Examination of Witnesses (Questions 500
- 519)
THURSDAY 4 FEBRUARY 2010
PROFESSOR CHRIS
HAM AND
DR JENNIFER
DIXON
Q500 Chairman:
If it is, in a sense, a weakness in PCTs, can we not do without
them like they are doing in Wales and Scotland?
Dr Dixon: Somebody has to be the
agent for the patients. There are very powerful forces within
providers which mean that they do not necessarily align their
objectives with what the taxpayer or populations might want for
their health, so there has to be some agent, and therefore having
direct feeds of money directly to the providers, without any kind
of agent group like a commissioner, would be a problem.
Professor Ham: I think you have
to ask what PCTs do and who would do their functions if we did
not have them; so there is a responsibility for population health.
Focusing on prevention, tackling health inequalities is a really
important function: somebody needs to do that within the system.
There has traditionally been the responsibility of running the
PCT provider services in the community: somebody has to take on
that responsibility. I think your question is about the third
principal function, which is the commissioning role of PCTs, and
then there is a more important first order question that lies
behind that: do you want to organise your NHS on the basis of
a commissioner-provider split or do you want to argue for an alternative
sort of arrangement? If it is an alternative, then you do not
need PCTs or other bodies to do commissioning.
Q501 Chairman:
You have obviously looked at this issue, not just in the UK, but
worldwide as well, and we will have some specific questions on
that, but why did Wales and New Zealand abolish the purchaser-provider?
Professor Ham: I think for political
reasons fundamentally. In New Zealand they had had their version
of the old internal market with a purchaser-provider split because
the Government at that time, going back to the nineties, as it
was, wanted to introduce more choice and competition. Therefore,
there was logic in trying to separate out the roles to stimulate
a market to drive improvements in performance. A change of government,
different priorities, did not believe that markets had a big role
to play in healthcare; they therefore reverted to their integrated
structures based on the health boards, like Wales now has and
also Scotland. I guess (and Jennifer can speak to this better
than I can), if you look at the performance of Wales and Scotland
compared with England, the recent very comprehensive analysis
done by the Nuffield Trust seems to suggest that England has made
further faster progress in improving performance on things like
access and waiting times than the more integrated systems in Wales
and Scotland. It is, of course, much more complicated than that
because there is never one thing, like integration or purchaser-provider,
that helps explain variations in performance, but it gives us
pause for thought.
Q502 Mr Bone:
Should we not be worried about this weakness in the PCTs? What
is it, £80 billion a year of taxpayers' money goes through
things that are weak, and it has been suggested already that they
do not have the highest calibre of staff. Mind you, I find it
strange when chief executives are paid £200,000 a year. It
is not lack of money that does not attract them, but if they are
that rich should we not be very worried about that?
Dr Dixon: Yes, I think we should
be worried. It is interesting that the attempts to try to boost
skills of Primary Care Trusts, as Chris has said, have only really
latterly started with World Class Commissioning. They have only
recently been set out, and that was in 2007 in World Class Commissioning,
but there are attempts now made to boost the skills in a number
of ways and also to tighten up on performance management through
analysis of a range of indicators. For example, there are commercial
support skills through the Commercial Skills Units at regional
level now to help PCTs tackle one of their most inherent weaknesses,
which is management of the market, as fleshed out by World Class
Commissioning, and through the Performance Framework in
the NHS there is much greater and more forensic focus on a mixture
of outcomes as well as competences and governance; so there is
quite a lot more scrutiny, I would say, now on PCTs. It is still
pretty weak but we are creeping towards something that is a lot
better, but even if we really boost up PCTs, there is still this
fundamental power imbalance with the fact that the people who
generate most of the costs in healthcare are clinicians.
Q503 Mr Bone:
I think we may be coming on to that in a later question. At the
moment do we not have the PCTs really as price and quality takers
rather than price and quality makers? In other words, they very
much take whatever price and quality the hospitals give them,
do they not?
Professor Ham: I think, on the
price side, it is constrained by the national tariff. One of the
things that is very different from this version of competition
in the NHS compared with the internal market is that there is
no price negotiation, essentially, for those services within the
tariff because the Government decided that, if you take that out
of the equation, then it ought to be possible for the PCTs to
focus much more on the second part of your question, the quality
and the outcomes of care that are delivered. That has been, quite
frankly, slow to develop. I do not think any of us would say hand
on heart that PCTs have done a great job in being the active,
intelligent commissioners leading the debate about quality and
outcomes, putting lots of stuff in their service specifications
and standards. That is very much work in progress.
Q504 Mr Bone:
We have the Strategic Health Authorities sitting in these regions
which are supposed to lick the PCTs into shape, but have they
not just failed miserably? Would we not be better off just getting
rid of the SHAs?
Dr Dixon: Like World Class Commissioning,
it has become much more obvious now how SHAs should hold PCTs
to account. There has been a lot of vagueness in the system, I
would say, but now there is a much more obvious set of indicators
that SHAs should hold PCTs to account on. Traditionally, they
probably also have been quite weak, but now their roles are far
more specified and the indicators on which they should be holding
PCTs to account are more obvious. I think we may see more activity
there.
