My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Warner.)
In moving this amendment I shall speak also to Amendments Nos. 341, 347 and 360. I make no apology for returning to the issue of star ratings. We see in Clause 49 that, in each financial year, CHAI will have to conduct a review of the provision of healthcare by and for each English NHS body and each cross-border strategic health authority and must award a performance rating to each such body.
There is, to my mind, a distinction to be made between performance indicators and star ratings. I have no objection to a hospital being measured against a range of performance indicators. That is often a useful exercise for management in driving up standards across the board. When the process gets corrupted, however, is in the translation of those indicators into crude star ratings. Under the system devised by the Government, star ratings determine a great deal. A three-star rating is currently a prerequisite for a hospital if it wants to apply for foundation status. More generally, it is the goal towards which the management of a hospital strives in order to win the prizes distributed by the Secretary of State under the banner of so-called earned autonomy. But there are wider dimensions as well. Whether a hospital gets three stars, two stars, one star or none can affect the whole range of its activities; chief among which is the ability to recruit and retain good staff. There is no doubt that star status directly affects morale, and it is inevitably the measure by which that hospital is perceived by its patients and the wider public.
Given that so much depends on it, the one thing that we should look for in a star rating system is for it to be a true and fair indicator of performance. Yet that notion was completely blown apart by the report of the Audit Commission earlier this year. The report showed that, in very many instances, a hospital's star status had almost no bearing at all on how good a hospital it was from the point of view of patient care. That is partly because of unreliable data collection; and partly because star ratings are much more to do with internal processes than with the things that most of us would associate with good care and treatment.
Managerial competence is hardly reflected in the figures at all. Indeed, in a revealing section of its report, the Audit Commission states:
"There is a statistically significant relationship between performance and managerial adequacy. The number of DH stars awarded is only weakly related to either".
That is the nub of my objection to the current system. One well-known example of zero star status is the Bath Royal United Hospitals NHS Trust, yet the respected health management consultants, Dr Foster, goes out of its way to praise that hospital as excellent in the treatment it delivers to patients.
Equally, a high star rating need not necessarily indicate good care. That is because the target indicators can often be selective. For example, waiting times for outpatient appointments relate only to the first appointment and not to subsequent ones, although there are twice as many follow-up appointments as first appointments. Similarly, with cancelled operations, only those operations cancelled on the day are counted in the figures, not operations cancelled on the few days preceding that.
The following shows how blunt an instrument a star rating is. One specialist acute trust was rated by the Audit Commission as very good on achieving NHS Plan targets and on most measures of financial and performance management. Another acute trust performed poorly on NHS Plan targets and was rated poor managerially, including significant financial management failings and no signs of imminent improvement. Yet both those hospitals achieved a two-star rating from the Department of Health. The Audit Commission found that, on average, three-star trusts were likely to achieve only 69 per cent of NHS Plan targets compared with 66 per cent in two-star trusts—3 per cent separating two-star and three-star ratings. That small difference hardly seems enough to warrant the very favourable treatment that three-star trusts receive and two-star trusts miss out on.
Star ratings ought to be abolished and I therefore do not think CHAI should be required to award them every year. They are profoundly misleading; and their knock-on effects, whether good or bad, are unwarranted. Exactly the same argument applies to CSCI and the star ratings of local authorities that it is required to award under Clause 77. For the same reasons, those ratings are also unrepresentative and misleading. If we must have targets, the language of performance of those targets should be devised by CHAI and CSCI themselves. It should be a linguistic rating, not a crude numerical one. The Minister will need to do an exceptional job in defending this element of the Bill if he is to start convincing me that these provisions have a value. I do not believe that he can do that. I beg to move.
I rise to support the noble Earl, Lord Howe, on Amendment No. 282 and to speak to Amendment No. 284.
Earlier this year, not long before the House rose for the recess, I spent several hours in the A&E department of a large hospital. It was perhaps one of the most informative experiences I have had and has informed me extremely well for our debates on this Bill. At seven o'clock in the morning, when the newspaper shop opened, I went to buy a copy of the Guardian, as one would, and saw that the A&E department that I was visiting had achieved a low star rating. I was profoundly glad that I did not have the job of telling the people in that department, in the middle of their twelve and a half hour shift, that they were not doing a good job. That is one of the reasons why my noble friend Lord Clement-Jones and I are happy to put our names to Amendment No. 284. The current star performance rating takes precious little cognisance of what patients, other users and clinicians actually feel. It is a management, target-driven process.
