Health and Social Care Bill

Baroness Murphy Excerpts

Tuesday 6th March 2012 Lords Chamber

[Lord Skelmersdale]

My Lords, the House seems to have gone remarkably silent after those two introductory supporters of this particular amendment. As some of your Lordships will remember, when I returned from Northern Ireland as the ex-Minister responsible for health and social services, I came as a great fan of combined health and social services. Yet I discovered in my experience there that it would never, ever work unless you had one organisation in total and utter control. This may seem like a Second Reading speech, but it is not intended to be. The Secretary of State mentioned in the amendment means any Secretary of State, and currently we have two Secretaries of State. That is why the notable ambitions of this amendment—and they are notable—will always fail. Therefore, I encourage my noble friend, until a higher authority than himself, senior as he is, gives the imprimatur to take social services away from local government, to resist this amendment.

[Baroness Murphy]

My Lords, I think that the noble Lord, Lord Warner, is having us on. There is an urgent need to press the Government on bringing forward their White Paper on social care reform, which is the pressing economic and social care issue of our day—more important than this Bill. But we have to get it right. We are expecting a White Paper, and there are many arguments to be had about the recommendations from the Dilnot commission, although there is quite a consensus of opinion, and about the right and wrong and who will pay and when. I hope that we can have those debates in this House. But this issue requires a full Bill. This amendment gives a new Bill inside the Health and Social Care Bill on Report, and I do not really think that it will fly. I can imagine what the noble Lord, Lord Warner, would have done if it had been proposed when he was Health Minister. He would have given it very short shrift—and I urge the Government to do so again. We need a proper recommendation and discussion in the White Paper.

I also remind the House that last year the Law Commission came out with a report on adult care social services that said that we had had endless piecemeal bits of legislation over and over—and this amendment does it all over again. Let us not make the mistake of supporting this amendment. I am very sympathetic to what the noble Lord wants to do, and we all feel very impatient about it, but let us have a proper Bill and proper debates and get it right for the next generation. Frankly, it is our generation and the next one that will benefit from a proper social care reform Bill. Let us get it right and not do it this way.

[Baroness Barker]

The noble Lord, Lord Warner, asked what was to disagree with—what was not to like—and the answer is nothing at all. However, that is not to say that this amendment is not deficient and there are not an awful lot of questions that it begs.

The noble Lord is right that my party, along with others, has agreed with the Law Commission review and supported the efforts to see the Dilnot commission brought into law. However, he will know as well as I do that the history of social care law reform is littered with failed attempts to deal with one of the biggest issues that our society faces—the Royal Commission on long-term care. The Wanless report was largely about the NHS, but a significant chunk of it was about the need to reform social care to drive down future demands on the health service. Noble Lords have been critical of this Bill, and many of their criticisms are justified, but they overstate the extent to which the latter parts of the Bill, with the placing of public health into local government and the creation of health and well-being boards, attempt to deal with that agenda, decrease health inequalities and raise levels of preventive health promotion. I, too, think that this is an inadequate response, particularly to the Law Commission report, which was a good and detailed piece of work. It deserves extensive scrutiny and to be brought forward in law in a way that is far more comprehensive than this.

I will not have a go at the noble Lord, Lord Warner, for keeping the issue on the agenda, but I say to him that the Care Services Minister, Paul Burstow, has made it clear throughout his tenure that he is doing all in his power to keep social care to the fore. I come back to the £2 billion that was invested in social care at the beginning of the Government’s term. The Government are mindful of the need to deal with this, not least because the noble Baroness, Lady Murphy, is right to say that, as she often reminds this House, no one has a social care need unless they have a healthcare need—the two things are indivisible—and if the Bill is about anything, it is about tackling the health needs of the population as a whole over time.

I do not disagree with the noble Lord, Lord Warner, but I do not think that this is quite the way to go forward. I hope that all Members of this House will continue to uphold the consensus that there has been over the past two years behind the work of the Law Commission and the Dilnot report to bring this issue forward in a way that means that it can be determined successfully once and for all.

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[Lord Turnberg]

My Lords, I wonder whether I could comment on that. It depends on the timescale between admissions. If it is longer than two months, I think that you get a second shot.

[Baroness Murphy]

My Lords, this is a disparate group of amendments. I support the principles that underline Amendments 164, 165 and 166. The Bill has been amended since the Committee stage and may address some issues, and that is one of the difficulties when we discuss competition, collaboration, integration and co-operation. We will have yet another amendment later today or on Thursday from the Government on the duty of co-operation that will further strengthen the role of Monitor in regard to these issues. That, I think, will meet some of the arguments.

