Examination of Witnesses (Questions 400
- 419)
THURSDAY 20 JANUARY 2005
RT HON
JOHN HUTTON,
MP AND MR
JOHN BACON
Q400 Mr Prentice: The target is not
going to slip from December 2005 for e-bookings with the kinds
of exceptions and caveats that you have expressed?
Mr Hutton: Sorry?
Q401 Mr Prentice: Is there not a
target of December 2005?
Mr Hutton: Yes. We want Choose
and Book to be available to GPs by the end of 2005 and it certainly
will be. We have never committed ourselves to making sure that
every secondary care appointment is delivered through Choose and
Book by the end of 2005, it will take us longer to generate that.
There will be perfectly sensible areas of the NHS where patients
will quite rightly choose not to use Choose and Book. In sexual
health clinics, for example, those clinics operate on an instant
drop-in basis and you will not need to book in advance because
you can literally walk through the door and get treated.
Q402 Mr Prentice: I am interested
in limits to choice. A lot of people in my constituency are not
very well off and 30% of them do not have access to a car. In
your submission I think you referred to the national figures.
If one of my constituents went along to their GP and wanted to
exercise choice and have his or her operation done in some hospital
in the South West of England, would my constituent have to bear
the travel costs or, as part of the choice agenda, are people
going to be reimbursed for the consequences of choice that they
properly exercise?
Mr Hutton: It could be. It would
depend on exactly what their income is. The NHS operates a low
income travel cost support scheme and if they qualify under that
then they would certainly get the costs of their travelling paid
for by the NHS if they exercised choice, as you say, to go to
the South West of England to get their operation. It would very
much depend on their own personal means. We do have a low income
travel cost support scheme and I am very happy to provide the
Committee with details of that, Chairman.
Q403 Mr Prentice: There are sceptics
out there who would say that the Government's agenda is really
privatisation by the back door and the Government is actually
encouraging private sector providers to do NHS work. Do you think
it is very unfair for this to be characterised as privatisation
by the back door? Would it not be better to say this is privatisation
by the front door?
Mr Hutton: We have not done anything
by the back door, let me be quite clear about that. We have made
it quite clear what it is we are trying to do. If we were trying
to privatise the National Health Service, which is an absolutely
ludicrous allegation, the NHS today would not be employing nearly
200,000 more people than it did in 1997 when this Government took
office, so I think we can really put that particular argument
on one side. It is true that we have decided as an instrument
of policy, and I am sure the Committee will want to explore this,
to use independent sector providers to provide more choice and
capacity in the National Health Service. When we have done that
we have done it in consultation with the local NHS in order to
fill gaps that they tell us they cannot fill themselves in the
timescale that is necessary for them to be filled. Remember, in
the background to all of this we have the Government's waiting
time targets which are increasingly reducing the length of time
that people have to wait. Of course, as we know by 2008 the total
wraparound time from going to see your GP to having an operation,
we say the maximum length will be 18 weeks and the average length
will be about 10 weeks. In order to do those things, in order
to get capacity up to a point where we can deliver that target,
we need substantial extra capacity in the system and in particular
we need extra surgeons, operating practitioners, nurses and everyone
else. The independent sector treatment centre providers are providing
that personnel. In the short-term that is the only way that we
can boost capacity. These treatment centres have greater significance
than that. They are providing some contestability into public
services for the very first time in the NHS and I think that is
a very, very good thing to do because alongside choice, and this
is very, very important too, there has to be rewards and incentives
in the system. I believe the three key ingredients to make choice
work to be extra capacity, more information for patients and the
right rewards and incentives. I believe that it is in this latter
category of providing the whole service with sharper incentives
that reward good performance but also through a spotlight on poor
performance that is the way to drive up efficiency ultimately
in the long-term in the NHS. Rather like your opening question,
Chairman, yes, of course there are some risks in this. If you
are going to throw a spotlight on failure you have got to know
how to deal with failure.
Q404 Mr Prentice: I am not a health
professional. I have got a persistent cough, I think, but I come
to this from an amateur perspective. It concerns me, as I said
earlier, that you do not have the general practitioners on board
as part of this agenda and we see from the press today and from
the Health Service Journal today that managers in the health
service are very, very sceptical of the Government's plan. John
Carvel in The Guardian says: "John Reid is facing
a groundswell of opposition from NHS trust chiefs in England about
plans to contract out up to 15% of non-emergency operations and
diagnostic tests". Thirty-seven per cent of the survey, and
you will have seen the piece in the Health Service Journal,
said they were being bullied by the Department of Health. Does
that concern you?
