Examination of Witnesses (Questions 40-59)
MR JOHN
BACON, MR
MARTIN CAMPBELL,
MR ANDREW
FOSTER AND
MR CRAIG
MUIR
28 OCTOBER 2004
Q40 Chairman: You are absolutely washing
your hands of the situation. It is a "Not me guv" job,
is it?
Mr Bacon: In terms of the financial
position in Bradford, and of course I am aware of the issues,
this is a matter for the regulator against the licence that he
has issued them. The discussions between the regulator and Bradford
Foundation Trust are not discussions that we are party to and,
indeed, not issues that we have responsibility for. In terms of
accountability to this Committee, that is a matter for the regulator.
Q41 Chairman: So basically, in the not
too distant period when you have far more acute trusts having
foundation status, this session will become largely irrelevant?
Mr Bacon: The Department retains
overall responsibility for the NHS and many of the issues that
we will be talking about today will continue to be our responsibility.
Similarly, the overall policy applying to the NHS remains a matter
for the Department. The individual relationships between foundation
trusts and regulators are matters that you would have to put to
the monitor.
Q42 Chairman: I think we might have to
pursue this with the Secretary of State next week. Can I just
ask you, in terms of the financial situation affecting a significant
number of acute trusts, what bearing do you feel this will have?
I am not specifically talking about Mid Yorkshire, although that
is in the back of my mind, but there are other trusts as well.
What effect will this have on the capital schemes, the PFI schemes,
that have been approved by Government and are about to be signed
up? It is not just Mid Yorkshire, there is a whole range of them
where there are similar points that they are addressing.
Mr Bacon: With any major capital
scheme the Department or, if it is a very significant size such
as the one in Wakefield, the Treasury, are required to give final
approval before the contract can be signed. That requires approval
based on both value for money and affordability. We would be looking
at any scheme that was about to come up for final business case
approval and, therefore, the immediate prelude to signing the
contract with a PFI partner, to ensure that it was affordable.
In the case of a trust which has a very significant deficit we
would need to be convinced that the scheme was affordable in its
own right and that the trust was able to get itself back into
recurrent balance to be able to afford it. Sorry, this is a slightly
complicated answer. If you take the position where you look at
the trust's income and you assume it is in balance, is it affordable,
that is question number one. Question number two, if the trust
is not in financial balance, is it able to get back into financial
balance and, therefore, afford it. That is the sort of process
that we are going through with the trust that you have mentioned.
Q43 Chairman: I am trying not to ask
a political question here but in terms of the statements made
by the Prime Minister and the Chancellor of the Exchequer as to
how many hospitals we will get, you have no reason to believe
that because of the deficit status of a number of trusts concerned
we are not going to see the delivery of those new schemes?
Mr Bacon: We are confident that
the commitment we have got to, I think it was, 100 new schemes
by 2008 we will achieve.
Q44 Dr Naysmith: Turning briefly to the
whole question of monitoring trusts and the role of the strategic
health authority. When we were talking last year about North Bristol
Trust, which still holds the record, it was said that monthly
accounts, quarterly accounts, were being submitted to the strategic
health authority but they are now slimmed down bodies that do
not have the ability to look in detail, or they did not last year,
at the accounts of all of the trusts in the area. Is that part
of the system that has been put right? Has that been sorted out?
Does the strategic health authority look carefully at the accounts
of every trust?
Mr Bacon: I think the answer to
that is most definitely yes. The strategic health authorities
account to me for their operational performance and I hold them
responsible for delivering financial balance within their health
authority area and for the financial performance of each
of the organisations under their control, with the exception of
foundation trusts, of course, which are the responsibility of
the monitor. There is a clear process of accountability that runs
from me through the health authorities to the trusts. Are they
equipped to do that? I think the answer to that is yes. Each of
the health authorities on average has about 25 or so organisations
that it has to look at and I think that is manageable. When I
was a regional director in London I had something like 80-odd
organisations that my organisation was responsible for and we
had roughly the same sort of number of people to do it. I am confident
that they have both the expertise and the size of organisation
to do that thoroughly. You can debate, and we have just debated,
whether that worked in the case of North Bristol or in the case
of Mid Yorkshire, but—
Q45 Dr Naysmith: We were assured last
year that this was going to be looked at and you have assured
me again that mechanisms are in place.
