Examination of Witnesses (Questions 1-19)
NATIONAL HEALTH
SERVICE
26 MARCH 2008
Q1 Chairman: Good afternoon, welcome
to the Committee of Public Accounts. I apologise for the earlier
time; it is so we do not clash with the visit of President Sarkozy
to the House of Commons and the House of Lords. We have a very
important and interesting session this afternoon. We are considering
the Comptroller and Auditor General's Report NHS Pay Modernisation:
New Contracts for General Practice Services in England. We
welcome back Mr David Nicholson, who is the Chief Executive and
Accounting Officer of the National Health Service. You are very
welcome. Perhaps you would introduce your colleagues for us.
Mr Nicholson: Mark Britnell, who
is the Director General of Commissioning and Professor David Colin-Thomé
who is the National Director for Primary Care.
Q2 Chairman: We always try to get
a balanced point of view so I have to congratulate you on at least
making an attempt to get a better quality outcome for patients
from seeing their GP. However, there are various aspects of this
which worry a value-for-money committee. We can see this laid
out for the benefit of members of the Committee in figure 4 on
page 10. This is the "National Audit Office's assessment
of the progress made against the benefits the Department of Health
listed in its business case". What we see there and in fact
what shouts out to us throughout the Report is that you spent
£1.8 billion more than expected but people still cannot see
a GP when they need to. Why is this?
Mr Nicholson: I would say two
things about that. First of all on the £1.8 billion, of course
the National Audit Office reflects this, but £1.4 billion
of that was not actually extra money paid by the taxpayer for
the contract it was based on a miscalculation, an estimate of
the amount of money we already paid. If you take that against
both ends of the argument, £1.4 billion was not extra money
paid to general practice over what we had expected. The issue
was just over £400 million.
Q3 Chairman: Remind us of the percentage
increase—not for salaried GPs as I know their salaries only
increased by 3%—for GPs. It is about 56% is it not?
Mr Nicholson: Absolutely.
Q4 Chairman: Quite a high increase.
Mr Nicholson: It is.
Q5 Chairman: Remind us what the productivity
increase has been? There has actually been a decrease of 2.5%
has there not?
Mr Nicholson: One of the issues
around productivity, as you will know from previous Committee
of Public Accounts hearings—
Q6 Chairman: But that is right, is
it not? A 56% increase in their salaries and a 2.5% decrease in
their productivity. That is right, is it not?
Mr Nicholson: The Office of National
Statistics have calculated 2.5% but that does not take account
of the complexities of delivering primary care and all the other
significant benefits that we got through the contract. It is essentially
a measure of the number of people divided by the amount of activity,
the number of patients seen. In modern primary care it is much
more complicated than just how many patients GPs see and much
better for patients. Patients now see a whole variety of professionals
in primary care, nurses, podiatrists, dieticians, a whole range
of people as part of this service.
Q7 Chairman: You set the bar so low
in terms of meeting the quality and outcomes framework, the QOF,
that the GPs get 96% of the available points. Doctors are doing
seven hours less work a week on average, there is no real Saturday
or evening service, it is still difficult to book an appointment
in advance. The trouble is that you rushed this, did you not?
The PCTs did not have the resources available and the BMA took
you for a ride. That is the honest truth, is it not?
Mr Nicholson: I do not think any
of those things are—
Q8 Chairman: What I said is not right,
is it? What I said about the extra cost, the decline in productivity,
their meeting 96% of the quality outcomes, the fact they are doing
seven fewer hours a week on average, none of that is right, is
it?
Mr Nicholson: No, the judgment
you made at the end about it being rushed is not correct. We set
out to change completely the nature and the way general practice
is remunerated in this country, something which had been continuing
since 1948, getting a GP contract which was ready for the NHS
we were trying to build for the future. The QOF was a really important
part of that. For the first time we could connect the GPs' pay
to performance and in particular clinical performance; a fantastic
opportunity for us to take services forward. No doubt during this
hearing we will talk about some of those benefits. We completely
changed the way in which general practice is funded, much more
focused on the health needs of the population, and we managed
to allow GPs to expand considerably the services that they did.
This was against a background of general practice which was demoralised,
we had large numbers of vacancies, we were having real difficulty
recruiting people into general practice and, as no doubt many
of you remember, general practices at the time were threatening
to resign en masse from the National Health Service.
Q9 Chairman: Can you please look
at Figure 22 on page 30 "The number of GPs working in the
NHS in England"? I hear plenty of threats of resignation:
I do not see that actually manifesting itself according to that
figure. I see the number of GPs rising continuously according
to this Report which you have agreed.