I live in an area where people can go to one of two hospitals, both of which offer some of the same services. Given my age group, I know people who will sing the praises of the gynaecology and maternity unit at one of the hospitals but not set foot in the other. Others hold an entirely different opinion. I am not sure how they have reached their conclusions although I am sure that they have good reasons. There is perhaps one main reason why these amendments should be accepted and it relates to the provision of specialist services. I have taken part in various debates in your Lordships' House on specialist services, particularly neurological services. Many neurological patients say that locating good services simply by means of word-of-mouth recommendation is one of the most difficult tasks that they face.
Hospital star ratings do not meaningfully reflect that information. Star ratings by themselves are a crude target. Like the noble Earl, I should like to see the back of them. If they are allowed to continue, they should be the product of consultation with those who really know how hospitals work or do not work and what is wrong with them. I am therefore very pleased to attach our names to Amendment No. 284.
I should like very briefly to support as warmly as I can the amendment which was moved in such reasonable terms by my noble friend. I have just one question to ask. Who will actually award the performance rating of each body on behalf of CHAI and what training will they have for dispensing what amounts to a very serious measure of power in this instance? We have to be very careful about giving the power provided in this clause to people who have not had very meticulous training. I hope that the noble Lord will at least take the matter seriously. If he does not, I hope that my noble friend will return to it on Report.
I must admit to sharing some of the concerns behind Amendment No. 282. I share the concern about the reliability of the star system, which I, too, believe is rather a blunt instrument for assessing the abilities and facilities to deliver care for patients. I fear that the correlation between stars and what patients want may not be anywhere near exact. However, I think that there is a need for some form of performance rating. After all, what is CHAI about if it does not try to assess how care is provided in those hospitals? I should like to see not star ratings, but a performance rating that takes a much broader and much more sensitive look at how care is delivered. I am not sure that removing the phrase "award a performance rating" will change anything. I think that one can change the star system without removing that phrase.
I should very much like to support what the noble Lord, Lord Turnberg, has just said. I know that it is very difficult for the Government to reverse once they have gone down a particular line. In this instance, however, is there not a case for trying to get back into the National Health Service some real confidence in the present system? Perhaps we will have to change the words and reinvent the assessment. However, as the noble Lord, Lord Turnberg, and my noble friend Lord Peyton rightly asked, who is going to do it? Nevertheless, the present system lacks such credibility. There is so much cynicism about it, not necessarily so much among members of the public who I do not think quite understand all the nuances, but certainly among members of staff who are being judged by the system and think it unfair.
As I had ministerial responsibility for performance rating I am overwhelmed by the level of support that noble Lords have shown for both the concept and the practice. I hope that the Committee will excuse me if I rise to defend performance rating, but I do not recognise some of the complaints that noble Lords have made this afternoon.
There is a huge variation in performance between individual organisations within the National Health Service. For far too long, for years, those organisations were allowed to carry on as they were without any external pressure at all on how they were performing. I do not pretend, as I did not when we debated this matter on Thursday, that the current performance ratings are 100 per cent perfect. Of course I recognise that it is very difficult to create an accurate performance measurement which goes across the whole of the work in each individual NHS organisation. However, I think that the key targets and the range of benchmark figures that will inform those targets provide a pretty fair reflection of how well the organisation is doing.
I have been to NHS trusts that received a poor rating and to NHS trusts that received a three-star rating. I have been struck by the positive attitude that many people have taken towards the ratings. There was real pride in the organisations that achieved a three-star rating and a determination to do better in those that did not do so well. Surely that is the attitude that we want to engender in the health service, an attitude in which everyone is committed to improving overall performance.
I understand some of the concerns that have been expressed, but surely we should allow Sir Ian Kennedy and CHAI to take on board those concerns and to come up with new proposals. Sir Ian has already indicated that he wishes to make changes and we should welcome that. Please, however, let us not leave the concept that it is right to rate NHS organisations and to provide the public and staff with an indication of those that are doing well and those that are doing not so well. After nearly 50 years in which the public have had very little opportunity to assess their own local hospital, we now have such an opportunity. We should show our confidence that this is the right way to go forward in the future.
I am sure that we have all listened to the noble Lord, Lord Hunt, with interest. He knows why the rating system was invented in this way and he knows how he considers it to be working. But the Audit Commission disagrees with him. It is fairly devastated about how it is working. My noble friend's Amendment No. 282A does not suggest that the rating system should be done away with; it suggests that there should be rating, but that it should be in a form to be determined by CHAI.
A difference of 3 per cent between a three-star and two-star rating, with all its implications, must be shocking to the people who work in the hospitals and shocking to the locality and to patients. It is very unnerving. It clearly is too blunt an instrument. The Government should accept that it needs sharpening up very much.
