NHS: Healthcare Data

Lord Macpherson of Earl's Court Excerpts

Thursday 6th September 2018 Lords Chamber

[Lord Macpherson of Earl’s Court (CB)]

My Lords, I congratulate my noble friend Lord Freyberg on securing this timely debate and on his thought leadership and his excellent contribution. I also congratulate the noble Lord, Lord Bethell, on his eloquent maiden speech. I know that we are not supposed to believe in the hereditary principle any more, but I am quite sure that he will bring the same credit to this House as his four predecessors did.

As a former Treasury official, my interest in this debate is in the prosaic issue of finance. Pressures on NHS expenditure are set to increase hugely in the years ahead; that is partly due to the long-predicted demographic pressures finally arriving, but it is also about raising expectations about the standard and quality of care. According to the independent Office for Budget Responsibility, spending on health and adult social care is set to rise by 3.2% of national income in the next 20 years. That is £64 billion at current GDP levels. Taxes will clearly have to rise, but so will the efficiency and effectiveness of the National Health Service, and that is where the use of data comes in. Take Tesco or Amazon. Using their customers’ data to provide a better service is fundamental to their business model. The NHS has a dominant market position in its field; it needs to find a way to do the same. I welcome the new Secretary of State’s commitment to technology-driven health and care and the £475 million he has put on the table; like other noble Lords, I hope that that is new money. But we are still not making sufficient progress: the whole approach is too fragmented and balkanised.

Britain starts with an advantage. The clue is in the name: we have a National Health Service. It should not be beyond the wit of government to join up hospital data with general practitioner and other data sources through greater interoperability. But, to use one example a GP mentioned to me the night before last, in many parts of the country paramedics in the ambulance service still cannot access a patient’s wider medical records. This cannot be good for the service patients receive.

I know and recognise that the mishandling of large-scale data initiatives, in particular the care.data programme, has not been conducive to public trust. Many noble Lords have spoken eloquently on this subject today. Obviously we need a coherent, comprehensive and ethical system for protecting people’s privacy, and we need to make restoring trust in sharing health data a national priority.

The message should be simple. If we are to nurture the right to a publicly funded health system, we have a duty to share our data. Other countries have grasped this nettle and their citizens have responded. We must do so too. That will require strong leadership from the centre as well as at a local level. I would strongly recommend a campaign which health practitioners and patient advocates own and lead.

Healthcare data is undoubtedly an asset. But I am agnostic at this stage on whether we should seek to monetise it. I recall a debate some years ago in the Treasury about the Ordnance Survey: should it be privatised or not? Were its services effectively a public good for which no charge should be paid? In the end, the Government, correctly in my view, went for a more open-source approach. Healthcare data may be different. The fact is that trusts are already exploiting its value potential commercially although, as my noble friend Lord Freyberg suggested, some of the current deals look too one-sided. If the NHS could harness its negotiating power at a national level, underpinned by a strong national framework on confidentiality, I am confident we could unlock much greater value. As my noble friend Lord Mitchell said, our aim should be to maximise that value. If it were clear that value would be recycled in higher spending on health and research, I believe we could yet secure the necessary public support.

The Treasury’s balance sheet review is due to report in the Budget and is set to cover intangible assets. I hope the Treasury will work with the National Audit Office to develop an appropriate accounting framework. Above all, the review provides a golden opportunity to examine the value of NHS information the better to inform public debate. Knowing the Treasury as I do, I am sure that, even now, officials are considering the best way of unlocking that value. I look forward to the Government bringing forward a vigorous response to the review in due course.

NHS and Social Care: Winter Service Delivery

Lord Macpherson of Earl's Court Excerpts

Thursday 25th January 2018 Lords Chamber

[Lord Macpherson of Earl’s Court (CB)]

My Lords, we may or may not be experiencing one of those periodic crises that beset the NHS and the social care sector every 10 years or so, and by the time we know for certain it will be too late to do anything about it. Indeed, even if the Government announced another £1 billion of spending today, the lead times are such that it would not have any impact until well into the next financial year. However, if there is not a crisis this year, it will happen next year or the year after that.

The coalition Government were right to try to secure efficiency improvements out of the NHS and social care sectors, but the squeeze has gone on for too long. Although the Chancellor announced more money in his recent Budget, it was more a temporary sticking plaster than a permanent solution to NHS finance problems. The NHS will come under further pressure in the years ahead as the demographic pressures long predicted by the independent OBR and others begin to materialise. Those spending pressures are compounded by the so-called triple lock, which means that pensions and health spending are accounting for an ever-increasing proportion of public spending. It is no longer realistic to cut spending on prisons, the police and defence; they too are under heavy pressure. So something has to give.

The NHS is the last great socialist institution, free at the point of use and based on the principle of command and control. Its founders were wrong when they predicted that better healthcare would reduce demand. The fact is that demand is infinite. We now know that demand increases as society becomes more prosperous so healthcare, under the NHS model, will always be rationed. Governments are inevitably reluctant to admit this but it is a fact, and it may be no bad thing. The NHS is certainly a lot cheaper than the US private system, which is beset by waste caused by supplier-induced demand.

Such is the British people’s attachment to the NHS that I do not think it is realistic to change its founding principles. Of course the NHS could be better managed. For example, we need to find better ways of managing demand. Far too much money is wasted on patients who fail to turn up for appointments. We also need to solve the age-old disconnect between the NHS and social care. I welcome recent government efforts to address this, although there is still more to do, but better management and reform is not going to be enough. If we are to avoid future winter crises, we need to address the funding side of the equation.

Despite the Treasury’s excellent presentation in this year’s Budget, the Chancellor’s proposals effectively financed extra spending on the NHS through higher borrowing. That is not the right approach. The current pressures are structural and on revenue spending. Good stewardship should ensure that structural spending is financed out of higher taxes. It would run against the orthodoxy that I imbibed over 30 years at Her Majesty’s Treasury but I propose a hypothecated tax that would be set at the beginning of each Parliament, informed by independent projections by the Office for Budgetary Responsibility. A new NHS and social care tax would be introduced to fund these additional pressures. It would be based on national insurance contributions, which, incidentally, already include a little-known NHS allocation. Unlike national insurance contributions, the tax would be paid by those above retirement age as well as those below it, and it should be charged on savings, rental and pensions income as well. The fact is that young people are already bearing too much of the burden of funding the elderly. It is time that the old folk put something back. We need greater solidarity across the generations.

This new NHS tax would be separately itemised on people’s pay slips and could be spent only on the NHS and social care. In my view, taxpayers would be more prepared to pay higher taxes if they knew where the additional money that they raised was being spent. A 2% tax, paid by young and old alike on incomes above the lower earnings limit of national insurance, would raise well in excess of £10 billion a year. I hope the Government will give it serious consideration.