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21 Mar 2007 : Column 262WH—continued

21 Mar 2007 : Column 263WH

The trust has been a three-star trust for the past three years, and it has been in overall surplus for a number of years. Therein lies the rub. Because Wrightington merged with Wigan at the request of the Department of Health, and because the trust is in surplus—it had to stay within budget at the Department’s request, and rightly so—we do not even get the sticking-plaster that the other four hospitals have. Not only do we have the problem of the national tariff not being sufficient to pay for the specialist work done at the hospital, but we do not get the top-up that has been agreed with the Department that applies to the other four hospitals. The reason is that Wrightington is attached to an acute hospital and is surplus—again, all at the request of the Department. The effect is that Ashton, Leigh and Wigan primary care trust is subsidising other PCTs that use the specialist orthopaedic hospital at Wigan—to the tune of £1.1 million.

We are not profligate in Wigan. As I said, we have a three-star PCT, a three-star acute hospital trust and a four-star council—and we have the best lift company in the country. It is not the Wigan way to be anything other than very proper in the way that we manage our affairs. I know that the Minister is well aware of that. We know how many beans make five. We know that if we have £1, we can spend 19s 11d, and if we have 19 bob, we can spend 18s 11d. The problem at the moment is that someone else is spending our bob for us. We would like to spend 19s 11d, but we can spend only 18s 11d. That is not right. It is not fair. It is the result of the Department of Health’s pushing Wrightington into the Wigan and Leigh acute trust.

I remind the Minister that the Wigan PCT is £11 million underfunded in accordance with the Department’s formula for health needs in the Wigan and Leigh area. In addition, because we manage to keep our affairs in order, we were top-sliced last year to the tune of £3 million. As well as the £11 million, another £3 million was taken off us to subsidise spendthrift PCTs elsewhere in the country. Again, we are suffering because we carry out our duties properly.

What are the options for the Wrightington hospital? What can the Wrightington, Wigan and Leigh hospital trust do? It could again become Wigan and Leigh; in other words, we could get rid of the Wrightington site, which is very valuable. It is in exceptionally nice countryside, very close to the M6 and not far from Manchester, Preston or Leigh. Best of all, it is close to Wigan. The site could be sold for a lot of money; that would solve the problem of Wigan and Leigh trust’s £1 million deficit. The money could be spent on patient care. It would also be a huge capital receipt, which could be used to develop the Wigan site and the Leigh hospital site that the acute trust has.

Clearly there would be a bad downside. For instance, the hospital’s brand name would be lost. The work of Dr. Charnley has been continued by many others since, and I have no doubt that the Wrightington hospital has an incredibly good name in the medical profession.

Mr. Andrew Smith: My hon. Friend is making a powerful argument. In all hospitals, but perhaps especially in the orthopaedic centres of excellence, there is a real
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dedication on the part of the staff. There is also deep and strong affection and support for them from the public. Brand names are not the only consideration; there is a much wider constellation of commitment to excellence. Were that to disappear there would be very damaging consequences for patient care and for staff. Does my hon. Friend agree?

Mr. Turner: My right hon. Friend is absolutely right, and his comments are true of all five trusts. The particular difficulty for Wrightington is that it is part of a general hospital trust, so if it were to disappear, the general hospital trust would not attract the people who come to the specialist hospital trust at present. If it was a stand-alone hospital, however, it would be in the same situation as the other four hospitals in being able to attract those who want to specialise and be at the cutting edge of orthopaedic services. “Cutting edge” might be a particularly appropriate phrase to have used, given the subject of the debate.

It is important to be able to attract such people. Most general hospital trusts do not have that opportunity; they do not have a specialism. Wrightington’s status as part of the Wigan and Leigh hospital trust means that the brand name attracts people to the trust, and it obtains not just people who want to work in the orthopaedic field but other doctors and consultants who want to work elsewhere in the hospital. However, my right hon. Friend is right in the general sense.

Another effect is the effect on patients—not just those in Wigan. We should remember that each of the four hospitals serves a huge area. Wrightington hospital serves not only the north-west, but the whole north of England—it is the natural place for people to go for such specialist operations from York and the north-east, as well as from the north-west. It is hugely important for lots of people throughout the north of England. We could let down not just patients in Wigan, who use it for more general work, but people in the rest of the country, and there could be a tremendous effect—a point that was well made by my right hon. Friend the Member for Oxford, East and the hon. Member for Newbury (Mr. Benyon).