Mr Hutton: I find that latter
allegation totally ludicrous and ridiculous. In relation to your
first point when you say that the GPs are not on board with this,
I dispute that. The GPs support patient choice. We know from all
of the work that the Royal College has done, the BMA and others
have done, that the BMA supports patient choice, a point of referral,
and so does the Royal College of GPs. I am not at all surprised,
however, that there will be some NHS managers who feel concerned
about the direction of reform, of course they will.
Q405 Mr Prentice: It is not concern,
it is freaked out really.
Mr Hutton: They are bound to be
concerned about these reforms if we do create a new market in
health care in the UK, new providers providing NHS care free at
the point of use, which might well involve some transfer of activity
across the service from the NHS to the independent sector. They
are bound to be concerned, are they not? Their concern is with
their own organisation, naturally so. What we have got to oversee
at the centre is the strategic direction of this reform and I
think it is absolutely essential that we maintain this new third
sector, if you like, in health care in this country because the
benefits of establishing this new wave of independent sector treatment
centre providers has been enormous. You have been quoting from
newspapers today but I would suggest there is a whole series of
articles in the Financial Times you might like to refresh
yourself with which show the extraordinary impact that the arrival
of these new providers is having on the private sector, how it
is lowering prices in the private sector substantially, and we
are using and taking advantage of those changes for the benefit
of taxpayers because we will be buying capacity at much cheaper
prices than we have ever done before from the independent sector
allowing us to cut waiting times much more quickly for your constituents
and mine. I think that is a virtuous circle, not a problem.
Mr Prentice: A couple of days ago we
were in Birmingham and we quizzed the Chief Executive of the South
Birmingham PCT, which I think is one of the biggest in the country,
and he was saying that what the Government is planning is utterly
perverse.
Chairman: That was not the expression
that he used. This is Gordon's version of what he said, lest it
be recorded back that his words were "utterly perverse".
Mr Prentice: No, he did not say that.
Mr Heyes: On the contrary, I thought
he was exceptionally cautious in the way he was talking and that
was interesting as well.
Chairman: That is my health warning on
Gordon's question. I can see a man getting into deep trouble at
that point, and not you, Gordon.
Q406 Mr Prentice: He told us in a
very measured way that there was some concern that by 2007-08
8% of elective work would have to be bought in by the South Birmingham
PCT from private sector providers. He told us that as a way of
getting the private sector up and running the contractors for
the work would extend for five years and South Birmingham would
have to pay private sector providers to do work that it could
do perfectly competently itself and more cheaply. If I have got
any of this wrong, the Chairman will correct me. That was the
gist of it and that was why I said just a few moments ago that
it seems utterly perverse.
Mr Hutton: Let me just put the
record straight. I think John might want to say one or two words
about this because I can feel him twitching. He is the guy with
the chequebook so he has to pay for all of this. The idea that
we are going to make the Primary Care Trusts pay more than they
would currently pay NHS providers is simply not true. They pay
the NHS tariff and the Department of Health manages any additional
costs from central funds, so the Primary Care Trust is left in
exactly the same position it would have been whether it was purchasing
that care from the independent sector or whether it was purchasing
that care from the NHS, it makes no difference to the PCT at a
local level at all. In relation to this idea that we are going
to contract for five years, and I assume you were referring to
a sort of guaranteed volume and a guaranteed price—
Q407 Mr Prentice: Yes.
Mr Hutton: We have made no such
decisions yet. I am not sure on what basis you were told that
was the Department's policy because that is not the Department's
policy.
Q408 Mr Prentice: In order to nurture
and bring on the private sector there has got to be some kind
of guarantee about the volume of work and health service professionals
are concerned that work that could be done within the NHS will
inevitably go to the private sector because it is the Government's
policy to bring in this other third force, I suppose.
Mr Hutton: Just two things very
briefly. As I say, we have not made any decisions yet on how we
are going to contract for the second wave of operations that the
independent sector are going to provide. We have not made a decision
on that yet. I agree there are some difficult issues there for
us but we have not made a decision yet and we have certainly not
communicated that to the NHS by the back door. The second thing
I would say about this whole issue about capacity, and I know
the Committee wants to get on to this, is anyone listening to
that debate would assume that the NHS capacity is either going
to stay frozen or it is going to go back, so we have got all of
this difficult business to do of taking work out of NHS hospitals
and taking it on to the independent sector. Currently we do about
five and a half million operations a year. By 2008 that is going
to have to rise to nearly seven million if we are going to meet
the target of 18 weeks, so we are going to see significant increases
in the total amount of capacity we need in the service. We have
said, and the Prime Minister has said, we have already purchased
about 200,000 and we are going to buy another 250,000. The total
is less than half a million out of that seven million.
Q409 Mr Prentice: This is additional
capacity, there is absolutely no question of transferring work
that is currently being done in the NHS into the private sector,
we are talking about additional capacity.
