Mesothelioma (Amendment) Bill [HL]

Baroness Murphy Excerpts

Friday 20th November 2015 Lords Chamber

[Baroness Murphy (CB)]

My Lords, I am the last person to speak before the winding-up speeches and the fifth doctor in this debate. Noble Lords will all be highly relieved to know that I will not say anything medical.

Unfortunately, I was unable to participate in the debates on the Mesothelioma Bill last year, so I very much wanted to come along and add my personal support for the initiative of the noble Lord, Lord Alton. Everyone has said that he has been tireless; he is not only tireless but energetic and focused in a way that has brought great rewards for people with mesothelioma. I also wanted to add my personal thanks to the noble Lord, Lord Freud, for the work that he did, and we must not forget the noble Lord, Lord McKenzie of Luton, before him, who also made great strides during his time in office. The noble Lord, Lord Prior, the Minister today, will not be surprised to know that we want to see the same from him.

Why am I here today? Like the noble Lords, Lord McNally and Lord Freyberg, I have a personal story. My father died of mesothelioma. I was a young doctor in the 1970s when I first realised that my father had this appalling constricted breathlessness. He had worked as a powerhouse engineer during the war. He supervised the powerhouses for Boots Pure Drug Company, which was a massive manufacturing plant during the war, making not only the pharmaceuticals needed, from antidotes to chloramine to aspirin, but gasmasks on military contracts. As noble Lords know, military gasmasks had the worst sort of asbestos in them during the war.

There is no doubt that it was the powerhouse lagging and that factory work that produced the illness that killed my father 35 years later. My mother well remembers him coming home with his overalls drenched in white and grey powder, which she washed, of course. She was darned lucky not to get it. As a result of this illness and because of his early death from this terrible disease, she was widowed for 37 years. It is a terrible thing, as a young doctor, to watch somebody dying of this appalling constriction. As the noble Lord, Lord Ribeiro, said, at the time all they could do was keep taking the fluid off. That was the only way to help him through this terrible time.

The mean survival rate has gone up by no more than 2.8 months over the last 30 years. That gives some indication of the desperate need to research. Normally, rather like the noble Lord, Lord Howarth of Newport, I would not have supported the Bill, but we are now at the point where we are seeing a resistance from the insurers. They are not coming to the table. They are not stepping up to the mark and supporting it.

I want to bring home to the Minister what has happened with regard to dementia research because of all the arguments we have heard about why people are not coming forward with good proposals—for example, this is not a fashionable area of research or there are issues about funding. We heard all these arguments in relation to dementia but what made the difference is the point that the noble Lord, Lord Wills, made—namely, there was political focus. Somebody in the Department of Health took an interest in dementia and said that for all kinds of economic and other reasons, and given the seriousness of the disorder, we must focus our efforts on tackling it. Only the Department of Health can get people round a table and ask them, “What are you doing? How can we make this work?”. It does not take a great deal of a Minister’s time to do this. I challenge the Minister to provide a political focus on this issue. He will no doubt tell us how we can tackle the research deficit, but I believe that Ministers need to take an interest in this issue and provide the political focus to make the research happen. Money is important, but providing political support to make the research happen is what is really required.

Atrial Fibrillation

Baroness Murphy Excerpts

Wednesday 4th November 2015 Lords Chamber

[Baroness Murphy (CB)]

My Lords, I am delighted to support the noble Lord, Lord Black of Brentwood, in his campaign to get better recognition for the causes and treatment of atrial fibrillation. I am interested because I have spent a good part of my professional life as a psychiatrist working with elderly people suffering the emotional and neuropsychological aftermath of serious stroke. It makes me hopping mad to come across people who still have atrial fibrillation after they have been treated for their stroke and have then come on for further psychiatric treatment. It is a tragedy to recognise that they still have the atrial fibrillation that could be treated to prevent a further stroke.

I am now retired from clinical practice and I understand that things have improved. It is now much more likely that patients will arrive with appropriate treatment. I congratulate this Government, the previous coalition Government and the Government before that, on supporting the major stroke initiative that has led to much better targeted care of people with stroke, from access and recognition of stroke right through to focused centres and better outcomes in mortality and morbidity. We are making good progress, but there is still much more to be done.

Atrial fibrillation is extremely easy to diagnose, as the noble Lord, Lord Black, said. If you are treating a lot of elderly patients every day, it is very nice to sit down and gently feel their pulse, right at the beginning. This breaks the ice and is a very good way of making contact with an elderly patient you might not know very well. We are now getting to the point when we are joining the elderly generation. Some of us are already well into that period of life. The time has come when we are the patients who need to know about atrial fibrillation and know when we have an irregular pulse. We are the ones who need to understand. The population increasingly understands the causes of stroke and what to look for. We can teach people, with education and public information, how to feel their own pulse. Most people already know; it is so easy, so there is no problem there.