If Wrightington went its own way, and was not sold off, it would get the money from the Department of Health, because it would suddenly become a specialist, stand-alone orthopaedic hospital. The sticking-plaster whereby additional money is received because of that status—the other four orthopaedic hospital trusts receive it already—would suddenly come to Wigan. So why do we not get it now? Why do we have to jump through the hoop of dividing up the hospital in order to get the extra money? Why can it not be recognised that the Wrightington hospital is an orthopaedic, specialist trust hospital that has the same problems and financial difficulties as the other four hospitals, and that the money should therefore be awarded now?

The Department of Health has a moral obligation in the matter. It was the Department that pushed the Wrightington hospital into the Wigan and Leigh trust to make it the Wrightington, Wigan and Leigh hospital trust. It was also the Department that—quite rightly—made sure that the trust was in surplus and did not spend money that it did not have. It is basically immoral for the Department then to turn around and say that, because the hospital is part of an acute
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hospital trust and because that trust is in surplus, it will not award money that is given to the other four hospitals. I hope that the Minister will seriously reflect on that point. Despite all the other issues that exist, that one would be fairly easy to resolve.

A solution would make a huge impact on the Wigan trust, which will be applying for foundation status in 2008. We applied for it before, and one of the major reasons why the application was turned down was the impact of the orthopaedic specialist tariff on the finances—not just the status of the finances at the time but the uncertainty of future finances. None of that has changed, so all the other things that have been done will have no impact if there is no resolution in that respect. We will be turned down for foundation status for reasons that are beyond the ability of the trust to resolve.

I give 100 per cent. support to everything that my right hon. Friend the Member for Oxford, East said about the national tariff. There is a special case for Wigan, however, and I hope that I have set out that case. I hope that the Minister will respond positively.

10.5 am

Dr. John Pugh (Southport) (LD): I congratulate the right hon. Member for Oxford, East (Mr. Smith) on securing the debate. I know that it is good form to offer such congratulations, but I offer them very sincerely on this occasion, because he brought all his Treasury experience to bear in giving us a competent lesson on the hard facts of health economics, and he presented a rational and persuasive case on an important issue. Essentially we are concerned with the survival of specialist services in the NHS under the new financial regime, which is based on payment by results and on the need for every cost centre to be in balance or to secure foundation trust status. The issues have already been flagged up to some extent in connection with children’s hospitals such as Alder Hey. At times there has been a vociferous outcry in connection with that hospital—the tariff has been adjusted under pressure. It is perhaps harder to find champions for the orthopaedic sector, which is a less glamorous area of medicine, so I congratulate the right hon. Gentleman on having forced himself forward as that champion—it is an important role.

Orthopaedic complaints are a massive cause of absence from work. One thinks of the numbers of people who are off work today with back pain, and of the poor quality of life that is endured by people who suffer with such complaints. There are mobility issues as well. Thousands if not millions of people in the country have chronic conditions. Orthopaedics are also important from the point of view of preventive medicine. Just think what might be achieved if a treatment were secured that prevented the early onset of complaints such as osteoporosis.

Orthopaedics are bread and butter medicine, and increasing longevity will mean that there will be no shortage of work for people in the field. The Government have recognised that. Historically they have identified the long waiting lists that have existed, and the big demands that have been made on GP time and hospital time, and on ancillary services such as occupational therapy, physiotherapy and so on. In all, I think that 10 million people are currently affected by orthopaedic complaints in the UK.

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There has been a long-standing need for specialist and training institutions in the field. That is a need that is recognised by everyone in relation to complex cases—accident victims, sports injuries and so on. The Government are to be congratulated on having recognised that and on having done some positive things about it. I do not want to overdo my congratulations to the Government, but they have genuinely increased diagnostic and treatment capacity for standard cases. The expert patient initiative has enabled certain chronic conditions to be managed outside of clinics—or at any rate outside of hospitals. If I were really pushed I could also congratulate the Government on a degree of capital investment and on having put in place a new service framework.

That is all good, but in doing it all the Government have created a new problem, as the right hon. Member for Oxford, East suggested: they have financially destabilised the specialist services. That is because the standard cases are often now undertaken by independent sector treatment centres, which in the past allegedly subsidised the complex cases undertaken by certain specialist hospitals; although, in fact, some of those cases are still done by the specialist hospitals and the NHS.