Mr Bacon: As we were just saying,
the Mid Yorkshire situation was happening, as it were, as we were
talking to you. The systems that we were beginning to put in place
and to strengthen should avoid repetitions, if they are effective,
but the Mid Yorkshire situation had already started and, in fact,
had happened.
Q46 John Austin: One of the things taken
into account in allocations is the market forces factor in determining
or adjusting the allocations. Are you satisfied that the criteria
on which they are based are accurate and are a fair outcome?
Mr Bacon: I think the straightforward
answer is it is as good as it is possible to make it. We are in
the process of reviewing the way that is done and I think Martin
may be able to explain to you how we are looking to revise that.
Mr Campbell: Briefly, we have
got the University of Warwick who produce the market forces factor
for us and they have just done a review of it, as they do on a
regular basis.
Q47 John Austin: Would you accept that
it throws up some very strange anomalies within London?
Mr Bacon: I think one of the difficulties
with it is that it has a sort of cliff edge approach, if you see
what I mean. We define the market forces factor for a piece of
geography and then for the next piece of geography and it is not
a smooth transition, you are either at that level or the next
level. That can look as if that throws up anomalies.
Q48 John Austin: You are going to have
trusts which are competing in the same markets for a start.
Mr Bacon: What we are looking
at to try and smooth that is to increase the number of bands,
as it were, so that there are smoother transitions over those
cliff edges which should mitigate the problems that you have described.
Q49 John Austin: When do you think that
is likely to come?
Mr Campbell: I do not know. We
can let the Committee have a note on the future of that.
Q50 Dr Taylor: A quick question about
foundation trusts before I move on, probably to Mr Foster, about
the appointment of consultants to foundation trusts. I was approached
by the College of Physicians just yesterday expressing their alarm
that there is something about consultants to foundation trusts
being appointed by a different mechanism from consultants throughout
the rest of the NHS. Is that true? Can you give us any detail
on that?
Mr Foster: Foundation trusts were
given a substantial range of freedoms from Secretary of State
directions, many, many freedoms, one of which is that they are
not obliged to use the National Consultants' Appointment Procedures,
although they are perfectly entitled to do so, and my understanding
is that the vast majority of them are continuing to use them.
Q51 Dr Taylor: So this is not anything
new, this was in the original—
Mr Foster: Yes.
Q52 Dr Taylor: Thank you very much for
clarifying that. Moving on to NHS activity and productivity. We
have been given a graph of NHS output which shows from 1995 to
about 2000 output was just better than input and then very gradually
input has now become greater than output. We are also told that
that does not take into account quality and that you are in some
way working on trying to build quality into this. Could you explain
this, please, because it is really completely puzzling to me?
Mr Bacon: I think it is widely
recognised and, indeed, you will have seen exchanges to do with
the ONS report recently on NHS productivity, that the old productivity
measure was a very poor measure of the productivity of the NHS.
As you rightly say, it counted inputs and a limited number of
outputs, mainly around hospital based activity. It took no account
of any quality improvement even in clinical quality or in quality
of management.
Q53 Dr Taylor: Was it just FCEs?
Mr Bacon: It was wider than FCEs.
Mr Campbell: There were about
16 categories but the vast majority of the index was related to
FCEs.
Mr Bacon: We have been working
with ONS for some little while now in seeking to make this index
a better reflection of the true productivity of the NHS. The reports
that came out last week or the week before reflected some of the
work that we have been doing with them in widening the number
of things we are able to count, which is why the productivity
measure increased. We still feel very strongly that the interim
review that was published recently does not fully reflect productivity
because it still fails to measure the quality improvements. There
are some slightly perverse issues, such as it measures the cost
of extra prescribing so that, as it were, would diminish productivity.