I agree that there is a problem with the drugs. I went to see an elderly friend of mine who was also a doctor in her time and is now 90. She has a touch of atrial fibrillation and she said, “I will take anything except that rat poison”. I told her that she was taking a bit of a risk but she said, “I have discussed it with my doctor, but my next-door neighbour has just died of a cerebral haemorrhage. Are you really going to subject me to that risk as well?”. There are now four new drugs on the market, some of which have been around for about two years, but the problem is that they do not diminish the risk of haemorrhage. We need to discuss the risk with individual patients, but patients are still having to think through whether or not they really want a drug when the side-effect risks are huge.

I have been speaking for four minutes, so I will shut up, but my final point is that we need to take heart from some of the newer treatments. Left atrial appendage ablation, which is available in the States now, and is coming here, is the way forward for the future.

NHS: Clinical Commissioning Groups

Baroness Murphy Excerpts

Wednesday 16th September 2015 Lords Chamber

[Baroness Murphy (CB)]

Does the Minister agree that the inequity of allocations to CCGs is reflected and made worse in allocations on mental health which, for historical reasons, are very skewed to where there are large hospitals? Not only that, but at the moment it seems that CCGs are not even spending the money that is allocated to them for mental health on mental health but are diverting it to other areas. What is going to be done about this in terms of the fairness of the allocations and the insistence that the money should be spent on what it is intended for?

[Lord Prior of Brampton]

My Lords, I am not convinced that the method of allocation is unfair. ACRA will soon be reviewing its method of allocation for 2016-17. I repeat that it is an independent process. How CCGs allocate the money they receive to mental health, physical health, public health or anything else is up to them. With the King’s Fund, we are introducing a range of measures to enable us to see how individual CCGs are performing.

National Health Service

Baroness Murphy Excerpts

Tuesday 17th June 2014 Grand Committee

[Baroness Murphy (CB)]

My Lords, none of us can listen to the noble Baroness, Lady Masham, talking about the noble Baroness, Lady Wilkins, without being moved and horrified by her story. It is indeed a very sad reflection of how, not only occasionally, patients can be treated quite appallingly in the NHS, and I speak as somebody who has worked in the NHS all my life.

There seem to be three sorts of power relations in the NHS. We have been making enormous progress in some of the areas that the noble Lord, Lord Crisp, outlined, as mentioned by the noble Baroness, Lady Brinton. We have thrown ourselves at developing patient involvement groups, voluntary organisations and pressure groups, encouraging them to get involved and to try to change the agenda of the NHS to being more patient-focused. Shifting the perception of clinical outcomes to patient perception outcomes is of course crucial.

We have had the major initiatives on personal budgets, which are very positive, and we have also had, for example, NHS Choices websites, where you can now, TripAdvisor-fashion, comment. I know that GPs take that seriously because I had an e-mail from my own GP in Norfolk—he e-mailed every patient, I might add—saying that he was having difficulty recruiting a partner. He was worried that his ratings on the NHS Choices website were not very good for the practice. He asked whether, if any of us had had good experiences, we would like to comment, which of course we all did. He is now one of the top-rated GPs in the whole of Norfolk. I approve of having a TripAdvisor-type website but we must not take it all too seriously. We have to find other ways of having real surveys.

These sorts of patient powers where groups of patients make a difference, and citizens make a difference through enabling groups, are a substitute for the other, more important power which comes through knowledge of the expert patient and indeed through knowledge from the web. Certainly, there has been a dramatic improvement in people’s ability to access really good information on websites. For example, you can now get cancer information from Cancer Research UK in a very accessible fashion and from the websites of other voluntary organisations. Macmillan has a wonderful website, too. I typed into Google “patient power”. When you do that, you get a wonderful American website run from Seattle which gives information. When my husband was recovering from prostate cancer, I remember that the most important information we got about the rehabilitative phase came from an Australian website called “You Are Not Alone”. It was about men talking about how they managed and it was absolutely wonderful. There was even a section where wives, spouses and partners could comment, which was great.

I want to talk briefly about the other structural problem. This is where I will tread in very dodgy waters and no one will like what I have to say. It probably refers only to access to GPs and A&E. There is a structural problem caused by there being apparently no relationship between what we pay for and what we get. Of course, the vast majority of the population understand that we pay for the NHS out of our taxes, but it is desperately remote. Staff still behave as though they were a charitable clinic dishing out paternalistically to the grateful masses.

The question arises of how we get patients to act more like consumers when they often feel very vulnerable. They also need to feel that they have a stake. I remember being extraordinarily impressed when I first went to the States. I am not by any means praising United States’ healthcare to the roof, but because people have to pay for insurance or care at point of access, Americans have a deep and abiding interest in their own health and that of their children. I remember meeting young women who were my age and being extraordinarily impressed by what they knew about their own health.

