Health and Social Care Bill

Baroness Meacher Excerpts

Tuesday 13th December 2011 Lords Chamber

[Baroness Meacher]

My Lords, I rise to speak in support of Amendment 260EA which, as I understand it, seeks to maintain the essentials of the role of Monitor as set out in the 2006 Act. I support the extending of Monitor’s roles beyond those of foundation trusts. However, in response to the argument of the noble Earl, Lord Howe, that we need to change the functions of Monitor in order to achieve cost-effectiveness, improvements in quality and productivity in the years ahead, I would argue that with Monitor as it stands, together with the National Institute for Health and Clinical Excellence and the CQC—a great improvement on its predecessor—we have all the tools we need in the kitbag in order to improve our productivity, quality and cost-effectiveness.

I want to focus on one issue which I believe to be the greatest threat presented by these reforms to the improved quality and cost-effectiveness of the health service. There are two powerful reasons for avoiding the reorganisation of Monitor. The first is that if it ain’t broke don’t fix it. Monitor has been, in my experience, an extremely successful organisation, with one exception to which I will return. The second is that the main new ingredient is, indeed, the promotion of competition that has been addressed so effectively by other noble Lords. Although this will not be based on price, I have absolutely no doubt that it will drive financially driven decision-making.

I want to touch on these two points. Monitor is not broke, as it were. Having been on the receiving end of Monitor’s demanding regime for accreditation as a foundation trust service, I can vouch for the fact that Monitor has been the engine behind the transformation of inefficient organisations, run by boards with weak non-executive directors—who therefore offered very little professional challenge to the executive directors—weak financial systems and weak financial management. That is what we had, and that is what other trusts have had, prior to undergoing the rigorous process driven by Monitor to become foundation trusts. In my case, as chairman, I had no alternative but to get rid of my chief executive officer—no easy task but somehow this process enabled that to happen—and, indeed, to get rid of my non-executive directors. It was as simple as that. The same process continues to take place all over the country. I know this because others tell me. My belief is that we owe to Monitor, more than any other organisation with the possible exception of NICE, the fact that the NHS is now one of the most cost-effective health systems in the world, as the noble Lord, Lord Owen, has said very clearly. We should be proud of that.

At this stage I ought to mention Mid-Staffs, because this is, indeed, the one failure to which people refer. As I understand it, the problem was that Monitor at that stage had no information about quality, and the Healthcare Commission, which at that stage was responsible for quality inspection, did not pass data to Monitor. All those problems have been resolved, and they needed to be, because without the quality information, Monitor was ill-equipped to do the job it had to do.

I come now to my second point, which is about the promotion of money-based competition. I want to emphasise “money-based”, because I support competition, but it must be based on the quality of services to patients. The promotion of money-based competition and private sector provision of health services will be a detrimental and costly experiment. We have only to look to other countries, as the noble Lord, Lord Owen, has said, to realise that this is nothing short of a disastrous route forward. I refer to page 19 of the Department of Health’s document Protecting and Promoting Patients’ Interests: The Role of Sector Regulation. It states:

“Regulation and competition will always play an important role”.

I know that the word “competition” here means money-based competition: not price-based, but financially based or commercially based. It goes on to say that Monitor will,

“provide a fair playing field for all, regardless of ownership”.

I understand that the existing foundation trusts will remain as they are as long as they remain solvent. The document refers to patients wanting more choice. As we know, we can get any answer we want from surveys, as long as we ask the right questions. No patient would want more choice if they were aware of the costs and the appalling consequences of the dominance of the money motive in a commercial system. Patients want choice within the systems that we currently have.

I will not focus on the US, because we know that with health costs soaring towards 20 per cent of GDP and 30 million people excluded from remotely satisfactory health care, this cannot be a model to follow. However, Germany is held up as a good example of a health system which has worked with more competition in the system for a long time. I will start with an anecdote. A German orthopaedic surgeon we met on holiday a few years ago happily referred to the fact that he and his colleagues regularly undertake unnecessary operations if they are short of work. What was remarkable was that he seemed completely unembarrassed that this should be the case and that he should admit such a terrible thing to somebody who is used to working in a country with a national health service. It seemed completely normal; it clearly is.

I want to make available to your Lordships the more considered experience of one of the German consultants, Professor Priebe, who worked as a clinician in Germany for 17 years before emigrating—utterly disgusted with the German system—to the UK to work in the National Health Service. He gave me his comments and pleaded with me to make them available to the Government, because he is so alarmed at the thought that he escaped the German system to come over here only to be followed by something rather similar. I will try and draw on his comments as quickly as I reasonably can.

In Germany, the contractual agreement between commissioners and provider organisations define the funding arrangements. Clinical decisions are then strongly influenced by financial incentives. Computer-based algorithms have been developed to guide doctors on what diagnostic interventions and medical treatments patients should receive in order to maximise the income for the provider organisations. These algorithms consider the characteristics of the given patient as well as the characteristics of the broad category of patients with that particular diagnosis in order that the doctor achieves the,

“most profitable average treatment costs across a diagnostic group of patients”.

Is that really what we want in our country?

In Germany, evidence-based medicine and the interest of patients are much less important. In the UK in recent years, the emphasis has been more and more on evidence-based medicine; that is based, of course, on the professional work of NICE, which I have already referred to. If the drive towards competition threatens this ethos, Britain will lose something extremely precious. Competition not only reduce the flexibility needed to provide individualised effective care, but also requires ever-increasing documentation. Ministers often refer to the bureaucracy of the National Health Service, but if they had the experiences of the bureaucracies of other systems, they might be slightly less critical.

This documentation is supposed to ensure that clinicians can demonstrate that these income-generating interventions have indeed been provided. Commissioners mistrust the providers and require more controls and ever more documentation as well. This waste and inefficiency inevitably drives up costs.

Financial incentives and competition encourage commissioners to accept less costly patients. The providers are inclined to do the same. Here is another major fault in the system. As a result, patients with severe and chronic disorders become disadvantaged. It is no accident that mental health services are relatively well funded in this country, when compared to these competition-based systems, though I should emphasise that even in the UK, mental health remains the Cinderella of the health service.

Financial incentives also lead to the prescription of useless treatments—my anecdote makes the point—and the over-provision of services. Apparently, this is widely known across the German system. The providers then argue for the funding for all these unnecessary operations and superfluous services.

Competition and fragmentation of local service systems create the need for more referrals and associated paperwork and further increased costs. There are multitudes of downsides from these financially driven systems. Our consultant concludes that,

“most of these downsides of a more market orientated system appear to be intrinsically linked to the promotion of competition in health care and to having a system based on independently negotiated contracts rather than one controlled by agencies that are directly accountable to the public”.

In this country, we know from other sectors that markets do not work. The name Jarvis will mean something. Jarvis was, of course, the private maintenance company for the rail companies. Jarvis was found negligent following various rail disasters and, of course, Jarvis no longer exists.

Do we really want to generate these risks of negligence in the health sector? Surely not. I realise that at this point in time, the plan is not to go all the way down the rail route, but the direction of travel is extremely clear and I have no doubt that that is where we shall arrive unless there are safeguards within this Bill to prevent it. Some may point to the apparent savings achieved by fundholder GP practices. The evaluators apparently found, however, that GPs bumped up their prescription costs immediately before becoming fundholders by going to special drugs only to return to generic prescribing once they became GP fundholders.