In his excellent speech in last week's debate on the National Health Service, my right hon. Friend the Member for Chingford (Mr. Tebbit) characterised the speeches from the Opposition Benches as a series of complaints, not as an attempt to address the problems of running a multi-billion pound organisation. I hope not to fall into either error.
First, I want to express my gratitude to those who have significantly improved the NHS in my constituency. In Hemel Hempstead we now have the first phase — the Tudor wing—of a brand new hospital. The other phases are due to start soon. It is worth noting that this is a hospital that was cancelled by the last Labour Government. I am therefore grateful to the Conservative Government for delivering on a promise that others broke. I hope that my hon. Friend the Minister will be able to take the opportunity of her reply to confirm that the DHSS is not blocking the approval in principle of further phases of that hospital.
Secondly, I should like to express my appreciation of the two top health officials in my area—Roger Stokoe, our general manager, and Nick Tiley, the district health authority chairman. Mr. Stokoe's excellence has convinced me of the benefits of general management—in my district, at any rate. Mr. Tiley has been the driving force behind a thorough examination of costs, which has resulted in the North-West Herts district health authority being among the most efficient in the country. I hope and expect that my right hon. Friend will reappoint him.
On the subject of the NHS management at national level, in recent months we have had in Parliament and in the media a national debate that has highlighted many of the inefficiencies of the NHS, without paying proper regard either to its achievements or to the money that has already been spent on improvement. It is easy to see why we have had such a debate. Headline stories about waiting lists, ward closures and staff shortages have very properly caused us to ask probing questions about the ability of the NHS to deliver the standards of health care expected by our fellow countrymen.
To me, one of the most significant features of these headlines is the fact that they are not universal, but local. The west midlands readily springs to mind as an example of that feature. Analysis reveals many common factors. Some of these headlines are caused by the consequences of the redistribution caused by RAWP, though recipient areas either stay quiet, or, worse still, sometimes claim to be hard done by.
Staff shortages often turn out to be the direct consequences of national pay bargaining. Put bluntly, what is a fair income for living in the north is unacceptably low in much of the south. Therefore, nurse and junior doctor retention, recruitment and motivation become very difficult. As for nurses who specialise in intensive therapy, there must be a case for abandoning national pay bargaining and looking to rewarding their specialties. Other problems are caused by sheer incompetence and inefficiency.
Two great questions have never been answered in the history of the NHS. Since both are fundamental, I think that we must at least start the debate by encouraging people to recognise them. First, no one has ever attempted to lay down the medical parameters. Is the NHS there to provide unlimited health care for everybody, regardless of cost, life expectancy or chances of success? The clear and implied answer is no. However, since no guidelines exist against which individual situations may be judged, we inevitably end up with unlimited public expectations every time a case is featured in the media.
Put crudely, we need to know how to answer the question whether an expensive operation with a slight chance of success should be carried out at the expense of large numbers of operations with a high rate of success. While we must pay due attention to the needs of developing medical knowledge, we must not try to hide the ethical dilemmas that actually exist.
Secondly, we must take a more fundamental look at the way in which we budget for the NHS. To some Labour Members, the service should not be cash-limited at all. But it is significant that no Labour Government have ever followed that course, partly because they always end up broke, and partly because they, too, realise that there must be some limit.
Unlike Opposition Members, I do not believe that money alone is the key. If it were, there would be no complaints in Scotland, where NHS spending is about 25 per cent, higher than in England, and that is a greater increase than has ever been asked for by any Opposition spokesman.
Given this apparent conflict between unlimited demand and limited resources, I cannot see how any politician can fail to address the issue of how to get best value from the NHS. Inevitably, being a large organisation, it has a natural tendency towards inefficiency. This is compounded by a lack of effective control and the absence of a competitive framework. The NHS, we are told, is the largest employer in western Europe. It has also doubled its work force since 1960, partly due to a shorter working week, and partly because the NHS is doing more things. Because of this huge wage cost, we must start looking at the efficient use of manpower.
I would start with the consultants. Studies have shown them to have widely differing work rates and work practices that should make them the laughing stock of the commercial world. The trouble with the present system is that they are independent contractors to the NHS. They are contracted not to the authorities that use them—the district health authorities — but to the regional health authorities. One of the simplest reforms which the Government could make, and which would lead to falling waiting lists, would be in consultant contract reform.