We are one of the very few countries where the relationship between us and the GP or doctor in A&E is one of supplicant and provider. It is because we do not make a small direct charge. Let us face it: there are charges within the NHS although not many people pay them. A small contribution for access would make a difference to how you are likely to perceive your immediate relationship with a doctor or nurse. Most people now use private chiropodists; even those who have very little money. They go along to a foot care place run at a supermarket or in Boots and get direct treatment. They do not wait for an NHS chiropodist these days: they organise it themselves. They feel that they are getting the service they make a contribution to and that they are making a choice.

I know that this raises enormous concerns, but we are now in a minority of countries in western Europe and in liberal western democracies that do not make that charge at the point of access. That discourages people. It diminishes and belittles what they need to know to look after their own health and shifts the power base too far towards the professionals who deliver it. We need a little bit of patient power through a little bit of a contribution. It is politically very unpopular, but I believe that it would make a difference just as it does in the way you feel about going to see a doctor in western Europe. It is quite different from how you feel when you go to see one in Britain.

Care Bill [HL]

Baroness Murphy Excerpts

Wednesday 7th May 2014 Lords Chamber

[Baroness Brinton]

My Lords, I add the thanks of the Liberal Democrats to those that have already been offered for the help from the Minister and his officials since this matter was last discussed in your Lordships’ House. There have been a number of meetings and an enormous amount of correspondence during that time. A key part of that has been the definition of “consultation”, and how to ensure that services in another trust area rather than only an adjacent area are considered. I am particularly grateful because the amendment tabled by my honourable friend Paul Burstow in the House of Commons is broadly the same as today’s government amendment. I thank him too for his tireless work in expanding this. I very much appreciate the comments made by the noble Lord, Lord Hunt, in his amendment, which try to strengthen that.

However, I am not convinced that there is a need for further strengthening. The committee is there, and I hope that the Minister will be able to confirm that, following the request made by the noble Baroness, Lady Finlay. The committee is there to help set things up and ensure that the progress made as the special administrators start their work takes place in an appropriate fashion, and that every aspect of the consultation—which clearly has worried your Lordships—is addressed.

I want particularly to come back to the point about not considering only adjacent services. Much of the discussion this afternoon has been very focused on London, for fairly obvious reasons. However, there are issues around reconfigurations in rural areas, which do not mimic the pattern of a large number of hospitals in a fairly narrow space. Services may be much more scattered. That is why the word “adjacent”, to which others have referred, is not particularly appropriate. Quite often people will find themselves going not only to one area but beyond that area for a very particular service. It is important that the amendment laid down by the Government today makes it absolutely clear about the extension of consultation with those affected trusts.

[Baroness Murphy]

My Lords, the disease with the greatest economic impact on the NHS is the disease of inertia. As the Secretary of State, Jeremy Hunt, pointed out in the other place during the debates on this issue, we are now four years on from the very public exposure of the problems of Mid Staffs and we have not yet made a decision. The trust administration procedures are indeed invoked only as a very last resort, but they are a very necessary one. I am very worried because, although the noble Lord, Lord Hunt, thinks that this government amendment does not go far enough, I am afraid that I think that the government amendment as it is goes quite a long way. I was much happier with it before we all started meddling with it.

The real issue is that we must start to make decisions, and we are not making decisions. We are allowing services to carry on producing bad care. We are allowing them to get into debt, which means transferring money from good services. It is almost never possible to reconfigure a bad service out of one hospital, or indeed to shut one hospital or service, without a substantial reconfiguration of services in another hospital. Unfortunately, it will always impose on the wishes of commissioning groups in another adjacent location or a little further down the line in a rural area.

I will, with reluctance, accept the Government’s amendments, although they add a little more consultation to the process. Please, however, let us go no further than that, and please let us not support the amendment of the noble Lord, Lord Hunt, which in my view would take us even further away from where we want to be.

Mental and Physical Health: Parity of Esteem

Baroness Murphy Excerpts

Thursday 10th October 2013 Lords Chamber

[Baroness Murphy (CB)]

My Lords, the sustained commitment of the noble Lord, Lord Layard, to improving mental health care has had a profound impact on mental health services since 2008, and I admire him for it. If today I challenge some of the priorities, this in no way detracts from his remarkable achievements in addressing the needs of a long-neglected group of patients who, after all, make up the vast majority of a GP’s mental health load. But I return to patients with severe mental illness, including schizophrenia, the recurring psychoses, and those with mixed substance abuse and psychosis. As the noble Baroness, Lady Tyler, said, the importance of achieving parity of access and healthcare for them is shown starkly by the increased mortality and physical morbidity that they suffer. As Professor Graham Thornicroft from the Institute of Psychiatry has memorably observed, patients with long-term psychoses have third-world mortality in a first-world country, dying on average 20 years earlier than the general population, often of preventable smoking-related diseases and treatable cancers as well as the obvious suicides and accidents. This is completely unacceptable in a country such as ours, so I would like to know what are we doing for them and whether we are truly prioritising those greatest in need.