Q505 Mr Bone:
Are you not just being nice to them? Are they not terribly bureaucratic
and are they not just jobs for the boys? If you talk about the
standards in PCTs being bad, are not the standards in SHAs almost
as bad?
Professor Ham: What I would say
on that is that, again, you have to unpack what it is that SHAs
are supposed to do within the system. One of their functions is
to be the local arm of the Department of Health within the NHS.
If the Department continues to push targets and performance management
and lots of other stuff out in the system, you cannot do that
from round the corner in Richmond House, you need to have a local
presence, and that is what SHAs are partly there to do. Whether
they need to be as big as they are with the range of staff they
currently have, that is a really good debate to have, particularly
given that in many parts of the country now—London is a
great example of this—PCTs are being required to collaborate
across sectors, sub-regions if you will, and it looks like there
is a very crowded space between what those PCTs collaborating
together across bigger areas are doing and what SHAs are doing.
As that evolves I think your question is very pertinent.
Q506 Chairman:
How much smaller do you think SHAs could be then?
Professor Ham: There are two parts
to that. One is how many SHAs do we need? Is ten the right number?
As a sometime historian of the NHS, then it has swung back and
forward over the years. We started with 14 in 1948 and at some
point it got down to four regional offices and we are now back
to ten SHAs. There is no science about this; it is what fits the
spirit of the times. I think there could be fewer than ten. I
think the core question is what are their essential functions
that cannot be done better lower down the organisation, whether
on the provider side or on what eventually emerges on the commissioner
side. I think you can legitimately argue the SHAs we have today
are, by definition, transitional bodies. They have a job to move
trusts to become foundation trusts, to take forward some of the
World Class Commissioning stuff. When that process is more complete
than it is today, I do not think anybody would argue you need
SHAs with their current management costs and staffing.
Q507 Dr Stoate:
We have been part of the internal market now for the best part
of 20 years, and yet all the power (and I really mean all the
power) is in the hands of the providers. Is that not a bit odd?
Dr Dixon: For various reasons
we have described why PCTs have been inherently weak, but it is
not so much that they are weak just here, commissioning is weak
in other places in the world, largely for the reasons that we
have pointed out, because all the power, the information, resides
on the provider side.
Q508 Dr Stoate:
I know it does, but why is that?
Dr Dixon: The focus has not been
on commissioning. Why has that not been? Probably because some
of the pressing problems in the Health Service have been particularly
due to issues that providers can tackle directly, such as waiting
times, and there has been so much focus on that that the focus
on the commissioning side has been fairly weak; but now that we
have Foundation Trusts that are becoming more independent, then
we reside, or at least the NHS now resides far more on commissioning
to lever up change through the contracting and commissioning system.
Q509 Dr Stoate:
But if you have got Foundation Trusts which are now even more
powerful, you are up against bodies which are inherently even
less balanced, because PCTs, I think, would find it very difficult
indeed to stand up against a well-run Foundation Trust.
Dr Dixon: Absolutely, and so that
is why, if you want to try and improve commissioning, you cannot
do it in isolation from other things in the system, in particular
to re-orient incentives in the provider system so that everyone
is pulling in the same direction, and they are not at the moment.
Q510 Dr Stoate:
Why has it taken 20 years to get to this point, and this is not
very far, let us face it?
Professor Ham: Because policy-making
does not progress, if I may say, in a neat, linear, logical learning
process.
Q511 Dr Stoate:
If you look at the so-called internal markets of the world, let
us take, for example, the food industry: if you speak to somebody
like Tesco, who are rather good at that, they will say that they
are entirely driven by their purchasers and that if purchasers
did not like what they did, they would not do very well. If you
look, for example, at the car industry, we have seen the problems
that Toyota are having this week: if people stop buying Toyotas,
they are in serious trouble. On the other hand, if people seem
to stop wanting to use Foundation Trusts, Foundation Trusts simply
get richer. I do not understand how it is that the market fails
to work in the Health Service when it quite clearly does work
in other sectors.
Dr Dixon: Again, there is not
a market. Punters do not choose hospitals.
Q512 Dr Stoate:
Even under Choose and Book we are still not choosing?
Dr Dixon: Not really. Also the
movements under choice are actually fairly small and they are
not providing the bite that is necessary to make providers sit
up and listen.
Q513 Dr Stoate:
What would happen if Primary Care Trusts had the power to refuse
to pay hospitals that screwed up?
Dr Dixon: They are now having
that power.
Professor Ham: I do not think
it will make a huge difference. It is a fair point to make, the
comparison with other sectors where procurement and purchasing
is much further developed and much more effective, and the examples
you have given demonstrate that, but, back to the very first point
that Jennifer made, healthcare is different. Healthcare is much
more complex. You cannot define the product, because there are
so many different products. If you think about what comes out
of an acute hospital, it is not widgets or car components, there
is a whole variety of things that patients require that trained
healthcare professionals do.
