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There has been a system of additional payments to offer some protection to the specialist trusts, but there is a fear that if and when that is removed they will be exposed to severe financial pressures. The arrangement
also works very unfairly in that it undermines the ability of those hospitalsmy own includedto gain foundation status. In the case of Nuffield, that was merely because of questions about its medium-term financial viability, which was solely the result of the problem I have described. There were no doubts about its expertise or the international renown of the quality of the work done there.
Talks on this issue have been going on for a long time. The Secretary of State for Work and Pensions was Minister of State for Health when I first took a delegation to the Department about this problem. I am looking to the Minister today to provide some assurances, including to the Specialist Orthopaedic Alliance, about when the problem will be resolved. I ask in particular for reassurance with respect to a suspicion that exists of a danger that hospitals will be pressured into mergersin some cases, not altogether well considered mergerswhich will not resolve the problem, but merely hide it. The problem of fairly reimbursing the specialist centres for those highly complex operations is the nettle that must be grasped. The possibility of a merger with the John Radcliffe hospital has been floated in my area, but another tranche of specialist underfunded work that would have to be cross-subsidised out of other services is something the JR needs like a hole in the head.
I am speaking up for internationally outstanding centres of excellence in this country and I urge the Minister to assure us that early progress will now be made to ensure that those centres that have co-operated with the ISTCs will be fairly and properly reimbursed, as they should be.
Andrew George (St. Ives) (LD): I congratulate the hon. Member for Wyre Forest (Dr. Taylor) on securing the debate. I certainly accept the principle, particularly in respect of emergency and core NHS services, that a service is bound to be compromised if at the same time the provider is seeking to maximise shareholder profit.
I acknowledge that the private sector has a role to play in the NHS. I am not ideologically opposed to that, because it has a role in the provision of bricks and bedpans, but I am, to use that polysyllabic word, ideologically opposed to its involvement in core services, because that compromises them.
I said that clinicians who work for the NHS and are in the market for private work at the same time clearly compromise themselves and the efficiency of the service. A survey that I undertook in Cornwall in 1999 showed that the specialties with the longest waiting times were, coincidentally, the same specialties in which the greatest amount of private work was done by clinicians who also worked in the NHS.
I question whether that situation is efficient. It creates more bureaucracy. One of the clinicians in my constituency, Alistair Paterson, has complained to the Secretary of State through me that his previous booking system has had to be replaced by a waiting system, and, as a result of the new independent sector treatment centres, referral management centres now intervene in the process of GP referrals. A new raft of bureaucrats tries to redirect patients away from the NHS to ISTCs, because otherwise the income that the ISTCs will inevitably receive will be wasted.
The key issue is the one that the hon. Member for Wyre Forest finished with, and I hope that the Minister will address it. At the time, perhaps because of a surplus of NHS policy development officers in the DepartmentI am not sure why this happeneda decision was made that privatisation was a jolly, whizz-bang idea and that we should give it a whirl. The problem is that Pandoras box has been opened, as the hon. Gentleman said. Now the NHS has to play by market rules, and it is open to the same competition rules as other sectors. In fact, the situation is rather worse than that. The advice that I have seen implies that the Secretary of State herself will be constrained from intervening and bailing out services in the way that under previous regimes she could have done.
Dr. John Pugh (Southport) (LD): I congratulate the hon. Member for Wyre Forest (Dr. Taylor) on introducing this important debate. I too had the privilege of sharing a room with him during our early period in Parliament, which makes this occasion quite incestuous. I hope that the Minister is in a good mood today, particularly after the excellent Champions league results last night. As an Evertonian, I am sure that he is as pleased by that as I am.
It is nonsense to suppose that public service can exist in isolation from private enterprise. The NHS, like any public service, has always been a big purchaser of supplies and, indeed, of services from the private sector. But, by and large, it has not bought direct services for patients from private enterprise until recently. Nowadays, however, it is almost an orthodoxy to say that it should, provided that neither the quality nor the cost to the patient is in any way affectedprovided that the service remains free at the point of delivery. That mimics the great saying of Deng Xiaoping, the founder of modern China, who said, Who cares whether the cat is black or white so long as it catches mice? Thus we have seen under this Government private profit-making enterprises take on many of the medical duties that formerly were done exclusively by NHS bodies and employees.
Ministers sometimes argue, with a degree of sophistry, that the NHS has always been, de facto, a confederation of small businesses. They argue that GPs have always been self-employed. However, the goal of private business, as we must acknowledge, is profit-making, but the goal of GPs is not and never has been profit-making. No genuine private enterprise would encumber itself with anything like the Hippocratic oath or subordinate its business practices to a constitutional framework such as that imposed on all the people who work for the NHS. In fact, the British Medical Association made that point specifically when it wrote:
Although GPs are independent contractors they are steeped in the ethos of the NHS and put the interests of their patients at the heart of their work. In many ways GPs independent contractor status is simply a reflection of the way they are paid rather than any suggestion that they not an integral part of the NHS.