There have been considerable successes in the mental health strategy that has been adopted in recent years, and I mention in particular the increased services for people with dementia, which has undoubtedly risen up the Government’s awareness scale. That has been a great help for families which have a person with dementia. We have also had some success in trying to improve the assessment of risk to others posed by some severely mentally ill patients. This year’s annual report of the National Confidential Inquiry into Suicide and Homicide by People with Mental Illness by Professor Louis Appleby and his colleagues shows that homicide by mental health patients has fallen substantially since a peak in 2006. The most recent figures are the lowest since data collection began, albeit in a setting of a national reduction in homicides. This is especially true for people with schizophrenia. The homicide statistics are tiny, in spite of what might have been heard on the news in the past week—they are now extremely small—but they are very important as an indicator of the cultural attitude of mental health workers to assessment of risk.

But all is not well. Suicide by mental health patients has risen again. There were more than 1,300 deaths in England in 2011, after a previous fall. The rise partly echoes the rise in suicide in the general population, probably related to the economic downturn, as has happened in every previous recession that we can measure. But in recent years there have been more suicides in those undergoing home treatment or crisis resolution than in-patient care, which used to be one of the areas with the greatest risks. A substantial proportion of these deaths occurred in patients who live alone, have refused treatment, or are accepting only partial treatment. Services simply are not providing enough round-the-clock care of the right kind to the very severely ill. The mantra of home treatment needs better thinking through if we are to keep patients out of hospital and safe.

So we have made substantial gains in some areas but are losing pace in others. I have concerns about the direction that mental health services are now taking. I do not want to disparage the value of treating patients with common mental health episodes with cognitive behavioural therapy and other NICE-recommended therapies, but we have to be aware that the budget for psychological therapies has gone up from £100 million annually to £400 million without even reaching a high proportion of sufferers of the milder forms of distress, as the noble Lord, Lord Layard, has said. I do not dispute the efficacy of such treatment; with good CBT, faithful to the model delivered by a good therapist, 40% get better, of those who accept the offer of treatment, which is 15% better than doing nothing. For mildly to moderately unwell patients it is effective. But we have to recognise that the studies do not include patients who never accept treatment because of chaotic lives, intrusive events, a dislike of sitting down and talking, a failure of faith in the referrer, which is all too often the case, and sometimes also because people have learning disabilities and are unable to value the treatments, in spite of those patients having a very high order of risk of depression and anxiety. These factors significantly reduce the efficacy of treatments. We would surely get better value for money from addressing the problems which still beset people with more serious long-term mental illness. I accept the economic argument from the noble Lord, Lord Layard, for treating lesser forms of disorder; it is very compelling. But the only true justification for treating patients is the overall reduction in patient suffering and the burden of disability overall in the community, which is worse for those with the most severe illness.

The USA introduced a parity of esteem law in 1996. It was meant to improve the investment in mental health services through Medicaid and other insurance and to bring it up to the level of physical health services. I accept that managed care solutions funded by the public purse in the United States are not entirely analogous to publicly funded systems here, but they are similar enough. There is now worrying evidence that, in the States, the greater access to services for the less severely affected has impacted negatively on the care of the seriously mentally ill. A recent study by the well-known sociologists David Mechanic and Donna McAlpine, who for many years have been experts in the United States on the provision of mental health care, demonstrated that this apparent increased democratisation of mental health has simply shifted money from the severely ill to the lesser forms of illness, away from those with the least chance of ever being able to work and those with the highest excess mortality and suicide rates.

These findings are deeply worrying and should give us pause. There is some evidence that this is already happening here. In 2011-12 there was a reduction in spending on crisis resolution and on outreach services for those in acute crisis, while spending on psychological therapies rose by 6%. Total spending on mental health has increased by a massive 60% in real terms over the decade. That is something for us to celebrate, but now we are beginning to see a fall in investment in the acute care end.

It seems to me that the NHS and social care services should listen more to Mind, Rethink and SANE, and listen to what their priorities are. If true parity of esteem is to be promoted then we must look at the way that these acute and crisis services are running. Four in 10 trusts have staffing levels well below established benchmarks. There are serious issues around safety, respect and dignity in in-patient care. There are still insufficient non-hospital options.

As long as 10% of patients with schizophrenia kill themselves, we have not got our priorities right. As long as the rate of psychosis in prisons is 50 times higher than in the general population, then we have not got our funding priorities right. If we are really to make headway with mental health services, we must first and foremost concentrate on those who pose the highest risk to themselves or the highest risk to others, and try to improve the lives of people whose lives are truly blighted by long-term psychotic illnesses.

