3. NHS PLAN & REFORM (continued)
3.3.3 What has NHS expenditure on healthcare
provided in other EEA member states or Switzerland been in each
year since 2002-03? What is it expected to be in future years?
(Q37)
ANSWER
1. There have been two separate systems
in operation. Regulations (EEC) 1408/71 and 574/72 co-ordinate
the social security and health care systems of the member states
of the European Union the European Economic Area and Switzerland.
These Regulations cover, amongst other things, medically necessary
health care for temporary visitors (the E111/European Health Insurance
Card (EHIC) arrangements) and referral of patients specifically
for treatments of pre-existing conditions (the E112 scheme).
2. A direct referral scheme outside the
scope of the European Community arrangements was available in
England until 31 March 2005. Between January and April 2002 there
was a pilot scheme in south-east England whereby a number of surgical
procedures were commissioned directly by the NHS from healthcare
providers in France and Germany. One hundred and ninety patients
were treated under this pilot at a cost of £1.1 million.
3. This was extended for orthopaedic treatment
overseas, with patients drawn from five different areas. A total
of 917 patients have been referred for treatment abroad as part
of the overseas treatment programme at a cost of £6.5 million.
The option of receiving treatment abroad was also been offered
as part of two patient Choice pilot schemes. This includes all
programme costs, for treatment, travel, comprehensive rehabilitation
and outpatient clinics run within the UK by European clinicians.
4. A total of 21 cardiac patients have also
been treated abroad at a cost of £300,000.
5. The data in Table 37 shows, in
resource terms, costs of treatment provided under the terms of
the Regulations to UK insured persons. Actual treatment costs
are used for both medically necessary health care (E111/EHIC)
and for patients referred specifically for treatment (E112) as
well as some other categories of persons covered. But, in practice
claims do not necessarily distinguish between categories so that
no cost distribution between E111/EHIC and E112 arrangements is
available. Patient numbers are not available since claims may
cover several episodes of care for a single individual. However,
the UK approved the following number of patient referrals under
E112 arrangements as follows:
2005-06 = 281.
6. Lump sum costs cover, in particular,
state pensioners who have relocated to other member states; the
costs of their health care lie with the member state paying the
pension (unless they also have a pension from the member state
of residence).
7. No precise information is available on
types of treatment covered. For E111/EHIC, medically necessary
health care covers the range from minor ambulatory care to major
trauma. E112s cover ongoing treatment begun in the UK, specialised
care not available in the UK and care for which there is a long
UK waiting time.
8. It is estimated that the overall resource
requirement for treatment given to UK insured person under the
Regulation in other EEA member states in 2006-07 is expected to
be around £641 million. This increase is due to a number
of factors:
— An increase in Health care costs
in other member states over which the UK has no control.
— The increasing trend of UK state
pensioners to relocate to other member states (the UK pays a lump
sum for their health care).
— An extension of rights to third country
nationals.
— An alignment of rights which has
given increased healthcare rights.
Table 37
RESOURCE OUTTURN 2002-03 TO 2005-06
|
| Year | Claim type
| Member States claims against the
United Kingdom
| UK claims against
Member States
|
| | £ thousands
| £ thousands |
|
| 2002-03 | Actual cost
| 26,500 | 14,200
|
| Lump sums
| 233,200 | 17,300
|
| Total |
249,700 | 31,500
|
| 2003-04 | Actual cost
| 40,091 | 15,248
|
| Lump sums
| 273,909 | 9,926
|
| Total |
314,000 | 25,174
|
| 2004-05 | Actual cost
| 49,500 | 18,700
|
| Lump sums
| 331,900 | 12,500
|
| Total |
381,500 | 31,200
|
| 2005-06 | Actual cost
| 59,100 | 20,600
|
| Lump sums
| 404,100 | 14,400
|
| Total |
463,100 | 35,000
|
|
Source: The 2005-06 Resource Accounting and Budgeting
(RAB) outturn excercise.
