Clause 66 - The NHS payment scheme

Part of Health and Care Bill – in a Public Bill Committee at 2:00 pm on 23rd September 2021.

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Photo of Karin Smyth Karin Smyth Labour, Bristol South 2:00 pm, 23rd September 2021

There is an army of accountants out there suddenly looking at their abacuses and speeding up the work they are doing.

My hon. Friend the Member for Nottingham North mentioned coding. The basis on which we know how much things cost—we can then compare things, look at efficiency and so on—is coding. We know there has been some up-coding over the years, but we also know that it took a large effort to train up and try to reward coders, who are often the lowest of admin staff, to recognise how important they are to the system.

Part of that was a drive for competition, payment by results in foundation trusts and so on, but it seems that that is all going to be swept aside by the Bill in the interests of co-operation—that is another word for collaboration, which is something we all support. I do think that running through this Bill is a problem of throwing the baby out with the bathwater. In the 1970s and early 1980s, the NHS really had no idea what things cost and what value they brought. We had no way of objectively understanding how scarce resources were being allocated. In a publicly funded system, that should worry us all, particularly as we in Parliament are the guardians of the public’s money.

We can argue about how much money will be saved by not having the current system. I am not sure that much money will be saved by abolishing the current system, although the Minister may be able to assure us about this point today. I gently advise the Minister and the Secretary of State to take a great deal of interest in this and consider how the NHS will produce such a system in 16 or 17 months at the maximum, as we have just heard. The data on which the system is predicated—the collection of that data, and the use of it to inform clinical and managerial practice—will continue, but, without the incentives around competition and price and the competing agenda of recovery and the management of large hospitals in particular, it will be quite a tall order.

The Secretary of State and the Minister might want to look at the issue in a bit more detail. The Minister outlined quite a complicated process about how we will get to this scheme and a lot of consultation. Although I am all for democracy, as we embark on our conference season the Minister might want to consider at some point why a scheme should go out to quite so much review and consultation by the providers in the system.

Perhaps I could say something here about how the issue affects our local system. When we start to iron it all out and see the impact assessment on the impact—classic NHS terminology—on our local communities, there will be, for want of a better phrase, a bun fight in all our local communities. Again, as my hon. Friend the Member for Nottingham North outlined earlier, when we talk about payment by results it is, of course, acute sector trusts that are the major drivers. Mental health, learning disabilities, community services, and GP services are outwith some of that funding scheme.

Many providers then wanted to come on to the system because they felt that it was more rewarding financially and better for their bottom line. The fact that those services are outwith the scheme remains a problem. I can see why the Government want to change that, but it is not quite as simple as they might want to make out. My hon. Friend has talked much about whether we start competing on price, but now that we know that competition on price is not being permitted, that does throw out a lot of other issues, particularly those around the procurement system.

With regard to amendment 84, the Minister made reference to independent sector treatment centres and incentives for getting the private sector in under previous Governments. We can all banter about the politics of that, but the key task for the Labour Government was to incentivise and change practice in a monolithic system, to drive down waiting lists and times. The question that I leave hanging for the Minister is, given the movement to a new payment system, how will the patient voice, waiting times and waiting lists be managed and incentivised in a central block payment system, which is what I think we are looking at?

Furthermore, with regard to our amendment, the private sector, having no responsibility for education, training and the large crumbling estate, should be able to offer any kind of services at a lower price than the NHS by any logic of efficient running. Ensuring that it is not offered more is the very minimum that we should be demanding. Given that the private sector should have a lower-cost base than the public sector, perhaps it should offer a cheaper price.

Does the Minister have a view on whether paying by results will be anywhere in the new system? Are we to continue following the changes made during covid, by which I mean the block grant system, which allows for baseline costs, a bit of variation for the population, and perhaps some deduction for efficiency and top-ups for various programmes—a bit like the old days when we mysteriously drew down pots of money from the centre for various programmes across the country? What is the balance between that block funding, payment by results and programme funding? Will there be an assessment of the impact of this change, particularly on reducing lengths of stay, as a measure of efficiency in the system, or on reduced waiting times and waits for diagnostics?

It would be good to nail down a few of these key principles in the Bill. The Secretary of State should really approve any scheme and give Parliament a look in; we should understand, as local representatives, what the impact is on our local system and whether we are gaining or losing money, or whether this is just £100 billion-plus going into a central pot and then seeing what happens—that cannot be sustainable.

Private providers should certainly have no say in the rule-setting, as this is a public service; if it is not a market, it is not a market. We are going to be able to debate this only when we know what it is. Given that the Minister has given a big push to the abacuses across the country, with a deadline of somewhere in 2022, for a Bill that we are expecting to put into a new system for April 2022, this situation is not satisfactory for us as representatives. There must be some way—perhaps this will be debated when the Bill leaves this place—for us to understand the broad principles and criteria. We know that there is going to be guidance from NHS England, but if it is going out for consultation, re-consultation and re-consultation, then redrafting and at some point the Secretary of State is going to see it, at some point Parliament should have a say or have a look at that and we, as local representatives, should understand what the impact is on our local communities.

We should also understand what the impact is on the balance between the acute sector, and the community and primary sector—and mental health and learning disability services. Another real concern about the Bill, which I will keep referring back to, is the cartel between the acute trusts and this new integrated care board, and the cutting out now of GP primary care commissioners, and the rolling back on the aims of the primary care trusts to switch the movement of the NHS to be focused not just on the money and where the big money is being spent, but on the service for patients and the public.

The crucial point for the Government will be: how are they going to use the financial mechanisms that exist to recover the backlog and put the NHS back on an equal footing? We have been asked to pay more for the new part of social care as well. As we continue to ask our constituents, the taxpayers, to pay more for what is a good, efficient service that does use its money well—we know that and we want to keep knowing that—how are we going to be able to persuade them of that in the future if we have this amorphous block allocation of money and no incentive to keep focused on efficiency and, in particular, on data collection?