Examination of Witnesses (Question Numbers
20-39)
DR MARK
EXWORTHY, MR
JOHN CARRIER
AND MR
KEITH PALMER
3 JULY 2008
Q20 Dr Naysmith: Do you think there
is still hope?
Dr Exworthy: I think so. I think
it represents the form of membership and the form of organisation
that Foundation Trusts have become, to represent an innovative
dimension in this regard. Traditionally the NHS has had rhetoric
in this but has not always delivered.
Q21 Dr Naysmith: When it went through
Parliament it was described by one or two members as a fig leaf
of democratic accountability; do you think it is more than that.
Dr Exworthy: Yes, and also I think
it sets up an interesting tension particularly on behalf of the
PCT as another constituent because they could claim equally that
they have the needs of their resident population in mind. I note
that the Darzi report earlier this week allowed PCTs to change
their name to become NHS such-and-such a county or town to identify
much more with the population on whose behalf they are commissioning.
I think there is a tension that patients might well have a very
strong affiliation to particular institutions and particular trusts
but the PCT loyalty, on the other hand, could set up a tension
and clearly there are not enough evenings in the week for people
to attend all of these public meetings.
Q22 Dr Naysmith: Do you both have
experience of the area we are talking about?
Mr Carrier: There is a tension
but I think it is a tension between strategic and operational
issues on the board in that the true members are lay people, intelligent
and inquisitive and want questions which often are the questions
that non-executive directors should be asking. There is this quite
interesting way of handling those sorts of things because some
of them are not for public discussion and that sets up concerns;
others are. One way I have seen it work is by the board of directors
through the chairman inviting members' councils to join committees,
to form sub-committees and to reach into the organisation in a
much greater way so our patients see what reception is like, what
discharge policies are like and so on and so forth. There is a
way of involving people in working which does not quite cross
the operational line but gives people some identity. I am pretty
sure there are hard to reach groups of people who have never made
their voice known or engaged with a hospital; they take it for
granted, it is there, they expect high quality services. I also
know that the oversight and scrutiny committees are doing their
job. We have just seen a very good example in London in Healthcare
for London where all 31 of them got together as well as the
31 PCTs to comment on Darzi's Healthcare for London. They
are also good at calling in both Foundation Trusts and non-Foundation
Trusts for scrutiny and the public do turn up and the newspapers
are interested.
Q23 Dr Naysmith: That is by-passing
the governors in the membership of the Foundation Trusts. I am
not saying that is a bad thing.
Mr Carrier: It is another dimension;
it covers columns of local newspapers which means that people
are informed. The other thing I have noticed is that the staff
members do speak out in these governing bodies. As you know, the
big issue is the appointment of chairman, the appointment of the
chief executive and the NEDs and that in the end a very big piece
of knowledge that all members' councils have; it is not used in
a threatening way but it is there. My observation is that they
have attempted to involve them but there is this very strange
operational strategic issue.
Q24 Dr Naysmith: Do you have anything
to add?
Mr Palmer: I would just say that
for me it is much better than what was there before. When I think
about what was there before there were no local accountabilities
at all and everything was directed by the Department of Health.
I have always believe that it is not a perfect system and it works
less or more well in different settings depending upon the communities
you are dealing with, but I think it is the right thing to do
to try to create some local accountability and some more effective
channels to the local communities so that there is an outlet or
an opportunity for them to express views and of course ultimately
to get involved in governance. One hopes that that is never necessary
because something has gone badly wrong, but the very fact that
there is now a local solution mechanism if there are major disputes
I think is a very helpful thing. The only other thing I would
add is that although Barts and London is not yet a Foundation
Trust we have decided to try to create some of these mechanisms
anyway. We have created a membership, we have invited people to
join and we are absolutely thrilled with the engagement we are
getting. We have Medicine for Members events which are
mostly about public health issues in East London and we get a
tremendous turnout of people you would never imagine would ever
go to a committee. I would say that it is not perfect but it is
a good start and I think it is an approach which should be rapidly
generalised across all trusts whether Foundation Trusts or non-Foundation
Trusts.
