Healthcare: Costs

Earl Howe Excerpts

Monday 15th November 2010 Lords Chamber

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

My Lords, the Government have guaranteed that health spending will increase in real terms in each year of the Parliament. However, in order to meet rapidly rising demands while improving quality, substantial improvements in economy and efficiency will be required across all areas of health spending. This response is best led by the NHS locally, while the centre will focus on reforming the health service to create a long-term sustainable NHS.

[Lord Taylor of Warwick]

My Lords, I thank the Minister for his reply. Does he agree with me that putting more funding now into research into terrible conditions such as dementia, in which I include Alzheimer’s disease—for which there is no cure—will ultimately bring down healthcare costs? We must find a cure, and I ask the Minister to commit more research funding to the terrible condition of dementia.

[Earl Howe]

My Lords, my noble friend is quite right to identify dementia as a particular cost pressure over the next few years. The coalition Government signalled in their programme our intention to prioritise funding for dementia research. The spending review confirmed that and committed to real-terms increases in spending on health research. This investment is indeed essential if we are to increase the quality, productivity and cost-effectiveness of the NHS.

[Lord Brooke of Alverthorpe]

My Lords, I return to a question which I posed previously to the Minister and which remains unanswered. Does he not agree that if patients in the health service knew what the costs of their treatment, care and drugs were, as they do in the private sector, this would create a downward pressure, which would reduce costs overall?

[Earl Howe]

My Lords, I know that this is a question to which the noble Lord and other noble Lords regularly return, and it has a superficial attraction. The problem with it, I am advised, is that patients who are informed of the cost of their treatment—some patients, at any rate—take that as a deterrent to accepting the treatment in the first place. That is something we need to avoid. Nevertheless, there is an underlying point here; there is a need to provide better information to patients about their treatment so that they can take ownership of their state of health.

[Baroness Finlay of Llandaff]

My Lords, what consideration are the Government giving to seven-day working in the NHS, including renegotiating Agenda for Change, to make better use of the NHS’s equipment, promote early diagnosis and decrease morbidity from complications of treatment that is not overseen by senior staff—particularly over weekends and bank holidays?

[Earl Howe]

My Lords, creating a seven-day service is a particular concern of mine, and the noble Baroness is quite right to raise it, particularly given her long experience in the health service. As for Agenda for Change, any alterations to existing terms and conditions, such as the unsocial hours payment or sick pay, would need to be negotiated in partnership with NHS Employers and trade unions, through the NHS Staff Council.

[Lord Alderdice]

My Lords, I know it is extremely difficult, but has my noble friend had the opportunity to explore how much of the increase in health service costs in recent years has come about because of the increase in administration and management costs? I refer not simply to the salaries of administrators and managers but to the administration for the administrators, and to the amount of time that clinical and professional staff must spend in servicing the requirements put on them by administrators and management.

[Earl Howe]

My noble friend is right to pinpoint this area. If my memory serves me correctly, the average annual increase in management and administration costs over the past 10 years has been 6.2 per cent per year, which is by far and away higher than the increase in costs in clinical areas, for example. That is why we are determined to reduce the administrative cost of running the NHS, and we are in the process of planning for exactly that.

[Baroness Wall of New Barnet]

Does the noble Earl agree that that is an opportunity for us to look at saving costs in the health service by ensuring that we think of methods to persuade people to attend their day clinics? The cost of people not attending—DNA, as it is called in the health service—is huge, particularly in day surgery.

[Earl Howe]

The noble Baroness is quite right, and I am well aware that she speaks from personal experience. Many hospital trusts, and indeed GPs’ surgeries where applicable, have devised inventive ways of reminding patients of their appointments, either on the day or on the day before, perhaps by text. Good practice in this area is something that we need to focus on.

[Lord Kakkar]

My Lords, clinical leadership is critical if we are to secure the greatest benefit for patients from NHS spending and the appropriate use of resources. What strategies do Her Majesty's Government have for developing clinical leadership in the NHS? I declare an interest as patron of UCL Partners’ NHS staff college.

[Earl Howe]

Again, my Lords, the noble Lord is absolutely right to focus on clinical leadership, which will be critical if we are to deliver the improvements in the quality of care that we wish to see, and also to roll out the vision laid out in the Government's White Paper. The department has a number of initiatives under way, as do deaneries in strategic health authority areas around the country, to promote clinical leadership. There are also active programmes in acute trusts. Without good clinical leadership, the programme cannot proceed as we all hope and wish.

[Lord Eden of Winton]

My Lords, can my noble friend say what proportion of total National Health Service costs is represented by drugs and medicines? Might it not be that if there were tighter control over the dissemination of pills and medicines, particularly in outpatient departments, there could be important savings?

[Earl Howe]

My Lords, my noble friend is right that drugs and medicines account for a sizeable proportion of the NHS bill. Successive rounds of the pharmaceutical price regulation scheme, combined with what we call the category M scheme for generic drugs, have held down the cost of drugs to the NHS very successfully over the years. However, this is an area to which we are devoting a great deal of attention, not least in our plans for value-based pricing in the longer term.