Another area, that of competitive tendering, has already been tackled by the Government in catering, cleaning and laundry services. I shall not comment on that, other than to say that private independent quality control on those services would be an even greater boon. The lessons from the exercise are obvious; the NHS benefits from specialist firms in spheres where they are more aware of new techniques and materials.
We should not rest on our laurels. It surely makes sense to involve the same private contractors—for example, in decorating and in the purchase of linen. That is the road to a proper balance between initial costs and running costs, including cleaning. Private companies would in all probability fund the acquisition of such materials, freeing capital for other purposes. The logical extension of this is to look at private management on an experimental basis, and I commend to the Minister the work of my hon. Friend the Member for Boothferry (Mr. Davis), who I see in his place.
One reason for health authorities not grasping these opportunities, except sporadically or under direction from central Government, is the absence of a parallel system to that of the Audit Commission. I believe that investment in a series of best practice units enabled to look at each health authority and make recommendations for action would repay itself many times over. This could be reinforced by a central fund, or perhaps 2 per cent, of NHS spending, which could be directed to individual health authorities in the pursuit of best practice.
The same technique would also repay examination in the capital sphere. At present, overwhelmingly, new projects secure investment at the expense of less jazzy projects which are aimed at reducing running costs. For example, it makes sense to invest in energy-saving equipment and other such measures. This would be greatly encouraged if districts could bid for money from an allocation of capital specifically set aside for cost-saving projects. This sum could be paid back over five years, automatically refilling the pot and ensuring that DHAs delivered on the cost improvements. I find it astonishing that there is no provision for depreciation in the NHS.
These are all limited measures which are intended to improve efficiency within the present framework and are all relatively short-term. In the medium term, we must look at the whole system and introduce some of the disciplines of the market place into the NHS. At present we tend to reward the inefficient and penalise the efficient, sometimes through the lack of effective internal RAWP and sometimes because of the political clout of the teaching hospital system. Thus, in London and the southeast, patients are encouraged by shorter or non-existent waiting lists in inner London to have routine operations there. The trouble with this is that the operations cost more than they do in the shire counties, and we end up treating people in the most expensive way possible.
The best model for an internal market would be for patients to register with the district health authority of their choice and for them to be funded on a per capita basis to cover all routine operations and treatments. The DHAs would then purchase the more complex operations and treatments from teaching hospital boards, which would be encouraged to avoid unnecessary duplication and to bring about further specialisation.
Furthermore—I realise that this is not a point for my hon. Friend the Minister—we need to make sure that people know how much the NHS costs them. Too many people think that the NHS and social security are funded from the stamp. It makes a great deal of sense to me that we should have three levies to pay on income: general income tax, health contributions and a social insurance stamp. That would really hammer home the costs.
I sat through all last week's debate, which was on the whole remarkably sterile. Many hon. Members on both sides of the House attacked the failure of the NHS to deliver the goods, but sadly few, with honourable exceptions, were prepared to address themselves to new ideas. Indeed, the Labour party is opposed to new ideas, which may account for the total absence of any of its representatives tonight.
That opposition should not surprise us, because the same has applied in every other policy field. Those on the Labour Benches believe in open mouths; we on the Government Benches believe in open minds.
I hope that my right hon. Friend the Secretary of State will encourage new ideas from all quarters and rule none of them out until they have been properly examined, since no thought process should be stifled by presumptions at the start.
I commend those few thoughts to the House and invite other hon. Members to contribute to the continuing debate.
Yes, Mr. Deputy Speaker.
I am very grateful to you, Mr. Deputy Speaker, and to my hon. Friend the Member for Hertfordshire, West (Mr. Jones) for allowing me to participate in this important debate, developing good ideas for the future of our Health Service and to improve the quality of patient care.
There has been much debate recently about the internal market and about increasing efficiency. These are good ideas, but they are not phrased in a way most likely to make them beloved of the British public. If we put across to people what we are after—more patient choice, more and higher-quality patient care — and the fact that we wish to see that happen by the patients having more power within our health system to encourage good practice and good delivery and discourage bad practice, particularly to discourage long waiting, we would release forces that could be most important, not only in delivering a better service, but in delivering a service that gives better value for money.
