to be at lower end of range.
45	Caelyx for advanced ovarian cancer	July 2002	2.9
46	Surgery for the morbidly obese	July 2002	12.7	This is long-run cost—NICE suggest £1.7 million in year 1.
47	Review of guidance for acute coronary syndromes (Glycoprotein IIb/IIIa inhibitor)	September 2002	0	Replacement of the September 2000 guidance with this revised guidance is not expected to increase costs to the NHS
48	Home verses hospital haemodialysis	September 2002	n/a
49	Ultrasound locating devices for placing central venous catheters	September 2002	0.9	200,000 procedures x "less than £10" per procedure. Number of additional machines @ £7-15K not quantified.
50	Imatinib for chronic myeloid leukaemia	October 2002	13	Estimated increase in the first year is between £11.8 million and £15.8 million for England and Wales.
51	Computerised cognitive behaviour therapy	October 2002	0	Further research recommended.
52	Early thrombolysis treatment for myocardial infarction	October 2002	15.6	Net costs appear to be in the ranged £14-£19 million
53	Long acting insulin analogues for diabetes	December 2002	7.6	Estimate on the high side—based on all potentially eligible patients switching to this treatment—actual costs will be proportionately less depending on uptake
54	Vinorelbine for breast cancer	December 2002	n/a
55	Review of paclitaxel for ovarian cancer	January 2003	0	Unlikely that additional costs to the NHS will result from this review.
56	Tension free vaginal tape	February 2003	n/a	Further research recommended.
57	Insulin pump therapy for diabetes	February 2003	3.8	NICE suggest costs will be at the bottom end of the range
58	Zanamivir (review), amantadine and oseltamivir for influenza	February 2003	0	Cost impact depends on the severity of an outbreak in any given year. No anticipated increase over previous estimated figures—as savings/pressures balance out between the three drugs.
59	Electroconvulsive therapy	April 2003	n/a	Guidance recommends the use of ECT only in certain restricted circumstances.
60	Patient education models for diabetes	April 2003	10.3	160 centres for England each with running costs of £64,500 pa =10.3 million
61	Capecitabine and tegafur uracil for colorectal cancer	May 2003	-11.20	Assumes 3,500 each use capecitabine or tegafur uracil in preference to existing treatment options
62	Capecitabine for breast cancer	May 2003	-1.1	Saving is for combination capecitabine/docetaxel relative to docetaxel monotherapy
63	Glitazones for type 2 diabetes (review)		3.4	Revision to previous guidance reduces by about 30% the previous estimated saving of £12 million pa.
64	Human Growth Hormone in adults		0	cost saving—but no figures estimated
65	Rituximab for aggressive non Hodgkin's lymphoma		12.4	NICE say incidence is rising by 4% pa and quote an upper limit of £27.3 for 2007 but basis is not clear.
66	Olanzapine and valporate semisodium for bipolar 1 disorder		0	Unlikely to be net costs or savings
67	Oseltamivir and amantidine for prophylaxis of flu		9.4	Costs will vary with severity of influenza outbreak
68	PDT for macular degeneration		19.5
69	Use of liquid-based cytology for cervical screening		10.20	Running costs are likely to be similar with some possible (unquantified) time savings in diagnosis. Running costs are likely to be similar to the start-up costs.
70	Use of imatanib for chronic myeloid leukaemia		17	Steady-state (year 5) costs.
71	Use of coronary artery stents		6.2	This is the net cost of using drug-eluting stents vs bare metal stents. NICE estimate a possible £4 million offsetting saving from reducing the restenosis rate.
72	Rheumatoid arthritis—anakinra		0
73	Myocardial perfusion scintigraphy for the diagnosis and management of angina and myocardial infarction		25.5
74	Pre-hospital initiation of fluid replacement therapy in trauma		0
75	Hepatitis C—pegylated interferons, ribavarin and alfa interferon		9.9
76	Newer drugs for epilepsy in adults		0	cost neutral
77	Newer hypnotic drugs for insomnia		0	cost saving—but no figures estimated
78	Fluid-filled thermal balloon and microwave endometrial ablation techniques for heavy menstrual bleeding		-14.2	NICE quote a range of -£29 to -£32 million. However it is unlikely that such savings would be realised. Assume half this figure.
79	Newer drugs for epilepsy in children		0	cost neutral
Total costs for all guidance to date			621.8

Notes:

1.  All estimates are based on figures published in NICE's appraisal guidance.

2.  Where the NICE estimate is given as a range, a central value (the mid-point of the range) is taken.

3.  NICE estimates are given on an England and Wales basis. Where they are still on that basis (in the "comments" column) they are specified. To derive the financial estimate, they have been pro-rated to an England basis using appropriate population factors (Source: ONS and NICE guidance).

  1.  The information requested is shown in Table 3.6.2 . It is as at August 2004.

  2.  The estimated full-year costs of all NICE appraisal guidance issued so far amount to some £621.8 million.

  3.  In some cases the financial impact on the NHS may build up gradually over a number of years, for instance where infrastructure changes are needed to put the recommendations into full effect.

