Examination of Witnesses (Questions 40
- 59)
THURSDAY 1 DECEMBER 2005
SIR NIGEL
CRISP, MR
JOHN BACON,
MR RICHARD
DOUGLAS AND
MR ANDREW
FOSTER
Q40 Chairman: The problem in a sense
is that not everything is targeted and there are people working
in areas of the NHS who may feel that they might suffer if there
is a budget deficit of some sort—not a catastrophic one
but they might suffer because they are not targeted, whereas people
who are targeted will be the priority that you and SHAs will be
looking at. What do you say to that?
Sir Nigel Crisp: No, we are concerned
with quality overall as well.
Mr Bacon: Again, if I can just
respond to you, Chairman, there was a period when we first got
into the business of setting targets that we had a plethora of
them, and we used to track every one. I think in the original
NHS plan there were something over 350 separate things that we
were looking to do. We felt and the Service strongly felt that
there was a much more advantageous approach which said, "Let's
be very clear about what the absolute headline targets that the
Government wishes to achieve are . . . but then let's allow local
people to determine amongst the other objectives which things
are particularly important for them". That balance we think
has been very, very beneficial indeed in terms of delivering the
key objectives but allowing as much local discretion as possible.
Of course, if you take that approach, what you cannot then do
is to seek to prescribe lots and lots of separate things because
that system will not work. We think this has been a much more
successful system.
Sir Nigel Crisp: That is also
why we have the Healthcare Commission. That is the management
process which Mr Bacon has described, which is the management
process you will find in most big organisations, tackling a certain
number of things at a time, not trying to do too much at a time,
trying to get it in balance, but we also have the Healthcare Commission,
whose responsibility is for oversight of quality more generally.
So in some of the areas you may be thinking about, like learning
disabilities, for example, we have recently had a Healthcare Commission
look at those services, even though we do not really have any
targets in that area, because it is fantastically important that,
whilst we may talk in management terms about priorities, we know
that everything in health care is a priority.
Q41 Dr Stoate: I am particularly
concerned about the appalling health inequalities we still face
in this country. As you are no doubt aware, life expectancy can
vary by up to nine years across regions and across social classes.
We have huge inequalities in smoking, in teenage pregnancy, in
infant mortality, in suicides, almost anything you can think of,
yet despite the huge amounts of money that this Government has
put into the health system, your Department has admitted health
inequalities are widening and will continue to widen, and that
all the targets that have been set as far back as 2002 have been
slipping. Surely this is a pretty desperate situation. What on
earth is going on, with all this extra money going in, and yet
health inequalities, which are, I believe, a shame on this country,
actually getting worse?
Sir Nigel Crisp: Dr Stoate, firstly,
can I say I absolutely take the point about the importance of
health inequalities but I also take the very important point as
well how difficult it is to deal with, and it is not necessarily
just purely a health issue either. The things that we have done,
firstly, very importantly, in these allocations we were just talking
about, we changed the allocation formula last time to take more
account of health inequalities, so that still more money was channelled
to the 88 PCTs which register on the health inequality scale.
So the most important thing we thought to do was actually to get
more money that recognised that need. There are a whole series
of other things going on, and if you actually take one area, which
is cardiovascular disease, we are now seeing the gap narrowing
in that area. That has not fed through yet into life expectancy,
which is actually what the target is, and the reason it is narrowing
is because actually, this is something that you can get hold of.
We actually run the cardiovascular service with GPs and with hospitals
and we can actually make sure we are targeting the right people
and measuring that. But to actually change the life expectancy
target, which is what it is, you need not only to be able to get
that result in cardiovascular disease but in everything else as
well, and get more emphasis on healthy eating and so on, which
Choosing Health, the White Paper we talked about earlier, was
doing. I absolutely accept this is one area where we are behind
target and where we need to give renewed emphasis.
Q42 Dr Stoate: If you will pardon
the expression, the proof of the pudding is in the eating, and
particularly talking about health inequalities and dietary inequalities,
but your target specifies a 10% reduction in health inequalities
by 2010 and yet your Department has admitted that it is getting
worse. Are you going to abandon that target? Do you see any possibility
of achieving that target by 2010?
Sir Nigel Crisp: Maybe colleagues
might want to answer. Certainly, we are not abandoning it. That
would be a great mistake, to abandon the intention to tackle probably
the hardest health issue. Let us not pretend that this is the
same as trying to tackle the number of heart bypasses or whatever.
You can see how to do that, you can get on and straightforwardly
do it, but in health inequalities there are very many factors
at play, and that is why we have a developed strategy with other
government Departments, because this is also about housing and
about all kinds of other things as well, is it not? But at the
moment, apart from getting the money in the right place, which
is fantastically important, and some particular gains in areas
like cardiovascular disease, we do not yet have the momentum around
this that we have to get, and that is where we have got to get
to.
