Examination of Witnesses (Question Numbers
1-19)
DR MARK
EXWORTHY, MR
JOHN CARRIER
AND MR
KEITH PALMER
3 JULY 2008
Q1 Chairman: Good morning gentlemen.
Can I welcome you to this one-off session that we are having looking
at the issue of Foundation Trusts and Monitor. I wonder if I could
ask you, for the sake of the record, if you could introduce yourselves
and the current position that you hold.
Dr Exworthy: I am Mark Exworthy.
I am a Reader in Public Management and Policy in the School of
Management at Royal Holloway, University of London.
Mr Palmer: I am Keith Palmer.
My current position in the NHS is that I am Chairman of Barts
and the London NHS Trust. Up to a year ago for six years I was
a non-executive at Guys and St Thomas's, three years of them as
an NHS Trust and three years as a Foundation Trust.
Mr Carrier: I am John Carrier.
I am the Chairman of Camden Primary Care Trust. Formerly I was
Vice-Chairman and then Chairman of the Royal Free Trust.
Q2 Chairman: As you can imagine with
three witnesses we may have a tendency to all say the same thing,
so what we would like to do is try to put our questions to individuals
concerned. Obviously others may be asked an opinion about them
but we will try to keep the session reasonably tight if that is
at all possible. My first question is to you, Mark. You argue
that the evidence suggests an unwillingness on the part of Foundation
Trusts to exercise their autonomy fully and you also state that
the Department of Health and the SHAs require a change in attitude
and behaviour to reflect the changed landscapes of Foundation
Trusts and their activities. In what ways is the Department of
Health and SHA's behaviour compromising Foundation Trusts' autonomy?
Dr Exworthy: We have been looking
at the issue in terms of local health economies and the ways in
which the Department of Health's policy is being implemented at
the local level. We have been observing changes from the centre
right down to the locality and as part of our research—which
we are part way through—we have been identifying issues
at all levels. Part of that is the changed landscape both for
Foundation Trusts at the local level but it also requires a change
in mindset, in attitudes and approach from the centre as well.
There are signs that that is changing but clearly there are examples
where there might be a tendency to revert back to traditional
patterns and there has been some discussion recently between David
Nicholson and Bill Moyes about the degree to which the Department
of Health is able to influence Foundation Trusts and I think generally
Monitor and the Foundation Trusts have been resistant of that
change. I think that gives you an illustration of the sort of
change of mindset that is taking place but there is probably further
work to go if autonomy is going to be fully realised at the local
level.
Q3 Chairman: Is it the case that
Foundation Trusts could exercise more autonomy but culturally
they do not? Or is it the case that they are being effectively
advised not to? Which is it? Are people in Foundation Trusts still
looking to the Department or beyond for the answer?
Dr Exworthy: I think the balance
between willingness and ability is quite crucial because certainly
many of them are able. They were high performing trusts in the
first place and many of them have very skilled managers and clinicians
involved in the governance of these organisations. They are clearly
able and Foundation Trusts require them to take another step forward
to become more robust and much more independent. I think there
is that ability and there are signs there. Their willingness in
a way is being compromised not so much in the sense that they
are being told what to do but there is a cultural change that
is involved. In some ways many of these Foundation Trust organisations
have grown up in an NHS that has traditionally been centralised
so to some extent they have always been looking up, hence David
Nicholson's advice to look outwards and not upwards, but clearly
those traditional patterns still persist. Also I think the rules
of the game are still a little unclear for Foundation Trusts in
the sense that this is such a new departure and represents such
a significant change in health policy that their willingness to
extend into new areas—innovations, service developments,
capital spending et cetera—exposes them in a much more visible
way financially and publicly which you could say is a good thing
but clearly, as you are exposed a little more, your willingness
to do so leads to a certain caution or a certain carefulness which
again might be a good thing but perhaps it starts to explain why,
although they are very able and capable, they have not always
been willing to exert that. Going back to my previous answer,
I think there are still some elements of centralisation of being
"told what to do".