  4.  In addition, there will be some costs arising out of appraisals due to be completed during the current year.

  3.6.3  How much is spent annually by the Department on promoting the dissemination of drug prescribing information from independent sources (eg drug bulletins)?

  1.  The Department of Health spends around £4.5 million annually on promoting the dissemination of drug prescribing information from independent sources. This funding covers the purchase for the NHS of the British National Formulary (BNF), the Drug and Therapeutics Bulletin (BNF) and the MeReC Bulletin (funded by the Department of Health through the National Institute for Clinical Excellence).

  3.6.4  How much is spent annually by the Department on investigating the prevalence, cost and reduction of adverse drug effects, including costs associated with related actions for clinical negligence?

  1.  In 2003-04 £8.8 million was spent on post-marketing surveillance activities within the Medicines and Healthcare products Regulatory Agency in monitoring the prevalence of adverse drug effects and in working to reduce adverse drug effects through the processes pharmacovigilance, advertising and product information control.

  2.  The information requested in the second part of this question is provided in the attached table.

PAYMENTS MADE FROM THE CLINICAL NEGLIGENCE SCHEME FOR TRUSTS (CNST) FOR MEDICATION ERRORS

				Payments (£)
Payment Year	Damages	Defence Costs	Claimant Costs	Grand Total
1995-96	1,000	3,304	646	4,950
1996-97	56,607	3,591	7,541	67,740
1997-98	40,867	14,216	29,607	84,690
1998-99	213,842	73,581	75,838	363,262
1999-2000	400,038	114,492	156,822	671,352
2000-01	561,506	309,196	168,676	1,039,377
2001-02	4,716,635	1,476,257	913,274	7,106,166
2002-03	3,116,835	629,727	702,304	4,448,866

  3.6.5  How much is spent annually by the Department on the deployment of post-marketing surveillance systems, education and training programmes and other measures intended to improve standards of drug prescribing and reduce levels of drug injury?

  1.  In 2003-04 £12.4 million was spent on the following post-marketing surveillance activities within the Medicines and Healthcare products Regulatory Agency: pharmacovigilance, advertising and product information control, medicines testing, intelligence, borderline, standards and enforcement work.

  3.6.6  We have been informed that synthetic "human" insulin is currently the automatic first line treatment for people with insulin-requiring diabetes, and that synthetic insulin analogues are now beginning to take over from synthetic "human" insulin as a first line treatment. Could the Department provide information on the amount that is spent annually on different types of insulin, indicating what national policy informs decision-making on NHS use of different types of insulin?

  1.  Table 3.6.6 gives information on the prescribing levels of the different types of Insulin that were dispensed in the community in England from 1994 to 2003.

Table 3.6.6

NUMBER OF PRESCRIPTION ITEMS (thousands) OF INSULINS THAT WERE DISPENSED IN THE COMMUNITY IN ENGLAND. 1994 to 2003

									thousands
	1994	1995	1996	1997	1998	1999	2000	2001	2002	2003
Animal Insulin	354.6	327.2	306.9	288.9	280.6	271.8	250.1	232.2	208.7	181.1
Bovine	60.3	51.9	44.4	39.1	37.1	35.3	32.0	29.5	25.6	21.8
Porcine	294.3	275.3	262.4	249.8	243.5	236.5	218.1	202.7	183.0	159.2
Human Insulin	1,393.0	1,546.6	1,723.2	1,902.9	2,153.4	2,450.5	2,701.5	3,003.9	3,274.7	3,654.3
Synthetic Human Insulin	1,393.0	1,546.6	1,717.8	1,869.4	2,081.7	2,326.2	2,513.8	2,727.5	2,879.2	2,819.2
Synthetic Insulin Analogues	0.0	0.0	5.4	33.5	71.7	124.3	187.7	276.5	395.5	835.1
All Insulins	1,747.5	1,873.7	2,030.1	2,191.8	2,434.0	2,722.3	2,951.6	3,236.1	3,483.4	3,835.4

NET INGREDIENT COST (£ thousands) OF INSULINS THAT WERE DISPENSED IN THE COMMUNITY IN ENGLAND. 1994 to 2003

										£ thousands
	1994	1995	1996	1997	1998	1999	2000	2001	2002	2003
Animal Insulin	9,750.0	9,311.2	9,104.6	8,797.6	8,698.8	8,406.6	7,072.9	6,923.3	6,787.5	5,933.4
Bovine	2,145.5	2,249.1	2,360.2	2,103.3	2,114.7	2,041.4	1,817.3	1,676.1	1,473.9	1,284.7
Porcine	7,604.4	7,062.1	6,744.4	6,694.3	6,584.0	6,365.2	5,255.6	5,247.3	5,313.7	4,648.7
Human Insulin	37,836.6	43,301.2	49,305.2	59,177.7	71,142.6	83,237.5	93,744.6	115,735.9	136,096.0	162,613.8
Synthetic Human Insulin	37,836.6	43,301.2	49,112.9	57,966.7	68,473.2	78,211.6	85,409.3	102,480.0	116,594.0	119,945.7
Synthetic Insulin Analogues	0.0	0.0	192.3	1,211.0	2,669.4	5,025.9	8,335.3	13,256.0	19,502.0	42,668.1
All Insulins	47,586.6	52,612.4	58,409.8	67,975.3	79,841.3	91,644.1	100,817.5	122,659.3	142,883.6	168,547.2

