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NHS (Co-operation/Competition)

Volume 488: debated on Tuesday 24 February 2009

It is very nice to see you in the Chair, Mr. Taylor, and it is good to see the Minister in his place, because in my experience he is a listening Minister who takes note of what people say and tries to answer questions put to him.

The Government have just founded another panel—the co-operation and competition panel—which is such a crucial development in the NHS that I thought that we should shout it from the rooftops. I realise that there are not many hon. Members here, but at least this debate will get into Hansard, which hopefully means that it will be widely read, because this panel is crucial. When I started thinking about this subject, I thought that the words “co-operation” and “competition” were the opposite of each other. I was browsing around and came across something that John Ruskin said in 1862:

“Government and cooperation are in all things the laws of life; anarchy and competition the laws of death.”

I do not quite hold to that extreme view, and as can be understood I was staggered when, again while browsing, I came across new clause 4 of the Labour party constitution, which I had never come across before. In part, it refers to

“a community in which power, wealth and opportunity are in the hands of the many not the few, where the rights we enjoy reflect the duties we owe…in which the enterprise of the market and the rigour of competition are joined with the forces of partnership and co-operation”.

There we have the origin of this apparent paradox between those two particular words. The scene for competition was set by the previous Government in the 1980s and 1990s with the purchaser-provider split, contracting and so on, and that approach is now espoused in the constitution of new Labour.

A very significant change in words has taken place. We no longer talk about NHS services, but about NHS-funded services, which immediately poses the question of whether NHS services will now be provided by a wide range of organisations. For someone such as myself who grew up passionately believing that the NHS could cope and work so well that the private sector would not be needed, it goes against the grain to accept that there are possible benefits to competition. When parts of the NHS are unable to improve, there is a place for competition. As we are so firmly set on this path, we must accept that it is the only way to go. There is not much point in trying to fight against it. In the Financial Times a fortnight or so ago, the appointed chairman of the panel, Lord Carter of Coles, said:

“But once you have created a market as the NHS has, up to a point, the law of unintended consequences kicks in and big issues arise. People want clarity about what the contracting relationship should be.”

He goes on to say that the shift to the more competitive market for health services is “inexorable” and that

“ultimately most things will be contested.”

In the 1980s, when I was on the local health authority, domestic services were being considered for privatisation. Domestic staff were about to go on strike, but we explained to them that such an action would do no good. We told them that the only way they could compete was to put in a competitive tender. They did that, and they won the contract and retained the services.

I have two messages to give during this debate. I say to NHS staff that it is possible to win a tendering process, and to the Government I say that the tendering process has to be fair and on a level playing field for all potential providers. Richard Smith, a former editor of the British Medical Journal, had almost a Damascene conversion. In 2008, in the journal of the Royal Society of Medicine, under an article entitled, “The NHS: losing my religion” he said:

“There would be regulated competition, because, much as we might bemoan the fact, competition is one of the few drivers that can consistently deliver higher quality and lower costs.”

If regulated competition is really what the co-operation and competition panel is going to promote, then I for one welcome it.

I now want to address some of the information that we already have about this panel. The information is voluminous to say the least. There has been not just one consultation, but four separate ones. I welcome the statement about the target audience. Such an audience includes commissioners, providers of health services—including GPs—and patients and other interested parties. In other words, it includes everyone. I hope that notice will be taken by all interested parties and that they will get in some responses.

On page 4 of the consultation document, the seven criteria for consultation are listed. I will not go through them all, but let me mention a few. Consultation must be early enough to influence the policy outcome. The process must be at least 12 weeks or longer; it must be clear and have an appropriate scope, and the analysis of it must be open and honest. Those criteria, which came out in July 2008, reflect the Cabinet code of practice that was published in January 2004, and they are welcome and timely. I often refer to my election to this place. If consultation had gone according to those criteria, I am sure that I would not be here. During the downgrading of my hospital in 1997 to 1998, consultation was a complete mockery. Analysis of the responses was decidedly odd. There was no consultation over the private finance initiative. The initiative was portrayed as the only game in town.

Bringing us right up to date, the NHS Support Federation has recently compiled a report on public consultations around GP-led health centres. The executive summary says:

“A survey of all 152 PCTs showed that there were wide variations in the timetables and approach to consulting taken by each PCT and even confusion about the need to consult at all.”