Mr Hutton: We are talking about
additional capacity but as part of the eventual deal that will
follow through there could be the opportunity as well to transfer
some work from NHS facilities into these new treatment centres.
Mr Prentice: Mr Bacon is twitching.
Q410 Mr Hopkins: To quote from the
Chief Executive of Nuffield Hospital, which is a private group,
he said, along with extra capacity "with doctors we have
a structured secondment arrangement with the NHS where we get
doctors from trusts", so the doctors are going to be taken
from the NHS to produce this so-called extra capacity in the private
sector.
Mr Hutton: I think you are confusing
two things there. We have got a number of agreements with the
Nuffield. We have centralised bulk purchasing which the Department
is overseeing where we insist on additionality in relation to
staff. At a local level, NHS trusts will have local contracts
with Nuffield, for example as a local private sector, to deal
with waiting list objectives to make sure that they get their
operations done. In relation to that latter category of contracting,
yes, it is very likely, almost certain, that those consultants
will be some of the same NHS consultants who are working in NHS
trusts, but in relation to the bulk purchasing, the contracts
that we announced last year that John Bacon helped us negotiate,
there was a very strict additionality requirement in relation
to extra staff.
Q411 Chairman: Having stopped Gordon
let me now reinforce him because he is paraphrasing what was said
by a Chief Executive of a high performing PCT who was very supportive
of the choice agenda, fulfilling all their commissioned obligations,
doing well in the scores, but who was flagging up the fact that
they could offer the range of choice providers from within the
NHS and he said "the only logic I can really make of this
is if there is a long-term objective to make a market then I can
understand what this is about, but in the short-term I am being
asked to go and make a contract with a private sector who I do
not need to make a contract with and to pay them, as it were,
to be there as a potential provider even though I do not need
them". You can see from the point of view of someone running
a PCT this did not make a lot of sense.
Mr Hutton: It is part of a long-term
objective to create this sustainable third sector in the NHS.
Not an established UK private sector, not the NHS, but new independent
sector providers who provide treatment for NHS patients at NHS
tariff rates. To do that we need to make sure that there is a
sufficient volume of activity in the service to support that new
centre that we have created, which has had such a beneficial effect
on waiting times and improved efficiency across the NHS. John
made clear when the Secretary of State gave evidence to the Select
Committee a few weeks ago that this issue about how do we plan
for the precise amounts of capacity that are going to be in the
new independent sector providers and how much in the NHS is a
fiendishly complicated thing and we have asked the NHS to plan
at a baseline assuming about 8% of activity will be in the independent
sector. As John made very clear to the Health Select Committee,
having gathered in the plans there now needs to be a set of negotiations
at a local level to try to work out precisely what gaps need to
be filled and who is going to fill them. John, I do not know if
you want to add anything.
Mr Bacon: The Minister has set
it out very well. Initially, the primary objective is to work
out the total amount of capacity you need in order to deliver
the objectives by 2008 from whatever source. There is a baseline
plan of how much outpatient diagnostic and inpatient capacity
you need. We then need to think about how we stimulate the situation
where patients have real choice and I think the point I was going
to add to the ones the Minister has made is that from next year,
2006, essentially the volume of activity any of these providers
get is driven by patient choice, not by locking health PCTs into
set volumes as we did in the early days of this initiative. We
want to get enough capacity in the system to enable the plan to
be delivered, we want to give patients a range of choices, and
then we want to introduce a degree of contestability so that the
providers, be they NHS or the private sector, have real incentive
to offer very good services and very convenient services to our
patients. Essentially we are moving to a patient driven system
here.
Q412 Chairman: Let me just try this
another way. When we were asking this PCT about their experience
of talking to their client groups about choice, the PCT were talking
quite positively but then we said "What about the people
who are running these meetings, what do they say?" and it
came out that people were not really very interested in choice,
they had to concede. One of them said, "Their ears pricked
up though when we talked about private providers" meaning
they thought they were going to get private treatment on the NHS.
If that is the bigger turn-on for people when they sit down in
that GP's surgery and he says, "Look, I have got a little
menu here of people you can go to and one of them is this private
outfit" and someone thinks, "That is good, is it not,
I get private health service without paying for it, I will have
that", what if everybody starts saying "I want to go
to a private hospital?"
Mr Hutton: Personally I think
that is extremely unlikely to happen. It comes down to one point
that John has just been trying to make. It is an area where we
have still got work to do in the NHS and across the public too.