Q4 Chairman: We may pick up on one
or two of those things. Keith and John, does that tally with your
experience?
Mr Palmer: My experience was three
years getting into a position where Guys and St Thomas's became
a Foundation Trust and then three years before I left the board
when it was a Foundation Trust. I would say that Guys and St Thomas's
was a first wave Foundation Trust so it is one of the very early
up-takes. What it felt like on the board was that during the first
12 months all the Foundation Trusts were made Foundation Trusts
as standalone entities, they need to remain financially viable
but with no reserves in the balance sheet. The first thing that
happened, during the first year or two, was a drive in performance
to generate surpluses in part to provide a risk cushion in case
things went haywire in the future and also to drive performance
because before Guys and St Thomas's at least started to think
about rather grander initiatives we felt we needed to get our
act together and push for the very best quality of services in
what we already provided. By the time I left the board in the
third year of a Foundation Trust there were active programmes
which I know are on-going to engage with the rest of Southeast
London health economy to see if they can extend the excellence
which Guys and St Thomas's now provides to its patients to a wider
community. I would say that there have been uncertainties about
how much authority there is to do new things; there is an emerging
confidence that they are allowed and some of the trusts like Guys
and St Thomas's are beginning to put their best foot forward.
Q5 Chairman: John, is that your experience?
Mr Carrier: Yes, I think I would
agree with Keith rather than with Mark. I was in at the ground
floor with University College Hospital who asked obviously under
the Act for a Primary Care Trust representative to be on the Members'
Council. My feeling was for the first few months there was some
sorting out to do because we had a huge constituency of people
coming along who had no experience of Foundation Trusts let alone
a health service organisation. There was a lot of discussion about
what their role was. The hospital was also moving from an old
building to this brand new palace on the Euston Road—you
may have seen it, this great giant green thing—but the concern
that the executive had and the rather experienced chairman and
NEDs was with financial stability, the commissioning position
that the PCT would take as well as other targets the PCT were
concerned about (delayed discharges, MRSA). There were always
debates about the tariff and whether it should be unbundled and
whether PbR was the right way of going forward. So all those things
were being sorted out in the first year. I then left because the
chief executive of the other local Primary Care Trust, Islington,
came on board and I thought that my chief executive ought to be
on instead of me to match her. One of the issues that was always
raised was the accounts, the finance. Innovation, I think, would
have been pushing it for the first couple of years. They were
the first wave. I was then asked to go onto the Tavistock and
Portman, a much smaller Foundation Trust with a budget of about
£20 million a year in contrast with a budget of about £400
million or so. What I thought was interesting was the efforts
both Trusts made before they were set up to involve the public
by meetings et cetera.
Chairman: We may pick up on these matters
later. Could we move on to Sandra?
Q6 Sandra Gidley: Innovation has
been mentioned. Dr Exworthy, reports by the Foundation Trust Network
and Monitor proved some examples of what they term innovative
practice being employed by Foundation Trusts, but a recent HCC/Audit
Commission report concluded that "On a national level ...
FT status does not yet seem to be empowering organisations to
deliver innovative models of patient care". Are there any
practical examples or independent evidence that Foundation Trusts
are actually delivering care more innovatively or efficiently?
Dr Exworthy: I think you are right
to point out that there is relatively little evidence of this
so a lot of it does rely on the sort of reports that you have
mentioned which clearly have a "vested interest" in
some of these issues so independent research or independent evaluations
tend to be rather scarce. Having said that, innovation covers
a wide range of activities so it would be difficult to categorise
all the sorts of things that are going on. Probably there are
two points to make, one is that these were high performing, largely
innovative, dynamic organisations so, as it were, much of that
has continued in the direction that you would expect it to, so
what difference would Foundation Trust status over and above that
bring? Some of the evidence seems to be a little bit weak in that
regard. Whether they are actually offering over and above improvements,
I am not too sure whether that exists so far, I am slightly dubious.
