NHS Finances

Part of the debate – in Westminster Hall at 9:30 am on 14th March 2006.

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Photo of Andrew George Andrew George Liberal Democrat, St Ives 9:30 am, 14th March 2006

It is certainly true that there has been enormous surprise and concern about the loss of the contract from KernowDoc. Serco, a company that does not have a tremendous track record so far—I understand it has just started running an out-of-hours service in the Cardiff area—has successfully bid for the out-of-hours contract. I understand the concerns regarding how streamlining or joint working with other out-of-hours services, such as NHS Direct, will be co-ordinated under the new regime, but many GPs who will be called on to support that service have yet to be convinced that the new arrangements are adequate. In fact, they may add further to the administrative complexity of the service.

To return to the issue of the market forces factor, the King's Fund report in 2004 cites its chief economist John Appleby, who, in issue 114 of the Health Service Journal, said:

"While the principle of adjusting purchasers' allocations and providers' prices to take account of unavoidable differences in cost is clearly sound, there is a question of how to do it."

He went on to say that the market forces factor

"is not the perfect solution to the issue of unavoidable cost variations".

That is why I am rather surprised that the Government have not taken into account other geographical factors of the type that I described. There are issues of economies of scale because it is clear that in areas such as Cornwall which have problems of remote rurality one cannot sacrifice accessibility by putting all services into one major centre. The unit costs are inevitably going to be higher if there are more smaller community hospitals and other services of the type that I described. There are bound to be higher travel costs. Research has shown that rural staff tend to travel two and a half times further than urban-based staff—that seems rather a low figure—and higher levels of unproductive time as well as cost prevail as a result. Therefore, staff-to-patient ratios need to be higher.