RT HON PATRICIA HEWITT MP, MR DAVID NICHOLSON AND MR HUGH TAYLOR

29 NOVEMBER 2006

  Q160  Dr Stoate: Secretary of State, obviously reducing unnecessary emergency admissions is one of the key platforms for improving efficiency in the NHS. I just want to move on to Payment by Results and the effect that might be having on emergency admissions. The evidence we have seen does show that emergency admissions seem to have gone up quite dramatically. There has been a significant increase certainly, over the last three or four years, in emergency admissions. My worry is that Payment by Results might be driving hospitals either to recode admissions because it is in their financial interests to do so or possibly, and I would like your comments on this, unnecessarily admitting more people than they might previously have done because there is a powerful financial incentive for them to do so?

  Ms Hewitt: On the question of emergency admissions, you are quite right that, if you look at the country as a whole, they have been going up pretty steadily by a couple of percentage points every year for quite some time, roughly 3% per year. That seems to be a long-term trend. At the same time, you can look at parts of the country where local GPs and the Primary Care Trust have really worked to reduce emergency admissions. In some practices they have managed to cut emergency admissions by 15% at a time when they have been rising nationally, and they have done that, of course, by much better case management, community nurses looking after the long-term ill in their own homes and thereby, in some cases, completely eliminating the need for multiple emergency admissions during the year, and clearly that is what we want the NHS to be doing right across the country, particularly with practice-based commissioning to do that. At the hospital end, one of the things that we have done with the tariff is to give hospitals a significantly reduced payment for short admissions, because we were seeing quite an increase in very short admissions and there was a fear that that might have been driven by the tariff system. Therefore, by sharply reducing the amount that is paid for a short admission, 24 hours or less, we were very deliberately sending a signal to hospitals that they could not expect to get something approaching the full tariff for a long emergency admission by simply admitting somebody into a short-stay medical admissions unit, but it is one of the aspects of the application of the tariff that we keep under close review.

  Q161  Dr Stoate: I accept that, but if you look at the graph that we have been given—I do not know if you have got it actually (it is on page 17 of our brief)—it shows that there has been a significant increase in emergency admissions since 2003. The graph has gone much steeper since 2003. I apologise that you have not got sight of this particular document, but that seems to be case, and the evidence seems to be that the hospitals are recoding in order to improve their financial position. So, whereas one of the drivers, as you quite rightly say, is that GPs and others are trying to keep people out of hospital, there is not really any incentive for hospitals to do this. We have heard from Ken Cunningham, a former Acute Trust Chief Executive, who said, "There is still an increase in the number of people presenting at A&E. I do not think the acuity of disease has increased, people are not sicker than they were, but the threshold for entry seems to have dropped." Although I fully accept your drive to try and keep people away from hospitals, the driver at the other end, the hospital end, does not seem to be reflecting that in the figures that we have seen.

  Ms Hewitt: I understand the point you are making. The tariff, of course, was not introduced in 2003/2004. It was initially introduced, of course, only for Foundation Trusts. It was then extended to elective admissions in NHS trusts and then extended to emergency admissions. So, I do not think a rise that dates back to 2003 can be blamed on the tariff. That would be my first point. The second point is that clearly we are all quite worried about the significant increase in emergency admissions, and the other thing we have done, which I think was touched on last week, is to say to Primary Care Trusts and hospitals: you should agree between you what you would regard as an acceptable level of rise in emergency admissions for the next year based on last year, and then, if emergency admissions rise by more than that, the hospital will only get 50% of the tariff. Conversely, if they fall by more than an expected amount, the PCT will only gain 50% of the saving. It was a point, I think, that Charlotte Atkins referred to last week, because what we wanted to do there, although it somewhat reduces the savings to the Primary Care Trust or the practice that keeps people out of hospital, it actually gives hospitals an incentive to co-operate in that process because they do not lose quite as much if they help keep people out of hospital and they do not gain as much if they put too many people into hospital, if I can put that way.

  Q162  Dr Stoate: I certainly accept what you are saying. For your information, the figures we have got I think were in your response to Question 63 in the data, but, nevertheless, despite the fact that I fully accept what you are saying is the intention, it does seem from our information that the number of patients admitted for less than one day is rising particularly quickly, and, again, it seems to us that the threshold for admission does seem to have dropped. I accept that you have altered the tariff to try and reduce that effect, but, nevertheless, the figures that we have got show that the proportion of patients admitted by A&E who stay in for less than one day has risen from 13% to 22%. It comes back to my point. I fully appreciate what you are trying to do; it just does not seem to be working in the way that I think you would like to see it work.