Q25 Dr Naysmith: I find it fascinating
what Mr Carrier said about the Overview and Scrutiny Committee.
Did you experience that as well when you were involved?
Mr Palmer: The Overview and Scrutiny
Committee is of course a statutory component of oversight. We
have not found, at least in Guys and St Thomas's, that there is
undue overlap between its role and the role of the board of governors
of the Foundation Trust.
Chairman: We have a series of questions
now on the impact of Foundation Trusts on the wider health economy.
Q26 Dr Stoate: John, I would like
to start with you. We heard how Foundation Trusts might be able
to improve efficiency and might be able to improve outcomes, but
they do have a very, very significant impact on the wider health
economy. We know, for example, that Foundation Trusts collectively
have a surplus of £1.7 billion and Keith has told us he likes
to have a surplus in the bank to make sure they can hedge against
the future. However, this is tax payers' money. If it is being
locked up in trust accounts does that have a big impact on PCT
spending and thinking?
Mr Carrier: No. We think PbR is
wrongly named; we do not think it is payment by results we think
it is payment by activity. In a sense that surplus is a hidden
iceberg and what we are constantly debating with them are issues
like coding of procedures and whether the returns we get quarterly
are accurate and validated and so on. So there is that very administrative
financial detail and we tend not to look at that big issue of
the surplus and tax payers' money. We are obviously very keen
on effectiveness and efficiency and value for money and I think
it is right that the big Foundation Trusts, University College
in our particular PCT is £52 million and the Royal Free is
£58 million; Tavistock is very much less. We tend as a PCT
not to think about the surpluses; we tend to argue about our bottom
line and us coming in on budget. We look at it that way. We also
view it as a health community rather than a health economy as
well because obviously we are very keen to delay wherever possible
entry into any hospital if primary care can do the job. Recently,
because of the debate about polyclinics, we have certainly had
discussions with the UC as a Foundation Trust and the Royal Free
as a non-Foundation Trust about polyclinic issues and primary
care. We are conscious of that but not the surplus that Keith
has referred to.
Q27 Dr Stoate: I am worried about
this now because that is evidence of real silo thinking; you are
saying that you do not really care about those surpluses.
Mr Carrier: I am not saying that
we do not care; I say that our main concern is to make sure that
the 18 week target is met, that our chief executive meets the
three financial targets he has to meet each year, that services
are of a high quality. If you want me to put them in order of
priority then high quality comes top. We are obviously interested
in cost efficiency and clinical effectiveness—we would distinguish
between those two—but all hospitals in our area have quite
a good reputation.
Q28 Dr Stoate: Yes but that is not
the point I am making. The point I am making is that we have a
lot of tax payers' money; £1.7 billion collectively is locked
up in trust coffers and surely as a PCT you must be very concerned
to ensure that that money is all spent on patient care, or do
PCTs not care whether that money is spent on patient care?
Mr Carrier: Again I think it is
wrong to say that we do not care but I think you are also right
to say that our interest is not directed to that; our interest
is directed to the day to day making sure that patients get in
when they need to get in as fast as possible and are given the
highest quality treatment and there are no delayed discharges
and the community will support them once they are out. That is
our main concern. I am sure if we changed our direction and started
to ask questions about the surplus and how it is being spent we
would have a different debate. I do meet the chair of the Foundation
Trust at regular intervals; our chief executive meets their chief
executive, there is an interchange and the relationship is good.
Every now and then it gets tense because we are asking for details
and they are asking for money but you are correct in one sense
that we do not concentrate on the surplus.
Q29 Dr Stoate: PCTs are always finding
difficulties with their finances and under payment by results
they do the work and you have to pay them; there are no ifs or
buts or maybes. The more operations they can hoover up the more
operations you have to pay for whether you like it or not.
Mr Carrier: No, it does not quite
work like that. We have a demand management system in place.
Q30 Dr Stoate: How does that work?