It has no measure of the benefit of that prescribing, so if you
take something like statins, which are very widely accepted as
having very significant health benefits, and the number of prescriptions
for statins, as you will know, has risen very substantially in
recent times, the cost of those would be in the cost base, the
input side, but the benefits in terms of reduction in heart failure
are not measured, so in a curious way we would be better off not
prescribing statins if we were just interested in the productivity
index which, of course, would not be very sensible for us or for
the public. We are very keen that we get this quality dimension
of our productivity firmly built in, both in clinical quality
and in the quality of service that we provide on some things,
such as faster access.
Q54 Dr Taylor: Can you give us any idea
of the quality issues that you can measure?
Mr Bacon: I think I have just
given you an example but, of course, these are much more difficult
to measure, particularly in the short-term, than something as
simple as the amount of pound notes that go in and the amount
of FCEs we produce for them.
Q55 Dr Taylor: Are you coming anyway
towards being able to measure health outcomes?
Mr Bacon: Perhaps I can ask my
colleague, Mr Campbell, to describe the work that we are doing
currently.
Mr Campbell: We can measure health
outcomes on a fairly consistent basis.
Q56 Dr Taylor: Like survival?
Mr Campbell: Survival rates, for
example. The difficulty is putting a cash value to those things.
We have commissioned some work from the University of York to
look at this. That is feeding into the Atkinson review which will
be reporting in January which we hope will point in a direction
for us to be able to measure this.
Q57 Dr Taylor: If we are all here next
year will we be able to ask you something about how you measure
health outcomes?
Mr Campbell: That is right, you
will be.
Q58 Chairman: It has always struck me
as being unfortunate that we have this naïïve debate
about the amount of money the Government has put in and the output
not reflected in the proportions. How would you measure in quality
terms the impact of an organisation like the NHS Commission, the
quality work that is done by an organisation like that, the impact
of revalidation of doctors, the impact of clinical governance?
Is there a way of measuring it? Looking at it as a lay person
from the outside I see some significant improvements arising from
that but how can you quantify them in the terms that we are talking
about here?
Mr Campbell: I think, again, we
have to measure the downstream impact of that by looking at the
improvements in death rates and improvements, for example, in
readmission to hospital, hospital rates and things like that.
I think that is the only way we can measure the impact of these.
Mr Bacon: As my colleague said,
the conversion of that into a pound note equivalent or a measure
equivalent is really very difficult, which is why we have struggled
with this for quite a considerable period of time.
Q59 Dr Naysmith: I would like to turn
to the European Working Time Directive, switching to something
which has been discussed a lot over the last 12 months. The BMA
says that the European Working Time Directive effectively reduces
the number of junior doctors by a figure of 3,700 at the moment.
I know the Department was a little surprised when the Directive
came in and it was applied to doctors not actually on duty but
asleep and on call. What has the effect been on NHS trusts and
so on? What is being done to compensate for this? Are the figures
of the BMA accurate?
Mr Bacon: Perhaps I could ask
Mr Foster to answer that.
Mr Foster: The substantial change
that has affected the NHS is that the old style pattern of working
was to have a 16 hour shift worked at night or weekends by a junior
doctor, of which they were expected to work half of that on average
and be available for the other half. The effect of the particular
rulings, the SiMAP and Jaeger rulings in the European
Court, meant that time asleep or time doing nothing, playing pool
or whatever, counted as time working. So if we had continued with
the old style of having people on call for 16 hours we would have
had to have paid them for 16 hours, so the calculation that the
BMA are reporting to you is effectively saying that half of that
time is lost. What we have done to avoid that time being lost
is switched substantially to shift working, so we are moving away
from on-call working to shift working, so we get larger rotas
of doctors doing eight hours at a time or 11 hours at a time or
whatever and that is a way of avoiding a substantial loss of resource.
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