Some of the PCTs said that, because it was Government policy, they did not need to consult on it. The report then looked in detail at the consultation of 37 PCTs outside London to consider the consultation process. It said:

“Only 22 per cent. of PCTs are explicit in their consultation documents about the fact that a new health centre could be run by a commercial or voluntary sector provider.”

It went on to say:

“2/3 of PCTs do not ask local people whether they agree with the overall plan for a GP-led health centre; 16 per cent. provided less than 12 weeks for responses…only 16 per cent. of PCTs asked about the importance of the distance of travel to the new health centre”.

There were many deficiencies in that consultation, which took place after the Cabinet guidelines of 2004 and probably before the latest criteria of July 2008. The report concluded:

“There is a need for far greater accountability of NHS bodies and providers especially in the new market-based era for the health service. Diminishing is the inherent protection of a public service ethos. Public consultation is therefore an essential check to safeguard the public interest.”

Let me turn to the principles and rules for co-operation and competition that are mentioned on page 6 of the document. It says:

“The aim of the Principles and Rules is to ensure seamless services for patients; foster patient choice, transparency and fairness; encourage competition for NHS-funded services; and establish the ground rules for mergers and other transactions involving an NHS body.”

I should like to pick out one or two of the principles. Again, I will paraphrase rather than quote them. They say that commissioners must commission from the best providers. That is both obvious and correct. Commissioners and providers must co-operate to produce a seamless experience without boundaries and with continuity. This is where co-operation comes in. The Department of Health is talking about co-operation between commissioners and providers. Another principle says that commissioning and procurement should be transparent and non-discriminatory. I hope that that refers to the level playing field that I want to see. Another principle says that the payment regime must be transparent and fair. I hope that that means we will not have any loss-leaders, because loss-leaders from the commercial sector would not help.

On page 10, the document says that the panel will work closely with stakeholders. Absolutely correctly, the first group of stakeholders mentioned are patients and the public, but the document does not go into detail on how they are going to be involved. The document mentions choice, and by choosing and providing feedback, people give a certain amount of comment. It states:

“The public also hold the Government to account for their stewardship of health services, to ensure the taxpayer gets good value for money”,

but only once in five years do the public actually hold the Government to account for that sort of thing. I am disappointed that the document does not mention active participation of patients and the public in the form of general practice participation groups and local involvement networks, which should have been set up for exactly such processes. Digressing for a moment, it appears that LINks are rather slow in forming and becoming functional, and the all-party parliamentary group on patient and public involvement in health has been rather distressed by the delay. It is crucial that the panel communicates with LINks.

On mergers, the place of overview and scrutiny committees is mentioned, but the place of the independent reconfiguration panel is not. I can see the latter being removed from the field, which would be a great shame, because it has proved its use and independence frequently recently.

We have heard that the Department of Health is talking about co-operation between commissioners and providers, but there has been staggering news in the press recently about much wider co-operation between competitors. It was reported that GlaxoSmithKline has pledged to cap the prices of its drugs to the 50 poorest countries and, amazingly, to pool intellectual property with its competitors. That goes towards the “Webster’s” definition of “co-operate”, which is:

“Work or act with others for a common end.”

The common end for the NHS must always be the patients, to whom it belongs. I just hope that the consultation on the new co-operation and competition panel will result in a valuable body that works to make competition fair and transparent. It should foster co-operation not only between commissioners and providers, but between providers.

I congratulate the hon. Member for Wyre Forest (Dr. Taylor) on securing the debate. I hope that he will forgive me, but I was looking forward to a more philosophical debate on competition and co-operation in the NHS before I was pre-warned that he was going to talk about the more technical issue of the competition and co-operation panel, which I will mention later.

I recognise the good work of NHS staff throughout the hon. Gentleman’s constituency. They are delivering a better health care service than ever, which benefits his and other hon. Members’ constituents. Perhaps more than anyone else in the House, he has demonstrated his commitment to the NHS in 50 years of dedicated service. We should all be grateful that he continues his dedication in a different way in the House.

When this Government came to power, we found the NHS on its knees. It was chronically underfunded, woefully understaffed and provided a service to patients that was unacceptable in too many cases. The immediate and urgent answer was sustained and substantial investment combined with a strong direction from the centre. Having resuscitated the patient in the years after 1997 and addressed some of the pressing capacity problems that we faced, the next challenge was to build a health service that was more responsive to the public’s modern-day expectations. That is where choice and competition come in.