It certainly is the case that some bodies private and profit-making, or independent and charitable, are capable of taking on medical work done by the NHS. It is often suggested nowadays that there should be no animus against their doing so, especially as it appears at first sight that patients will be looked after as quickly and as well.
There are presumptions for and, equally, against using the private sector. It can reasonably be suggested that involvement of the private sector adds an additional cost: the profit margin of the entrepreneur, as mentioned by my hon. Friend the Member for Westmorland and Lonsdale (Tim Farron). As the hon. Member for Wyre Forest said, it puts at risk the co-ordination and smooth operation of health system provision and complicates the patients path to care when they are passed between the public and the private sector.
Using the private sector certainly reduces transparency in the operation of the whole system. There have been a couple of debates in this place on the deficiencies of out-of-hours services. Many people who have looked into the situation to get details about what is actually happening have had to use freedom of information legislation to prise from private contractors information that they would normally have had from the local NHS.
I believe that the Minister would acknowledge that using the private sector introduces needless legal complexity and a lesser degree of accountability. One cannot impose a statutory duty on a private contractor. If a private contractor fails to deliver, people normally complain to the commissioner, not to the contractor. That creates a genuine difficulty. Legislation going through Parliament at present will introduce local involvement networksLINKsto lobby on behalf of patients. If they want to take up issues, they must go to the commissioner first and only indirectly to the provider.
The major presumption against private sector involvementit is a presumption that runs from Beveridge to Bevan right through to Wanlessis that a publicly delivered, publicly financed system of health care is an equitable, efficient and good model. In fact, I hesitate to call that a presumptionit is a fact.
To be fair, presumptions are made on the other side in favour of contracting out delivery to private contractors. It can be suggested that they are more motivated to control costs. It might be assumed that there is a plethora of competing interests out there just waiting to vie competitively for NHS custom, and that using them can defray capital costs and reduce the public sector borrowing requirement. It may be suggested that they are more flexible, and more ready to embrace innovation or bring in experience from other health systems. The big presumption running through all of that is that a competitive market will always deliver better outcomes than monopoly provision, even if the goal is to deliver health entitlements.
My views are clear: I am with Beveridge, Bevan and Wanless. The Government, though, have a problem. The Labour heart and soul are with Bevan but the brain has been captured by centre-right policy units. The Government endeavour to solve the problem by claiming to adopt a stance of even-handed Deng
Xiaoping-type pragmatism, but the practice is quite different, and that has been well exemplified in this debate.
The private sector is not just chosen. It is encouraged, featherbedded and guaranteed payment regardless of work actually done. It is introduced into areas where its presence creates problems not only for NHS providers but for patients pathways of care. That is not just my view. The Healthcare Commission complains about clinical data from independent sector treatment centres being of extremely poor quality. The National Audit Office in its recent report on clinical governance mentioned poor management and audit of the independent sector by the PCTs that commission them. The Health Select Committee complained about the lack of robust data. The BMA bemoans the absence of a level playing field, and cherry-picking by the private sector. The Royal College of Surgeons reports itself as being unhappy about outcomes, and even the Conservatives suggested in a recent survey that poor value for money is produced by such arrangements.
If we go back to Deng Xiaopings metaphor, using the private sector is like force-feeding the black cat with food taken off the white one and not expecting it to catch any more mice in the process. At times, it approaches an improper attempt to use public resources not to benefit from a market but to create one in the belief that marketisation is the panacea for all public service woes. The Minister, I think, is on the verge of producing for Parliament a solution and a way of allaying those fearsthe new NHS constitution. That will clarify all those issues and leave many of us quietly at rest.
Mr. John Baron (Billericay) (Con): I start by congratulating the hon. Member for Wyre Forest (Dr. Taylor) on his thoughtful and kind contribution. I congratulate him also on his positioning in the Chamber, which is truly independent.
The Opposition support the involvement of the private sector in the NHS if it can deliver benefits for patients. Private sector involvement is nothing new and nothing to fear. For instance, GPs, opticians and dentists are, essentially, private providers. Our central concern is that the way the Government are trying to embrace the private sector is highly inefficient. By trying to micro-manage where the extra capacity is being placed in the NHS, they are doing patients down and causing harm. We believe that if the Government were to create a right to supply the NHS and then allow patients a choice of where independent providers should be engaged, that would make for a much more efficient allocation of resources. The problems caused by the Governments heavy-handed approach can be seen clearly in their policy towards independent sector treatment centres, as the hon. Member for Wyre Forest and others pointed out.