Mental Health (Approval Functions) Bill

Baroness Murphy Excerpts

Wednesday 31st October 2012 Lords Chamber

[Baroness Murphy]

My Lords, I give my general wholehearted support to this. I am very sympathetic to the difficulties in which the Government find themselves and I wholly understand the need for the emergency legislation. It seems to me quite astonishing that these four health authorities should have made this decision. I say that because at that time in 2002, I also became chairman of a strategic health authority. I want to reassure the noble Baroness, Lady Jolly, that we had a very long list of our legal obligations, of which one was clearly the approval of Section 12 approved doctors. It was discussed. It is very difficult and time consuming to set up the training programmes to ensure that the right wisdom is in place and to supervise those being approved by the authority itself. I quite understand that people might have thought that it would be easier to delegate it but the 1983 Act is so clear that I cannot understand how these four authorities could have thought that they could delegate that.

Speaking as a former vice-chair of the Mental Health Act Commission in the 1990s, I would like to ask why that commission did not pick up that these Section 12 approved doctors were being approved by the wrong authorities. I find that quite astonishing. While I can see the need for this legislation and the reason for the emergency, I hope that we will look carefully at how they got this so wrong.

I have a suspicion that the difficulty may arise because of an attitude in some authorities to treating with less gravity the detention of mental health patients than perhaps it is in others. As you travel around the country, regrettably it is true that this appears to be a lesser function for some authorities than they want to undertake, which is seriously worrying.

I share the anxieties that the noble Lord, Lord Pannick, has outlined that there could still be quacks or quite unsuitable doctors who have discharged the functions of an approved doctor; yet in this catch-all Bill their decisions would not allow patients to challenge them. After all, we are talking about right up to the present day. Therefore, we are talking about patients who perhaps are coming out of hospital in the next month or two and still want to challenge the legality of the detention because of the approval of the Section 12 approval. We are going to be ruling that out. I wonder how that sits well with our assurances that we will take this process more seriously, and as seriously as Parliament intended when it passed the 1983 Act.

Health and Social Care Bill

Baroness Murphy Excerpts

Monday 19th March 2012 Lords Chamber

[Lord Wilson of Dinton]

It is not for me to advise the Government on what to do, but I hope they will appeal, because the issue involved is of huge importance. I read the Information Commissioner’s first judgment and I do not find it satisfactory. It is written in a way that suggests that it does not understand the issues in government. I think the issue at stake is of sufficient importance for the Government to fight its corner, and for this House not to add its weight to it.

[Baroness Murphy]

My Lords, I declare that I am a member of the British Medical Association and a fellow of the Royal College of Psychiatrists.

The risk register is a complete red herring and we all know that this is an attempt to delay the implementation of the policies in the Bill. The Bill has received extraordinarily careful scrutiny. In fact, it has received better scrutiny and a warmer response from government Ministers in addressing amendments proposed by all sides of the House than any Bill with which I have been associated in the past eight years. At the moment, I can think of nothing worse for the National Health Service than to have these policies delayed yet again by further uncertainty and greater procrastination.

The risk register saga was so obviously a political ruse from the beginning that I did not even bother to speak on it when it was first introduced. It was so obviously a red herring, produced for the benefit of the House to debate a slowing down of the Bill, that it was not worth addressing.

[Baroness McIntosh of Hudnall]

Would the noble Baroness explain to the House whether it is her view that the Information Commissioner has deliberately delayed the progress of the Bill? That seems to be the implication of her remarks.

[Baroness Murphy]

That is not the implication of my remarks at all. The Information Commissioner has not released his full judgment and will not release his reasons for some time, so we cannot debate that.

This comes back to what my noble friends Lord Birt and Lord Wilson and the noble Lord, Lord Fowler, said about what these risk registers contain. I know very well because I have written risk registers for the National Health Service. I have sat down with my chief executive, and with my chairman when I was a chief executive, and we have written these things for public consumption. The Cabinet Office has a very nice risk register, but it is for public consumption; it is not to do with the private discussions between senior civil servants or advisers. I have worked as an adviser at the Department of Health, and this is not the kind of thing that comes up in conversations between Ministers where you want to be really frank.

We now have an out of date, almost two years’ old risk register that will not be relevant to the passage of the Bill. We have assessed the detailed risks of the Bill better in this House than in any other forum I can imagine. Those who have sat through the progress of the Bill, line by line and word by word, know very well that we have improved it. I am sure there are areas that many of us would still like addressed, but for all kinds of reasons we are not able to do so. I beg the House not to delay the Bill. If we delay it further we will have no guarantee that we will be able to get it through before Prorogation. I see this simply as a ruse not to implement these polices. We would gravely let down the National Health Service by not implementing them, and I urge noble Lords not to support the Motion of the noble Lord, Lord Owen.