Footnotes:
1. The information is compiled in line with the requirements
of "Government Accounting 2000" and National Audit Office
(NAO).
2. Claims against the UK are made in national currency and
converted in to sterling by using the quarterly mean exchange
rates published by the EU commission.
3. Actual costs under Article 93 of Regulation 574/72 include
E111s/EHIC (temporary visitors and E112 cases (referrred patients).
4. Lump sums under Articles 94 and 95 of Regulation 574/72
include 121s (pensioners).
5. Figures may not add up due to rounding.
3.4 Other Reforms
3.4.1 Could the Department detail expenditure and
projected expenditure on the National Programme for IT? Can the
Department estimate the extent of local additions to NHS Connecting
for Health funding? Could the Department comment on any cost overruns
and delays? (Q38)
ANSWER
1. Information is given in Table 38a and Table
38b.
2. The projected expenditure that was identified by the
NAO in their recent report amounted to £12.4 billion. However,
this did not take account of known and estimated cost reductions
based on early implementations. The projected expenditure, taking
these factors into account amounts to £7.55 billion and this
is explained in Table 38b. This figure does not take into
account the benefits that will be realised from the programme.
3. There have been no cost overruns. Local additions
are included in Table 38b.
4. There have been some delays but the programme is broadly
on track within the context of a 10 year programme. The Programme
was set ambitious and challenging targets to deliver systems to
provide essential benefits for the NHS. Many systems are on or
ahead of schedule and implementation is accelerating. Additional
systems such as the Quality Management and Analysis System and
Payment by Results which were not within the original programme
plans have also been taken on and delivered. The cost of any delays
is being met by suppliers, not the taxpayer.
Table 38a
CONTRACT EXPENDITURE ON THE NATIONAL PROGRAMME FOR IT
(excl local NHS expenditure(1)) TO 31 MARCH 2006
|
| £ millions | Contractor
| Lifetime contract value |
Expenditure |
| Programme area | |
| |
|
| Spine | BT
| 620.0 | 239.8
|
| N3 Broadband network | BT
| 530.0 | 130.5
|
| Choose and Book | Atos Origin
| 64.5 | 27.1
|
| London LSP | BT (CCA)
| 996.0 | 1.3
|
| North East LSP | Accenture
| 1,099.0 | 51.6
|
| NW/WM LSP | CSC
| 973.0 | 119.3
|
| Eastern LSP | Accenture
| 934.0 | 57.9
|
| Southern LSP | Fujitsu
| 986.0 | 26.5
|
| Total | | 6,202.5
| 654.0 |
|
Source: NHS Connecting for Health internal accounts.
Footnote:
1. Figures for NHS expenditure on implementing the National
Programme, separate from the totality of NHS spending on IM&T,
are not collected centrally.
Table 38b
PROJECTED LIFETIME CENTRAL AND LOCAL EXPENDITURE ON THE
NATIONAL PROGRAMME FOR IT
|
| Expenditure type | £ millions
| Sources |
|
| Original contracts | 6,220
| 1 |
| Increased scope | 382
| 1 |
| Additional services | 239
| 1 |
| Total contracts | 6,841
| |
| Central expenditure | 1,500
| 2 |
| Total contracts and central expenditure
| 8,341 |
|
| Cost reductions (EWAs, NHSMail, PACS) | 1,731
| 3 |
| Total net central costs | 6,610
| |
| Local NHS expenditure (estimate gross) |
3,400 | 4
|
| Estimated local cost reductions | 2,457
| 5 |
| Net local costs | 943
| |
| Total gross programme costs | 11,741
| |
| Total net programme costs | 7,553
| |
|
Source:
1. Fixed price contracts.
2. NAO estimate (£1,900 million) adjusted for costs relating
to non-NPfIT activity and future reduction in size of NHS Connecting
for Health.
