Select Committee on Health Minutes of Evidence

Examination of Witnesses (Question Numbers 40-59)


3 JULY 2008

  Q40  Mr Bone: Following on from Lee's question, is it more like internal politics within this very large organisation that Foundation Trusts see themselves as something above the rest and the others think they really do not want to cooperate with them; they are a grammar school and we are a secondary modern. Is it that sort of thing you are worried about?

  Dr Exworthy: I probably would not put it like that. Foundation Trusts have a duty of partnership but that clearly gives them quite a wide latitude of how they interpret that. Many of the rules under which they are now operating are much more explicit, so legally binding contracts, payment by results. They are very much more of a higher profile, more explicit, more overt and so clearly they are thinking in terms of managing their risks accordingly.

  Q41  Mr Bone: John, earlier on in your evidence you actually said that you thought it had encouraged better working between partners. Could you just say a bit more about that?

  Mr Carrier: Since shifting the balance some years ago which emphasises the cultural change that would have to come about, there is no doubt that the large hospitals, especially teaching hospitals, could see that commissioners were going to be important because their income is going to come from commissioners. I think other things which are difficult to quantify are also important, which are relationships: knowing people, meeting at networks, meeting at the oversight scrutiny committees, exchanging ideas, being invited to seminars and goodbye parties; all those sorts of networking, gossipy things do help to get the feel. As Wellington once said, you look to the wit and spleen of the person to understand who they are. That does help collaboration and I think it also goes beyond that and gives you the idea that whether it is a Foundation Trust or a non-Foundation Trust there is complementarity here, they are both on the side of the patient. For the Foundation Trusts with very high reputations, with teaching responsibilities and medical students, there is another dimension here which is extremely important because they have an intellectual critical mass which they want to defend as well. We want that to get into the service. So there is a whole debate in London about academic health science centres and we have been invited to discuss those and that is interesting. The last president of the Royal College of Physicians but one, myself and the chief executive and the chairman of what is now the Camden and Islington Foundation Trust also had discussions with the Foundation Trusts about the easy and quick reception of people with mental illness who are brought in under section 135 and how that could be improved in the middle of London. That seems to be working. So there are changes but it does very much depend as much on relationships and understanding of each other and not simply on the economy issue. I think it is a health community as well as a health economy. We are not against the economic and financial issues but other things are just as important.

  Q42  Mr Bone: Mr Palmer, I think you have seen this from both sides, Foundation Trust and non-Foundation Trust. Would you say that there is any evidence that Foundation Trust hospitals are better at collaborating with the private sector than non-Foundation Trust?

  Mr Palmer: If I may I will answer that as well as whether they are any better at collaborating within the NHS because I have, as you say, seen it from both points of view. I do not think that the tensions in the system about service re-design and cross-organisations makes very much difference whether they are Foundation Trusts involved or not. I am now at Barts and the London; we are a high performing, financially in surplus major teaching hospital trying to do re-configuration with clinically less high-performing, financially very troubled DGHs. I think that situation creates enormous tensions in trying to do things that are good for patients that the losers will sign off on and losers will usually the district general hospitals. I see that exactly the same in the Northeast where we do not have Foundation Trusts as it was in the Southeast where they have the same issues. I think they are inherent in service re-design and the way that payment by results works more than whether you are engaging with a Foundation Trust or not. On the private sector, my answer would be exactly the same. There are inherent difficulties in the NHS dealing with the private sector; I do not think it makes very much difference except there are a few more legal powers to do it in Foundation Trusts but that does not make it any easier actually.

  Q43  Dr Stoate: I am going to be the Committee Rottweiler for a moment or two and have a go at Mark now. We are talking in theory about primary care in the NHS and yet we are seeing Foundation Trusts which are gaining huge amounts of power and control over the local health economy. What evidence is there that Foundation Trusts have in any way facilitated the move of resources and services into the community away from themselves?

  Dr Exworthy: Foundation Trusts were initially acute trusts and have been extended into mental health trusts and there is the potential to move into community foundation trusts so there is a pathway if you like in which that Foundation Trust status is moving. Given my earlier comments about their self interest, they have a clear interest in looking at acute care. Having said that, I think there are some areas where they are moving into primary care and that is either a function of other partners in the local health community—so re-configuration across organisational boundaries (clinical networks might be one example)—but there might be other areas, particularly outside the bigger cities, where the Foundation Trust as it were dominates the area so that in a sense they become the provider across many towns and villages that they encompass. There might be a degree of difference and ability of moving outside their traditional remit for Foundation Trusts to enter into those primary care pathways.