My feelings are consonant with those of the noble Baroness, Lady Williams. I am furious at some of the debates in the press about whether we are marketeers or pro-NHS. In fact, the vast majority of people in this House steer a course in order to do what is in the best interests of patients in terms of competition, collaboration and integration. I acknowledge that many of us must feel the same as the noble Baroness in her frustration about that.

The intervention of my noble friend Lord Adebowale was helpful in that it reminded us of how competition has worked in mental health services and substance misuse services. For many years collaboration between organisations to deliver services in both acute care and for long-term conditions has been helpful. I have no difficulty thinking of dozens of situations where commissioners have decided to commission services in areas where there has been collaboration between a group of service providers. They may involve social care services, residential care homes being run independently and so on. Commissioners might seek to put together an improved ortho-geriatric service especially for people with multiple disabilities in later life. There are examples of successful collaborative services which have been competitively tendered for. However, I do not want to take up the time of the House at this stage by mentioning too many examples.

I have a question to ask of the Opposition in relation to Amendment 163BA. This is the first amendment in the group, and perhaps the noble Baroness, Lady Thornton, could help me in one respect. I am not quite clear whether this amendment would return Monitor to the position it is in now—where we would continue with the two-tier system of foundation trusts and other trusts with a simple economic regulator for foundation trusts—and would rule out the rest of the new economic regulation functions. If it has that effect, it would seriously wreck the main purpose of the Bill. However, I may well be reading it incorrectly, so before I decide which way to go, I wonder whether the noble Baroness, Lady Thornton, could reassure me that that is not the purpose of the amendment.

[Earl Howe]

My Lords, there is a clear purpose to Part 3. It is to strengthen sector regulation of healthcare in England by building and improving on Monitor’s existing role as the regulator of foundation trusts. It does that in three main ways. First, it makes clear that Monitor’s overriding duty would be to protect and promote patients’ interests. Secondly, it makes sector regulation more comprehensive by extending Monitor’s remit to all providers of NHS services. Thirdly, it makes sector regulation more effective in realising benefits for patients; for example, by monitoring the NHS Commissioning Board setting fairer prices for NHS services. Fair pricing is important for a whole host of reasons: to strengthen incentives for improvement, to enable better integration and to reduce the risk of cherry picking.

I shall deal with a simple point. Monitor will continue as the regulator of NHS foundation trusts. The Bill makes that crystal clear in Chapter 1. However, I am most grateful to my noble friend Lord Clement-Jones for highlighting the need for greater clarity on what intervention powers Monitor would have over foundation trusts on an enduring basis as against what would be transitional. I shall say more about that when we come to debate his amendments in a later group.

Before going on, let me address Amendment 167 from the noble Lord, Lord Hunt, on the specific issue of patients’ rights to refuse consent for treatment in the NHS. I can absolutely assure the noble Lord that these rights must be protected and nothing in the Bill would change that.

Returning to Part 3 and the role of Monitor, its overarching duty will be to promote economy, efficiency and effectiveness in the provision of healthcare while maintaining or improving quality for the benefit of patients. I underline those last words. This is the single overarching purpose for which Monitor would carry out all its functions, including its continuing functions under the NHS Act 2006 as the regulator of foundation trusts. Monitor’s overarching duty is clear, unequivocal and focused on improving outcomes for patients. I stress that point since as this is its guiding principle for resolving potential conflicts, there is no need to separate Monitor into two organisations, as the noble Baroness, Lady Thornton, proposes in her amendment. I suggest that she has raised an issue that in reality is not a substantive one.

Let me briefly address Monitor’s role in ensuring that where there is competition in the provision of healthcare it operates in the interests of patients. We will have an opportunity to consider this issue in more detail later. Decisions on whether and when to use competition will be a matter for clinical commissioners. As I have already said, there have always been private and voluntary providers in the NHS. Anyone who reads Part 3 will see that it does not create markets for NHS services, despite what some others have said. This is not the same Bill as that which was debated in the Committee of the House of Commons in March 2011. It has changed significantly as a result of amendments tabled by the coalition in response to the NHS Future Forum.

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[Lord Patel]

My Lords, I support the amendment. The noble Lord, Lord Warner, and the noble Baroness, Lady Williams of Crosby, have said all that needs to be said. I had my name to Amendment 217. To relieve the anxiety—if they had any—of the noble Lord, Lord Warner, and the Minister, I will not move that amendment either. I strongly support Amendment 196ZA.