Q514 Dr Stoate:
You can break them down, though. We have managed to break down
what hospitals do into activities which are reproducible across
different hospitals. We can say, for example, a hip replacement,
generally speaking, takes these particular activities and an ultrasound
scan takes this particular activity. We can break it down. Why
is it we are so bad at commissioning services which are cost-effective
and do work?
Professor Ham: Could I suggest
the reason. When the internal market was first promulgated, people
said exactly the point you made: "What can we learn from
other sectors in healthcare to help our purchasers at that time
do really well?" I spent a day in Marks & Spencer back
in 1990 at their headquarters, then in Baker Street, to understand
what did they do in terms of their skills, their people, to be
able to do effective contracting with a whole range of different
suppliers. I learnt two things from that. First of all, they had
one centralised procurement organisation, purchasing organisation,
in Baker Street. They did not regionalise it, they did not have
each store doing its own purchasing: they had a critical mass
of people in one place. The second thing I learnt was that the
people who were doing the buying for Marks & Spencer had a
history, a career, an expertise in the things that they were responsible
for buying. They had worked in food, industry, the clothing sector;
they brought that deep knowledge and they were adding value to
the suppliers of Marks & Spencer because they themselves were
experts. Look at who we have in PCTs. Do we have expert GPs and
clinicians across a range of specialties who have got the same
depth of knowledge? No, we do not. That is why we have the difficulties
we do.
Q515 Dr Stoate:
One final point: I want to go back to this idea of PCTs levering
more power by refusing to pay for poor quality, refusing to pay
for "never events", refusing to pay when hospitals miss
their C.diff targets, refusing to pay when someone has waited
more than two weeks for a cancer appointment. Why can they not
arrest that power and simply say to hospitals, "If you do
not deliver, you do not get paid"?
Dr Dixon: I think the answer is
they are beginning to do this under this new payment system called
CQUIN which has been brought in, whereby there is a certain amount
of money that can be withdrawn from the contract or not given
to providers, and in the future it is meant to be going up to
10%—it is now about 1.5%. There are seven "never events"
at the moment that PCTs simply do not have to pay, so there is
some help with the payment system. There is also other help. There
are standard contracts, there are standard evidence-based pathways,
from NICE and NHS evidence, that commissioners now have that they
did not have, say, two years ago, but still the issue is two things.
One is that there is a high amount of discretion in healthcare;
physicians do not necessarily follow the path. Because healthcare
is so complex, there is a huge amount of discretion that is still
possible, and probably should be. The second thing is that there
is still a lack of information for commissioners to be able to
get a handle on some of these discretionary practices. For example,
though we have quite a lot of information on patients flowing
through the system, the information we have on quality of care
is still fairly low. We are only just beginning to experiment
with outcome measures. Although we are getting much better at
standardising things, precisely for the reasons you are suggesting,
to define pathways the information is not so good, as there are
huge amounts of physician discretion still.
Q516 Dr Stoate:
Is that acceptable, or do you think we should be looking to consult
the contracts if they do not do what they are supposed to do,
if they do not complete their contract?
Dr Dixon: The nature of medicine
is that there will always be discretion, but this discretion should
be justifiable in more ways than it is at the moment. For example,
we should be much better in the Health Service at documenting
variations and asking severe questions such as why are there such
variations, and we have not been as clever at that as, for example,
they have been in the States.
Q517 Dr Stoate:
You do not advocate my Stalinist approach then of forcing them
into line to deliver or not get paid?
Dr Dixon: I think everyone agrees
that there should be some significant external challenge on providers:
the question is what is the best mix of levers to use, and command
and control is but one.
Q518 Mr Scott:
Professor Ham, you were just talking about clinical leadership
and the weakness of it in PCTs. We have also heard evidence about
lack of management skills. From my colleague we heard that it
is nothing to do with how much is being paid, because that is
obviously, seemingly, more than adequate, but why is there such
a lack of talent and skills and is it undermining the PCTs' effectiveness?
Professor Ham: Could we go back
to the issue about pay. I think the figure of £200,000 for
chief executives was mentioned. Yes, in Foundation Trusts, not
in PCTs. You might argue that is one of the reasons why we are
still struggling, because the rewards and the status on offer
if you are on a Foundation Trust are much greater than in a PCT,
which is why many of the most experienced managers tend to work
on the foundation trust side. We are still struggling to recruit
the same experience and talent into Primary Care Trusts, not just
at the chief executive level but further down among senior and
middle manager posts too. The issue you raise about clinical leadership,
I think, is so important in all of this. Jennifer mentioned the
professional discretion available, whether it is GPs or hospital
consultants, the difficulty for people who do not come from clinical
backgrounds in challenging that. It seems to me that as we go
forward and learn about the difficulties we have had in developing
a really effective commissioning function, we still remain as
the weak link in the reforms. What we need to consider is how
we can do much better, in both primary care and secondary care,
in supporting and developing doctors and nurses, AHPs to take
on a much bigger responsibility for managing budgets, improving
services, focusing on quality, which may take us beyond the purchaser-provider
split as it has been introduced in the current reform programme.
Q519 Mr Scott:
Dr Dixon, is there anything you would like to add?
Dr Dixon: No, I do not think so.
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