[Lord Falconer of Thoroton]

I support the Motion of the noble Lord, Lord Owen. I understand that he is saying, “Let us look at the reasons for saying that the risk register should be made public”. He understands that it must be done before Prorogation, so I am not entirely clear why the noble Baroness, Lady Murphy, is saying that this will cause delay. I hear what the noble Lord, Lord Wilson, says—you do need to strike a balance between appropriate confidentiality in relation to what the Government do and the need for openness.

The Freedom of Information Act was passed so that it would not be government Ministers or civil servants who determined what was kept confidential but an independent tribunal. We have reached the position on this issue at which Professor Angel, who is regarded as probably the best chair of an information tribunal that there is, has struck the balance. Take it from me that Professor Angel very well understands the need for proper confidentiality in relation to government. He and his tribunal are not remotely people who would make everything public. They well understand that lots of government matters have to be kept under wraps for the purpose of good government. If a tribunal chaired by Professor Angel said that we should see this, and he reached that conclusion on the basis not of politics but of good government, my instincts are that we should listen more to what he said than noble Lords around this House who have an interest in trying to rush the Bill through. I am struck by the modesty of the amendment by my friend, the noble Lord, Lord Owen. It says that we should see what Professor Angel said before we reach a conclusion. I strongly urge the House to take that course.

Health and Social Care Bill

Baroness Murphy Excerpts

Thursday 8th March 2012 Lords Chamber

[Baroness Murphy]

My Lords, it is evident that everyone around this House who has participated in the discussions on the Bill in effect wants the private patient and other private income to be of benefit to and contribute to institutions whose primary focus, not just their duty, is to public patients. That is what we have all been trying to achieve and it is a matter of finding the right words. Actually, I was going to say to the noble Baroness, Lady Finlay, that I quite liked her Amendment 220. The amendment might not have the right wording but it encapsulates exactly the principle that we are trying to get into the Bill. The amendment is admirable.

I do not have any problem at all with Amendment 218A, which is about accounts, because foundation trusts already produce very detailed accounts in order to indicate to Monitor how near or far they are from meeting their existing private patient cap, which is carefully monitored. Those sorts of accounts are already there. The only difficulty is that accounts, being made up by accountants, do not always reflect which service line is supporting another service line. Therefore, I am not quite sure that requiring this great detail will do quite what the opposition Benches hope. However, in principle, I see nothing wrong with the amendment.

It is worth while remembering all the time during these debates that we are talking about a situation where the vast majority of hospitals—apart from a handful of internationally renowned specialist hospitals in London and the suburbs and in one or two other cities outside—have a private patient income of about 2 per cent. That is not likely to change very much. However, we need to add something that is reassuring because we all understand the anxieties out there. Amendment 220BZB, in the name of the noble Earl, Lord Howe, is an excellent solution. The change to a 5 per cent limit during the year means that there will be no great energy thrown at changing this area, which is the most important thing. We want the board of the hospital and the governors to focus on public patients. If they have some other income coming in from private activity, that is fine, but we do not want them suddenly to throw a lot of energy at it. Therefore, I think that 5 per cent is about right. I know that some foundation trusts have asked for 10 per cent, but 5 per cent is fine.

Requiring hospitals to warn everyone in advance what they are going to do is also helpful. I seek reassurance from the Government that that will still protect the confidentiality of plans, because I know that trusts have expressed anxiety about that. However, I cannot see any problem with it.

The reason that I prefer the amendment of the noble Earl, Lord Howe, to Amendment 220C is because his amendment involves the governors. Crucially, they are the people responsible for the institution, whereas Amendment 220C involves the much wider membership—often 10,000, 12,000 or 20,000 members. That is just too unwieldy a group to be seriously involved in the governance of an organisation. They are vital people in getting local communities to be involved in and have knowledge about the hospital but they would not be the right people when it comes to these sorts of changes.

I support much of what the noble Lord, Lord Marks of Henley-on-Thames, has said, but I am attracted to the Government’s amendment, which solves the problem that we are all looking for a solution to.

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, this has been a good and constructive debate on NHS foundation trusts. It is right that we should focus on the removal of the private patient income cap, as I am acutely aware that that is where the majority of noble Lords’ concerns lie.

We need to focus on one core point at the outset. Fears have been expressed that removal of the cap could see foundation trusts increasing private income at the expense of NHS patients—in other words, that it could create a two-tier NHS, with those who can afford to pay going to the front of the queue. That is wrong and, I believe, alarmist. There are robust safeguards in place to prevent that kind of outcome.

Allowing a foundation trust to generate more private income does not release it from its prime duty to its NHS patients. Foundation trusts will still have to meet their legally binding contractual obligations on waiting times and provide the highest standards of care for NHS patients. Foundation trusts themselves are very clear about that. Removing the private patient income cap would allow them to bring extra investment in infrastructure and leading-edge technology to benefit NHS patients. Today, foundation trusts can be prevented by the cap from treating private patients who wish to be treated at the trust even when the income that the trust would earn would support its NHS services. The point made by the noble Baroness, Lady Finlay, was absolutely spot on. The cap leads to the ridiculous situation where NHS consultants are forced to get into their cars to drive to independent providers to perform private patient work in their non-contracted hours. Removing the cap would improve clinical safety for all patients in NHS hospitals, because doctors would be more likely to remain on site for longer.