AVERAGE NET INGREDIENT COST PER ITEM (£) OF INSULINS THAT WERE DISPENSED IN THE COMMUNITY IN ENGLAND. 1994 to 2003

										£s
	1994	1995	1996	1997	1998	1999	2000	2001	2002	2003
Animal Insulin	27.5	28.5	29.7	30.5	31.0	30.9	28.3	29.8	32.5	32.8
Bovine	35.6	43.3	53.1	53.8	57.0	57.9	56.8	56.9	57.5	58.8
Porcine	25.8	25.7	25.7	26.8	27.0	26.9	24.1	25.9	29.0	29.2
Human Insulin	27.2	28.0	28.6	31.1	33.0	34.0	34.7	38.5	41.6	44.5
Synthetic Human Insulin	27.2	28.0	28.6	31.0	32.9	33.6	34.0	37.6	40.5	42.5
Synthetic Insulin Analogues	—	—	35.5	36.1	37.2	40.4	44.4	48.0	49.3	51.1
All Insulins	27.2	28.1	28.8	31.0	32.8	33.7	34.2	37.9	41.0	43.9
Notes: 1.  The data is from the Prescription Cost Analysis (PCA) system which covers all prescription items that are dispensed in the community in England. This does not include drugs dispensed in hospitals or private prescriptions. 2.  Insulins are those defined in the British National Formulary (BNF) paragraph 6.1.1, "Insulins. Insulin drugs have been grouped into Animal (Bovine and Porcine) and Human insulin (Synthetic human insulin and Synthetic Insulin Analogues) in line with the British National Formulary (BNF) 3.  Doctors write prescriptions on a prescription form. Each single item written on the form is counted as a prescription item. 4.  The net ingredient cost refers to the cost (which the dispenser is reimbursed) of the drug before discounts and does not include any dispensing costs or fees. It does not include any adjustment for income obtained where a prescription charge is paid at the time the prescription is dispensed or where the patient has purchased a pre-payment certificate.

ALL INSULINS

  2.  In 2003, 3.9 million prescription items of all Insulins were dispensed in the community in England with a net ingredient cost of £168.5 million. Human Insulin (synthetic human insulin and synthetic insulin analogues) accounted for the majority (96%) of all Insulin dispensed in the community. Animal insulin accounted for 4% of the cost of all insulins dispensed in the community.

HUMAN INSULIN

  3.  There are two forms of human insulin; Synthetic human insulin and synthetic insulin analogues. According to the British National Formulary (BNF), Synthetic insulin analogues include Insulin Aspart, Insulin Lispro and Insulin Glargine. The number of prescription items of all human insulins dispensed in the community has been increasing by around 10% a year since 1994.

  4.  Prescribing levels of the synthetic insulin analogues have been increasing since they were first dispensed in the community in England in 1996. Between 2002 and 2003 the number of prescription items of all human insulins increased from 3.3 million to 3.7 million; an increase of 12%. The number of prescription items of synthetic insulin analogues more than doubled over the same time period whereas the number of items of synthetic human insulins decreased by 2%. The increase in the prescribing of the analogues suggests that they are beginning to be prescribed more than the synthetic human insulins. In 2003 synthetic insulin analogues accounted for around a quarter of the items (23%) and cost (26%) of all human insulins dispensed in the community in England compared to only 12% of the total items and 14% of the net ingredient cost of all human insulins dispensed in the community in England in 2002.

  5.  Due to the increased prescribing of synthetic insulin analogues, the net ingredient cost of all human insulins has been increasing faster than the number of prescription items since the analogues are on average around £10 more expensive per prescription item than the synthetic human insulins. In 2003, the net ingredient cost of all human insulins dispensed in the community was £162.6 million, an increase of 19% on 2002. The net ingredient cost of the synthetic human insulins increased from £116.6 million to £119.9 million (an increase of 3%) over the same period whereas the cost of synthetic insulin analogues increased from £19.5 million to £42.7 million (an increase of 119%).

Insulin Prescribing Policy

  6.  National Institute for Clinical Excellence (NICE) published guidance on the use of long acting insulin analogues for the treatment of diabetes—insulin glargine. (NICE Technology Appraisal Guidance No 53 (2002) Guidance on the use of long acting insulin analogues for the treatment of diabetes—insulin glargine.)

  7.  The guidance recommends insulin glargine as a treatment option for people with Type 1 diabetes. The guidance also recommends glargine as a treatment option for people with Type 2 diabetes who require insulin therapy, but only if they fall into one of the following categories:

—  those who require assistance from a carer or healthcare professional to administer their insulin injections;

—  those whose lifestyle is significantly restricted by recurrent symptomatic hypoglycaemic episodes; and,

—  those who would otherwise need twice-daily basal insulin injections in combination with an oral antidiabetic drug.