3. Difference between cost of central procurements and cost
of equivalent procurements by individual NHS bodies.
4. NAO estimate.
5. Estimates based on case studies following early deployments.
Footnote:
1. Considerable further savings are anticipated from wider
programme benefits, eg improvements in patient safety.
3.4.2 What have the costs of implementing Choose and
Book been to date? How does this compare with original estimates?
(Q39)
ANSWER
1. The cost to date of developing and beginning to implement
the system is £29.2 million. The total committed contract
cost is £65 million.
2. The cost continues to remain within the planned budget.
3.4.3 How has the Department deployed the additional
funding granted as a result of the Health Committee's report into
New Medical Technologies towards improving the management of patients
through the use of telecare in liaison with social services? How
was the funding for such schemes deployed in the last financial
year and how much will it be in the future? Is this money ring-fenced?
(Q40)
ANSWER
1. In April 2006, a Preventative Technology Grant of
£80 million over two years was provided to enable councils
to invest in Telecare to help an additional 160,000 older people
nationally to remain independent at home and reduce the number
of avoidable admissions to residential/nursing care and hospital.
2. The grant has been allocated using the Relative Share
for Older People's Relative Needs formulae. £30 million is
available in 2006-07 and £50 million in 2007-08.
3. The grant is not ring fenced and is paid under Section
31 of the Local Government Act 2003 to all councils. Three Star
Councils received the grant in one payment in April 2006 for 2006-07
financial year and will receive another payment in April 2007
for 2007-08 financial year.
4. At 31 March 2006, all local councils were required
to complete the Commission for Social Care Inspection (CSCI),
Delivery and Improvement Statement (DIS). The statement specifically
requested that councils provide information on the number of existing
service users with Telecare and projected numbers of Telecare
users at 31 March 2007 and 2008 following introduction of the
Preventative Technology Grant. It also asked councils to report
on how much the council was intending to spend on Telecare in
2006-07 and 2007-08 and to give a brief description of the, service
they were planning to implement.
5. The information collected from councils through the
delivery and improvement statement is currently being analysed
by the Department of Health.
6. The Care Services Improvement Partnership (CSIP) is
leading on implementation of the Preventative Technology Grant.
CSIP also has information on the current state of play with councils
implementing Telecare. This information is being collated alongside
the information collected through the DIS at 31 March and will
be available shortly. CSIP have been very active over the past
year in promoting Telecare and have run a number of events, workshops,
learning sets and master classes to help support the take-up of
Telecare.
7. We know from CSIP that a variety of different models
of Telecare service are being developed some are based around
extensions of basic community alarm, systems to include other
sensors such as motion, flood and smoke detectors. Some areas
are piloting models of Telecare service aimed at specific client
groups eg those with dementia, people at risk of falls etc. We
know other areas such as Kent, Cheshire, Durham, Cumbria, Norfolk,
Newham and Sandwell are now moving towards or already mainstreaming
their Telecare service.
8. In July 2006, NHS PASA launched a National Framework
Agreement for the procurement of Telecare and telehealth equipment
(including installation and maintenance) and response services
(including control centres, monitoring and response). The framework
has been developed to support spend through the £80 million
Preventative Technology Grant.
9. We know that around 100 local authdrities have registered
to access the electronic catalogue that supports this framework.
PASA have developed a benefits tracking tool, this will enable
them to get feedback from suppliers about who is purchasing what
and where. The first information from this tracking tool should
be available by November 2006. However, it will be limited to
purchases from the framework and will not pick up any purchases
made through other routes eg suppliers not on the framework agreement.
3.4.4 How many, and what proportion of, practices
are involved in practice-based commissioning (PBC), and what is
progress towards the "universal coverage" of PBC? (Q41)
ANSWER
1. As of 31 August 2006, 6,260 GP practices (74%) had
taken up an incentive payment to become involved in practice based
commissioning (PBC).