It may well be, as the noble Baroness, Lady Murphy, pointed out, that most foundation trusts will not be affected at all by the removal of the cap. Many of them are earning below their caps at the moment. It is worth noting that NHS trusts, as distinct from NHS foundation trusts, which are not subject to a cap at all, are not earning proportionately more than corresponding foundation trusts. The point is that removing the cap gives the most innovative organisations the opportunity to boost income for NHS services.

I can also assure the House that we have put in place substantial safeguards to protect NHS patients. NHS foundation trusts will remain first and foremost NHS providers. Their principal legal purpose, to treat NHS patients, has been in legislation since 2003. I tabled an amendment in Committee to clarify its legal meaning. A foundation trust’s principal purpose requires it to earn the majority of its income from the NHS. That is very different from saying that 49 per cent of the work of foundation trusts will be with private patients, as some have misinterpreted it. The Bill does not mention 49 per cent, as I hope the noble Baroness is aware. Amendment 220A would remove the clause. That would be most unfortunate, because its effect would be to leave governors and local communities unclear that foundation trusts must remain predominately NHS providers.

There have been worries that the internal governance of foundation trusts will not be strong enough to exercise the requisite control in that area. I hope that I can provide reassurance on that point. As the local community's representatives, it is the responsibility of the governors to hold the board to account for its management of the trust. The governors should also consider whether the level of private activity is in the best interests of their organisation. The Bill will ensure that governors are better able to do that. It strengthens their arm by giving them new powers to hold directors to account and, if necessary, to remove the chair and non-executives of the board of directors. It would be entirely appropriate for the governors to use these powers if they felt that non-NHS activity was not operating in the interests of NHS patients.

At this stage, I should like to thank my noble friend Lord Clement-Jones for setting out a very persuasive case for adding to governors’ powers to oversee a foundation trust’s private income. I have tabled an amendment, which I hope will address his concerns, requiring directors to detail in the trust’s annual plan—that is, the forward look—any proposals to earn private income and the income that they expect to receive. By law, directors already have to take into account governors’ views in preparing this plan, but this amendment would place an explicit duty on governors to consider the plan and be satisfied that any proposals to increase private income would not significantly interfere with their foundation trust’s principal legal purpose to treat NHS patients.

With regard to the point raised by the noble Lord, Lord Campbell-Savours, a plan to increase private income substantially—that is, to increase by 5 percentage points or more the proportion of total income earned from non-NHS activity—must secure agreement by a majority of governors in a vote. For example, governors would be required to vote where a foundation trust planned an increase in non-NHS income from 2 per cent to 7 per cent or more of its total income, or from 3 per cent to 8 per cent or more. To make it quite clear, the vote would be triggered by plans for large increases in non-NHS income. Other matters, such as significant transactions, are for foundation trusts to decide. These proposals would complement the amendment that we introduced in Committee to require directors to explain in a foundation trust’s annual report how private income had benefited NHS patients.

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[Baroness Northover]

I remind my noble friend that he can reply on his amendment at the end. I am sorry to keep on intervening on my noble friends in defence of the noble Lord, Lord Warner, who wanted to continue his argument, as he did. My noble friend has the opportunity to respond at the end.

[Baroness Murphy]

I have concerns similar to those of the noble Lord, Lord Warner, but this amendment is different from those that I have seen floating around from the noble Lord, Lord Phillips. I also have questions, but we must be very clear about what we mean by “queue-jumping”. If an NHS patient goes to an ordinary NHS hospital consultant and is told that they need an operation, it is completely legitimate for them then to ask to go privately and pay for the operation. That is, as the noble Lord, Lord Warner, said, enshrined in the NHS Act of 1948, and completely legitimate. Queue-jumping is when a patient sees a private consultant who then inserts the patient into the NHS list ahead of other NHS patients. That is what we want to avoid, and it is already completely illegal and highly frowned on. Most hospitals do what they can to exclude it, but I take the point made by the noble Lord, Lord Phillips, that it goes on, and we know that it does. It is an unpleasant practice and should be stamped out, but I do not know whether this amendment does that.

As the noble Lord, Lord Kakkar, reminded us, the conundrum of private units in NHS hospitals must be borne in mind. That may be the most constructive way in which to ensure that NHS consultants are available to NHS patients when they need to be, as the noble Baroness, Lady Finlay, said. But often private patients have operations that go wrong—and then, if there are two patients in need of an NHS intensive care bed, the patient who takes priority is the person with the clinical need. It is very much the same as someone on a battlefield. It does not matter whether it is an enemy soldier or a domestic soldier.