Q43 Dr Stoate: I do entirely accept
that you have real problems with health inequalities, and certainly
the Health Service is not the only mediating effect on health
inequalities—of course it is not—but why set a target
of 10% by 2010, which strikes me, to say the least, as optimistic?
Sir Nigel Crisp: Can I just make
one other point, which is that health inequalities in this country,
by international standards, are not significant. If you look at
all the ratings of our Health Service compared with other health
services, you will see that actually, we are starting from a position
where health inequalities are not as bad as most of our competitor
countries.
Q44 Dr Stoate: Are you talking about
Europe? You are saying health inequalities in Holland, Germany,
Spain . . .
Sir Nigel Crisp: If you look at
the ratings of—we can provide the information for you.
Q45 Dr Stoate: We would like that,
because we have the highest teenage pregnancy rates in Europe,
we have one of the highest cardiovascular disease rates in Europe,
we have one of the highest asthma rates in Europe, so I fail to
see how you say that health inequalities are not greater here
than they are in many other European countries. If you have facts
and figures on that, I would like to see them.
Sir Nigel Crisp: Let me come back
with information on that.
Mr Bacon: I was going to add to
what Sir Nigel has said. You are quite right. We have set an ambitious
target. We have done that in the past in other areas of our activity
and we have delivered those ambitious targets. So we do not shy
away from setting ourselves ambitious targets. What we will be
doing very intensively now is taking the same forensic approach
to delivering this target as we have done with the ones that we
have successfully done over the last three to four years. If you
look at our overall objectives for the NHS, the 20 things we have
said we want them to do, over half of those are related in one
form or another to addressing this overarching target of health
inequalities. We are trying to apply some of the same tools and
techniques to delivery here that we have done successfully in
other areas. As Sir Nigel has said, this is intrinsically more
difficult, because many of the levers you need to pull in order
to achieve this are not directly under our control. So we are
working very actively now with our colleagues in local government,
etc, to see how we develop the levers to deliver this. But we
do not apologise for setting ambitious targets. We think that
is right, particularly in this crucial area, and we are very,
very focused now on how we are going to deliver those.
Q46 Dr Stoate: Just finally, Chairman,
how do you see the NHS integrating across other government Departments?
Clearly, these health inequalities are often the result of poverty,
unemployment, poor housing, poor education and all the rest of
it, so what active steps is the NHS taking to integrate with these
other Departments to attack what is, after all, a very widespread
problem?
Mr Bacon: We have been developing
with local government colleagues over the last little while local
area agreements, which specifically target areas of inequalities,
so that we can take a joint approach to them. We have set up things
like the Children's Trusts, which again are looking to bring together
the resources of health and local authorities to focus in a way
which we have not done in the past. This is really very much about
identifying the things that are going to make a difference, and
then working with colleague bodies such as local authorities to
really focus not only our money but our clinical and managerial
attention on achieving the objectives.
Q47 Charlotte Atkins: You told us
about all the extra money going into the NHS. How come we are
having so many deficits reported? What do you see as the main
causes of those deficits?
Sir Nigel Crisp: If you look at
where the money has gone—and, as I said, it has achieved
all those things we are talking about—if you actually look
at the deficits, and I take last year, for example, where there
was a net deficit of £250 million, the first thing to note
is that slightly more than 70% of NHS organisations were not in
deficit, were in surplus or break-even, and 28% I think were in
deficit, but it was not even spread evenly with those 28%. 5%
of organisations, 33 actually between them contributed half the
growth deficit. So this is quite focused in terms of where the
problems are. If you look at those problems, there may be a whole
series of different reasons for them, in particular localities.
Sometimes it is actually about historical reasons and about structures
of services and things like that. In some cases we are not seeing
people perhaps following as best practice as we can, and therefore
part of what we are doing this year is actually getting alongside
those people who are particularly in trouble and making sure that
we bring them the help to get them up to the standard of other
people. The actual overall deficit in gross terms, in proportion
terms, is pretty small but we are taking it extremely seriously,
because we do not want it to grow and to continue as a problem.
But that is the broad picture of the deficit. It is not everywhere,
and indeed, many of the top-performing organisations are hitting
all their targets and achieving financial balance or surplus.
Q48 Charlotte Atkins: So you do not
put it down to poor management at local level then?
Sir Nigel Crisp: There may be
some instances of that, but I think what has already come out
in today's discussion is that this is a difficult management task
that people are facing in terms of additional money coming in
but additional demands being put on the service.
Q49 Charlotte Atkins: Is there any
correlation between the places where there are deficits and particular
geographical locations or types of population served?