2. Universal coverage of PBC is defined as PCTs putting
in place the right environment to facilitate practices to take
up PBC. This is defined in "Practice based commissioning:
achieving universal coverage" (January 2006). All PCTs have
agreed to meet universal coverage by the end of 2006.
3. As of 31 August, 69% of all PCTs had put in place
the factors required for universal coverage.
4. PCTs have agreed trajectories with the DH for universal
coverage and the DH expects this target to be met.
3.4.5 How much is available to PCTs to provide out-of-hours
services? What proportion of practices have opted out of providing
out-of-hours services? (Q42)
ANSWER
1. In 2004-05, the Department provided support for the
new out-of-hours arrangements through greatly increased funding.
Some £316 million was allocated to primary care trusts (PCTs)
to fund the provision of out-of-hours services. In 2005-06, the
Department continued to support PCTs that commission and in some
cases provide out-ofhours services by allocating a total of £322
million nationally.
2. The out-of-hours service budget was one of 110 different
budgets issued to the NHS in 2005-06. These centrally held funds
were the responsibility of specific DH budget managers, who arranged
distribution of the funding to PCTs and SHAs throughout the year.
Potentially these allocations for a single budget may have been
to all PCTs and SHAs (331 organisations in total). This presented
major planning and operational difficulties for PCTs, as adjustments
may have been required on a weekly basis.
3. For 2006-07, the arrangements for funding all central
budgets, including provision of the out-of-hours service have
changed. Out-ofhours funding has become part of a separately allocated
NHS Central Budget Bundle, which covers all programmes formerly
allocated under the centrally funded initiatives and services
(CFISSA) programme. The purpose of the bundle is to ensure that
all funds that were intended for allocation to the NHS, over and
above PCT initial allocations, reach the NHS quickly and efficiently.
This will maximise the opportunity for the NHS to plan with the
total resources available.
4. A total of £5.5 billion is available to SHAs,
and is accompanied by a service level agreement (SLA) that sets
out the required outputs from the funding. However, it is for
SHAs to decide, in consultation with other local stakeholders,
how to deploy the funding. We believe local NHS decision makers
are in a better position than the Department to determine funding
priorities, and ensure that the money is used most effectively.
5. PCTs should also be thinking beyond specific allocations
and making most effective use of their unified budgets to establish
integrated networks of urgent care provision.
6. The National Audit Office report on "The Provision
of Out-of-Hours Care in England" makes it clear that if PCTs
had commissioned effectively the NHS could have lived within the
£322 million provided last year. The report also highlights
that there is significant scope to reduce the costs of out-of-hours
services in future by more than £53 million.
7. By 1 January 2005, all those practices, which wished
to transfer outof-hours responsibility, had done so. Approximately
10% of practices chose to retain responsibility for out-of-hours
services.
3.4.6 How much NHS expenditure was paid, or is forecast
to be paid, to trusts via the national tariff in each year from
2004-05 to 2007-08? How much activitiy did this purchase? (Q43)
ANSWER
1. NHS expenditure on tariff activity is not separately
identified within DH accounts.
2. Each year forecast estimates are made of the financial
coverage to support PbR implementation planning.
3. Estimates of the financial coverage of PbR in 2004-05,
2005-06 and 2006-07 are detailed in Table 43.
4. Figures for 2007-08 are not yet available because
of the overall tariff uplift upon 2006-07 has not yet been finalised.
Table 43
ESTIMATED VALUE OF FINANCIAL COVERAGE
|
£ billions
Year | Estimated value of activity covered by PbR
| Coverage of PbR |
|
| 2004-05 | 2.0
| FTs—elective, non-elective, outpatients and A&E.
Non-FTs—PbR on growth activity on selected HRGs.
|
| 2005-06 | 9.0
| FTs—elective, non-elective, outpatients and A&E.
