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Department of Health: Procurement

Volume 691: debated on Tuesday 24 April 2007

asked Her Majesty’s Government:

What account they have taken of whole-life costs of procurement in the Department of Health’s consultation on Arrangements for the remuneration of services relating to appliances under Part IX of the Drug Tariff in the light of the price cuts proposed therein.

My Lords, the department is reviewing the cost of appliances that are set out in Part IX of the drug tariff. It is also looking at how dispensers are remunerated for related services. It is taking into account the costs and benefits to society as a whole, in particular the ongoing healthcare of patients.

My Lords, I thank the Minister for that Answer, but he will know that this is a considerable worry to the highly vulnerable men and women—up to 350,000 of them—who are reliant on incontinence and stoma appliances. What is the logic of judging a product purely in terms of its price and imposing price cuts of up to 80 per cent when that product could well represent much better value for money than one that is cheaper? Does the Minister realise that the better-value-for-money products are likely to be withdrawn from the market altogether if these proposals are implemented?

My Lords, the consultation has just concluded. The department will consider the results and will bring forward recommendations in due course. I understand the concerns that have been expressed and can assure the noble Earl that they will be fully taken into account. I say to him that the price mechanism for pharmacy contractors and dispensing contractors is not transparent. There are variations between different classes of contractor, which is the reason for this review. It would be sensible to await the outcome of the review, while taking into account some of the concerns that have been expressed.

My Lords, can the Minister confirm that the department is proposing to halt payments for services to urology patients? If it is, why?

My Lords, I say to the noble Baroness that these proposals have been consulted on. The Government are not putting forward any firm conclusions; we are awaiting the results of the consultation. The point of the changes that are being proposed to the remuneration is to create a more level playing field between pharmacy contractors and dispensing appliance contractors, because they are paid very differently at the moment and are offering different levels of service. The proposals are partly about getting greater consistency to encourage competition and the provision of more consistent services. The price proposals try to relate the cost of the appliance to the cost to the contractor.

My Lords, is it not an important issue for people receiving these appliances that they are now delivered to them in their homes? These are sensitive issues. The people are often disabled and unable to go to collect such appliances. If the appliances could not be delivered, people might well have to go into care homes. The firm that is doing the greatest number of these deliveries at the moment is very concerned that those doing much less will be paid much better and it will be priced out of the market. In a health service that is now supposedly operated on payment by results, surely the larger and more efficient supplier should not be dismissed in that way.

My Lords, I agree with the noble Baroness that the concept of payment by results is the right one. The whole purpose of the review and the consultation is to ensure that a proper payments system is put in place that is transparent and fair to the various categories of contractor. As far as home visits are concerned, I agree with the noble Baroness about the importance of that service. However, there is inconsistent provision at the moment, and it is not part of the work that is contracted with the pharmacists. The aim of this review is to encourage all potential contractors to provide those enhanced services. The system of payments is designed to reflect fairly the cost to the contractors. I assure the noble Baroness that we will take those matters into account. The last thing we want to do is to discourage home visits in the way that she suggested.

My Lords, is the Minister aware of the importance of the home advice service, given that some of these devices are very complex? Some people cannot have latex, of which some of the catheters and things are made. The advice is vital.

Yes, my Lords, I agree with the noble Baroness. I can confirm that part of the service provided by some appliance contractors is specialist nurse visits. I agree with her about their importance. At the moment, there is no specific price for the home visits. The proposals being put forward would set a price for those visits, which could be undertaken either, as now, by the appliance contractors or, in future, by the pharmacy contractors. We have to distinguish between our aim to ensure that services to the public are appropriate and competitive issues between the various players in the market, which is a very different issue.

My Lords, may I forewarn the Minister that, if the proposals are implemented, there will be a direct threat to the high level of personal services, including home delivery, given by the major contractors? I have personal experience of this problem and I think that the Government very much appreciate a warning in time. In addition to the 350,000 recipients mentioned by my noble friend, I understand that some 6 million people in this country suffer from incontinence of one kind or another.

My Lords, the figures that I have are 450,000 patients and 4.5 million dispensed items. Clearly, this is an important issue for many people, and I am always happy to accept advice from the noble Lord in view of his distinguished ministerial career. Let me make it absolutely clear that the last thing I want to do is to inhibit the provision of the kind of services that he has described. This is about value for money and ensuring that we move away from the difficult-to-understand financial regime and payments to the various contractors to a transparent system that is based on value and enhancing the service to the public. We should make sure that that happens.