[Baroness Murphy]

My Lords, I also add my support to the very practical solution given in Amendments 196ZA, 214G and 217 that will provide Monitor with a mechanism to deal with future, upcoming failure and intervene early. That is very practical. I hope that it will be attractive to the opposition Benches because, in part, it deals with their anxieties about special administration orders. None of us wanted to see those special administration orders used early. We want them as a very rare fallback position, and to use them maybe once in a decade not once a year. If there were a mechanism like this one, enabling a practical way of targeting and getting local commissioners to address local failure, we could avoid some of the draconian measures that it is necessary to have in the Bill but which none of us wants to see used frequently. I hope that the solution will commend itself to the opposition as addressing their concerns about this regime.

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[Lord Clement-Jones]

My Lords, I want to speak to my amendments, to express my thanks to the Minister for the amendments that he has tabled, and to give a little rationale for why we were concerned but are now satisfied by the Minister’s amendments. On these Benches we were very concerned about the deregulation of foundation trusts in 2016. We believed that putting foundation trusts on the same footing as all other provider licensees was not only dangerous because of the risk of wider application of competition principles, but undesirable since district general hospitals—essentially foundation trusts—are the core of public provision in the health service. They are public assets, funded either conventionally by the Government or by PFI. Sadly, many of us argued at the time that PFI would be an expensive and inflexible method of financing healthcare infrastructure. Nevertheless, district general hospitals are an essential part of the NHS.

Therefore, we proposed amendments that removed Clauses 111 to 114 and retained Monitor’s special powers over foundation trusts unless terminated by the Secretary of State with the authority of an affirmative resolution of both Houses of Parliament. We were not saying “never” but the Secretary of State, after some years of the new structure, clearly needs to satisfy Parliament as to why particular foundation trusts no longer need to be subject to regulation by Monitor in this way. It may be possible to make the case for the deregulation of foundation trusts in the future, but currently the assumption should be that foundation trusts will be treated differently from other providers in regulation—not just in the transition period but in the medium term—so that Monitor will have the right to appoint and dismiss directors and governors in that period.

To that end, we very much welcome the amendments tabled by the Minister to meet our concerns. Our amendments talk of an order passed by the affirmative process and the Government’s by the negative process but I do not want that to stand between us. The Minister has gone a very long way to meet our concerns, for which I am extremely grateful, as are all my colleagues on these Benches.

[Baroness Murphy]

My Lords, I have added my name to four of the amendments in this group and I am wholly content that the Government have addressed them satisfactorily.

[Earl Howe]

My Lords, I am very grateful to my noble friend and the noble Baroness, Lady Murphy, for their comments.

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[Lord Warner]

My Lords, I support my noble friend’s Amendment 201D and I do so for a few simple reasons. I am afraid that I am a bit of a heretic on price competition. It has always seemed to me that, if you want to have competition, simply excluding all aspects of price will not necessarily be in the best interests of any public service, health or otherwise. Therefore, I do not start from the position where I think that a blanket refusal to have any competition on price is a sensible way forward. However, that is not what my noble friend’s amendment does. It is, if I may say so, uncharacteristically modest in its approach.

Although I shall not name the person or the circumstances, I should like to share with the House a recent discussion that I had with an innovative GP running a big group practice in something which looks remarkably like an Ara Darzi polyclinic. This practice is innovating the way that it responds to its patients’ needs and it is doing so by providing services without reference to an acute hospital. However, it is caught in a bind. It is making substantial surpluses, about which it is almost embarrassed, simply because it is required by its commissioners to accept the tariff payments. That is a nonsense in the circumstances in which the NHS finds itself, and I am certainly prepared to talk to the Minister privately about some of those circumstances. I am not fabricating this; it is a real case happening day in and day out. I suspect that, on the basis of what I was told, it is not alone in the country in being in that position.

If one thinks about it, this is bound to happen. If we are really serious about driving services outside hospitals and providing them in a facility where a lot of the things that would be done in hospitals can be done on a more out-patient basis but without reference to any in-patient costs, it is likely that we will get ourselves into difficulty with a tariff which at the moment is very hospital-driven. It is a tariff which is set on a basis of acute hospital costs. For a few years, we are likely to throw money at innovators who do not necessarily want that volume of money simply because we have ruled out the ability to pay below tariff, so that people can provide perfectly adequate, perfectly good services for their patients, protecting their interests, but they will actually be paid more than they need to be paid for providing those good quality services. I think that the Government have to look again at this issue. My noble friend has produced a way forward with many safeguards.