As the health economists and the right hon. Member for Oxford, East no doubt appreciate, the NHS carries the dual burden of competing against ISTCs and at the same time providing after-care for the patients of ISTCs and back-up for those patients when things go wrong. That is not a perfect financial model; in fact, one could say that it is a ruinous one. If one adds to that the move into the community of some services for chronic conditions, one could say that the future of the specialist services and specialist hospitals is in some doubt. Greater efficiency in those institutions can alleviate that only to a degree. As the right hon. Gentleman said, those institutions are graded as pretty efficient at the moment, if not as efficient as they possibly could be.

The key fact is that we need specialist services, and the NHS gives a guarantee not simply to the standard patient but to the non-standard patient who requires such services. We also need the developments and advances in medicine that can only be obtained through specialist hospitals.

I do not object in principle to the separation in treatment terms of highly skilled intervention, of the kind with which the specialist hospitals deal, from lesser skilled, standard interventions that are performed by ISTCs. I shall draw an analogy, although it is not a very helpful one in many respects. If my car just needs its exhaust replacing, I am perfectly happy to take it to Kwik-Fit, but if there is a major problem with the fuel management system, I will go to a specialist outfit. However, that model works only if the highly skilled institutions are appropriately rewarded. The allegation is that they are not, and I share that view. The model works only if the existence of ISTCs and the regime under which they operate do not imperil the specialist provision, and I think that that is possibly happening.

None of this would worry us under previous financial management arrangements, whereby everyone was under the same NHS umbrella and a surplus in one place would simply become a subsidy in another. However, there clearly is at any rate a prima facie case
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that specialist provision can be worn down, if not eliminated altogether, unless three things happen, and in my view none of those things is happening at the moment.

First, the costs of running treatment centres need to be fairly borne by them and not offloaded on to the NHS in some covert way. Secondly, payment by results needs to be sophisticated so that it is capable of fairly reflecting the costs of specialist treatments. I am in some doubt as to whether that can be done, but if it can be, it should be, and it currently is not being done. Thirdly, sufficient controls need to be in the hands of local NHS managers to ensure that no matter how complex or straightforward the condition, the NHS guarantees to patients can be delivered on in a seamless, organised fashion.

Those are three fair conditions, and I think that in supporting them I would join the right hon. Member for Oxford, East; I think that we are both suggesting that none of those conditions is currently being met.

10.11 am

Dr. Andrew Murrison (Westbury) (Con): I congratulate the right hon. Member for Oxford, East (Mr. Smith) on initiating the debate and on setting up the all-party group, which is a very positive move. I also congratulate the Specialist Orthopaedic Alliance, as it has informed much of the debate that we have been having today.

In talking about specialist orthopaedic services, we should reflect on the fact that many of the things that we have been debating that relate to the tariff and independent sector treatment centres relate also to many other tertiary services. One of the jewels in the crown of our NHS is the ability to have tertiary services—specialist centres—that focus on conditions that are not routine. If I may say so, the hon. Member for Southport (Dr. Pugh) was a little pejorative in his description of the work load of ISTCs, but there is certainly a world of difference between some of the routine work done by them and the work done by highly specialist centres of the sort that we have been describing today.

We have mentioned the five specialist orthopaedic hospitals in this country. I have a particular affection for the one at Oswestry, because it is where my wife trained to be a physiotherapist. It is important to recognise that, within our specialist centres, a great deal of extra work is done over and above simply treating patients. That extra work has to do with training and research. Much of what is good about specialist centres is that in treating patients with complex disease, there is also the ability both to train people, not just doctors, although doctors seem to get all the attention, but others as well, in a highly specialised environment, and to conduct research that is world renowned. One of the characteristics of our health care system is the fact that we have centres of international repute—indeed, far more than one would naturally expect in a country of this size.

That is worth celebrating in a week that is not exactly full of celebration of the stewardship of the NHS, given that the report published yesterday by the Select Committee
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on Public Accounts, “Financial Management in the NHS”, is very much in people’s minds. No doubt the Minister has been scrutinising it. I hope very much that he will have learned some of the lessons in the report concerning management of finances in our health service and getting effective results and clinical outputs from the admittedly large sums of money that the Government have applied to the NHS over the past few years.

Earlier this week, the Prime Minister launched in Hackney the first of his policy reviews of public services. We understand that he wants more competition and contestability and more information for patients. It is perhaps salutary to contrast that with the perverse and somewhat opaque tariff and the lack of openness about ISTCs, which is based largely on the grounds of commercial confidentiality.