I think a lot of the work that has gone on is making sure that
they are a robust organisation in the sense of greater attention
to costs and greater focus on improving the managerial skills,
clinical involvement et cetera. I think there is a lot of work
that is going on that might not yet have translated into, as you
call it, innovative practice or service developments.
Q7 Sandra Gidley: Some of these trusts
have been in existence for a number of years now so surely there
should be some sign of changes in practice.
Dr Exworthy: We have to remember
that all of these operate within a local health system which,
to some extent, liberates them and to some extent constrains them.
We are seeing some much more innovative practice in terms of developing
clinical networks outside the organisation which I think is quite
important—cancer surgery, for example, being quite significant
there—but that is not necessarily to do with their Foundation
Trust status.
Q8 Sandra Gidley: It might be helpful
to ask somebody who is representative of a trust. Mr Palmer, you
have been in since the beginning, are there any benefits conferred
by Foundation Trust status? What have you been able to do that
you would not otherwise have been able to do with regard to innovation?
It seems that the best high performing trusts were the first off
the blocks, as it were, and could have done this anyway. What
difference has it made in practice?
Mr Palmer: I asked myself that
question right the way through actually because I held great hopes
for Foundation Trust status. I would identify two in particular.
The first is the fact that that Foundation Trusts are allowed
to keep the surplus that they generate through efficiency improvements
is a really important driver of behaviour within the hospital
trust.
Q9 Sandra Gidley: What do they do
with it when they have got that money?
Mr Palmer: At Guys and St Thomas's
the promise was that if we can generate the surpluses we can reinvest
them in even better health care and that motivates clinicians—not
just doctors but a whole community of people, the 8000 people
who work over there—that the thought that you are slogging
to get cost reductions because the Department tells you you have
to is an entirely dynamic to: if you do this and do it well you
can then do the things which have been on our planning horizon
that we could not afford for a very long time. The question of
what you do with it of course is a very important question. As
I say, at Guys and St Thomas's the view initially was that we
must generate surpluses to create some risk cushion because it
is a very uncertain world out there; we do not know what the Darzi
plan is going to be for our services; we need to be able to invest
in the fabric of the building. The basic position was to get some
surplus and then think about what to do with it. I have not been
privy for the last 12 months, but there are some very interesting
plans to change the models of care, to use language you use. However,
as Mark said, you can only change models of care by interacting
across the whole network. You have to deal with organisations
which are not Foundation Trusts and who are subject to direction
by the SHA. I think it has been slow but my observation would
be that there is a degree of freedom now and the fact that Guys
and St Thomas's plan to use those surpluses is really quite interesting.
It would be a shame, I think, to stop the experiment now, but
if you do not see some action over the next couple of years then
you should be asking the question why. The other important difference
is the membership and the engagement and the board of governors
of a very wide range of stakeholders. We have a slightly absurd
board of governors at Guys and St Thomas's in the sense that it
has 40 people on it and you could say that no body of 40 people
can do anything effective, but because it is so representative
of all the interest groups—staff, patients, PCTs, local
healthcare trusts—it really is a tremendously effective
forum for sharing ideas and discussing things, not in a governance
sense but simply sharing in a single forum the very different
interests of everybody. I think that that has been very valuable.
Q10 Sandra Gidley: I would like to
be reassured that it is not just tokenistic; can you give me one
practical example of something the board has done to make a difference,
something you would not have been able to do if you were not a
Foundation Trust?
Mr Palmer: I think it is difficult
to pick something out. The behaviour of the board of directors
at Guys and St Thomas's has been different in the sense that they
have felt free to take certain decisions which otherwise they
would have been directed when they were an NHS Trust. Things like
how to conclude negotiations with the commissioners, how to engage
with the sector about the changing models of care, there is a
sense of empowerment that there is a right to carry on those discussions
which simply was not there before. I am absolutely sure in my
mind, having been both an NHS Trust and a Foundation Trust, it
feels very, very different on the board of an NHS Trust—which
is where I am back again—because you really have to ask
permission all the time. It is a different dynamic and it is quite
difficult for me to give you a particular instance, but it is
tangible and real.