Mr Nicholson: Absolutely; that
is the case.
Q10 Chairman: So you were led astray
by a very powerful lobby and threats.
Mr Nicholson: No; no.
Q11 Chairman: Give your answer then.
Mr Nicholson: I am sorry, none
of those things was the case.
Q12 Chairman: Look at the figure.
Mr Nicholson: It was success;
that was part of what we were trying to do. The whole point of
the new contract was to get us to a place where we could recruit
more general practitioners, where we could keep more general practitioners
in primary care and expand the nature and range of services that
we provided. It seems to me that is a success measure of the contract.
Q13 Chairman: There is no point repeating
these points; other members can come in if they wish to. Will
you please look in rather more detail at paragraph 4.13? When
are you going to reverse this very late decision to guarantee
the historic income of GPs, which has prevented redistribution
of income to deprived areas?
Mr Nicholson: It was a really
important decision when it was taken. As no doubt members will
remember, when the GP contract was originally formulated and GPs
looked at what the implication of going to a needs-based funding
formula would be, it became very clear that a large number of
practices would be destabilised by moving in one step to a needs-based
formula. So MPIG, the minimum practice income guarantee, was implemented
in order to stabilise general practice at a time when we were
going through a massive change in terms of the nature of services
that we provided. We are now past that stage and there are two
issues which are really important to us for the future. One is
how we can get from a position where the funding of primary care
gets much better to a place which reflects the health needs of
the population. Second is how we can make it much easier for patients
to move between general practices as a matter of choice and how
we can build incentives for practices to make sure they keep their
patients. In order to do that you clearly have to tackle the issue
of the minimum practice income guarantee, but you need to do it
in a way that on the one hand you do not completely destabilise
existing general practice, but on the other hand you have the
opportunity to move relatively quickly to that position. We are
now entering negotiations because the position I have just described
is also the position of the British Medical Association and we
will be working with them over the next few months to see how
we can take this particular issue forward.
Q14 Chairman: Fair enough, but paragraph
4.10 tells us that deprived areas are still under-doctored, are
they not? "Several studies have shown that the more deprived
PCTs have fewer GPs per capita, on average, than the least deprived."
This is a National Health Service publicly-owned body.
Mr Nicholson: That is true.
Q15 Chairman: So why has this contract
failed to deliver an improvement?
Mr Nicholson: It has given us
the opportunity to take this forward and that is precisely what
we are trying to do.
Q16 Chairman: To take it forward.
Mr Nicholson: Absolutely.
Q17 Chairman: What have you achieved?
Mr Nicholson: By the end of this
year we will be in a position where we will put into place 100
new practices across the country in those deprived areas. The
number of doctors is not the only issue. It is the number of nurses,
the number of physiotherapists, the number of dieticians; the
whole primary care team needs to be developed in these areas.
What the contract enables us to do—and this is what we are
doing this year—is to attack this particular issue.
Q18 Chairman: So doctors are working
fewer hours and the NHS has to pay extra to provide out-of-hours
care. Are we, the taxpayer, paying twice?
Mr Nicholson: No. One of the aims
of the contract, and we made it very clear at the beginning of
the contract, was to better and more fairly remunerate GPs. One
of the issues which particularly affected GP morale and which
GPs were very concerned about was the whole issue of out-of-hours
care. As part of that most of the reduction in GPs' hours has
come from a reduction in their working out of hours and we put
in place a new out-of-hours scheme which we have described to
the Committee before. This was funded by taking money from and
resource from existing general practice, but also adding to it
top-ups from the Department of Health. We found that the issue
for us was that whilst we have gone very quickly to providing
a service which is quick for patients, so now nine out of ten
patients can be seen within 48 hours, we have lost something in
relation to convenience and that is why we are tackling this particular
issue around out of hours, evenings and weekends and that is why
we are implementing the proposals that we negotiated with the
GPC.
Q19 Chairman: Others can come back
on the lack of an evening service if they wish to. Let us now
look at the quality and outcomes framework in more detail, particularly
paragraph 4.2. Achievement of this framework is obviously far
too easy—96% of doctors achieved the available points. Why
is this? Why did you not have a more demanding assessment? There
are various case studies at the back of the Report. Some PCTs,
which were perhaps better resourced, better managed, more skilful,
do seem to have achieved some improved outcomes but the picture
is very mixed. Generally it appears to be too easy; doctors met
these outcomes too easily.
Mr Nicholson: I shall ask David
to talk a little about some of the outcomes in relation to what
you have described. This was a groundbreaking set of proposals
which we put in place as part of the contract.
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