We have learned from the Minister, fresh from his “Days out in the NHS”, that he wants to inform the public via statements about the cost of NHS services. On the face of it, that is quite a reasonable idea. We shall have to see what the costs of such an initiative would be, but I suggest to him ever so gently that if we are to inform patients in that way, it needs to be done on the basis of accurate information. As things stand, there is no real way in which patients will be informed of the true cost of their treatment in specialist centres, because the tariff on which presumably such a statement would be made would be based on a false premise, which is that people can be and are treated in specialist centres in the same way that they are treated in ISTCs or, indeed, in our district general hospitals. We have heard today that the cost of treatment in our specialist centres greatly exceeds the cost of treatment in ISTCs.

The tariff is, as my hon. Friend the Member for Newbury (Mr. Benyon) said, a somewhat blunt instrument. In the context of describing orthopaedic surgery, the phrase “blunt instrument” can suggest all sorts of things. I am sure that none of the five specialist centres that we have been discussing would ever use a blunt instrument, but the phrase provides a good analogy for describing the use of the tariff in the current situation.

In theory, the tariff is fine. Indeed, if we are to support the notion that funds should follow patients, we must have a tariff. The trouble is that it is very much a guesstimate. It was arrived at by canvassing the views of directors of finance in NHS trusts as to what they felt was the cost of particular health care resource groups. Of course, different finance directors will come up with different figures. The tariff was arrived at by averaging them out. Unfortunately, the cost drivers in different trusts will be different, so there will be losers and winners under such a system. Overall, one would hope that for a hospital it would pretty well even itself out. Although particular parts of the country have particular pressures, one would hope that overall such a guesstimate would enable a hospital to maintain some sort of balance. However, that is not necessarily the case for a hospital that deals exclusively with the sector that we are discussing today.

The Royal National Orthopaedic hospital in Stanmore, Middlesex, for example, receives £1,428 for excising a sarcoma; it thinks that the true cost of that is £8,674. That is a big difference. That is all right provided that service work—routine work—can be used to leaven out
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the difference. I remember doing orthopaedics and being, quite honestly, rather bored with much of the routine work that orthopaedic surgeons do. Their work is not necessarily glamorous, as the hon. Member for Southport pointed out, and nowhere is that more the case than in the routine work. Arthroscopies consume a huge amount of time. It is such routine work that ISTCs have scooped up and are doing, based on the tariff, and I suspect that they are doing quite well out of it, but that has removed the means by which specialist orthopaedic services are able to cross-subsidise the more expensive work that I have described.

At the heart of the problem lie two issues. One is the tariff and the other is the advent of independent sector treatment centres. As has been said, most people would not have a problem with ISTCs provided that they operated on a level playing field with other parts of the NHS. The evidence suggests that, at the moment, they do not. In mitigation, ISTCs have not been going for very long. I hope that the Minister will say how he has learned from the first three or four years of the operation of ISTCs and what might be done in the future to level out the uneven playing field. We suspect that at the moment there is a 10 per cent. difference in the costs applying to ISTCs and to the rest of the NHS on a case-by-case basis. That is very big difference indeed. Of course, ISTCs are paid irrespective of whether they actually do the work, and that goes back to the old days of block contracts, with their inherent inefficiencies. As we know, it is difficult to forecast patient throughput, and that causes particular problems in terms of utilising ISTCs to the maximum benefit of the NHS.

Do ISTCs offer value for money? As we have discussed today in the context of orthopaedics, they probably do not. In July 2006, the Select Committee on Health said that it was “impossible” to say whether ISTCs provided value for money, because of poor data. It is extremely difficult to benchmark the success of ISTCs against NHS providers if we do not have adequate data.

In 2003, the Department of Health imposed the first wave of ISTCs, and some primary care trusts felt at the time that they had been dumped with capacity for which they had not asked and which they could not use, but for which they still had to pay. Such a system is not conducive to ensuring good value for money.

Nothing daunted, the Government launched their second wave of ISTCs in May 2005. The Greater Manchester surgical centre has run at less than 60 per cent. capacity in its first six months, but half of PCTs are delaying operations to save money. Why can we not use the excess capacity that we have identified in some ISTCs to treat patients whose procedures are being delayed as we speak?

We must compare quality and outcomes if we are to achieve an adequate comparison of the work done by ISTCs and NHS providers. According to the Healthcare Commission, national data on the quality of ISTCs are

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