Q11 Dr Taylor: Quality occurs four
times in the titles of Darzi's report; four out of eight chapters
have the word "quality" in them. When we did our report
on Foundation Trusts right at the beginning some years ago one
of the recommendations was: " the key argument in favour
of the policy of Foundation Trusts is that it presents a genuine
incentive for trusts to improve their performance. However, we
are not clear that once Foundation Trust status is achieved there
are adequate incentives in place to ensure that trusts improve
or even maintain high levels of performance." Turning to
Mark first, I think you say that "initial evidence suggests
no significant improvements as a result of Foundation Trust status.
Dr Exworthy: Quality again can
be defined in many different ways just like efficiency or any
other concept by which you are wanting to measure. I think the
evidence is thin or weak at the moment; we do not have too much
on which to base other than perhaps anecdotal or experiential
evidence. However, I think there are signs of a greater sense
of ownership, a greater sense of pride, a greater sense of empowerment
through which you might hypothetically suggest that quality would
improve. Some of the evidence on decentralisation generally suggests
that people who have greater ownership tend to address things
more carefully, more assiduously and as a result quality might
improve. There is a hypothetical argument to say that that would
happen and there are a few signs that that has happened I think
so far.
Q12 Dr Taylor: As to one of the crudest
measures, complaints, is there any evidence that complaints have
either gone down or up since the Foundation Trust status?
Dr Exworthy: I do not have any
information on that.
Q13 Dr Taylor: Moving to Keith and
John, would there be any evidence on that side?
Mr Palmer: If the complaints records
are kept and constitute part of the insurance framework which
the Healthcare Commission expects. As you know, the majority of
Foundation Trusts are good or excellent but quite a few of them
were good or excellent before they were Foundation Trusts. I think
there is evidence that the standard of care and the quality of
care of the cohort of Foundation Trusts is very good. There is
some evidence it has been improving because the weighted average
of the scores of them has improved, but like Mark has said several
times, it is difficult to say that because of Foundation Trust
status it has happened. Certainly in my trust—which is not
a Foundation Trust yet—we are improving the quality of care
irrespective of an organisational status.
Q14 Dr Taylor: Do you have anything
to add?
Mr Carrier: I think the first
thing to say is that we are very conscious of sections 18 to 25
of the 1999 Act about that which lays a duty of quality on us
all. That is an overriding issue. Whether Foundation Trusts have
made a difference or not I do not have the data on the complaints
but we do have data on serious or untoward incidents. However,
I think it is wider than that. I think you can measure quality
in a number of ways and Foundation Trusts may have made a difference
here. There is the speed of care, the speed at which people get
into the system. There is the location of care and I think Mark
is right about that; networks have helped in that, for example,
if you get cooperation between Foundation Trusts and non-Foundation
Trusts like the Royal Free in our particular area there is no
doubt that there has been an interchange of services where the
location is best, so plastics move to the Royal Free, cardiac
goes down to UC. Networks are the important issue; you can say
it is coincidental but it may have been given a push. Liz Wise
who is the Director of Contracts and Performance has passed me
a note to remind me that one of the big issues is that Foundation
Trusts have to respond to commissioners; they have no option to
respond to commissioners on any service change or innovation.
However, on the other hand, commissioners need to support innovation
and what commissioners are interested in is not just efficiency
and effectiveness; clearly we are under some obligation to make
sure targets and standards are reached and that means relationships
with the Foundation Trusts. We do call for regular quarterly data,
financial data but also quality data. They come back to us and
say that the tariff is constraining them and they need some more
money if they are to meet the 18 week target, that relationship
has been set up since the Foundation Trust so there is that interchange.
My own feeling is that there is a paradox here and the paradox
is that the centre wants more and more care out of hospitals and
while we are trying to support centres of excellence which are
these hospitals in the middle of London there is a real demand
management question here which is quite tense I think. I think
quality has been improving and I think you have to use proxy figures
to demonstrate it, but you need the evidence to be properly discussed.