Mr Douglas: I do not think in
terms of particular populations served, no. The majority of the
deficits have tended to be broadly, if you draw a line from the
Wash down to Bristol, usually on the right of that. They tend
to be more in the South and East of the country. That does not
mean there are not deficits anywhere else, and it does not mean
everywhere in that part of the country is in deficit, but broadly
speaking, if you looked at a geographical pattern, that is broadly
what you would see.
Q50 Charlotte Atkins: I have to say
that that is not what I see, sitting, as I do, in North Staffordshire.
Quite a few deficits there, deficits not helped, I have to say,
by the Secretary of State making statements about Herceptin to
a very overspent local PCT, saddling them with an extra £40,000
over a two-year period because effectively they were told that
they needed to fund Herceptin for a particular lady over a period
of time, despite the fact that they were already overspent. Do
you accept that where you have a situation like that, where a
PCT or a hospital trust is overspent, when you rightly say you
have to pull back on these deficits, this can help increase health
inequalities quite significantly, because there is just not the
give there to pull back on particular services, particularly given
the priorities that the Department itself is going for in terms
of strokes, cardio issues and so on?
Sir Nigel Crisp: Our starting
point where there is an organisation that has a financial problem
is to start talking about how they are managed and organised,
and in the first place, we have a very well tried and tested document
called "10 High Impact Changes" in health care which
you may have seen, which is best practice in ways of organising
and managing services, which have been tested out by the NHS,
have been learned in the NHS, in literally hundreds of organisations,
and our first stop is to say, "Well, are you implementing
all of these?" Our second stop is to say, "And what
about things like these shared services, back offices?" which
I talked about a moment ago on Xansa. "Are you doing things
like that? Are you making sure you are not spending unnecessarily
on back office type services?" Then thirdly, "Are there
some particular local reasons why you've actually got a problem?"
I know your area a little bit, and sometimes, for example, thinking
of Stoke in particular, the two hospitals in Stoke, and necessarily
the fact that you have difficulties working across two sites,
for example, and things like that. So there are some indigenous
local reasons sometimes why people find it hard to implement best
practice, and we need to understand that, but that is our approach:
what is it that high-performing organisations are doing that people
locally who are in trouble may not be doing?
Q51 Charlotte Atkins: You also mentioned
historical debts and historical under-funding of particular areas.
Do you take that on board?
Sir Nigel Crisp: Maybe I will
ask one of my colleagues to deal directly with managing people's
recovery.
Mr Douglas: In terms of the historical
debts, it is very much the same as the overall over-spending for
an organisation. We have got to look at how quickly an organisation
can take its over-spending out. So we do not always push to a
position for every organisation that you must get everything back
in one year, because for some organisations that would not be
practically possible. So we try to give them some breathing space,
but what we have also got to take into account is that any organisation
that over-spends is taking money from somewhere else in the system,
because we have a fixed pot of money, so someone else has to under-spend
to fund that. We cannot just set aside historical problems that
are effectively money owed to someone else.
Q52 Charlotte Atkins: That would
be fine if the trusts and the PCTs were actually in control of
their spending. If we are talking about admission to hospital,
payment by results, a whole range of issues, those particular
organisations are not necessarily in control of the money partly
because of PFI schemes, new contracts, a whole range of things,
which are not determined by them locally but determined by the
NHS centrally.
Mr Bacon: As Sir Nigel has mapped
out, it is quite difficult to take a generic view here because
of the different circumstances applying in different places, but
what we do know is that the majority of NHS organisations are
managing both to live within their resources and to deliver their
objectives and that tends to be where a health economy, if I can
put it that way, works well together. We have not set the Service
an impossible objective here. If we had, then all organisations
would be in that position. As it happens, more than half of them
are not in that position, so our objective then is to work with
the organisations, particularly the very challenged ones, the
33 that Sir Nigel talked about, to help them through that issue.
We provide both the tools and techniques through the "10
High Impact Changes" for instance. We also provide intensive
support through teams of experts that we can put into those organisations
and help them manage either a specific issue like A&E or waiting
lists or a more general issue around the way the hospital is managed.
So what we have to do first of all is to be content that we have
set a deliverable objective, which we think we have, and secondly,
where organisations to a greater or lesser degree are not performing,
give them the help, encouragement, tools, techniques and real
support to help them manage out of it. That is what we are doing
and of course, as you would expect, the bulk of our effort goes
into the 5% roughly of organisations that are really struggling.
Q53 Anne Milton: It is not an entirely
flat playing field, is it? Because spending per head is not the
same throughout the country. One of the concerns that I and a
lot of people from places in the South East have is that the people
who consume health care are the older people. They are not necessarily
the people within the policies in health but you can get into
a vicious circle because relatively speaking they have less funding
and they suffer from long-term, chronic problems. In areas like
Suffolk and Sussex there are huge deficits in services. Could
I take slight exception, Mr Bacon, to your word "performance".