Non-FTs—elective only.
|
| 2006-07 | 22.0
| All NHS organisations—elective, non-elective, outpatients and A&E.
|
|
Footnotes:
1. These figures are based on 2004-05 activity.
2. Figures include MFF (market forces factor).
3. Figures are best estimates as at end of 2005.
3.4.7 Can the Department detail the current timetable
for the implementation of Payment by Results, explaining any delays?
(Q44)
ANSWER
1. The current timetable for the implementation of Payment
by Results (PbR) can be expressed in two ways:
— Scope of services commissioned under PbR; and
— Transition from local prices to national tariff.
SCOPE OF
SERVICES COMMISSIONED
UNDER PBR
2. Table 44a summarises the planned growth in
the range of services covered by PbR.
3. In terms of the difference between the planned scope
of services commissioned under PbR, and actual roll-out, there
was a delay in the timetable during 2005-06 when implementation
of PbR for A&E, outpatients and non-elective admissions was
deferred by a year for all Trusts other than the FTs and early
implementers. The reasons for this delay were set out in evidence
to the HSC's Public Expenditure Inquiry in 2005. From April 2006,
these services are included within the scope of PbR for all relevant
providers, as originally planned.
4. The exception is in adult critical care where we have
developed revised casemix measures/currencies (aka Healthcare
Resource Groups (HRGs), which Ministers have decided to allow
to operate in shadow form in 2006-07 and 2007-08. Whilst funding
for adult critical care therefore remains excluded from PbR and
negotiated locally, this approach enables providers and commissioners
to monitor activity using the new currencies and therefore calculate
baseline activity and costs.
Table 44a
PLANNED PbR IMPLEMENTATION TIMETABLE: SCOPE OF SERVICES
COMMISSIONED UNDER PbR
|
| Scope of services commissioned under PbR
| 2003-04 | 2004-05
| 2005-06 | 2006-07
| 2007-08 | 2008-09
|
|
| National timetable | Tariff applied to elective activity growth in 15 HRGs(1)
| Tariff applied to elective activity growth in 48 HRGs(2)
| HRGs V3.5 introduced. Tariff applied to baseline and growth in A&E; outpatients; elective spells (c550 HRGs(3)); non-elective spells (c550 HRGs)
| Tariff applied to adult critical care(4)
| Introduce the flexibility to "unbundle" the tariff for diagnostics and post-acute care(5). Start to apply the tariff to activity delivered in community-based alternatives to acute hospitals(5)
| HRGs V4 introduced(6) |
| Early transition (FTs and other early implementers)
| Tariff applied to elective activity growth in 15 HRGs(1)
| HRGs V3.5 introduced. Tariff applied to baseline and growth in A&E; outpatients; elective spells (c550 HRGs(3)); non-elective spells (c550 HRGs)
| No change | Tariff applied to adult critical care(4)
| Introduce the flexibility to "unbundle" the tariff for diagnostics and post-acute care(5). Start to apply the tariff to activity delivered in community-based alternatives to acute hospitals(5)
| HRGs V4 introduced(6) |
|
Footnotes:
1. Healthcare Resource Groups (HRGs) are casemix measures
used as currencies for the national tariff. HRGs represent clinically-related
groups of cases (ie diagnoses and treatment combinations) that
consume similar average levels of healthcare resource. The 15
HRGs are described in "reformaing NHS Financuial Flows: Introducing
Payment by results" (DH, 2002).
2. See "Payment by Results: Core Tools" (DH, 2004).
3. See "Payment by Results: Technical Guidance"
(DH, 2005).
4. See "Payment by Results: Implementation Support Guide"
(DH, 2006).
5. See "Our Heath, Our Care, Our Say" (DH, 2005).
6. See "Draft HRG V4 documents to preview" (Information
Centre, 2006) at www.ic.nhs.uk/casemix/sub000/preview
TRANSITION FROM
LOCAL PRICES
TO NATIONAL
TARIFF
5. Table 44b summarises the planned transitional
arrangements for NHS providers.