Perhaps I could also say a few words about the Secretary of State setting prices. I do so from my experience as the Minister who was involved in the first sets of price setting, when we introduced them across the country back in 2005 and 2006. In those circumstances, one of the places where we looked for experience was Germany. Germany has a separate organisation which sets the prices and collects and analyses the data. That happened because it was thought that there was a lack of trust in Ministers setting the prices. We got a fair amount of criticism in the beginning from the NHS about the price setting not being transparent. At that point, once we had established the tariff system—the payment-by-result system—we were inclined to move the setting of the price away from the Department of Health so that there would be more confidence in the process of setting prices.

In so far as there is a case for the Secretary of State to be involved, it seems to me that the case is stronger, not in relation to Monitor’s pricing, but in terms of the Secretary of State driving the change in the definition of currencies, which is the function that has been given to the national Commissioning Board. Making changes in the currencies is probably the most significant way in which we can improve the way that the tariff operates. I do not have any particular problem with that being with the national Commissioning Board now, but it is certainly an area where I think the Secretary of State will need to keep a close eye on the national Commissioning Board to see that it addresses the need to move away from episodes of care to patient pathways in the way in which the tariff is set.

I am not so sure that I agree with my noble friend on the Front Bench that we want the Secretary of State to set a price, but I think that the Secretary of State should take a healthy interest in the way in which the currencies are set with the tariff.

[Baroness Murphy]

My Lords, the noble Lord, Lord Warner, has said more or less what I was going to say. It seems to me that if you remove price setting from the regulator of healthcare, you do not have an economic regulator. From my experience of watching prices and types of funding formula go up and down over the past 20 or 30 years, it is crucial and admirable to remove it into a system that can be independent and transparent.

As the noble Lord, Lord Warner, says, after the Future Forum amendments, we have a system now whereby the shape of the tariff and the bundling systems, if you like, which will enable the sort of integration and co-ordinated care to be effective, will be firmly with the national Commissioning Board, and Monitor will respond to those design structures. I think that working together will be very healthy indeed. I do not underestimate the difficulties of getting it right; it is an ongoing developmental programme. Nevertheless, I think it is a good way forward. I do not like the idea of removing the price setting from Monitor.

I will briefly say that I am quite attracted to the amendment of the noble Lord, Lord Davies. One cannot not be if one wants value for money. I remember seeing the noble Lord’s face when he first realised that there was going to be no competition on price, and having a good deal of sympathy for where he was coming from. However, the matter is one of transition, and of when the public will feel confident that the way that the Bill intends to introduce competition on the basis of competitive tender will improve quality.

I worry about the response that the media could make to a significant change of this kind, even though I agree with the noble Lord that some services—as the noble Lord, Lord Warner, said—are overpriced and that there are opportunities for driving down these prices. That may come through the way that the national Commissioning Board and the regulator together set prices. After all, the price of a tariff will be a moving thing; it will be negotiated; it will change over time; and we will be able to address areas where there is obvious overpricing. I am attracted to the amendment of the noble Lord, Lord Davies, and it may be that eventually we will need to introduce something of the sort. However, I would be nervous of doing it at the moment in this form, even though it seems quite sensible.

[Earl Howe]

My Lords, the case for regulating prices for NHS services is strong. Many academics agree that competition should be on quality and not price and that this will increase the standard and quality of healthcare services and protect patients’ and taxpayers’ interests. This requires prices to be fixed. Therefore, it is vital that there is an effective system of price regulation that can deliver these improvements and help sustain a universal and comprehensive NHS, free at the point of use. However, a number of problems with the current system have been identified, including by the previous Administration, which mean that it is not as effective as it could be.

In particular, I will mention two things. First, prices are subject to potential political interference. This means that providers are more risk averse. That inhibits investment and innovation in the sector. As the noble Lord, Lord Warner, said, the methodology for setting prices is not transparent. This makes the system unpredictable—again, inhibiting investment and innovation. Secondly, prices can be inaccurate and may not always reflect best practice models of clinical service delivery. This may result in cherry picking and may hinder providers from expanding and improving quality. Therefore, the case for change is clear and compelling. The Government’s vision is for an independent, fair and transparent system of NHS price regulation that reflects best practice and extends the scope of the tariff when it is in the interests of patients; that ensures that competition is based on quality and choice, and not on price; and that addresses the problems of cherry picking. To deliver this vision, prices will continue to be regulated through a national tariff. This will build on and improve the system of payment by results—which the previous Government said that they would improve but failed to do so.

Perhaps it would be helpful for me to explain in a bit more detail how the Bill will support this vision. In other healthcare systems around the world—for example, in the Netherlands—Governments have delegated price setting to independent organisations. The noble Lord, Lord Warner, cited another example: that of Germany. Such bodies create a transparent and stable environment for pricing.