  Q44  Dr Stoate: Is it not happening?

  Dr Exworthy: Not at the moment. I think there are discussions and areas of debate in which they are thinking about that but have not actually moved in that direction.

  Q45  Dr Stoate: Given that the Government's line is for a primary care led NHS do you think it was a wise move to set up Foundation Trusts in the first place? You are going to have Foundation and Primary Care Trusts.

  Dr Exworthy: I think that is difficult if PCTs are commissioning on the basis of government allocations and financial allocations. There were some suggestions at the outset of Foundation Trusts that perhaps we should talk about a foundation community so rather than giving it to each individual organisation it would be given to a network of organisations. That obviously did not happen but that would be a very different model than setting it up with each individual, as it were, in competition with others.

  Q46  Dr Stoate: You are saying there is no evidence whatsoever that we are moving from the current situation of hospital dominated care into a primary led care as a result of Foundation Trusts.

  Dr Exworthy: I think a lot of the rhetoric about primary care led NHS is still to be realised, but I think there are steps in that direction. Clearly Foundation Trusts have been put in the position that they are going to try to shape that agenda in each health community.

  Q47  Dr Stoate: Given their self interest are they helping or hindering that process?

  Dr Exworthy: I think they are helping and they might be in a good position to do that because they might be able to coordinate many of these primary secondary care networks.

  Q48  Dr Stoate: Why could the PCTs not have done that? Why are we leaving it to Foundation Trusts to do that with their self interest? Why did we not set it up in the way that PCTs lead that process?

  Dr Exworthy: A lot of Primary Care Trusts are—and perhaps should be—leading that process. Clearly it makes a difference when one of your partner organisations—your providers—is a Foundation Trust because that sets up a potential tension and a potential resistance to shifting your money, especially under the PbR system which sets up different incentives for the PCT and the FTs.

  Q49  Dr Stoate: I am still trying to get a straight answer; is that a hindrance or a help in that case?

  Dr Exworthy: For shifting to the primary care led NHS? I would probably say it is a hindrance on balance but I think that balance might be shifting.

  Q50  Chairman: Have you got a view on that, John?

  Mr Carrier: I think it is shifting and I think it is shifting because the language now differs. The patient pathway/patient journey is an important idea; there is a pathway in and a pathway out. Some services are also clearly negotiated to come out of hospital and back into the Primary Care Trust (dermatology is an example and diabetes is an example). There is also quite a good discussion going on stimulated by the polyclinic, for example there is a discussion between the Camden Primary Care Trust and University College Hospital about the location of four GP practices on the ground floor alongside an urgent care centre, alongside an A&E department, alongside out-patient services. Whether this comes off depends on consultation and whether it is financially feasible, but there are four surgeries round about that are not DDA compliant and it would be very interesting to see if we can get an integrated centre out of that. The Foundation Trust is certainly interested in discussing this with us. I do not think that could have happened before although, to be fair, the Royal Free too is talking about collaboration with local integrated care centres and so on. Coming back for one second to something said earlier, I think one man's silo may be another man's professional division of labour and although you may want to defend a silo you may also want to defend your professional division of labour which is what you have been brought up on, what your skill is, what your competence is, what your knowledge is and what your values are. I think silo as a pejorative term does not really fit here. I think people will defend what they hold out to be good but I think there are gaps here which people are crossing and talking to each other. That is very, very important whether you are a Foundation Trust or not. I think Primary Care Trust is included now because commissioning is extremely important. We have shed our provider service; it is now an autonomous provider organisation and they will have to do what others do in that situation. We are purely commissioning. We have a budget of well over £400 million of which £52 million goes to UC, £58 to the Royal Free (both 2008-09) and we are financially in balance so we are not at the moment strapped for cash and we have taken advantage of the increase year on year.

  Q51  Dr Stoate: I understand what you are saying, it is just that my philosophy has always been that we should look at a health community where we spend large amounts of public money hopefully to the public good and anything that causes artificial divisions and effectively barriers to that happening I like to examine. It seems to me, just to step back, that locking money up when that money could be used and freed up for patient care seems to be a barrier rather than a help. I am just trying to tease that issue out.

