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The Department has...retained a capped and banded payment structure based on the volume of all Part IX items prescribed by a Dispensing Appliance Contractor...This means that the fee which DACs receive per item falls significantly as their output increases. And DACs will receive no additional payment for items dispensed above the level of the cap.
There is a cap of 50,000 items per month, whereas the company produces about 55,000 items, so its income will fall substantially. Its argument is that that approach will not increase efficiencies, particularly in the growth sector.
Astra Tech, my constituents company, has specific concerns. It is the leading intermittent catheter firm. That technologically advanced system allows many people to administer a catheter themselvesor it allows their carer to administer a catheterso that they can stay at home. It is a LoFric project: the hydrophilic layers in the catheter provide lubrication, so that when it is inserted it does not cause friction on the urethra and, as a result, reduces the irritation by 90 to 95 per cent. when compared with alternative products. The company is a good one, providing a range of services, including home delivery. It has a general concern about the method of charging, which is per boxed item. The fact that most of its items come in one box and do not have follow-on products will impact on the way the company is paid.
Astra Tech welcomes the Department of Healths new proposals because the reduction is only 2 per cent., rather than the originally proposed 12 per cent. The revised proposal includes a new system of infrastructure payment and an extension of payment for nurse visits, which are now called appliance use reviewsAURsand which Astra Tech supports. However, it has a specific concern that the new revised proposal for remuneration is mainly for the benefit of the stoma industry, despite the fact that an estimated 6 million people are affected by varying degrees of continence problems and only 100,000 are estimated to have stoma problems.
In particular, the proposals will have a disproportionate effect on intermittent self-catheters, and as a result Astra Tech still stands to lose about 50 per cent. of its home delivery remuneration. As mentioned previously, unlike other urological companies, which stood to be adversely affected under the previous proposals, Astra Techs position is different, because its market share is dependent on predominantly one product. Consequently, the company will not be able to offset any costs incurred on all the other product ranges across the stoma and urology market.
Innovation is very important. As innovative products, LoFric appliances are packaged so that they are small, flexible and discreet. They also contain a sterile water supply that is integrated into the packaging of the products, which means that patients do not have to worry about bacterial contamination from a public water supply if they need to change their intermittent catheter in a public place. That offers a high value level of independence, which is one of the reasons why such products are so popular. As LoFric has no accessories, Astra Tech will not be able to receive other service payments for accessories in the same way as other companies do so. The true cost of delivery is thus not reflected in the service remuneration of the ISC products.
The disproportionate effect on ISC products was acknowledged by the Department of Health in past negotiations, but the revised proposals still ignore the issue. The summary of the proposals states that
overall, we believe that patient care will be maintained and, where appropriate, improved.
NICE guidelines on urinary incontinence state that intermittent catheterisation should be used for women with urinary retention who can be taught to self-catheterise or who have a carer to perform the technique. However, the Department of Health is risking the withdrawal of the service and specialist support which is provided for patients that use intermittent catheters.
There is a specific problem for this innovative company that is providing a popular service for people who stay at home. It tells me today that its income for home delivery may be reduced for 10,000 households.
Mr. Philip Hollobone (Kettering) (Con): I congratulate my hon. Friend on securing this debate and on the way in which he is addressing these serious proposals. Like him, I have had several letters from constituents, one of whom wrote to me:
Having lived with a colostomy for a period of some 13 years, I am reliant on receiving a good...range of products and a supply service...Although having a colostomy requires careful management, it does not mean that I cannot live life to the full. I am, however, not willing to see a reduction in my quality of life resulting from a cost saving initiative by the Department of Health.
My hon. Friend makes a good point. It has been suggested that many of the changes have been driven by cost pressures rather than service provision, although the Minister may take a different view in a minute. The industry has been providing a good service
at home for people who need it because of their special conditions. It provides a service that allows people to live normal lives.
As a Member of Parliament, I would have heard about the service over the years if it had been failing. It has not, and we now have a reform. The changes to the earlier proposals are an improvement, but they will still put great pressure on the industry, and segments of the industry will still be disadvantaged. I especially wanted to raise the concerns about Astra Tech and my constituent Alison, who is very concerned about the impact that the changes will have on her company. I hope that the Minister will be able to give a fuller explanation of the changes that we have heard from the Government in these important areas.
The Minister of State, Department of Health (Dawn Primarolo): I congratulate the hon. Member for Poole (Mr. Syms) on securing this debate on a matter that is of interest to him and his constituents, and to other hon. Members following comments by constituents or companies located in their constituencies. We are looking at the review of the arrangements under part IX of the drug tariff for the provision of services, especially stoma and incontinence appliances.
I first wish to reassure hon. Members that no decision has been made on arrangements under part IX for the provision of these products and the related services. None will be made unless we are satisfied that the outcome of the review is about the quality of patient care and the support that they get. That has to be central to this.
Part IX of the drug tariff is complicated. It includes not only stoma and incontinence appliances, but dressings and chemical reagents, the latter largely being used by diabetics to monitor their blood glucose levels. Dressings and chemical reagents were reviewed during the early stages of the part IX review and the maintenance of patient care was a critical aim during that phase as well. For example, proposals had to take into account the fact that manufacturers provided diabetics with free meters to use chemical reagent strips as well as telephone care lines.