The NHS was built on two enduring principles: that health care available to all is free at the point of need and funded by the taxpayer. Those principles have not changed over 60 years, and they will not change as long as we have a Labour Government. However, in every walk of life, the current generation is used to exercising informed choices. People are no longer prepared to accept gratefully from the state services over which they have no control and little say. The medical evidence suggests that engaged patients are healthier patients. Being involved in decisions made about one’s health care improves results and speeds recovery.

However, as the hon. Gentleman acknowledged, there is another important reason for providing choice and an element of competition in the NHS: it helps to drive up standards. General practitioners or hospitals that know that they will lose money if their patients choose to go elsewhere face a strong incentive to improve the quality of the services that they provide.

The diverging health policies of the constituent parts of the United Kingdom amount to an interesting experiment. Scotland and Wales have not followed England down the path of choice and competition. In fact, in many ways, their health policies are going in the opposite direction. It might be too soon to say with certainty which approach is better, but if we look at performance against amounts of money invested and public satisfaction levels, we will see that England is doing far better. We have considerably shorter waiting times and better GP access.

The Minister is right to stress fostering patient choice. Will he explain how the move towards health centres—closing down individual GPs and moving them to major centres—will foster patient choice on GPs and pharmacies? Centralising pharmacy services puts individual pharmacies at great risk.

None of the new GP-led health centres, which are in every primary care trust area—I think the hon. Gentleman is asking about that—will involve the closure of existing services. The centres are extra capacity, over and above existing services. Any of his constituents who want to use the new GP-led health centres because of their convenience and long opening hours will be able to do so while remaining registered with their existing GPs. It is an extra rather than an alternative service, so it should not have the detrimental impact on existing GPs that he fears.

The founder of the NHS, Nye Bevan—a Welshman—understood that how services are delivered and who delivers them is never as important as the quality of the healthcare provided.

In England, what do we mean by competition? Competition is not and never will be about the privatisation of the NHS. The health service is concerned with patients’ needs, not shareholders’. The hon. Member for Wyre Forest has raised the spectre of health care in the United States in the House. In my view, the US has the kind of competitive health market that is disastrous in terms of both cost and the results for the American people. America spends twice as much of its gross domestic product per head on health care as we do, yet it has worse health outcomes. Some 50 million Americans have no health cover at all. Providers in America compete first and foremost on price, and insurers battle to gain market share by stripping the services that they provide to the bone, while pushing their costs ever higher. In our system, providers do not compete on price: they have to compete on quality and patient experience. As the American academic and big fan of the NHS, Professor Michael Porter, said:

“The fundamental flaw in the health care sector is not competition, but the wrong kind of competition”.

I believe that in England we have the right kind of competition: it increases value to the patient and the taxpayer.

Competition operates on two levels in the NHS. First, PCTs, holders of around 80 per cent. of the entire NHS budget, commission services from a wide range of providers based on the expressed needs of their patients. Public sector partners, social enterprises and private companies all compete to supply PCTs in a free, fair and transparent way. It is the job of the local NHS and local PCTs to hold providers to account through their contracts. The end of a contract is an opportunity for the PCT to see whether there is a better provider of care for its patients. If the current contract holder is still the best, the PCT will keep it. If not, it will not. As the hon. Gentleman has acknowledged, PCTs need to see it as their role not to commission services in order to prop up a local underperforming or failing provider, but to get the best services and best value possible for their public.

The second level of competition is patient choice. Today, patients—in most cases, we hope, with the support of their GP—play a significant and growing role in choosing their treatment and where and when they are treated. That ability to choose will soon be enshrined as a right in the NHS constitution. I am tired of hearing the frankly patronising line that patients do not want a choice. It is nonsense and, I am afraid, reflects the remnants of an outdated paternalism in which doctor or bureaucrat always knew best. In the recent British social attitudes survey, 95 per cent. of people said that they want some choice over which hospital they attend and what treatment they receive. As more people learn that they have a choice, more people are making one.