As my hon. Friend said, a starting point must be adequate information in the hands of managers within the NHS. We are in danger of seeing information systems proliferate and information becoming too complex and difficult to use. What the managers need is the right amount of good information, the basic statistics on quality, on cost, on access and on facilities. Then they can start to ask the right questions and, more important, to deliver the right service to the patients, who should be empowered to move the money with them in order to get the service they seek.
We could do that with some reforms of the structure and with a change in the culture and style of management. I do not believe that we can live with the regions for much longer. There must be a direct relationship between the National Health Service management board, at the top, and the districts and hospitals at the base of the pyramid. Long lines of communication cause fuzzy messages and involve cost and unnecessary resource use, which could be much better employed delivering service to the patient.
I wish to take briefly two topical problems, which have been highlighted in the recent uproar over the National Health Service, to illustrate how this better information and the new culture might begin to work in favour of the patient and the taxpayer, who are, of course, one and the same person.
First, let us take the problem of waiting lists, particularly for acute care, which have been highlighted in a number of noisy exchanges across the Floor in recent weeks. If it had the right information, the NHS management board could ask why so many operating theatres around the country are only half used, or partly used; why some hospitals have a shortage of the necessarily highly trained intensive-care nurses, for example, and others have a surplus or an adequate supply; and why babies or children in Birmingham cannot get immediate access to the care their parents would like them to have, whereas there is no such waiting list in other parts of the country.
It could also ask why district and hospital boundaries should be impenetrable barriers that seem more successful than the Berlin wall in keeping people in or keeping people out. These are the questions that good management information could ask. The development contained in that inglorious phrase, the internal market, is a solution to the problem because it would allow people to go across boundaries to get the care they want.
There is the second important problem of the closure of the small hospital. I am suspicious about the costings and the analyses used in many closures. If we went into it in more detail, I think we would find that very often the community hospital, like the one in my constituency at Wokingham, is not only a much-loved facility for the local community but offers a relatively cheap and caring environment in which basic surgery, cold surgery and maternity services and the like can be supplied.
I think we would find that it is not cost pressures so much as dogma and often management misinformation that lead to the closure of these facilities. I think that a managerial review would bring this to light, as would sensitivity to patient demand, because if patients were turning up with the power of money behind them, they would create a demand for the local hospitals which would thrive.
I know that the Minister wishes to answer in full the points that my hon. Friend has made. So, in conclusion, let us have good information and a simpler structure at the top, and let us empower the patients to deliver the service that we want to see.
I congratulate my hon. Friend the Member for Hertfordshire, West (Mr. Jones) on obtaining the debate and selecting this most important issue. I know that he is a tireless campaigner for the health of his constituents. I have no doubt that my hon. Friend the Member for Wokingham (Mr. Redwood), who is new to the House, will follow the same path. We might also note the presence of my hon. Friends the Members for Maidstone (Miss widdecombe), Boothferry (Mr. Davis), Ludlow (Mr. Gill), Gedling (Mr. Mitchell), Dover (Mr. Shaw), Walthamstow (Mr. Summerson) and Battersea (Mr. Bowis). I think it is worth noting that they are all new Members and, as my hon. Friend the Member for Hertfordshire, West said, there is not one Labour Member here to listen to this important debate.
The National Health Service is a subject of considerable current interest, if the volume of work coming through the offices of Ministers in the Department of Health and Social Security is anything to go by. As hon. Members are probably aware, this is the 43rd Adjournment debate that I have answered since I was appointed a Minister. Since October, I have met 17 delegations and answered 984 written questions. The total number of what are called yellow jackets — letters requiring a Minister's personal signature—which I have had thrust under my nose for signature since 19 October is 2,964. They are coming in at the rate of 350 a week from Members of the House alone.
As my office tells me that we ran out of our posh new notepaper this afternoon, I hope that I may be permitted to make two points. First, I apologise to any hon. Member or member of the other House who has had to wait more than a week or two for a reply. The replies are on their way. Secondly, I want to put on record my heartfelt thanks to my private office staff, led by Mrs. Grafton, who all work like Trojans. I am very lucky to have them.