  8.  NICE have not carried out any further technology appraisals on either animal or human insulin.

  9.  Ultimately, all decisions about appropriate treatment regimes for people with diabetes rests entirely with the healthcare adviser, in consultation with the patient.

3.7  National Specialist Services

  3.7.1  Could the Department please update the information provided in Table 3.7.1 in response to last year's questionnaire? [3.7.1]

Total and Planned Expenditure

  1.  Table 3.7.1 shows the expenditure on each of the national specialist services in 2002-03 and 2003-04. It also shows the service agreement values for 2004-05.

  2.  The National Specialist Commissioning Advisory Group (NSCAG) was established in 1996 to advise Ministers on the identification and funding of services where national commissioning was necessary for reasons of clinical effectiveness, equity of access, and/or economic viability. NSCAG superseded the Supra Regional Services Advisory Group.

Significant Changes

  3.  One new national service has been centrally funded from 1 April 2004:

Pancreas Transplantation

  4.  This procedure is of proven benefit to a small, defined group of people with Type 1 diabetes and end stage renal failure. It is usually carried out at the same time as a kidney transplant (known as simultaneous pancreas—kidney transplant or SPK). However, it can also be done as a stand-alone procedure in patients who have previously received a kidney graft (known as pancreas after kidney or PAK), or as a pancreas transplant alone (PTA) in someone who has never received a kidney.

  5.  An additional centre has been opened for the following service:

Secure Forensic Mental Health Services for Adolescents

  6.  NSCAG have commissioned a third national unit in the West Midlands. As part of the development of a full national service, inpatient services are also being developed in London and the South.

