Health and Social Care Bill

Lord Marks of Henley-on-Thames Excerpts

Thursday 8th March 2012 Lords Chamber

These principles are sound. I beg to move.

[Lord Marks of Henley-on-Thames]

My Lords, this group of amendments is on the question of foundation trusts’ private income cap. All of us are agreed that the number of private patients and the amount of private income are important considerations for foundation trusts. The risks to the NHS of too much private income and private treatment in foundation trust hospitals are clear and perhaps do not need rehearsing at length. If too many beds in such hospitals are taken up with private patients, unless we are very careful, that may limit accessibility of those beds to NHS patients. The development of foundation trust hospitals with an unusually great proportion of private income may—again, unless we are very careful—threaten to undermine the commitment to reducing health inequalities that runs through the Bill. Emergence of “star hospitals” could threaten other hospitals in the region.

Finally, the threat of foundation hospitals being subject to EU competition law would have been greater if it were possible to have foundation trust hospitals a majority of whose income was private; that, at any rate, is our view. This is one of the principal reasons for the cap on caps, by which the principal purpose of foundation trust hospitals can only be fulfilled if more than half of foundation trusts’ income is NHS income. That is the so-called 49 per cent.

I say to the noble Baroness, Lady Thornton, that the only reason that that majority provision can be said to send the wrong message is that, sadly, some in her party have taken to the airwaves to say that there is a hidden agenda to the Bill by which the Government seek to make national health foundation trust hospitals have 49 per cent of their income from private patients. There is no such hidden agenda. Frankly, it has not been responsible politics to raise people’s fears by going around the country suggesting the contrary.

[Baroness Thornton]

Does the noble Lord think that it was necessary to put 49 per cent in the Bill? Why did the Government have to put a percentage in at all? Does he think that the communication issues, as it were, around this were handled very well?

[Lord Marks of Henley-on-Thames]

My Lords, on these Benches we take the view that it was sensible to include this provision. The advice that we have is that the risk of the application of competition law is reduced by ensuring that the majority of income for NHS foundation trust hospitals will always be for the purpose of treating NHS patients. It is not an absolute guarantee but it is a sensible risk-reduction exercise and it was put in for that purpose. There is no point in taking a risk unnecessarily. The communication problem has frankly been the result of the efforts of opponents of the Bill, partly in the party of the noble Baroness, in stressing the 49 per cent and suggesting that it is the purpose of the Bill, which, as I say, it is not.

That is not to say that private income in NHS foundation trusts is bad. The Labour Government recognised that throughout. In her speech, the noble Baroness herself very properly recognised it. Private income represents an opportunity for foundation trusts to attract innovation, to buy new and expensive equipment and to develop world-class centres of excellence. We recognise and applaud those features of private income. However, when tabling Amendment 220B, we were concerned that there should also be an individual arrangement for foundation trusts by which individual limits would be subject to agreement with Monitor.

[Lord Campbell-Savours]

Will the noble Lord explain, in very simple language that people outside can understand, what is to prevent a central London teaching hospital with an international reputation ending up taking almost half its business from overseas patients who pay by private means?

[Lord Marks of Henley-on-Thames]

I take the noble Lord’s question to mean: why should a proportion not exceed 50 per cent? As I have explained, the reason is that we regard that as having a risk. If the question is why should a central London hospital not take nearly half its income from private patients, the maximum taken at the moment is, I believe, some 39 per cent. There is a limit of 5 per cent on any increase to be proposed, more than which the governors would have to agree to by a majority. It could not just be a simple majority; a majority of the governors must vote to approve the change. It may well be that some hospitals will wish to go nearer to 50 per cent, which is why there is a reference to 49 per cent.

[Lord Campbell-Savours]

So that we can have it absolutely on the record, is the noble Lord saying that a teaching hospital in central London—

--- Later in debate ---

[Baroness Rawlings]

My Lords, it must be a brief question.

[Lord Marks of Henley-on-Thames]

My Lords, I believe that I have answered the question. I accept that it is important. We believe that the provisions that are now to be in the Bill, given the government amendments and an assurance that I hope to receive from the Government, will cover the position.

I was explaining that, when we tabled Amendment 220B, we believed that there should also be an individual arrangement for agreement with Monitor so that all considerations could be balanced when considering any substantial increase in private income. However, in discussions, the Government agreed to respond to amendments that Liberal Democrat Peers tabled in Committee on the involvement of governors. Those amendments that the Government now pursue—Amendments 220BZA and 220BZB—represent that response. They ensure that any increase of more than 5 per cent would have to be approved by the governors voting, as I say, by a majority. The governors have to be satisfied that the plans put forward by the foundation trusts for attracting private income would not interfere with the treatment or welfare of NHS patients. I suggest that that scheme represents a devolved, local scheme that is consonant with the structures in the Bill and the desire to keep local decision-making at a local level.

There may still be concern that the governors of individual foundation trusts will primarily have in mind the concerns of their own foundation trusts. However, under amendments that have been agreed, Monitor is now to have continuing powers of supervision and intervention over foundation trusts. If we are assured that in every case where the governors approve a proposal for an increase in private income in excess of 5 per cent Monitor will consider whether the interests of NHS patients as a whole are to be safeguarded, and if it is not so satisfied it would intervene, I suggest that that assurance will meet that concern. We will not move Amendment 220B but we seek that assurance from my noble friend the Minister.

[Baroness Finlay of Llandaff]

My Lords, I have an amendment in this group. I recognise that it is badly worded and simplistic and I shall not be moving it. However, I would like to address other amendments in this group which are far better worded than mine. The adversarial debate that we have had has been unconstructive in view of the importance of the amendments we are discussing. Amendment 220C has the great advantage of involving all stakeholders. Some people will be affected when the balance of provision within a foundation trust changes. I am concerned about the amendment to which the noble Lord, Lord Marks, has just spoken because, as he admitted, the concerns of the foundation trust governors may be paramount as it is in their interests to look after their foundation trust and therefore the interests of others will be secondary in their minds. However, it is important to know what the local health and well-being board thinks about a proposed change, and that the clinical commissioning groups are involved and consulted on what could effectively be a change of provision.

I make it clear that I am not opposed to foundation trusts having private patient business. Indeed, I can see that it would be beneficial to all patients if we were to revert to the position that applied 30 years ago when these bodies were completely integrated. If highly specialised consultants provide outpatient and inpatient services to private patients on one set of premises in an area, they are on hand when things go wrong or an opinion is needed on a patient who has come in as an NHS patient. By driving some private provision outside that hospital campus, those consultants may be unavailable when they are needed because they are on premises down the road or they are on the end of a phone and cannot run down the corridor, see the patient and plan what is to happen strategically with the rest of the team and then monitor it.

An issue that has been resolved is the situation where a UK patient receives private treatment but something goes wrong and they need to go into intensive care, a renal unit or some other unit provided by the NHS. That previous episode of care has finished, they are now in a new episode of severe critical care and they go in as an NHS patient. That integration is therefore solved. But I hope that the Government will look kindly on Amendment 220C, despite some of the tone of the debate, because it ensures that all stakeholders are involved in the discussion. The change in provision is therefore planned and can happen smoothly and that decision is not taken on business grounds alone but can be for the benefit of the whole population that is being served.