I start with the question of capacity. The process of engaging the private sector has been managed from Whitehall, so the ISTC programme has resulted in capacity being misplaced. New providers have been
imposed on areas where NHS organisations are already meeting waiting time targets. That is happening because of a lack of consultation. Last year, in the Health Committee, the hon. Member for Wyre Forest made that very point. Indeed, the report stated:
ISTCs were not established in accordance with the local capacity plans...In Oxfordshire, independent provision was imposed on local NHS providers against their wishes...since it would involve the transfer of work away from an NHS facility with an excellent reputation.
Just as worrying, however, is the Governments model for engaging the private sector. Patient choice and GP-led commissioning have been sacrificed to divert referrals away from NHS providers and towards the ISTCs to make them viable. In other words, the decision has been made at the centre to restrict choice and to force patients down the ISTC route. That has to be wrong, but it is precisely what is happening through referral management centres, which sometimes have the power to overrule referrals made by GPs. What is more, some PCTs have told GPs that they must opt in favour of the new independent providers. That forces some patients into the private sector against their wishes.
I put it to the Minister that if the Government firmly believe in the value of the independent provision that they have commissioned, they should put that belief to the test by forcing ISTCs to compete fairly with the local NHS trusts. Patients and GPs would judge which was best.
As other hon. Members have suggested, another concern regarding the forced introduction of ISTCs is training. The impact of the policy on existing NHS services can beand, I suggest, isdisastrous. The private sector has effectively been allowed to cherry-pick straightforward operations. That point was made by the right hon. Member for Oxford, East (Mr. Smith). A real concern is that specialist services are suffering because of the withdrawal of cross-subsidy from the profits generated by those routine procedures. The training of the next generation of NHS employees will suffer as a result, as trusts have to cut back on their teaching responsibilities. That point has been reinforced by the British Medical Association. We therefore risk problems being stored up for the future.
Another concern is the nature of the ISTCs contracts with trusts. The reason is that errors in forecasting patient numbers could result in trusts paying for operations that do not occurin other words, paying for capacity that it not used. That will result in money leaving the NHS, but the NHS gaining nothing for it. The Minister may say that that is fanciful thinking, but answers to recent parliamentary questions reveal that utilisation rates, measured on the basis of value rather than activity, averaged only 77 per cent. in the 12 months to May 2006. That means that nearly a quarter of the capacity purchased from ISTCs has not been used. It is as simple as that. The NHS is paying for a service but not receiving it.
In addition, the ISTC programme is delivering procedures at a price that is above what they would cost the NHS. The figure is about 11 per cent. Again, that is hardly good value for money, and patients are suffering
as a result. That is why the Opposition say that the private sector should supply to the NHS only if it can meet the standards and the price. However, the Government are keen to shy away from genuine competition to favour the private sector. Why? That is clearly the impression being gained in the front line of NHS service.
I offer an example of the negative impact that ISTCs are having on local NHS providers, and I have only to look within my own patch and to Basildon hospital. I realise that the Minister has had meetings with the hospital management and the Under-Secretary of State for Communities and Local Government, the hon. Member for Basildon (Angela E. Smith), but the Government are trying to force an ISTC on the hospital without due consultation. That will harm local patients.
According to the hospital, imposing a new private sector provider on the hospital could, in a worse-case scenario, result in £11 million of income being diverted to the ISTC. That will cause real problems. It is not me saying that; the hospital management are raising those concerns on a cross-party basis.
In addition, I am concerned that Basildon hospital will be forced to pay for operations that did not occur because errors will have been made in forecasting patient numbers. I mentioned some figures given in answer to recent parliamentary questions and said that nearly a quarter of capacity purchased from ISTCs is not being utilised. If we really want an efficient NHS, I suggest that only those treatments received by patients should be paid for by the NHS. Basildon hospital managements concern is that that will not happen, particularly because patient number forecasts have yet to be finalised, although here we have an ISTC being forced on the hospital.
Imposing an ISTC on Basildon hospital will harm the training of staff therea point made at a recent meeting of the hospital management. We know that ISTCs like cherry-picking the straightforward operations, but that will harm the specialist services in the local hospital, as well as across the NHS. I therefore ask the Minister to assure me that he will re-examine that decision, because its effects apply not only in my patch, but throughout the country.
I am conscious that time is drawing on, Mr. Jones, and I want to give the Minister time to answer our questions. I shall conclude with another direct question. Since December, he and his Department have been consulting everyone who provides care to NHS patients on 10 core principles. I believe that that is part of plans for an NHS constitution. The principles suggested bear a remarkable similarity to the 10 principles set out in the NHS plan. In fact, the only principle from the NHS plan that does not appear in the new draft almost word for word, or in spirit, is the seventh principle, which states:
Public funds for healthcare will be devoted solely to NHS patients.
The other principles are all there, including shaping services around the needs of individuals, supporting NHS staff and respecting patient confidentiality. But the seventh principle has been dropped, which leaves the possibility open for public funds to be used for patients to go private.
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