As the hon. Gentleman has acknowledged, this debate is not just about competition; it is also about co-operation. I am grateful to him for his historical references not just to Ruskin but to the more recent event—I am embarrassed to say that I did not pick up on it in researching my speech for this debate—of my party’s replacement of clause 4 of our manifesto. As he rightly said, although some people see co-operation and competition as mutually exclusive principles, the co-existence of which creates an unstable tension at the heart of current health policy, I do not agree—nor, I believe, does he.

For a patient, any one provider or service is only one part of the story. Patients do not care and need not know that a range of organisations are taking care of them; they just want to deal with the NHS. Everything should happen seamlessly behind the scenes. Without the in-built fundamental principle of co-operation, as the hon. Gentleman said, that would not be possible. Far from being mutually exclusive, co-operation is a vital and necessary counterbalance to competition to ensure seamless and high-quality care.

Holding the ring, we have the local NHS, through PCTs, the strategic health authorities at a regional level, the NHS boards and, ultimately, the Department of Health and its Ministers at a national level, to intervene where necessary. Recently, we have added to that mix by forming the panel on co-operation and competition to give people confidence that, where arguments or disputes cannot be resolved locally, there is a fair, transparent and independent process. The hon. Gentleman is right to highlight that important development. It is a shame that it has not got more publicity outside this place. We have created, in effect, the NHS’s own Competition Commission. Under the chairmanship of Lord Patrick Carter of Coles, it will provide impartial, expert advice and recommendations on specific disputes. If an independent provider, a social enterprise or an existing NHS provider feels that it has not been given a fair crack of the whip in bidding for a contract and the dispute cannot be resolved by the SHA, it will have somewhere trusted to go to settle the dispute.

As the hon. Gentleman acknowledged, the principles for the panel’s operation are laid down in the principles and rules for co-operation and competition, which effectively set out the NHS’s first ever competition policy. They outline the rules governing choice, co-operation and competition, and detail the behaviours that we expect of commissioners and providers. Their aim is to ensure fairness by putting the interests of the patient and the taxpayer first.

The hon. Gentleman raised a number of specific questions about the panel’s workings. I was thinking as he made his speech that Patrick Carter or some of his colleagues from the panel might be prime candidates for an invitation to give evidence to the Select Committee on Health, on which the hon. Gentleman sits, so that he can ask the sort of detailed question that he asked here directly of Lord Carter. Indeed, he could also seek a meeting with Lord Carter himself, who I am sure—although I hesitate to add to his diary commitments—would be happy to meet with him or other hon. Members to go through some of the issues.

I want to reassure the hon. Gentleman about the role of local involvement networks. We certainly think that the panel should seek representations from LINks in its investigations. The role of the independent reconfiguration panel will depend on how fundamental a service change is being proposed in any particular case. I am glad that he acknowledges the panel’s important work in helping to resolve the issues and to take the politics out of controversial local proposals and disputes on the reorganisation of services. Clearly, it will still be up to the democratic lock at local level—the overview and scrutiny committees—to decide whether a full consultation is necessary on a proposal or, if they do not agree with a proposal, to refer it to the independent national reconfiguration panel. That will remain the case. It will depend on their view of how important the proposal is.

The mix of competition and co-operation in the NHS is a unique model in the world. It is, in my view, no accident that Governments around the world, including Barack Obama’s recently elected Administration in America, look to learn from our NHS as they address the serious crises in their own health care systems. I think the hon. Gentleman gives us the benefit of the doubt on having got the balance about right. I agree, and from all the recent international comparator studies of different health care systems, the international experts seem to agree, too. In its latest annual report, the prestigious Commonwealth Fund in Washington rated the UK as one of the highest performing health services for the past three years. It specifically praised the NHS on quality, managing chronic illnesses and access to primary care. It also highlighted the NHS as one of the most cost-effective systems of health care. Harvard medical school’s Donald Berwick called the NHS the

“bridge between the rhetoric of social justice, and the fact of it.”

The people of this country seem to agree. The latest public attitude survey shows satisfaction with the NHS to be higher than at any time since we began measuring it and dissatisfaction to be lower than at any time since the 1980s, although, of course, one will not read any of that in our newspapers; the good news on the NHS is no news as far as most of our media are concerned. That has been achieved through unprecedented investment and reform, getting the delicate balance right between the principles of competition and co-operation, and staying true to the founding values of the NHS, as well, of course to the amazing skill and dedication of those who work and have worked in the NHS, including the hon. Gentleman himself.

Question put and agreed to.

Sitting adjourned.