My hon. Friend mentioned the future development of Hemel Hempstead hospital. North West Thames region has submitted papers seeking approval in principal for phase 3 of this hospital, which will contain 40 mental illness beds, 40 beds for the elderly severely mentally ill with associated day facilities, a 54-bed obstetric unit and a pathology department and mortuary. The scheme is estimated to cost £14 million, with a further £2· 25 million for land purchase. Therefore, it represents a major capital investment. It needs to be cleared not only by my Department but by the Treasury, in accordance with normal procedures.
There has been a delay in processing the submission, for which I apologise. The region has a number of capital projects with the Department for approval. We have not yet reached a decision; therefore, I am sorry that I cannot give my hon. Friend the assurance that he seeks. However, I will urge the development and I hope that a decision will be taken shortly. My hon. Friend knows, of course, that the new Tudor wing at the hospital opened last year.
As for my hon. Friend's extremely kind remarks concerning the district health authority general manager and chairman, I am grateful for those, and I am sure those gentlemen are as well. We are considering the appointment of district chairmen when the current postholders' terms come to an end on 31 March. We are not yet in a position to make an announcement, but I will ensure that my hon. Friend's views are taken into account in making the decision.
My hon. Friend spoke about some of the problems of inefficiency, and I would not disagree with many of his remarks. However, I should emphasise the extent to which health authorities have already improved efficiency. Over the past four years, they have made cost improvements —that means productivity improvements—worth £600 million. Those savings represent cash released from the running costs of the services, which becomes available for patient care.
In addition, the substantial increase in funding for the Health Service—from £7 billion in 1978–79 to a planned £22 billion in 1988–89, a real terms increase of about 30 per cent.—has enabled authorities to do something very important with all the money that we give; that is, to treat increasing numbers of patients.
Between 1978 and 1986 health authorities treated over 1 million more in-patient cases, nearly 500,000 more day cases and dealt with nearly 4 million more out-patient attendances than under the previous Labour Government. We should make no mistake. Many health authorities have a record of improved productivity which is second to none, and which compares well with industry.
I make no apologies for repeating these figures, as they reflect credit on all our staff and management. However, we expect our health authorities to continue to improve efficiency in all areas, partly by further extensions of competitive tendering, partly by looking critically at current arrangements for the procurement, storage and distribution of supplies to ensure that that is carried out as effectively and economically as possible, and partly by looking, as my hon. Friend suggests, at savings on energy usage. We seek savings of 1·5 per cent, a year, and we are expecting savings of about £ 12 million on energy this year.
Authorities need to ensure that the best possible use is made of the Health Service estate. We expect authorities to look critically at their estate holdings, because sales of surplus land and buildings can generate significant capital proceeds—disposals since 1979 have realised over £370 million and we expect an additional £240 million from land sales this year — and enable authorities to reduce the running costs of the estate. It is worth putting on record that the costs to the Health Service cleaning, maintenance, rent, rates and energy alone is some £48 per sq m, before a single doctor, nurse or patient has walked in the door. In other words, the sheer maintenance cost of our enormous estate is about £1·5 billion a year.
My hon. Friend asked about holding consultant contracts at district level. That was considered carefully when the Health Service was restructured in 1982. Following consultation, it was decided to keep the contracts at regional level. From my personal experience —I was chairman of a teaching district health authority, so I held the contracts—I can tell my hon. Friend that it is no easier to enforce them there either.
Where we think we can make progress is to involve the consultants much more in managing their own budgets, so that they know how much things cost and can make sensible clinical decisions in the light of cost information. We are currently piloting that approach, which is jointly sponsored by the Health Service Management Board, the joint consultants committee and local health authorities, at five acute hospitals and nine community sites. If that produces the sort of result that we are expecting, decisions on the wider dissemination of the approach to other acute hospitals will be made later this year.
Good management, as my hon. Friend the Member for Wokingham said, needs information. We are now making real progress. Each year the Department produces a package of 450 performance indicators which are distributed to the health authorities. Those enable the authorities, and in many cases individual hospitals, to compare their performance with others and to identify areas where there appears to be scope for improvement.
The performance indicators include financial information, such as the cost of treating cases, and non-financial information, for example, on the length of stay of patients and numbers of staff employed. The figures show substantial variations between districts, even after taking out extreme values in the top and bottom 10 per cent., which may result from faulty data, but I suspect result from excessive adequacy—or inadequacy—of management staff.