6. We remain on target to complete the transition from
local pricing to national tariff for NHS Trusts and NHS Foundation
Trusts (FTs) by 2008-09. First wave FTs and other early implementers
will complete the transition by 2007-08.
FUTURE OF
PBR
7. In Autumn 2006, the Department will publish proposals
for consultation on the Future of PbR: 2008-09 and beyond. This
will include a policy update on extension of PbR to cover critical
care, mental health, ambulance services and long-term conditions.
Table 44b
PLANNED PbR IMPLEMENTATION TIMETABLE: SCOPE OF SERVICES
COMMISSIONED UNDER PbR
|
| Scope of services commissioned under PbR
| | | |
| 2004-05 | 2005-06
| 2006-07 | 2007-08
| 2008-09 |
|
| National timetable | | Transition period (ie movement from historic, local prices to national tariff over four equal, annual increments)
| | | |
| n/a | 25% of transition
| 50% of transition | 75% of transition
| Transition
completed
|
| Early transition (FTs and other early implementers)
| Transition period (ie movement from historic, local prices to national tariff over four equal, annual increments)
| 25% of transition | 50% of transition
| 75% of transition | Transition
completed
|
| | |
| | n/a |
|
3.4.8 How much extra funding is being provided to
NHS bodies to assist with the continued phasing-in of Payment
by Results in 2006-07 and 2007-08? (Q45)
ANSWER
1. Table 45 sets out funding, made to and taken
from, the NHS under the 2006-07 PbR transitional arrangements.
These transition paths were calculated on the basis that they
would be cost neutral to the Department. However, a number of
early implementer Foundation Trusts were eligible to apply for
Minimum Income Guarantee (MIG). The cost of this adjustment has
been funded centrally by the Department.
2. Transitional adjustments for 2007-08 have not yet
been calculated.
Table 45
2006-07 PbR TRANSITIONAL ADJUSTMENTS
|
| £ millions
|
|
| Funding allocated to the NHS |
|
| Increase to PCT allocations (1) | 482.0
|
| Transitional payments to providers (2) |
201.0 |
| Total additional funding to the NHS |
683.0 |
| Funding removed from the NHS |
|
| Reduction to PCT allocations (1) | -162.0
|
| Payments in-years from "gaining" providers (2)
| -497.0 |
| Total funding removed from the NHS |
-659.0 |
| Balance (3) | 25.0
|
|
Footnotes:
1. Based on 50% purchaser parity.
2. Based on the following published transition paths for providers:
|
| Organisation type | Activity type
| 2006-07 | 2007-08
| 2008-09 |
|
| Wave 1 FT gainer | Elective; non-
elective; A&E;
outpatient
| 75% X gain | 100%
| 100% |
| Wave 1 FT loser | Elective; non-
elective; A&E;
outpatient
| 50% X loss capped at 2% change pa (4.04% in 2006-07)
| 75% X loss capped at 2% change pa (6.10% in 2007-08)
| 100% |
| NHS trusts and future NHS FTs | Elective; non-
elective; A&E;
outpatient
| 50% X loss/gain capped at 2% change pa (4.04% in 2006-07)
| 75% X loss/gain capped at 2% change pa (6.10% in 2007-08)
| 100% |
|
3. Net additional funding allocated to the NHS in 2006-07
under the PbR transitional arrangements.
3.5 National Institute for Health & Clinical
Excellence (NICE)
3.5.1 What are the expected costs of implementing
each NICE recommendation, technology appraisal and clinical guideline
in 2006-07? (Q46)
ANSWER
Technology appraisals
1. Table 46a shows the technology appraisals issued
by NICE. The column headed "cost" shows the gross cost
to the NHS of implementing NICE guidance in England.
2. NICE provides estimates of the cost of implementing
the recommendations in its guidance upon publication of the final
guidance. All estimates are based on figures published in NICE's
appraisal guidance.
| 