I make those points because the hon. Gentleman referred to the length of the review of part IX and its cost. I am sure that it is probably an oversight on his part, but he referred to the costs for the total review, of which this is the final part. In every other area, we have demonstrated clearly that a review can take place that improves patient services and gets value for money for the taxpayer and the NHS. That phase of the review was concluded in October 2006, so we need to be careful that we do not imply that all the costs of part IX have been about only this particular subject.
As the hon. Member for Poole says, the current phase of the review focuses on the arrangements for stoma and incontinence appliances. Part IX of the drug tariffcompanies can decide whether or not to put their products within the tarifflists more than 5,000 items. There is no transparency about what is reimbursed to dispensing appliance contractors for those items and the money that they receive for service provision.
The arrangements have been in place and have not been properly reviewed for more than 20 years. That means not that the payments made to industry have not
gone up during that time, but that the structure of the tariff has not. It is vital that in looking at the provision of these important and sensitive services we seek to separate the costs so that we can see the cost of the product, define the services, and ensure that the £260 million is spent how we would want to see it spent.
The hon. Gentleman referred to home deliveries and advice and support lines, but the services are not universal or available to everyone throughout the country. They vary, and I do not believe that it is unreasonable for the Department to make it clear that it can increase the service providedhome services, deliveries, support and all the things to which the hon. Gentleman referredfor every patient while making it clear for the taxpayer what proportion of the money is paid for those support services and what is paid for the product. Unfortunately, there is a lack of transparency.
I am sure that the hon. Gentleman will have heard of the review led by my noble Friend Lord Darzi. It is centred on a vision of the NHS, which, as the House would expect, is that it should be fair, effective, personalised and safe. I hear what the manufacturers are saying, and that is their point of view about their products. Clearly, it needs to be taken into consideration. At no point during the review should any of us lose sight of the proposition: how do we ensure that the part IX review provides that the service for the products provided is fully consistent no matter where a user lives in England? That will mean considering the variations in home delivery services and where they do not exist, as well as ensuring that the reviews for those patients are carried out by specialist nurses or pharmacists to aid the patients knowledge of the appliances. It will mean ensuring that every patient receives that service. Our definition of part IX should make it clear that that is what we seek to achieve.
Of course, I acknowledgethis has been the case all alongthat there has been huge speculation about the possible outcome of the review. I regret deeply that users in particular have been very worried, sometimes unnecessarily so, that the service that they have come to depend on somehow will no longer be available to them, and that will not be the case.
The services that we seek to deliver are of a highly sensitive and personal nature, and any new arrangement needs to reach a conclusion that is right for patients, right for the NHS and right for the suppliers. Patients must come first every time. Furthermore, the Government are determined to ensure that the current level of patient care is maintained and, where appropriate, improved. That is why we have been prepared to listen carefully at every point in the review. My objective as a Minister is that I would rather take a little longer and get it right than do it quickly and find that we have made mistakes that are detrimental either to manufacturers but, more importantly, to the patients.
The hon. Gentleman is now aware of the further consultation that has just been published on the Department of Healths websitehe referred to it himselfalong with the impact assessment, which is intended to help to inform responses. The proposals that it contains reflect all the responses that the Department has received from earlier consultations. I fully admit to the House that I was a little frustrated at times that some of the earlier consultations did not get me closer to a conclusion; but each time, I was convinced by the Department that,
because sufficient outstanding items still needed to be clarified, particularly with manufacturers, we needed to issue a consultation document to refine the proposals.
Industry representatives have told us in particular that the new arrangements had to be more affordable than those that we proposed in September 2007, and I am confident that the proposals that we have now made will help to maintain dispensing appliance contractors current remuneration, while extending fees for certain services to the pharmacy contractors as well.
Mr. Syms: The industry representative whom I saw made it perfectly clear that those in the industry were very happy that dialogue continued between the industry and the Department of Health. They welcome that, and as a result of that dialogue we have had a better announcement today than the one that people feared. I want to put on the record the fact that segments of the industry are still concerned; there are still people to be listened to.
I absolutely acknowledge the point that the hon. Gentleman makes. I am also confidenthe referred to thisthat the proposed 2 per cent. reduction in the reimbursement for items will deliver a level of value for money for the NHS, while allowing manufacturers to provide a wider range of appliances. Certainly, based on the current number of part IX items dispensed, our
proposals represent an additional investment of £5 million. Of course, the investment will continue to increase in line with any increment in the number of items dispensed.
Owing to improving quality of service delivery, more and more patients are relying on stoma and neurology appliances, and the volume of dispensed items is increasing by more than 7 per cent. a year. I urge all those who are interestedI do not really think that I need to urge them, but I will, for the recordwhether they be patients, health professionals working in the area or manufacturers, to respond clearly to the consultation. It is vital that they do so, so that the Government can take their proposals forward. It is important that we try to draw the review to a conclusion and set out a lasting framework.
In conclusion, I acknowledge that the review has gone on for a considerable time. However, in the light of my comments, I hope that the House will agree that it is critical that we seek solutions that providers will find more acceptable if patient care is to be maintained. The speech made by the hon. Member for Poole should be taken note of, as should the comments of manufacturers and patients. If we can continue to work in a spirit of co-operationI have no reason to believe that we cannotI am confident that we will arrive at a lasting solution. When the consultation, which I sincerely hope is the final one, closes in September, I hope that we will have all the facts on the table, be clear about the direction, have agreement and at last be able to make progress.