  Mr Carrier: I see the point but my feeling also is that accountability is important, that the more pluralistic and the more multi-services there are, the more difficult it may be to see when things go wrong, who is accountable and where the money is actually being spent. I think there is a case for and against.

  Q52  Dr Taylor: I welcome what John says because you are obviously beginning to bridge the purchase and provider split.

  Mr Carrier: I hope so.

  Q53  Dr Taylor: That is absolutely brilliant. Keith, I want to know about the costs of the Foundation Trust application process. I have to declare an interest because on Saturday I am going to a consultation meeting in my own Trust about doing it. What does it cost to apply?

  Mr Palmer: I think the major cost is difficult to put a money value on because it is a huge effort that the whole organisation has to go through to get itself prepared. There is a very structured process that Monitor runs; there are very high standards in terms of compliance with their requirements and I would say at Guys and St Thomas's it caused us at least 12 months to take our eye off the ball; not take our eye off the ball because actually you cannot do that because you cannot become a Foundation Trust if you slip from meeting all the targets. People had to work much, much harder simply to get through an additional major agenda which is the Foundation Trust application process. The monetary cost is mostly measured in terms of the recurrent costs of running the membership. You have a membership; it is not the elections, they are not very expensive, but you have to communicate with them, you have to produce publications quite properly and circulate them to potentially tens of thousands of people. Those sorts of running costs are material but they are measured in hundreds of thousands rather than millions. The front end cost is really measured in the time and energy that staff have to put in; the actual cash on the table is not that great.

  Q54  Dr Taylor: Have there been any specific challenges for your trust particularly that you have had to face other than just getting the finances and the quality right?

  Mr Palmer: In becoming a Foundation Trust?

  Q55  Dr Taylor: Yes.

  Mr Palmer: I think that with hindsight the first wavers have got a relatively easy ride. Some of the follow-on trusts—people like King's—were referred back three or four times and there were major costs in terms of doing extra work and re-submitting that were not immaterial. For my rust at that time we sailed through.

  Q56  Dr Taylor: Do you think there are any major challenges to you at the moment?

  Mr Palmer: The major challenge for Guys and St Thomas's is to use the surpluses effectively. There is a major push to contribute to service improvement in southeast London outside the narrow ambit of Lambeth and Southwark and the reason they have to spend their surpluses if because that is capital which will be needed to bring about service improvements which have yet to be both agreed and consulted on, so it is simply a timing problem. The challenge for Guys and St Thomas's is to become an academic health sciences centre of international repute and to contribute to service redesign across southeast London.

  Q57  Dr Naysmith: This is a question for Mr Carrier because, as well as the acute Foundation Trust in your patch, you have a smaller mental health Foundation Trust as well. I just wondered what are the important management issues this has generated.

  Mr Carrier: There is a much smaller commissioning budget—just over £40 million a year—and it is much more difficult in a way because that trust has very deep relationships with two particular boroughs in London, Camden and Islington, with two local authorities and some very challenging users who are well organised into user groups and put a lot of pressure on that trust. I meet the chairman often—in fact I am meeting with him this Friday—and he is a very near neighbour, but we do not have half as much contact even though we are in the same building as we do with University College Hospital or the Royal Free or the Whittington. We do have regular meetings and mental health issues often come up on our agenda but it is not an issue in the same way that our relationship with University College is.

  Q58  Dr Naysmith: What about relationships with the local authority because of mental health issues?

  Mr Carrier: We have joint commissioning under section 31 of the act. We share senior managers between local authority and our trust. A lot of it has to do with mental health and obviously children and families, but the relationship is a good relationship and we often come into criticism because the local authority—as it has done—wishes to close the day centre and turn it into what they call a recovery centre. My trust then gets the flack in a sense and we have to explain that we are not responsible; we fund it but we would support what is going on having examined the case because we obviously jointly employ the senior managers.

  Q59  Dr Naysmith: Would that cause a problem between you and the council if they were proposing to close something?

  Mr Carrier: It is not a problem; it is a question of asking them to account for the policy and to make sure that my board agrees with it. The joint commissioner sits on my board and the senior officers from the local authority are members of our partnership board and attend our board and have papers on it. There is a good partnership working with the local authority. We find some of the scrutiny committees rather tense and difficult but they are doing a job.

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