House of Commons - Welsh Affairs

Select Committee on Welsh Affairs Fourth Report

FOURTH REPORT

The Welsh Affairs Committee has agreed to the following Report:—

HEALTH ISSUES IN WALES

Introduction

1. On 1 July responsibility for the management and funding of the National Health Service in Wales will pass to the National Assembly of Wales. It is therefore timely for us to report the findings of a short inquiry we have held into current health issues in Wales. We received a number of written submissions and held two sessions of oral evidence. We took evidence from the NHS Confederation in Wales, and from the University Hospital of Wales Healthcare NHS Trust on 23 March; and from the Secretary of State for Wales and Welsh Office representatives on 30 March. We have also drawn considerably on the Report of the Comptroller and Auditor General on the NHS (Wales) Summarised Accounts 1997-98.[1] We make this short Report to the House to inform fellow Members, and also colleagues in the National Assembly, about some of the concerns raised in evidence. We are reporting separately on Paediatric Cardiac Services in Wales, a matter which we consider requires to be addressed with particular urgency.[2]

Structural change

2. The past year has been a time of major organisational change for the National Health Service in Wales.[3] On 1 April 1999, the internal market in healthcare and GP fundholding were abolished and Local Health Groups were established. Contracting is being replaced by Long Term Agreements and Health Improvement Programmes. The number of NHS trusts has been reduced from 26 to 16. The Welsh Health Commons Services Authority has been abolished, and the Health Promotion Authority has been absorbed into the Welsh Office. Within the Welsh Office, the management of the Health Department has been restructured. The NHS Confederation expressed the understandable hope that, after this period of "managerial turbulence", they would be left in peace for a few years.[4] While the National Assembly will, quite properly, wish to make its mark on the NHS in Wales, we hope that it will see the benefits of a period of calm after the structural upheaval of the last year.

NHS financial performance

3. The financial performance of many health authorities and trusts in Wales continues to be a matter of very serious concern. The Welsh Office's memorandum showed that by March 1999, the cumulative deficit had risen to some £54.1 million, with the number of trusts operating at a deficit increasing to 12.[5] In his report on the 1997-98 Accounts, the Comptroller and Auditor General expressed his concern about the size of the forecast deficits and about the adequacy of the recovery plans in place.[6] The Secretary of State has announced that a "stocktake" of the overall financial position and management of the NHS in Wales will take place in 1999-2000.[7] This is welcome, but it is not enough just to find out how much the NHS Wales is in the red: something needs to be done about it. In our view, the Welsh Office has, over the years, allowed an unacceptable level of debt to build up. The NHS in Wales has only been kept going by loans from the Welsh Office to health authorities. Tackling the increasing financial deficit facing the NHS in Wales must be a clear priority for the National Assembly, but we fear that the problem will not be easily solved within the resources currently available to the Assembly.

Emergency admissions

4. The NHS Confederation drew attention to the significant increase in emergency admissions to hospitals in Wales over recent years (a 15% increase between 1996 and 1998), not just in the winter months but throughout the year.[8] They welcomed the £11.5 million made available by the Welsh Office last winter, but argued for such funding to be made on a recurring basis and at an early stage in the financial year. They pointed out that 20% of the winter pressure money was passed to Social Services, to support social care. Welsh Office witnesses agreed that the resource allocation process should allow the health service to manage emergency admissions without requiring additional funds.[9] As the Secretary of State said, "we need to have good planning and long-term management which deals with the ups and downs rather than ... crisis management".[10]

NHS pay awards

5. The NHS Confederation also drew attention to the impact on the health service of nationally agreed pay awards.[11] The impact of wage awards in the current year was expected to be some £80 million, and the impact of other workforce changes (including junior doctors' hours) a further £7-10 million. Pay accounts for some 70-75% of a typical trust's expenditure. The Director of the Welsh Office Health Department assured us that health authorities would be given an allocation for the current year which would cover the pay awards in full, though how allocations were spent was a matter for individual authorities.[12] We note that staff pay is a key area in which decisions made outside Wales (and outside the control of the National Assembly) impact directly on the resources available for patient care in Wales. We are concerned about the low level of pay of NHS staff, including technical service staff, and hope that this will be addressed in the Government's review of the NHS pay system.

