Examination of Witnesses (Questions 531
- 539)
THURSDAY 16 FEBRUARY 2006
MR SEAN
WILLIAMS AND
MR DAVID
STEWART
Q531 Chairman: Good morning. May
I welcome you to the fourth evidence session we are taking in
relation to our inquiry into the National Health Service charges.
I wonder if I could ask you to introduce yourselves for the record
and tell us the positions that you hold.
Mr Williams: Thank you very much,
Chairman. I am Sean Williams. I am a Board Director of Ofcom.
I am also responsible for the competition group in Ofcom, which
is where we enforce competition law in the communications markets.
I have with me today my colleague David Stewart, who can introduce
himself.
Mr Stewart: My name is David Stewart,
I am Ofcom's Director of Investigations, which means that I am
responsible for our Competition Law Enforcement Team which conducts
investigations and reaches conclusions on those
Q532 Chairman: Thank you very much,
again, for coming. There are no surprises as to why you are here,
of course. I would just like to ask you if you could describe
your concerns about the lawfulness of the contractual arrangements
made between the NHS Trusts and the providers of telecommunication
services to patients. We have obviously seen your letter to the
Secretary of State and understand that you are hoping they are
going to take some action. Could you tell us your views on this?
Mr Williams: Yes, indeed. As I
say, Ofcom is the competition authority in communications markets.
We became aware of the consumer concerns about high charges for
calls to hospital patients. We opened an investigation under competition
law to see whether or not the high charges were the result of
anti-competitive behaviour in breach of competition law. We found
in our investigation that they were not a breach of competition
law, and that the high prices which we remain concerned about
were the result of the arrangements put in place by various bodies
in the Government and the NHS. In particular they arise, I think,
from a combination of matters of Government policy, matters related
to the implementation of that policy by the NHS estates, and by
the particular concession agreements and their terms which the
providers have agreed with particular NHS Trusts. While we remain
concerned about the high prices, our view is that it is a matter
for the Government to take into consideration and is not a matter
of breach of competition law in any way. Following our investigation
the Government has set up a Patient Power Review Group to work
with providers to provide a better solution and hopefully to address
these particular problems.
Q533 Chairman: Would it be fair to
say that you thought it was unfair in the sense that patients'
friends and relatives should be subsidising this system?
Mr Williams: I would say that
we remain concerned about the high prices. We think the high prices
are, as I say, a result of the way the contracts and the arrangements
are structured. The concession agreements and the overall framework
agreement cap the charges for various services, so it is really
a matter for the Department, the NHS and the providers to work
out the fairest way to recover these costs, I think.
Q534 Chairman: Nowadays an enormous
number of people use mobile phones. There are some allegations
made that pressure has been put onto NHS Trusts to maintain a
mobile phone ban within their establishments. Would we get rid
of this problem if that sort of ban were lifted?
Mr Williams: I will bring my colleague
on this one, but, in general terms, our findings were that there
was nothing in the agreements as such which prevented in an inappropriate
way the use of mobile phones. But it is a bit more complicated
than that.
Mr Stewart: The agreements between
NHS Trusts and the providers reflect a general requirement in
the model agreement, which is that there be a provision saying
that the hospitals, to the extent that there are good clinical
reasons to do so, will restrict the use of mobile phones. That
is not a blanket ban on the use of mobile phones in hospitals,
and, amongst other things, we looked at the way in which in a
number of cases that provision had been given effect in practice.
One of the things that is clear to us is that it is not a simple
or straightforward issue: there are clearly some very important
clinical reasons related not only to the need to give patients
time undisturbed during their care but also, more recently, with
the development of camera phones, some issues around patient privacy.
There are some good reasons why hospitals should have and do have
the right to restrict the use of mobile technology and we have
suggested that one of the roles the Department might play is helping
the NHS Trusts to understand their rights and responsibilities
so that an effective balance can be struck.
Chairman: Thank you for that.
Q535 Mr Amess: Gentlemen, I might
look as if I am in splendid isolation on this side this morning,
but I am very much with you. Is that an Australian accent?
Mr Stewart: It is.
Mr Amess: Okay.
Chairman: That one was not in my brief!
Carry on, anyway.
Q536 Mr Amess: Gentlemen, it seems
to the Committee that the fact that you are having the review
is pointing directly towards National Health Service incompetence.
I wonder if you could answer that charge. The other thing I wanted
to put to you is this: In your report you blamed high incoming
call prices on "a complex web of Government policy".
That is a marvellous expression. Could you also enlarge on this
complex web of Government policy?
Mr Williams: The complex web really
has three kinds of component. The first level is Government policy,
the Patient Power Programme and the aspiration in Government policy
to roll out bedside communications on a national basis to all
bedsides. There is then the second level, which is the NHS Trust
licence, national licenses or framework agreements, which then
implement that intention by means of a framework agreement that
specifies the kinds of services, the functionality of these beside
communications units, the prices that have to be observed or the
caps on the prices that have to be observed. The third level is
the specific concession agreements or contracts that the providers
have agreed with particular NHS Trusts which then specify further
how the particular charges for the actual services are going to
be levied. It is in the interplay between those three levels of
these arrangements that the result is manifest, which appears
to us to be high call prices, particularly for incoming calls,
which, in a sense, are necessary for the providers in order to
recover the costs of these rather sophisticated units which they
put in at bedsides. That is, in a sense, what the complexity is
all about. I do not think we are in a position to judge whether
or not it is a good implementation of a good or bad policy intention—that
really is a matter for the Government—but I think it is
worth the providers and the Government getting together to work
out whether or not this is the most appropriate way to recover
the cost of these services.
Mr Stewart: I would add to that.
I think it is perhaps useful to clarify that our role is as a
national competition authority, and one of the things that is
axiomatic in looking at someone's conduct—in this case that
of the providers—under competition law, is that the conduct
that is under investigation is conduct that is unilateral conduct
or something for which, in effect, they can be held accountable.
Once you reach the point where it is clear that is not the case,
there are a number of other factors; in particular, when those
factors involve Government policy, then the responsibility of
the national competition authority is to stand back from using
what in those circumstances is the rather blunt instrument of
competition law and hand the issue of how the various interests
are meant to be traded off back to the Government and back to
the Department. I certainly would not agree with the assessment
that we have in any way been involved in making an assessment,
as Sean says, about the policy or how it has been implemented.
That is certainly not the way we see our remit.
Q537 Mr Amess: Thank you for rebutting
that. I did say I would ask two questions, but, as we have a little
bit of time, let us go for a third—and you are Australian:
Has Ofcom identified funding arrangements in other countries for
these types of systems that avoid high incoming-call charges?
If so, could you help the Committee and tell us where these examples
are?
Mr Williams: At a high level we
are aware that there are alternative bases for recovering the
costs of the investment necessarily to roll out bedside communications
units. I do not know whether my colleague has any further information
on that.
Mr Stewart: The biggest single
difference is between those countries where hospitals decide to
undertake the capital cost directly—and therefore are not
simply recovering the capital cost of these systems purely on
a particular group of users, in the way that applies in the UK.
We know from evidence which we gathered in our investigation of
a number of countries where that is the case—
Q538 Mr Amess: Where are these countries?
Mr Stewart: Holland and the US,
for example, both have systems that are funded, as I understand
it, on that basis.
Q539 Mr Amess: Are they good examples
to apply to England?
Mr Stewart: In a sense, it is
a financial trade-off. Do you make an investment directly using
public funds and secure a benefit that can then be managed along
with all of the other assets in the hospital?
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