If you talk to the staff working in the health service, to suggest
that they are under-performing in areas like this would begin
to be very offensive. They feel they are performing as best as
they possibly can in a very difficult climate.
Mr Bacon: I was not intending
to suggest that at the delivery of patient care level people were
not working extremely hard.
Q54 Anne Milton: The only people
who can under-perform are the staff, so presumably you are suggesting
that some staff are under-performing.
Mr Bacon: Clearly it is the case
that in our organisation, as in any other industry, some organisations
deliver a better level of performance by the way they are organised,
managed, geographically located than others. Why would we be any
different from that? We cannot make the assumption that all 600
of our statutory bodies will be as operationally efficient and
managed as well as every other one.
Sir Nigel Crisp: May I come back
on two points? Firstly, absolutely all of us take the point—and
I am out and about in the NHS every week, I meet nurses, I meet
people who are working in the NHS—that people are working
hard, they are working effectively. I understand the point you
are making. We are talking here about whether the organisation
is delivering what the organisation has signed up to do. On your
first point about how much money goes to different areas, I suspect
we have a complex formula which does take account of age and does
take account of inequalities. There will always be discussion
about whether it takes enough account or not. You, as a group
of parliamentarians, will be a cross-section, I have no doubt,
about whether we have that right. But we do take a lot of independent
advice, using independent methods, which then makes recommendations
to try to get that as right as we possibly can do.
Q55 Anne Milton: Do we take account
of what services cost?
Sir Nigel Crisp: Market forces,
yes we do. Mr Douglas could tell you a bit more about it, if you
want.
Mr Douglas: There are a number
of elements in the formulas: the overall population count; age-related
need—that at different ages you consume more health services;
a general need element; and, on top of that, the cost of services
taking into account something called the "market forces factor"—which
basically tries to assess the different cost pressures that people
face because they are in different places geographically in the
country, so the South East/London tends to be more expensive.
Elements of the formulas try to pick up on all these different
things. As Sir Nigel said, we have a committee that reviews the
formulas for us, that takes academic evidence to support it, and
then they make recommendations to the Secretary of State.
Q56 Anne Milton: But, when all is
said and done, you accept the fact that you know there will be
reduced services—in some areas significantly reduced services—to
people who need health care because of these budget deficits.
Sir Nigel Crisp: I am not sure
I do accept that. In proportionate terms, these budget deficits
are pretty small. All the evidence is telling us, on the level
of service, measured through activity levels across the country
as a whole and, indeed, at a local level, is that people are hitting
their targets, if you like, for looking after patients. That does
not mean to say that in some particular areas it will not be extremely
difficult. I do absolutely accept that. But, nevertheless, the
things we have said, like the continuing decline in premature
mortality, the continuing decline in waiting lists, the continuing
increase in activity around the country, are continuing everywhere.
Q57 Anne Milton: That slightly flies
in the face of what I have read in the PCT Board papers, which
is that one of the causes of the deficit is due to over-performance
in the NHS. Presumably, therefore, the answer for some areas which
have got big deficits is to reduce your performance; that is,
to provide less.
Sir Nigel Crisp: We are back to
this word "performance". The only point I would make
is that the agreement we have in budgetary terms is: You will
do this and achieve these results for this amount, and then it
is over to you locally as to how you manage that. If for some
reason you are seeing a big increase in emergency patients—which
some areas of the country certainly are—then that means
you are going to have to balance that by adjusting how you manage
everything else, but our expectation and the evidence is that
there is enough money in the system for people to deliver on all
the things which we measure.
Q58 Anne Milton: So you do not accept
the fact that there will be service restrictions.
Sir Nigel Crisp: There may be
some areas where, if they are well ahead of the number of patients
they were planning to treat, they may have to slow down and treat
some people next year—if they are ahead, but not if they
are behind.
Q59 Mike Penning: Sir Nigel, if you
have visited South-West Hertfordshire recently—and I know
the Secretary of State has refused to come because she is too
busy—my NHS professionals would be gob-smacked at what you
have just said, because there are £10 million cuts upfront
in services. Operations are being cancelled, wards are getting
closed and people's lives, in my opinion, are being put at risk.
What worries me about the complacent way you have discussed this
this morning, is that it is people's lives we are talking about.
You seem to be blaming individual trusts and PCTs, etcetera, but
not looking at yourselves at all. Are you convinced that everything
that your Department has done is right, that the formula is spot
on, that you have not made a mistake there? If you look at the
area of the country which has suffered historically, perhaps the
formula is wrong there, but you have not indicated that at all
this morning. If you have made any mistakes at all, it is always
someone else and not your Department.
Sir Nigel Crisp: I do not think
that is fair on a number of levels. I am sorry if we have not
talked more about individual patients, but I have to say that
is not where the conversation has gone.
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