My mind turns to Which? magazine and how the Consumers' Association tackles assessing comparatively simple products, such as motor cars. It looks at endless categories. Within each category, a great many ratings are considered—even for a motor car—before reaching a conclusion. I bought a car that was top of the pops in its range and it goes beautifully. The Consumers' Association did rather well on that, but it was subdivided into a great number of elements.
If the CHAI is to operate the system successfully and, above all, fairly, in a way satisfying to the public and to patients, it must make it much more complicated and subdivided than it is at present. The Government should not turn the amendment down flat. Amendment No. 282A is an extremely good one. I hope that the Government will accept it, or something very like it.
The noble Baroness spoke about Which? reports. I am old enough to remember that when they were first produced, there was outrage from many providers of goods and services. I am not sure that that is a particularly good experience of which to remind people. Perhaps it is a remarkably similar position to now.
My noble friend Lord Hunt eloquently reminisced about his experiences in this area. I suspect that after I finish speaking, I shall join him in the dock as I make the case for not accepting the amendments. Let me be clear at the outset: we are unapologetic about targets, as such. We are not claiming that all the targets have been perfect. We are not claiming that the present system is perfect. But targets have helped to cut waiting lists for patients. They have increased the number of coronary heart disease operations from 41,000 to 56,000 between 2000 and 2003. They have taken us to a point where 97 per cent of patients with breast cancer are treated within 31 days of diagnosis. They have reduced delayed discharge of patients from 7,000 to 4,000 between 2001 and 2003. That is just a sample of big improvements for patients.
I am not saying that that is just the result of targets, but targets and ratings concentrate people's minds. They change the focus in many areas where there have been considerable concerns about performance on the part of patients and, in many cases, on the part of many NHS staff. Performance ratings also help to hold people to account. It is worth bearing in mind that we have listened to some concerns about the number of targets. We know that they can cause concerns, not just to managers, but to clinical staff too. The Government have made great strides to address the concerns.
Through the priorities and planning framework for 2003 to 2006, we have set out in a single document a much more streamlined and focused set of targets—62 in total—for the whole of the NHS and social care for the next three years. Before Members of the Committee say that that is still over the top, let us put it in context. It is fewer than one target for every £1 billion of planned expenditure in health and social care over the next three years. I suggest that that is not out of proportion, given the huge sums of public money being developed for patients' concerns.
Performance ratings are only one of the criteria for applying for foundation trust status. We have not made them the be-all and end-all of the application for that status. They also provide an important means of informing the public about how their local NHS hospitals are performing. It is worth bearing in mind that under the present system, for example, the star ratings system published by the Commission for Health Improvement in July 2003 had 10 indicators with a clinical focus, which included outcome indicators such as death rates and emergency readmissions. It is of interest to the public to know how many emergency readmissions there are after discharge. That tells us something about performance in local areas.
It is no good just sweeping the system away as a totally irrelevant system in terms of telling local communities about the performance of their particular hospitals. We have always acknowledged that the system is not perfect, but it is improving and will continue to improve. We certainly have every confidence that, under the leadership of Sir Ian Kennedy, CHAI will make—it has committed itself to make—a proper analysis of the system so that it can propose changes which more adequately meet some of the concerns expressed by the noble Earl and other Members of the Committee.
We must bear in mind that we have come a long way quite quickly. Therefore, it is not surprising that some improvements can be made. However, we must not deny that the targets and performance rating system have brought real improvements for the users of the health service. Amendment No. 282, which would remove the obligation on CHAI to issue performance ratings after its annual reviews, is not appropriate. That would deny the public information about the performance of their local trust.
Amendment No. 282A allows CHAI the freedom to determine the form of performance ratings. Of course it is up to CHAI, as the independent commission, to determine expressly how the performance ratings will look and feel. That has always been our intention. We expect CHAI to do that. We know that it is thinking about changes that it would like to see, but that is covered already by existing wording. The amendment is unnecessary.
Amendment No. 341 would remove the obligation on CSCI to issue performance ratings after its annual review of local authorities. The star rating process has now been in place for some time, operated by the Social Services Inspectorate. To our knowledge, few local authorities have raised concerns about it. The majority of local authorities have seen the process as helpful in determining what they need to do to improve their services—whether three star councils or councils with lower ratings.
Performance ratings are an important means for CSCI to inform service users and the public at large about how local authorities are performing in the provision of social care. Another key consequence of removing the power for CSCI to award a star rating, as the SSI does now, is that it would not be possible to complete the annual comprehensive performance assessment process of all local authority services. That would make it difficult to judge which local authorities deserve freedoms to build on good or excellent performance.
I would not expect the Audit Commission to be thrilled about sweeping away star rating systems in relation to CSCI. Amendment No. 347 would prevent CSCI using the lowest level of rating as a measure of poor performance for advising the Secretary of State of the action to be taken to improve such services. That is an important means by which decisions can be taken to improve the quality of local services.