We have all grown up with an NHS that is built around what has
been alluded to, that organisations have a guaranteed block of
business that is always going to come to them, but that is not
going to be so any longer. That will be true for the independent
sector providers just as it will be for the NHS providers. I think
everyone has to come to terms with that and that is going to be
a huge challenge. The second thing I would say to the NHS and
to NHS organisations is of course you can theorise this to the
point of absolute destruction, and I know people are interested
in doing that, but I think those three letters—NHS—stand
for something very, very important, and I think the public overwhelmingly
have confidence and trust in NHS providers. I do not think for
a second that because there is one independent sector provider
on a menu of, say, four or five, that you can assume that means
that 80 or 90% would go down the private sector provider route.
I think the NHS has a huge amount to offer in this and we know
the vast majority of the public is very, very satisfied with the
care that they get from NHS providers. The important thing is
that in the new financial regime that will apply to the National
Health Service, no provider can take anything for granted and
neither should they be able to do so. They will get the business,
they will get the patients on the basis of the service they provide,
not on the fact that they have got a monopoly in a local market
but because patients choose to go there.
Q413 Chairman: I understand that.
I do not think this is theoretical stuff, it is real world, how
does it work stuff. I thought the Government's broad philosophy
was that it did not really matter who provided services, it was
the role of the public sector to commission services and to make
sure that everybody has access to them. Why on earth are we worrying
about the balance between providers? Why should you jib at the
idea if everybody wants to go private and they do it at rates
that the NHS will pay for? Why should it matter to you?
Mr Hutton: It is a transition
that we are talking about, we are going from the old NHS where
there was no choice to a new NHS where there is unlimited choice
by 2008, and obviously we have to plan to make that transition.
Frankly, I think it is impossible to imagine any sort of realistic
scenario between now and 2008 where we could put in place this
equivalent amount of capacity that the NHS currently has to have
it banked up on the theoretical possibility that everyone might
exercise that particular choice. That is completely impossible
to imagine.
Q414 Chairman: In principle as things
develop, as they evolve over the long-term, there is no reason
why provision should not move wholesale into the private sector
if that is what people want, if that is what choice drives.
Mr Hutton: Indeed. I think it
is choice that will drive this.
Q415 Mr Prentice: It is quite possible
for hospitals to close then. If patients are not going to a particular
hospital there is no point in keeping it open.
Mr Hutton: I think we have to
be clear about a number of things in this argument, about how
we deal with failure in this sense. I think we have got to have
a very clear perspective on this. What we have got to ensure as
an absolute and as a guarantee for NHS patients is reliable local
access to accident and emergency care. We have got to be clear
about that as our objective. Also we have to be clear, therefore,
that because choice is a discipline, and it is a new discipline
for the NHS and we should back patient preferences and not provider
convenience here, if large numbers of patients decide in the local
hospitals in your area that they do not want to go and have their
dermatology at the local hospital, they want to go somewhere else,
they might want it in primary care or they might want it somewhere
else, that might have an implication, of course it might, for
the continuance of that particular part of the service provided
by that hospital.
Q416 Mr Prentice: So that department
may just close down?
Mr Hutton: It might do, yes. Why
should we say to patients, "You have got to go to a failing
service because it is the local service"? I think that is
a totally unsustainable position. A service might be providing
a poor level of service and part of the work that we will do,
and continue to do, is to support providers to provide a better
service, and ultimately I think payment by results will provide
the incentive to do that, but if having tried and failed, and
failed to persuade the patients to go there, it is still the argument
that we should nonetheless keep that service there with all the
built-in costs—
Q417 Mr Prentice: It is all highly
technical stuff, is it not? Joe Bloggs out there does not have
the faintest idea about the competence or otherwise of the dermatology
department at a particular hospital. He or she will be advised
by other health professionals, like the GP that we started out
with. The GP is going to be incredibly influential.
Mr Hutton: I think GPs will be
influential too but I think patients—
Q418 Mr Prentice: They will be lobbied
very hard.
Mr Hutton: Patients are perfectly
capable of making up their own minds on these things. I do not
think you could generalise that this is all too complicated for
patients and they will never be able to make head nor tail of
it, that is not true. I think patients are becoming increasingly
health literate for a variety of reasons: through their own measures;
through access to the Internet and so on. There is no doubt that
the levels of health literacy are rising. At the end of the day,
you are quite right, GPs are influential and it will be part and
parcel of a combination of pressures. If the GPs have lost confidence
in that service, and that happens from time to time, and patients
say "We do not want to go there", then why should we,
as taxpayers, keep continuing to pay all of the costs associated
with a service that no-one wants to use?
Q419 Mr Prentice: This is fascinating
stuff. In the future when we have patient groups being organised
on the Internet it would be a really good thing for health provision
in the United Kingdom to be driven by what patient groups, brought
together on the Internet suffering from a particular condition,
decide. It is already happening to a limited extent but over the
next 5, 10 or 15 years this is going to mushroom, is it not?
Mr Hutton: I think patients will
gravitate towards the best providers and that is a good thing,
not a bad thing, and we should encourage that.
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