[Lord Hunt of Kings Heath]

I thought that the amendment was focused not so much on clinicians but on the board of the trust. That is a slightly different argument.

[Baroness Murphy]

The noble Lord may be right. If the change in wording applies to how the management behaves but makes no change in clinical priorities—the noble Lord, Lord Kakkar, said that it would not interfere with clinical priorities—I would support it. It is necessary to ensure that management acts like that, as long as it does not cut across the clinical priority that the sickest person comes first, whether private or NHS.

[Lord Ribeiro]

I have one question for the noble Lord, Lord Phillips of Sudbury. I agree with the comments made about management. When I worked as a surgeon, during a period when we were desperate to get patients into hospitals because we had already completed our NHS quota of work by January and had from January to April to make money, pressure was often placed on us as consultants by management to bring private patients into the NHS so that we could make the income. I hear “Oh!” from the other side. However, one problem that came from separating and withdrawing private beds from the NHS was that most consultants have established private practice in private hospitals outwith the NHS. The point that the noble Baroness, Lady Finlay, made was that part of the reason for removing or adjusting the cap and why she supported earlier amendments was to try to get integration of care to allow consultants to be on the spot.

The amendment refers to NHS foundations trusts. As we know, there are trusts that are not foundation but ordinary. What would apply to them? Would they therefore be free to undertake private work in a way that has been described here? This refers only to NHS foundation trusts.

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[Lord Warner]

My Lords, it gives me great pleasure to follow that sterling contribution by my noble friend Lady Pitkeathley. The real problem with the Government’s approach is that they really have not properly defined the functions of this body. One of the great strengths of this amendment is that it sets out what the functions of a truly independent body should be in this area. I make no defence of the previous Government’s attempts to wrestle with this idea, but I think that we have continued to go backwards in this area since the days of community health councils, despite their patchiness.

I was very optimistic when the Government made their first announcements about healthwatch, and I was a great supporter of the brand name that they had created, which I thought was very powerful. Unfortunately, the functions that they have given it and the way they have set it within the CQC do not enable it to live up to the strength of that brand.

I was full of admiration for the creative way in which the noble Baronesses, Lady Cumberlege and Lady Jolly, loyally tried to make the sow’s ear a bit more of a silk purse. However, it really does not cut the mustard. I think that we need to pay attention to the points made by my noble friend Lord Whitty, who emphasised very well the extent to which the model that the Government are pursuing has failed in a number of other areas of public policy. The Government should learn from that evidence and rethink this matter before we get to Third Reading.

I have one other point which concerns the rather spirited exchange that we had in Committee with the noble Baroness over the issue of campaigning. I shall return to that for a few moments. The whole point of having a body like healthwatch is to enable it to join forces with other people when there is a serious challenge to the public interest and to patients’ interests in this area and allow it to campaign. I cannot see how it can be very easy for a committee of the CQC to join in that campaign. I asked the noble Baroness whether it would be able to campaign and, to her great credit, she said that yes, it would. Most of us who have knocked around the public sector for any length of time would find it very difficult to believe that a committee of the CQC would be able, despite what the noble Baroness says, to join in a campaign that was highly critical of the CQC. We need to be clear on whether it can campaign; and if it can, I would like, as the noble Baroness said, a very convincing explanation of how it will be able to when it is sitting within the structure of the regulator and it is the regulator's deficiencies that it is campaigning against.

[Baroness Murphy]

My Lords, I hope I shall be allowed to put a contrary point of view to that of the noble Lord, Lord Warner, and those who have tabled Amendment 223. First, I apologise for not contributing in Committee on this area; I happened to be away during the debates on this, but I read the reports with much interest.

This area of patient and public involvement is one that, as many noble Lords have said, we have struggled with for many years. I hark back to the CHCs with some nostalgia. They were a very mixed bag of organisations, but those that were good worked very effectively. I too pay tribute to the noble Lord, Lord Harris of Haringey, for the work that he did in supporting CHCs around London, which made my life an utter misery, as they were intended to do. I am very grateful for that.

Unfortunately, the arrangements that were put in place after their abolition have not worked. I say to the noble Lord, Lord Whitty, who is very persuasive in his arguments, that we have been there, done that and it did not work. As the noble Baroness, Lady Pitkeathley, said, the Commission for Patient and Public Involvement in Health was a total disaster. It was an extremely expensive quango—it was bureaucratic, totally isolated from other health bodies, the Department of Health did not know what it was up to and I do not think it knew what it was up to itself. It fell out with all the local patient and public forums. It was a disaster. It did not have any symbiotic relationships with those who make the health and social care services work; it was not in any way linked in with local authorities, which is a huge difference from these arrangements; and it seemed to me then that you had to have a structure in which all the core patient and public involvement organisations locally were crucially interlinked with what makes things work.

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.