Amendment No. 360 would remove the power of the Welsh Assembly to award performance ratings as a result of an inspection. That would significantly weaken the framework for review and inspection of social services in Wales and would mean less robust arrangements in Wales than in England. That would be unacceptable to people in Wales.
So, as I have outlined, we think there are good grounds for keeping the present system in place while allowing, as the Bill provides, CHAI to make improvements following the process of thought and consultation that it will be undertaking.
I am sorry to detain the Minister once again. I thought that I had asked him what kind of people are to make these assessments on behalf of CHAI and what form of training they will be given. Before we give people powers of this kind, I think that we ought to be satisfied that they will be properly equipped to use them. While I do not want to go into all the arguments, there is an increasing army of people in this country whose role is to check up on other people working in sharp-end jobs. Only a limited number of people in the health service are capable of making anyone better at what they do, and it is doubtful how many of those would be included in the ranks of CHAI; indeed, it would be a waste of their time if they were.
I return to the question I asked the Minister earlier. If he does not answer it, rather than simply responding in accordance with his official brief stating "reject", he ought at least to leave it open until the Report stage and offer to reflect on it. The summary advice headed "reject" mutilates argument and does not do anything to convince Members on this side of the Committee that the noble Lord is really taking seriously what is being said.
I reject the noble Lord's last comment. On a number of occasions I have offered to take matters away and to consider amendments in regard to particular issues.
The noble Lord must have the arguments on his side. As regards the present arrangements, we have the Social Services Inspectorate, whose representatives are well trained. They have not been criticised on any lack of training or on how they carry out the inspections which will be used to form the basis of the future CSCI ratings. There will be transfers of staff there.
The Commission for Health Improvement undertakes the star rating system, based to a great extent on information provided by NHS trusts themselves. That work is undertaken by well trained and knowledgeable staff who will be transferring to CHAI. It will then be for Sir Ian Kennedy and his colleagues to decide, as an independent body—noble Lords have made great play of its independent status—what further training may be required. It is not for the Secretary of State to lay down the skills and competencies required by this independent body.
Amendment No. 284 seeks to specify those groups that CHAI must consult in determining criteria for determining the award of performance ratings. I certainly do not agree that we need to specify which groups, if any, CHAI, as an independent body, may wish to consult in developing its performance rating methodology. Clearly, CHAI will wish to engage patient representatives and those experts, clinical or otherwise, that it feels will be appropriate in developing such review criteria, but we do not think it would be proper for us to place in the Bill a duty on it to do so.
Again, I come back to the point that noble Lords cannot have it all ways. If an independent body is being set up and people are concerned about its independence, it is right and proper that that body should be given a degree of freedom of manoeuvre in how it consults. We must trust it to do that in a sensible way.
This has been a useful debate and I hope that the Minister will want to reflect on the concerns expressed by my noble friends Lady Cumberlege, Lady Carnegy and Lord Peyton, as well as the noble Baroness, Lady Barker, and, from the Minister's own Benches, by the noble Lord, Lord Turnberg.
I agree with the noble Lord, Lord Hunt, that there are variations in the performance of NHS bodies and that those variations do need to be identified, and I agree with the Minister in what he had to say in that regard. I have no difficulty with the concept of performance indicators; it is the star rating system which is too much of a blunt instrument. What I sought to suggest in Amendment No. 282A—to which I am not sure whether I said I was speaking, although I hope the Committee will realise that I was doing so—is that performance ratings should be formulated by CHAI itself in a more sophisticated way than is the case at the moment, and that perhaps a linguistic form of rating would achieve the kind of sensitivity described by the noble Lord, Lord Turnberg.
I agree with the noble Lord, Lord Hunt, that we want to motivate staff, but you simply will not do that if those members of staff have no confidence in the way that their star rating was arrived at. The trouble is that the targets on which star ratings depend are, in many cases, artificial. I mentioned targets for out-patient appointments and cancelled operations. Another is waiting times in A&E, because the performance is assessed on the basis of a snapshot in a particular week. In-patient waiting times targets take no account of clinical urgency and so are unrelated to what really matters. A huge management effort is put into chasing such targets and that effort could, I believe, be better used.
My noble friend Lady Carnegy said that star ratings could learn some lessons from car ratings, and I think she has a point. By no means do I want to sweep the whole system away, but it does need to be refined and I hope very much that Sir Ian Kennedy will be allowed complete freedom to devise systems in which everyone has confidence and which really do indicate the variations that exist in the health service. I beg leave to withdraw the amendment.
I beg to move that the House do now resume for the Statement.