Drugs

6. The NHS Confederation emphasised the increasing cost of the primary care drugs bill, which they suggested would rise by some £30 million above the £350 million it cost in 1998-99.[13] There is an increasing number of effective but very expensive new drugs, in some cases an alternative to surgery. There are above average levels of ill health in Wales, but it is also notable that rates of prescribing are significantly higher in Wales than in England, even in areas of comparable deprivation. The message needs to be got across to both patients and doctors that medication is not necessarily the required outcome of a visit to the doctor. The Welsh Office plans in future to introduce unified budgets for health authorities, so that drugs expenditure will be included within health authorities' cash limited allocations.[14] This would seem a sensible change, so long as the allocations are realistic.

7. We are also concerned about the varying availability of drugs between one area and another. For example, there appears to be variation in the availability of drugs to treat ovarian cancer. We welcome the establishment of an all-Wales Forum to consider the efficacy of new drugs. The new UK-wide National Institute of Clinical Excellence, and the proposed Commission for Health Improvement, should also improve equity of access, by providing clinicians and health authorities with better information.[15]

Health inequalities in Wales

8. We received a submission from North Glamorgan NHS Trust highlighting inequalities in health in Wales.[16] The Trust maintains that, while the Government is committed to redressing inequalities of health, the current funding system and allocation of resources is having the opposite effect. It argues for better focussed targeting, for clearer guidance to health authorities that they must address health inequalities in their funding allocations to trusts and Local Health Groups, and for funding to compensate for the diseconomies of small size. Welsh Office witnesses acknowledged the existence of health inequalities, though they distinguished between inequalities in health and inequalities in access to services.[17] We note that the Welsh Office has not adopted the Health Action Zone approach, as in England, on the ground the Welsh model is based on much smaller communities. However, it has established an expert group to advise on a system for monitoring health inequalities and to establish targets. Continuing health inequalities in Wales are a matter of very great concern, and will be a central challenge for the National Assembly. It is also an area which is likely to impact on our own work, since we are planning to conduct an inquiry into social exclusion in Wales after the Summer.

GP services

9. The NHS Confederation reported that some Health Authorities were experiencing difficulties in recruiting general practitioners, especially in the Valleys and rural Wales, and drew attention to the fact that 20% of GPs in Wales will be of retirement age in the next 5 years.[18] There is already a crisis in many areas and the situation will get worse. Efforts are being made to make the vocational training scheme for GPs more attractive, and to encourage women doctors to return to work by increasing part-time working and opportunities for non-principal GPs. A further possibility under consideration is a salaried service for GPs in disadvantaged areas. Welsh Office witnesses told us that there was scope at present for the employment of salaried GPs, though take-up had not been significant.[19] We accept that a salaried GP service is only part of the solution to health inequalities in disadvantaged areas, but suggest that there are lessons to be learned from the success of the dental initiative. The multi-professional model suggested by Julian Tudor-Hart in Going for Gold is worth exploring. We urge the National Assembly to give careful consideration to the recruitment of GPs in disadvantaged areas, and particularly to the potential for a salaried service for GPs.

Cross-border funding

10. At our request, the North Wales Health Authority provided us with a paper on cross-border funding issues.[20] North Wales residents are referred to English providers in much greater numbers than in other health authority areas: the population is not sufficiently large to merit its own specialist services; services in Chester, Manchester and Liverpool are much closer in travel time than services in South Wales; and there is a "complex inter-meshing of medical and clinical links involving clinics, staff and technology with English Centres". Thus, cross-border funding issues, though not unique to North Wales, are particularly significant there. The North Wales Health Authority raised three concerns stemming from the current changes to the NHS funding arrangements. First, it was concerned that the new Specialised Health Services Commission for Wales could "potentially duplicate a number of contractual arrangements for North Wales patients" and "could blur the objective of seamless commissioning". Secondly, the change from commissioning for a resident-based population to commissioning for a practice-based population with the setting up of Local Health Groups has meant that 7,000 people in North Wales will have services purchased by English authorities. (Conversely, North Wales will purchase for 6,600 English patients.) Thirdly, they were concerned that the change from Extra-Contractual Referrals to Out of Area Treatments would involve a loss of financial control, and could result in the Authority continuing to fund out of area services, even though they had been reprovided locally. The NHS Confederation witnesses were confident that the Specialised Health Services Commission would not duplicate contracts made by health authorities, and would be involved only with very specialised services.[21] They agreed, however, that the change to practice-based populations could disadvantage Welsh health authorities, and that the change to Out of Area Treatments could mean a loss of financial control.[22] In his evidence, the Secretary of State recognised the reliance of North Wales on services in England and assured us that this would be taken into account in the "stocktake" underway.[23] We urge the National Assembly to examine these concerns closely and to ensure that patients in North Wales do not lose out because of their traditional dependence on services in England.