Health and Social Care Bill

Lord Whitty Excerpts

Tuesday 11th October 2011 Lords Chamber

[Lord Whitty]

My Lords, I come to this from a slightly different angle. Unlike many noble Lords who have spoken, I am not an expert in the NHS. I have always had a very good experience as a patient, but I have none of the expertise that has been demonstrated here today. I do, however, have considerable experience of other regulated markets and of consumer representation in those markets, and I would like to focus on the proposals in that area in this Bill.

The Government’s objective is pretty radical. They want to move the NHS from what they see as a bureaucratic state provider to a system that is run by combining internal and external market regulation. They want to see, quite rightly, some market that does not actually have a cash nexus between the provider and the ultimate consumer. I am afraid that no precedent exists for doing this in the way the Government intend. It is very important that the way in which we are moving is seen as pretty radical. This is not a marginal change; it is not straightforward continuity on some of the changes made by the Labour Government; it is not even the latest instalment on the list of the noble Lord, Lord Walton, of top-down structural reorganisations over the past 50 years.

I accept that this is not privatisation in the normal sense, but it is a change that is almost as revolutionary as privatisation was in some of the other public services. When we vote tomorrow, and later on in the various stages of this Bill if we get there, Members of this House should be under no illusion: if the Bill goes ahead, we will change the nature of the NHS and the way in which it is understood by the vast majority of the public. There may be arguments for it, and we will come to that, but this is an entirely new model of delivery and a new model of regulation based on unproven premises that potentially put in jeopardy many of the achievements of our healthcare service, which, as the noble Baroness, Lady Williams, pointed out today, is reckoned by many authorities to be one of the most cost-effective in the world.

The rationale of cost saving is by no means clear. The noble Lord, Lord Cotter, recently cast aspersions on the quality of the impact assessment, with which I would not disagree, but in one regard it is commendably frank. On the potential benefits, it says on page 13 that,

“a robust figure around the cost savings or the health gains associated with the changes in commissioning is highly problematic to estimate … it is not possible to state monetised figures about the contribution that the changes in commissioning would make to this, as it is very difficult to estimate what would happen without the reforms in this instance”.

In other words, there is no proven cost saving. One has to get to about page 45 to see where the real cost saving envisaged by the Government is; they identify National Health Service pensions and terms and conditions as being excessive and suggest that moving away from NHS workforce conditions to private providers will therefore provide savings. However, the commissioning proposition itself does not have an identified cost benefit.

Nevertheless, assuming that the Government get through tomorrow and that we will deal with this Bill, there are some fairly central problems about how they actually implement it. Let us take the commissioning propositions first. The ostensible reasons for changing the whole basis of procurement are twofold. They want greater clinician involvement in procurement—I do not disagree with that—and they want greater devolution of decision-making. I agree with that as well. However, greater clinician influence does not mean that the whole process is handed over to clinicians. Greater devolution should not mean huge fragmentation.

It is not yet clear to me why it was decided that GP-based commissioning was to be the preferred choice. It is not clear, from the propositions in this Bill, how we will ensure that choice in this matter—and choice is a big word in the Government’s proposition—is the patient’s choice and not the choice of the commissioners themselves, or of the commissioning agency or those whom they employ. It is already clear—and the poll today underlines this—that the majority of GPs do not want this move. In a few cases, GP practices and other clinicians could probably set up an administrative procurement process, but in most cases it will divert them from their central role as clinicians and in practice they will employ others—private commercial companies —to do it, and it is not clear who regulates them.

The whole process is intended to be patient-centred, but since the creation of the NHS, patients have always been confident that when dealing with their GP or any specialist they get advice based on their clinical condition and there is no contamination of that advice by the possibility of financial gain by the person who is giving it. Unfortunately these propositions raise that doubt—I put it no higher—particularly when GP practices may provide some of the services that they commission or they are associated with companies that may have some role in providing those services.

What is the exact relationship between the local commissioning CCGs and what has been termed the biggest quango of them all, the national NHS Commissioning Board, in this new system? Clearly some of the concerns that I and others have will be covered by regulations, guidelines and injunctions from that board. Are we not in danger of replacing one top-down system with another?

There was an alternative. There are bits of the Bill that I agree with, particularly the provisions on public health that bring the local authority structure and the health service structure more closely together. Why was it not possible to use those structures, where NHS structures are roughly coterminous with local authority structures, as the basis for commissioning rather than fragmenting below that level and running the risk of having suboptimal provision of procurement?

On regulation itself and the regulator Monitor, Monitor will have a range of responsibilities, some of which are contradictory. It sets prices, ensures continuity of service, provides a failure regime, licenses providers jointly with the CQC and, crucially, has the job of promoting integration while at the same time having to come down on anticompetitive behaviour. I am not sure that joint licensing with another regulator is workable. In other areas where an economic regulator does licensing or franchising, there is a clear demarcation between different regulators or, alternatively, it is all in one regulator. I cite water on the one hand and energy on the other. There are other complications because the national commissioning board would also be a quasi-regulator, and there is also the role of NICE in this operation.

Following the pause, we have a slight change in the role of Monitor in this area. It was suggested that it was a dilution in response to pressure from the Lib Dems, but a move from promoting competition, which suggests nurturing new providers, to preventing anticompetitive behaviour, which is a much more draconian potential intervention in preventing certain behaviour, is not a dilution. In the context of the health service, it is not clear what anticompetitive behaviour is because, as noble Lords have said, it is clear that collaboration, specialisation, agreement between providers—the kind of things that in general competition law would be regarded as anticompetitive behaviour—are not relevant. In fact, not only are they not relevant; they are a huge advantage in treating many conditions and many patients in the health service.

Therefore, what do the Government mean by anticompetitive behaviour in this area? Even if, as the noble Baroness, Lady Barker, has just said, competition is primarily on quality, which I appreciate, it is still unclear what anticompetitive behaviour would be in this context. What would be regarded as cartels in other markets are clearly collaboration, collusion and the delivery of integrated services in the health service. Even more fundamentally, competition and choice require surplus. Is the price-fixing that Monitor will be required to engage in fixing a price at a level that ensures surplus? If so, what is the cost-effectiveness and value for money of that?

My final point relates to consumer representation. HealthWatch is a good new concept. However, consumer representation has to be independent not only of the provider and the Government but of the regulator as well. The location of HealthWatch in the CCG is not independence. It is not clear that it will have its own resources or staffing, and it is regarded in the proposed legislation as a sub-committee of the regulator. That is not appropriate, independent consumer representation for the patients of the NHS.

The Government are in a bit of difficulty on this Bill. They may be in difficulty tomorrow, and they will certainly be in difficulty as we go into Committee. However, I hope that in considering the Bill, some of the central issues relating to the nature of the regulation and consumer involvement in the health service will be addressed when some of the questions that I and others have raised are answered.