Mr Carrier: It is known as CCAS
which is the Camden Clinical Assessment Service where GPs, if
they want to refer to a hospital, will refer to this group which
is composed of GPs, unless it is an emergency.
Q31 Dr Stoate: They have to apply
to you for every single referral they make to everybody; even
under choose and book they have to apply to you first.
Mr Carrier: The CCAS does the
choose and book unless it is an emergency. That is how that system
works. It is based on what is known as the Kingston model which
was introduced a few years ago and it is really asking whether
the referral appropriate and obviously it is a cost effectiveness
mechanism so we have been working that for about two years now
and looking at the results.
Q32 Dr Stoate: So the GPs do use
choose and book.
Mr Carrier: They do use choose
and book, yes. We have about 42 practices in the PCT, about seven
of them are still not using choose and book and discussions are
on-going with them. It is about technology and cultural resistance.
Q33 Dr Stoate: The point is, when
a patient comes to a doctor and the doctor says you need your
hip replaced, the doctor has to say, "You can use choose
and book but I have to check with the PCT first whether I am allowed
to refer you".
Mr Carrier: The point is that
our GPs do support this system; they use it and how it is developed
is based upon their own thinking and ideas. They are paid and
it works. It works for all referrals in our particular Primary
Care Trust. The activities are monitored; there have been hiccups.
I think if activity is out of line, in other words it is not meeting
expectations—what we would have expected in terms of the
patient flow—questions are asked, but it seems to be working.
Q34 Dr Stoate: That is slightly off
the subject of Foundation Trusts but it is a question of how your
PCT works. My main concern really is to ensure that PCTs take
a close look at how the surplus is used. Do you think this is
something Monitor should look at in terms of ensuring that surpluses
are directed towards patient care or is it something that PCTs
should keep out of altogether?
Mr Carrier: No, they both have
a role in doing that, of course. We obviously expect Monitor to
do that but we are very challenging in terms of the volumes of
work that come to us and whether they have been properly coded,
whether the statistics are validated and so on. We have a whole
group of people who deal with the contracts. We are still on the
first wave contract although we have given notice—we gave
notice two years ago—and we will go onto the model contract
that is being introduced. Even then I think our Foundation Trust—the
big one, UC—takes patients from around 200 PCTs and whether
they will want to have one contract for all of them or negotiate
separately is another issue. We are the lead commissioner, that
is the point, and that is a way of ensuring economies of scale,
keeping an eye on the total picture.
Mr Palmer: Could I just add to
that the reason that John is not all that concerned about the
surplus is because it is not extra revenue that is being paid
to the providers; it is the benefit of providing the same volume
of care more efficiently. I think the right way to think about
the surplus is as extra resources available.
Q35 Dr Stoate: Yes, but it is still
tax payers' money being locked up in coffers and not being used
for tax payers' benefit. If you are going making efficiencies
surely that money must be recycled back into patient care.
Mr Palmer: That was going to be
my next sentence. I think it is not a question for me about the
commissioners being concerned; I think that what we lack at the
moment is precisely what you have just described. At the moment
Guys and St Thomas's, for very good reasons, is still planning
on how it wants to spend that money. Whilst it is locked up it
should be available to the NHS, recycled, and until it is needed
it is available to be used.
Q36 Dr Stoate: There are things the
PCT would like to do but cannot do, there is money in your bank
that is not doing anything and those two things are not being
put together. What I am saying is that this is silo thinking;
it is not joined up thinking.
Mr Palmer: It is a question of
policy. At the moment there is not the mechanism to recycle surpluses
so they can be used elsewhere in the NHS.
Q37 Dr Stoate: That is exactly my
point.
Mr Palmer: But on the basis that
those who generated the surpluses can get access to them when
they have plans to spend them. It is actually relatively straightforward
to devise an internal banking system where you re-use those surpluses
but you do not take them away from the providers so that when
they have good plans for them then they can use them.