Table 3.7.1

SUPRA REGIONAL SERVICES AND CENTRALLY COMMISSIONED SERVICES 2002-03, 2003-04 AND 2004-05

		Total Expenditure £'000					Service Agreement £`000
		2002-03		2003-04		2004-05
Service	NHS Provider Unit	Provider Funding	Service Funding	Provider Funding	Service Funding	Provider Funding	Service Funding
Adult Ventricular Assist Devices	Papworth Hospital, Cambridge, Harefield Hospital, Middlesex, and Freeman Hospital, Newcastle	2,709	2,709	1,511	1,511	2,109	2,109
Amyloidosis	Royal Free Hospital, London	1,223	1,223	1,518	1,518	1,611	1,611
Bladder Exstrophy	Great Ormond Street Hospital, London	1,179		930 (1)		972
	Manchester Children's Hospital	333	1,512	362	1,292	399	1,371
Mental Health Forensic Secure Service for Adolescents	Birmingham Unit	647		4,302		4,726
	Gardener Unit, Newcastle upon Tyne	3,346		3,513		3,817
	Roycroft Unit, Manchester	3,664	7,657	3,867	11,682	4,234
	West London Mental Health Trust					327
	South London & Maudsley NHS Trust					993
	Hampshire Partnership NHS Trust					100	14,197
Heart and Lung Transplantation	Great Ormond Street Hospital, London	2,476		2,721 (1)		2,962
	Royal Brompton & Harefield, London	10,253		10,541		11,658
	Northern General Hospital, Sheffield	2,034		1,600		1,171
	Papworth Hospital, Cambridge	5,951		6,410		7,079
	Wythenshawe Hospital, Manchester	3,138		3,250		3,683
	Freeman Hospital, Newcastle upon Tyne	4,112		4,336		4,639
	Queen Elizabeth Hospital, Birmingham	2,140	30,104	2,459	31,317	2,576	33,768
Choriocarcinoma	Weston Park Hospital, Sheffield	588		640		648
	Charing Cross Hospital, London	1,285	1,873	1,361	2,001	1,401	2,049
Craniofacial Surgery	John Radcliffe Hospital, Oxford	1,568		1,759		1,799
	Great Ormond Street Hospital, London	1,558		1,460 (1)		1,641
	Birmingham Children's Hospital	1,166		1,513		1,691
	Alder Hey Children's Hospital, Liverpool	995	5,287	1,042	5,774	1,192	6,323
Inpatient Psychiatric Service for Deaf Children and Adolescents	Springfield Hospital, London	1,359	1,359	1,791	1,791	2,115	2,115
ECMO (Adult)	Glenfield Hospital, Leicester	2,951	2,951	2,813	2,813	3,725	3,725
ECMO (Neonates and Infants)	Freeman Hospital, Newcastle upon Tyne	610		675		639
	Great Ormond Street Hospital, London	2,057		1,480 (1)		1,813
	Glenfield Hospital, Leicester	1,995	4,662	2,145	4,300	2,384	4,836
ENDO	University College Hospital, London	2,025		2,203		2,070
	Royal National Orthopaedic Hospital, Stanmore	3,072		3,243		3,559
	Royal Orthopaedic Hospital, Birmingham	3,110	8,207	3,678	9,124	3,933	9,562
Epidermolysis Bullosa (Paediatric)	Great Ormond Street Hospital, London	783		616		682
	Birmingham Children's Hospital	304	1,087	316	932	378	1,060
Epidermolysis Bullosa (Adult)	St Thomas' Hospital, London			470		492
	Birmingham Heartlands Hospital			163	633	271	763
Gauchers	Addenbrooke's Hospital, Cambridge	521		529		552
	Great Ormond Street Hospital, London	194		152 (1)		201
	Royal Manchester Children's Hospital	75		80		93
	Royal Free Hospital, London	304	1,094	320	1,081	354	1,200
HTLV	St Mary's Hospital, London			365	365	588	588
Reconstructive Surgery in Adolescents for Congenital Malformation of the Female Genital Tract	Queen Charlotte's Hospital, London	321	321	268	268	353	353
Intestinal Failure	Hope Hospital, Salford	5,497		6,120		6,677
	St Mark's Hospital, London	3,280	8,777	3,966	10,086	4,168	10,845
Adult Liver Transplantation	Addenbrooke's Hospital, Cambridge	4,493		4,837		5,081
	King's College Hospital, London	7,600		8,185		8,696
	Queen Elizabeth Hospital, Birmingham	8,152		8,665		9,270
	St James's University Hospital, Leeds	4,730		4,918		5,467
	Royal Free Hospital, London	2,883		3,049		3,414
	Freeman Hospital, Newcastle upon Tyne	2,865	30,723	2,897	32,551	3,304	35,232
Paediatric Liver Transplantation	Birmingham Children's Hospital	2,928		2,994		3,162
	Kings College Hospital, London	3,023		3,181		3,491
	St James's University Hospital, Leeds	2,803	8,754	2,367	8,542	3,128	9,781
Neuromuscular	Hammersmith Hospital, London	270		336		401
	Royal Victoria Infirmary, Newcastle upon Tyne	391		544		602
	John Radcliffe Hospital, Oxford	114		148		155
	University College Hospital, London	197	972	164	1,192	226	1,384
Ocular Oncology	Royal Liverpool University Hospital	960		936		1,052
	St. Bartholomew's Hospital, London	445		433		510
	Royal Hallamshire Hospital, Sheffield	1,163	2,568	1,172	2,541	1,357	2,919
Paediatric Ventricular Assist Devices (Bridge to Transplantation—VADS or ECMO)	Great Ormond Street Hospital, London	528		557		601
	Freeman Hospital, Newcastle upon Tyne	528	1,056	556	1,113	602	1,203
Paediatric Liver and Complex Hepatobiliary	King's College Hospital, London	4,659		5,042		5,561
	Birmingham Children's Hospital	1,873		1,939		2,112
	St James's University Hospital, Leeds	1,827	8,359	1,923	8,904	2,075	9,748
Pseudomyxoma Peritonei	North Hampshire Hospital, Basingstoke	2,763		2,996		3,076
	The Christie Hospital, Manchester	811	3,574	1,409	4,405	1,806	4,882
Pulmonary Thrombo Endarterectomy	Papworth Hospital, Cambridge	1,335	1,335	1,573	1,573	1,699	1,699
Retinoblastoma	St Bartholomew's Hospital, London	1,251		1,254		1,469
	Birmingham Children's Hospital	873	2,124	963	2,217	990	2,459
SCIDS	Freeman Hospital, Newcastle upon Tyne	3,279		3,499		3,840
	Great Ormond Street Hospital, London	2,840	6,119	4,189 (1)	7,688	3,641	7,481
Personality Disorder	Henderson Hospital, London	2,423		2,301		2,681
	Main House, Birmingham	1,829		1,891		2,234
	Webb House, Salford	1,983	6,235	2,019	6,211	2,409	7,324
Small Bowel Transplantation	Birmingham Children's Hospital	844	844	964	964	1,050	1,050
Total Anorectal Reconstruction	Royal London Hospital	491	491	477	477	565	565
Sub Total Service Agreements		151,977	151,977	164,866	164,866	182,202	182,202
Other		0	0	0	0	0	0
Paediatric Rheumatology Transplants(2)	Freeman Hospital, Newcastle upon Tyne	0		120		0
	Great Ormond Street Hospital, London	0	0	51	171	0	0
Total		151,977	151,977	165,037	165,037	182,202	182,202
NEW SERVICES
Pancreas Transplants(1)	Freeman Hospital, Newcastle upon Tyne/ Royal Liverpool University Hospital/ Manchester Royal Infirmary/ Addenbrooke's Hospital, Cambridge/ St Mary's Hospital, London/ Churchill Hospital, Oxford/ Guy's Hospital, London					3,309	3,309
TOTAL		151,977	151,977	165,037	165,037	185,511	185,511

Notes:

1.  Remapping between commissioners has taken place

2.  This service is funded on a cost per case basis.

  3.7.2  Could the Department specify the proportion of the acute commissioning budget currently spent on specialised services? Could this please be broken down by PCT region?

  1.  This information is not centrally collected.

  3.7.3  Could the Department outline any changes in the overall pattern of expenditure on specialised services since the devolution of responsibility for commissioning to PCTs?

  1.  This information is not centrally collected.

  3.7.4  Could the Department specify which healthcare resource groups (HRGs) currently capture specialist services?

  1.  All admitted patients are covered by HRGs, and approximately 90% of HRGs contain some specialised service activity.

  3.7.5  Could the Department specify how much additional resource have Foundation Trusts had to draw from the "risk pool" established by the Department? What proportion of this was attributable to expenditure on specialised services?