Let me take two examples from 1985–86, the last year for which we have performance indicators. We shall take out the top and bottom 10 per cent. The cost of treating a patient in a large acute hospital varied by a factor of two, from £560 per case to £960 a case, while the number of patients treated per surgical bed in districts varied from 35 to 54 per year—an astonishing gap.
The latest figures that we have available are for 1985–86. The figures for 1986–87 will be available very shortly, and we hope to produce the current year's figures much more quickly. It occurred to me, therefore, that my hon. Friend the Member for Hertfordshire, West might like to have the latest performance indicators as soon as we have them, and I undertake to send them to him as soon as they are available.
I am grateful to my hon. Friend for her kind offer, which I certainly wish to take up, but I imagine that I speak for many of my hon. Friends when I say that this will be of much wider interest, and I hope that it will be made available to all hon. Members.
I will take advice on that. I am sure that my hon. Friend realises that these are very bulky things. It may be that I should select some items from among them, to assist colleagues. I am sure that he and others will find, as the district health authorities have found, that they are very interesting indeed.
I would like to go into competitive tendering a little more throughly. Savings from competitive tendering are running at over £100 million a year. We are encouraging authorities to consider its use for other services. Some authorities have already put portering and internal audit out to tender, and, as my right hon. Friend the Secretary of State indicated at the party conference in October, there may be other possibilities.
More generally, we consider that the National Health Service and private health care sector should co-operate to provide the best possible total health care for patients. The private sector offers flexibility to authorities for short-term relief of pressure and long-term contractual arrangements. Co-operation of this kind is not new—it goes back right to the inception of the service—but we think that there is scope for both more, and more diverse, collaboration.
We take on board what my hon. Friend said about best practice units. Existing statutory audit arrangements provide for auditors to ensure that authorities have adequate arrangements for achieving economy, effectiveness and efficiency but we want to go further.
We are establishing a value-for-money unit intended to promote local and regional initiatives. We have taken steps to disseminate guidance on good practice in energy conservation. We have established a small group in support of the NHS management board's property adviser to assist authorities to make the best use of the estate. We have launched a number of central studies in areas with potential for value-for-money improvements — for example, a recent study into the paymaster function, which identified areas for improved efficiency in the payment of salaries, wages and creditors.
We are also encouraging authorities to establish their own value-for-money groups, and, as my hon. Friend knows, we are setting up an income generation unit from the centre, to help and advise authorities on the exploitation of commercial possibilities, as set out in clause 4 of the Health and Medicines Bill which is currently in Committee, of which my hon. Friend the Member for Wokingham is a most valued member.
I endorse everything that my hon. Friend said about capital management and the need for investment in revenue-saving schemes. I suppose that my hon. Friend may not know that at least one region, Oxford, is already running schemes on some of the lines proposed by my hon. Friend.
As regards capital depreciation, the Department is sponsoring pilot studies in four regions on improving the management of capital assets, including the possibility of introducing depreciation. I must say that I share my hon. Friend's views on this question.
In general, we welcome the suggestions made by my hon. Friends. It is very helpful and encouraging to hear such suggestions made by them, and by others too. I take the points about the barriers, the boundaries and the nurses. Those points are very well made. What we ought to do, in the light of current discussions outside the House, is to agree some very simple propositions.
First of all, we have funded the National Health Service better than ever before, with more money, more staff and more patient care. So more money alone is not the answer —which is what Opposition Members would say if they had bothered to come along. Perhaps I should add that, however much money we have, we still have an absolute obligation to spend every penny wisely.
Secondly, I am sure that we can agree that our ability to provide a well-funded Health Service depends on a strong economy, which will depend, in the future as in the past, on firm control of public spending.
Thirdly, increased personal prosperity makes it possible to look to individual pockets as well as to the public purse for a contribution. The state does not have to do it all.
Fourthly, our objective overall is not endlessly to build more hospitals, whether they are in the constituency of my hon. Friend or not, or just to employ more doctors.
Our objective is the better health of our people. That involves more than the Health Service or the whole health care industry. It involves individuals taking responsibility for their own lives and for those of their families far more vigorously than has ever happened in this country before. I know that my hon. Friend joins me in this belief and endeavour.
With those points, I commend my hon. Friends' remarks to the House as a reasonable and worthwhile contribution to the debate.
Question put and agreed to.
Adjourned accordingly at one minute to Twelve midnight.