Dr Exworthy: Could I just make
two quick points, one is that in a way this is the price of autonomy.
We are giving Foundation Trusts the autonomy and they keep the
surpluses; that is part of the rules. That is the name of the
game, as it were. I think also there is a difference between long
term and short term here. As Mr Palmer has just said, some of
them have been a little unsure as to what to spend it on, but
there is a difference between, as it were, short term improvements
you might be able to make and say, capital expenditure which might
take several years of surpluses to accrue. Building a new wing
of a hospital or even a new hospital would clearly be on a different
scale than, for example, I know from the Darzi report one of the
Foundation Trusts in Gloucestershire paid £100 to each member
of staff as a bonus. There is a short term/long term issue.
Mr Bone: I was going to come in but I
disagreed with Dr Stoate and I thought that was dinosaur thinking
of the NHS. The effect is that efficiency savings have been made
which would not have come about if you did not have Foundation
Trusts. That was the problem with the existing system, there was
no incentive to make the savings then no savings go to the hospital
which they could spend on long term projects. The Government is
absolutely right on this, it is the dinosaur thinking that they
are trying to get away from which I think actually Mr Palmer did
explain.
Q38 Chairman: Let me pick up on one
with John who is a commissioner effectively. Your health budgets
have been growing, effectively 4% above inflation or something
like that. Would your attitude to surpluses being held by your
local hospital be different if your budgets were not growing in
the way that they are now or indeed have done in the past, a lot
less than they are currently? Would it change your attitude?
Mr Carrier: It might well do.
We do see the surplus as a much broader issue. I will give you
the point, but it is a broader issue and again we see our task
as to make sure we commission services that are needed and the
tariff and then to check what it is going on. It may sound like
silo thinking but that is the accountability thing that we take
very, very seriously and that is why we call for the data and
statistics, and that is why we have these debates. I think that
is a fair point.
Q39 Mr Scott: Maybe I am a dinosaur
as well but I would quite like to see that if a PCT needs some
money and that one has it that it could be used for the benefits
of the patients, which is what I thought it was all about. Mark,
you say that provisional evidence suggests that Foundation Trusts
are picking and choosing the issues on which they are cooperating
with other parts of the National Health Service, especially if
it is in their own interest. Could you give us a little more detail,
please?
Dr Exworthy: I think it is perhaps
implicit in some of the things that we have been discussing already
this morning. Clearly Foundation Trusts have been given a set
of incentives in which they are much more responsible for their
own activities and affairs and, as we have just heard, surpluses
as well. So clearly there is a much greater focus on their internal
processes and decision pathways if you like and that clearly sets
up a self interest type model that they are responsible for the
boundaries of their trust and outside that is an externality;
it is beyond their responsibility. Clearly in terms of some of
the activities that might be going on in the local health community
they are deciding the degree to which they might cooperate. Clearly
there are areas in the country where there has been a history
of collaboration and Foundation Trust status does not immediately
change that; there has been an on-going network, many people will
have worked in similar organisations, their friends and colleagues
work similarly. There is a level of trust often between Foundation
Trusts and non-Foundation Trusts in the local health community
in the development of HR policies or clinical networks et cetera.
There might be some places where the Foundation Trust status sets
up a difference of position, responsibility and interest such
that there is—to use the term used earlier—more of
a silo mentality. That has created not just the acquisition of
their Foundation Trust status but some of the central rules and
implementation of those rules that set up a degree of resentment
between Foundation Trusts and non-Foundation Trusts. That might
hinder future collaboration. Some of the specific examples where
they might wish to collaborate, for example in some of the big
service reconfigurations that have been going on and are likely
to continue, in the sense that it is very much in their long term
interests for Foundation Trusts to get involved in these decisions.
Helping shape that debate locally within the county, city or whatever
is part of their interest. As we have heard surpluses might be
retained which might set up a kind of tension, the degree to which
they are seen to be retaining the surpluses and/or hindering or
hampering local service developments. I think it will be very
different in different places depending on the history and culture
of collaboration.
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