  1.  The Department allocated the "risk pool" to the Host PCTs of eight 1st Wave NHSFT applicants in 2004-05, as a supplement to the National Tariff. This Specialist Services Supplement (risk pool) amounted to £24.4 million nationally in 2004-05. The funding has been allocated on the basis of modelling that showed that these eight organisations were most at risk of being under-funded for the costs of specialist work under the 2004-05 Tariff.

3.8  Management and Administration Costs

  3.8.1  Could the Department please update the information provided in Table 3.8.1 in response to last year's questionnaire? [3.8.1]

  1.  An updated version of Table 3.8.1 is given below.

  2.  It has not been possible to provide the actual management costs of GP Fundholding as this information was not collected centrally.

Table 3.8.1

NHS MANAGEMENT COSTS 1996-97 to 2002-03

Actual Costs £ million	1996-97 Actual	1997-98 Actual	1998-99 Actual	1999-2000 Actual	2000-01 Actual	2001-02 Actual	2002-03 Actual
HA (including PCGs from 1999-2000)	450	432	414	497	536	463	97
PCTs	—	—	—	—	24	224	723
NHS Trusts	1,225	1,296	1,290	1,287	1,307	1,306	1,311
GP Fundholding*	—	—	—	—	—	—	—
Total	1,675	1,728	1,704	1,784	1,867	1,993	2,131
NHS Total Expenditure	32,997	34,664	36,608	40,215	43,951	49,279	54,352
Management costs as % of total NHS Budget	5.1	5.0	4.7	4.4	4.2	4.0	3.9

* Figures not available

Source:

NHS trust audited summarisation schedules 1996-97 to 2002-03.

PCT audited summarisation schedules 2000-01 to 2002-03.

Health authority audited accounts 1996-97 and 1998-99.

Health authority audited summarisation forms 1999-2000 to 2002-03.

  3.8.2  What was the expenditure and staffing (WTE) of each of the Department of Health's Arm's Length Bodies in 2003-04?

  1.  The information requested is provided in Table 3.8.2.

Table 3.8.2

EXPENDITURE AND STAFFING OF ARM'S LENGTH BODIES IN 2003-04

Arm's Length Body	Gross Operating Costs (see notes)		Staff
	£000
CHI	36,660	376
CPPIH	23,666	150
HFEA	7,324	106	Staff figs from DH sources
MHAC	3,884	45
NCSC	133,866	2,726
HPA	172,473	2,518
NBSB	17,045	305	Staff figures from DH sources
NRPB	15,158	315
PHLS	4,211	69	Figures from DH sources
DPB	23,896	325
NHSPA	19,136	277
PPA	64,826	2,919
NHSLogistics	64,590	1,377	Revenue figures excludes cost of sales
NHSPASA	20,841	318
HDA	13,121	132
NICE	17,561	81
DVTA	298	4
PMETB	3,000	27	Revenue fig from ALBs (Feb 2004) and staff fig from DH sources
NBS	364,541	5,916
UKTransplant	10,512	121
CRHP	1,436	3
GSCC	9,892	146	Rev fig excludes training grants and bursary costs.
MHRA	55,852	747
NHSAppComm	4,344	46
NHSInformation	204,837	918
NHSLitigation	11,207	182
NPSA	17,040	149
OIR	2,794	28	Revenue fig from ALBs (Feb 2004) and staff fig from DH sources. Three month figs
CFSMS	13,352	250
FHSAA (SHA)	954	13	Revenue spend fig excludes prescription penalties and provisions.
MA	232,400	765	Revenue fig from ALBs (Feb 2004) and staff fig from DH sources
NCAA	6,075	71
NHS Direct	120,000	2,000	Revenue fig from ALBs (Feb 2004) and staff fig from DH sources
NHSEstates	29,519	218	Staff fig does not include 204 Inventure staff.
NHSProfessionals	33,000	671	Revenue fig from ALBs (Feb 2004) and staff fig from DH sources
NHSU	27,888	234	Figures from DH sources.
NTAD	9,134	79
ROC	1,210	18
CHAI	3,622	84	Three months figs
CSCI	110	11	Three months figs
TOTAL	1,801,275	24,740

Notes:

1.  Additionally there is approximately £3 billion spent by ALBs directly on frontline services.For example:

NHS Logistics  £600 million

NHS Litigation  £2,000 million

NHS Professionals  £400 million

2.  NCSC, CHI and ROC were abolished on 1 April 2004.

3.  Gross operating costs exclude:

Depreciation and Amortisation

Capital Charges

Profit/Loss on Disposal of Fixed Assets

Impairments

  3.8.3  Could the department please update the information provided in tables 3.8.3 on the redundancy costs for senior executives arising from Trust mergers in the past three years? The information should be provided as a global figure and on a trust-by-trust basis.  [3.8.3]

  1.  This information is no longer collected. Information on compensation for loss of office was last collected by the Department from NHS trusts in 2000-01. The disclosure requirements of the summarised accounts are determined by the Resource Accounting Manual issued by HM Treasury. Personal data are included in individual NHS trust accounts which are published locally but the data are not collected by the Department as it is not feasible to include the disclosures on individuals in the NHS trust summarised account.