Q15 Dr Taylor: Keith, you are going
through the phase of applying for Foundation Trust status at the
moment.
Mr Palmer: That is correct, yes.
Q16 Dr Taylor: So you have to have
quality at a pretty good level before you can get in. Once you
have got in what are the incentives to go on improving?
Mr Palmer: They are various. Firstly,
as John has said, the commissioners have a responsibility to make
sure that standards are maintained at a certain level and of course
the Healthcare Commission inspects everybody, Foundation Trust
or not, and reports on the systems and processes in place to assure
quality. You get a score and all trusts, whether you are a Foundation
Trust or not, care mightily whether you are excellent, good, fair
or poor. So there are some dynamics in the system. This is nothing
whatsoever to do with Foundation Trust status but the dynamics
to improve quality of care have not been very strong and I welcome
the very recent announcements by Darzi et al for a renewed focus
on quality but if that is to be achieved we need instruments that
will drive it better than we currently have. I think those instruments
should apply to everybody, not just to Foundation Trusts
Q17 Dr Taylor: Can you define what
you mean by an instrument to drive it?
Mr Palmer: It has been proposed
for quite some time that you should link in part the payment you
make to a provider to the quality as well as the quantity of care.
Payment by results is a payment per unit. You can develop quality
metrics I think in some services quite easily and so the people
will recognise quality by paying a bit more but equally we will
punish you, as it were, for poor quality by paying you a little
bit less. I am a great believer that a properly graduated incentive
of that sort would put a renewed dynamic into the system.
Q18 Dr Naysmith: Can we move to the
area of governance and democratic accountability? This is an area
where, when the legislation was passing through Parliament to
set up Foundation Trusts, there was a lot made of it by the Government.
You may or may not be aware that there have been a couple of reports
into how this has been working, one an Ipsos MORI poll for Monitor
and a so far unpublished report by Mutuo for the Department of
Health by Chris Ham and Peter Hunt. It is true to say that there
is a bit of evidence in this area but both of these reports contain
good things but they are also more than slightly ambivalent and
suggest there is still a lot to be desired in this area. I wonder
if I could start with you, Dr Exworthy. In your submission to
the Committee you said that the new governance arrangements of
Foundation Trusts are "seen as an important development but
have yet to translate into meaningful change" and that "the
relationships between the FT Governors and the Board still require
further development." How do you see this development taking
place and how can Foundation Trusts governance arrangements be
improved? I would like specific suggestions if you can with evidence
if possible.
Dr Exworthy: I will try to be
as specific as possible. Like my colleagues on the panel who have
already mentioned the significant changes in governance and public
membership that Foundation Trusts give, having said that I think
that the focus—or priority if you like—has not been
on that so far, it has been about getting financial stability,
robustness and making sure that their operation as a Trust (usually
it is a hospital) is efficient and effective. There are signs
that they are moving into developing better relationships with
their memberships but I think there is a danger that initially
at least these efforts have been focussed on people who might
have been engaging with those Trusts anyway and extending it out
to a broader membership is traditionally very difficult so Foundation
Trusts would encounter similar problems. However, I think there
are signs of much more outward focus; I mentioned that, rather
than looking upwards, looking outwards. There are signs that they
are taking that on board, entering into dialogue with all the
various stakeholders that have been mentioned—local authorities,
other NHS trusts, the public in all its dimensions.
Q19 Dr Naysmith: In both the studies
that I mentioned there was evidence that there were members and
even some governors who said they did not feel involved and they
could not really make much of a communication with even their
chairs on some occasions.
Dr Exworthy: Yes, and I think
there is some evidence that the governors have failed to identify
their role in a sufficiently well-defined sense. In a way that
was my implication about this further development in that area.
I think also there are areas to test between the board of governors
and the executive team in the sense of on what occasions has that
role been exercised in audits, appointments et cetera. Maybe they
have not entered into that territory yet.
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