  3.8.4  The reduction of 1,400 posts across the Department introduced through the Change Programme will bring a redesign of key business processes within the Department. Could the Department comment on how this will affect Parliamentary-related work, NHS data collection, and the future support of the PEQ?

General Background

  1.  The projects undertaken as part of the Change Programme looked for ways of working more effectively and efficiently. Their recommendations, combined with the changes to the Department's structure and the transfer of staff and work to partner organisations, will address the concern that "2,245 people will have to do the work of 3,600."

  2.  Elements of the Department's new ways of working outlined below illustrate how a smaller Department will manage and improve delivery within key areas.

Correspondence

  3.  In 2002 the Department answered 29% of Ministerial correspondence within the Whitehall Standard of 20 days. In July 2004, this had already increased to 83%, with further improvements expected when the Customer Service Centre is fully established (by October this year).

  4.  The Department's incoming e-mail used to be allocated to officials throughout the organisation and response times were poor. When it was centralised alongside the telephone service, there was a step change in improvement. We now answer 95% of e-mails within the target times, with about 75% answered within 2 working days.

Knowledge management

  5.  By continually assessing and developing our knowledge management processes and behaviours, we can ensure that the Department maximises use of its resources. We are improving and joining up our key databases and using IT tools to create a "one-stop information shop" via an "Enterprise" portal. A separate programme—"UNIFY" (see also paragraph below)—will be one of the key information sources available through the portal. Alongside this, we are introducing knowledge management training and a facilitated methodology to help workgroups address their detailed knowledge and information requirements.

NHS data collection and future support of the PEQ

  6.  The Change Programme's demand for effective and efficient working with reduced numbers of staff is one of the key drivers behind the Department establishing its UNIFY programme. This comprises an integrated framework for coherent, up-to-date performance and programme information supported by significant changes in working practices and effective use of IT. It enables the Department to better meet information-flow requirements, including the future support of PEQs and other business objectives by:

—  improving service and speeding-up delivery of information to Ministers and other stakeholders

—  ensuring our compliance with Government's Strategy for performance information

—  reducing reliance on manual effort in data collection/reporting

—  rationalising data collection systems by providing a single collection framework for data supporting the PSAs. This will enable improved support for NHS data collection, as it will enable:

(i)  Strategic Health Authorities and other stakeholders to participate in information validation

(ii)  the tailoring of information output to specific audiences—such that it is presented in the most meaningful format

UNIFY's links with other information-related initiatives

  7.  The UNIFY programme will also interface with a number of other projects and systems which focus on streamlining information, including; the new Health Information Centre (see paragraph below) and the national programme for information technology (NPfIT).

Role of the new Information Centre

  8.  A proportion of statistical collection work is being moved from the Department into the NHS in order to create a new Health and Social Care Information Centre (to be established in shadow form later this year). The Centre will, in conjunction with the output from the UNIFY project, reduce burdens on the frontline NHS by co-ordinating information requirements across a wide range of bodies. It will also facilitate accessible and reliable information flows between patients, commissioners and suppliers and will further enhance the credibility of reported information, including that used in the PEQ.

3.9  Activity and waiting times

  3.9.1  Could the Department update the information given in Tables 3.9.1 showing activity data by region, including: total activity, with trends; activity by Inpatient, Day-Case and Outpatient; maternity and simple access data? Could the Department provide figures for the ratio of Finished Consultant Episodes (FCEs) to hospital spells by Region for the same period? To what extent do a relatively small number of providers depart from the overall pattern? Could the Department report on the progress made by the NHS Information Authority in reviewing clinical information, including the use of the FCE as a measure of activity?  [3.9.1]

  1.  The information requested is provided in Tables 3.9.1(a) to (f). Earlier versions were presented by regional office, but since these regions no longer exist, the data are shown for 2001-02 and 2002-03 by Strategic Health Authority of residence.

Inpatient/Day Cases

  2.  Table 3.9.1(c) presents the number of hospital inpatient finished consultant episodes (FCEs), for ordinary admissions and day cases, as number of cases and rate per 10,000 resident population. It has now been compiled into a single table. Table 3.9.1(d) shows FCEs by method of admission. These data are for England and Strategic Health Authority areas for 2001-02 and 2002-03. Data for 2003-04 are expected to be published in early December.

Ratio of FCEs to spells

  3.  Tables 3.9.1(e) and (f) show the ratio of FCEs to hospital spells. A hospital spell may comprise more than one FCE if responsibility for the patient is passed from one consultant to another. Table 3.9.1(f) shows the 15 providers who depart most from the average ratio of 1.132 in 2002-03.

  4.  The variation in ratio from provider to provider may be quite legitimate and may be due to a number of factors, including service provision, complexity of clinical care, clinical policy, and data quality. Nevertheless, there is less range in this ratio in 2002-03 than in earlier years (maximum value 1.330, compared with 1.910 in 2001-02). This is due to the correction of an earlier failure by Chelsea and Westminster Healthcare Trust to code episodes according to nationally agreed definition. The first episode in a spell should always be numbered 1, but this trust had mistakenly numbered some 2 (considering the first "episode" to be before admission) so that they were not recognised as the start of a spell.

  Could the Department report on the progress made by the NHS Information Authority in reviewing clinical information, including the use of the FCE as a measure of activity?

  4.  The NHSIA review of specialty codes resulted in revised sets of specialties for practitioners and treatment function that were introduced from 1 April 2004. These should enable better and more appropriate analysis of HES data by specialty.

  5.  Improvements and enhancements to clinical data, and new data standards, are being developed via several projects, especially in view of the more detailed clinical information required for Clinical Governance and Clinical Audit, the commitment to move towards consultant-level reporting in HES and Payment by Results.

  6.  FCEs provide a useful base measure of activity and, with admissions and discharges, are used increasingly alongside other measures of activity. They are the building bricks for more sophisticated analysis such as emergency re-admissions used in the Clinical Indicators. HES data now routinely has a unique patient identifier, mainly derived from the NHS number, which enables analysis of patients. Further work seeks to exploit this potential beyond the limited use for clinical indicators and to allow more regular analysis of deaths by linking HES with ONS mortality data.

Table 3.9.1(a)

NEW OUTPATIENT ATTENDANCES PER 10,000 RESIDENT POPULATION 2002-03 GENERAL AND ACUTE SECTOR

OrgID	Name	New outpatient attendances	Attendances per 10,000 population
Y00	England	12,246,231	2,490
Q01	Norfolk, Suffolk and Cambridgeshire	528,263	2,446
Q02	Bedfordshire and Hertfordshire	314,736	1,962
Q03	Essex	340,383	2,104
Q04	North West London	483,920	2,720
Q05	North Central London	487,750	4,016
Q06	North East London	417,976	2,718
Q07	South East London	436,629	2,887
Q08	South West London	342,421	2,629
Q09	Northumberland, Tyne and Wear	502,366	3,641
Q10	County Durham & Tees Valley	285,759	2,531
Q11	North and East Yorkshire and Northern Lincolnshire	323,721	2,010
Q12	West Yorkshire	470,865	2,256
Q13	Cumbria & Lancashire	413,691	2,169
Q14	Greater Manchester	764,604	3,044
Q15	Cheshire & Merseyside	677,718	2,891
Q16	Thames Valley	475,748	2,285
Q17	Hampshire and Isle of Wight	372,757	2,118
Q18	Kent and Medway	339,369	2,145
Q19	Surrey and Sussex	556,471	2,179
Q20	Avon, Gloucestershire & Wiltshire	494,243	2,296
Q21	South West Peninsula	357,481	2,272
Q22	Somerset & Dorset	308,574	2,591
Q23	South Yorkshire	443,189	3,502
Q24	Trent	508,700	1,931
Q25	Leicestershire, Northamptonshire & Rutland	302,534	1,930
Q26	Shropshire and Staffordshire	339,508	2,284
Q27	Birmingham and the Black Country	640,036	2,819
Q28	West Midlands South	316,819	2,061

Source: Department of Health form KH09.

Table 3.9.1(b)

WARD ATTENDANCES PER 10,000 RESIDENT POPULATION 2002-03 GENERAL AND ACUTE SECTOR

OrgID	Name	Total ward attenders	Ward attenders per 10,000 population
Y00	England	757,760	154
Q01	Norfolk, Suffolk and Cambridgeshire	28,731	133
Q02	Bedfordshire and Hertfordshire	19,379	121
Q03	Essex	10,142	63
Q04	North West London	32,270	181
Q05	North Central London	8,857	73
Q06	North East London	11,424	74
Q07	South East London	9,478	63
Q08	South West London	3,159	24
Q09	Northumberland, Tyne and Wear	29,601	215
Q10	County Durham & Tees Valley	36,391	322
Q11	North and East Yorkshire and Northern Lincolnshire	30,466	189
Q12	West Yorkshire	71,082	341
Q13	Cumbria & Lancashire	59,656	313
Q14	Greater Manchester	43,515	173
Q15	Cheshire & Merseyside	35,256	150
Q16	Thames Valley	24,202	116
Q17	Hampshire and Isle of Wight	16,891	96
Q18	Kent and Medway	20,253	128
Q19	Surrey and Sussex	52,296	205
Q20	Avon, Gloucestershire & Wiltshire	10,425	48
Q21	South West Peninsula	20,569	131
Q22	Somerset & Dorset	33,871	284
Q23	South Yorkshire	43,338	342
Q24	Trent	15,459	59
Q25	Leicestershire, Northamptonshire & Rutland	12,957	83
Q26	Shropshire and Staffordshire	18,404	124
Q27	Birmingham and the Black Country	44,826	197
Q28	West Midlands South	14,862	97

Source: Department of Health form KH05.

Note: KH05 is now no longer collected and no further updates will be available.

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Prepared 21 February 2005