  Mr Nicholson: I think clinical practice is changing and we are kind of catching up with all of that. Certainly there is no evidence to support, and I do not accept, the fact that medical staff are changing a diagnosis on the basis of whether it will benefit Payment by Results. There is simply no evidence for that. My experience of the medical profession is that they simply will not do that sort of thing, but the way we treat people is changing. For example, in the past we may have admitted lots of patients as in-patients but nowadays we can get them in for less than 24 hours, do all the diagnostic tests that we need and send them straight out again, and it seems to me that that is the expansion that we have got and that seems to be a good thing as far as clinical practice is concerned.

  Q163  Dr Stoate: In order to make this work we need very good data at primary care level. This is a rather personal thing really, because, as you know, I still do a certain amount of work as a GP. My practice manager says that we are getting all the Dr Foster data through now about these admissions, but the Dr Foster data was never designed to be drilled down to practice level, and the data is so penetrable that he spends considerable amounts of his day trying to sift through the figures. What I will ask for is if there is any way that you can prevail upon the data managers, presumably through Dr Foster, to actually make the data much more transparent at primary care level so that we can achieve a much closer handle on exactly what is happening?

  Ms Hewitt: We will do that and, indeed, already are. I think this is a critically important point about significantly improving the quality of data that hospital trusts but also Primary Care Trusts and practice commissioners have so that, as close to real-time as possible, you know as a GP what is happening to your patients and you can then take appropriate action.

  Q164  Dr Stoate: That would be helpful.

  Ms Hewitt: We do need much better data, and we will take a look. One of the bits of guidance we give to Primary Care Trusts is that they should be looking at the conversion rate between A&E attendances and emergency admissions, and certainly, if that is well above the average or if there is a sudden increase in the conversion rate, then that should trigger a conversation with the hospital to understand from the clinicians why that has happened and whether that has been through a change of clinical practice in the hospital, whether they should be looking at how other hospitals are managing their A&E attendances to avoid what maybe unnecessary admissions.

  Q165  Dr Stoate: It would certainly be very helpful, because we are still seeing too many instances where a patient disappears off the radar through A&E and some months later we find that the bill has run into literally tens of thousands of pounds, and we have very little control or influence over how that happened and how we can change it, so that would be very helpful.

  Ms Hewitt: That is clearly completely unacceptable, and good commissioning, underpinned by good data, will stop that happening.

  Q166  Charlotte Atkins: What is the department doing to explore the role of the Ambulance Service in reducing emergency admissions? It seems to me that the best ambulance services do treat many more patients at home or at the scene rather than transporting them to the hospital and actually compromising emergency capacity. What work is being done in the department on that?

  Ms Hewitt: A lot of work has been done on exactly that issue, and Peter Bradley's report, which looked at Ambulance Trusts right across the country, had that as a major theme. A&E medicine is changing, as medical practice is, in almost every other field and, as you rightly say and as your own Ambulance Trust has demonstrated, it is now possible for well trained emergency care practitioners to take a great deal of urgent care directly to the patient's own home or the street where they have had an accident, or whatever it is that has happened, and then treat them on the spot without any need for them going to A&E. Obviously, if it is something serious, similarly, the paramedic or emergency care practitioner will ensure they do go straight to hospital and get the appropriate care there, but it is a much better model of care and it also makes much better use of the skills of Ambulance Trusts. One of the points that has arisen where the local NHS is considering changing hospital services is that they need to involve the Ambulance Trusts right at the beginning of those discussions, because very often the Ambulance Trust staff themselves will have real clinical insights and proposals about how they can look after patients better in the community and avoid these unnecessary A&E attendances.

  Q167  Charlotte Atkins: Is the department going to be publishing any sort of report following on from the Peter Bradley report about how ambulance services are meeting this challenge: because it seems to me that it is not necessarily picked up in the star system of the Ambulance Trust. It would be useful to have a report looking at how best practice is rolled out through the Ambulance Service. I realise that a reconfiguration should help in that respect, but it seems to me that there should be much further work in developing that good practice so that there is some attempt to spread that right across the country. For too long Ambulance Trusts have operated just as individual services without that best practice being rolled out.

  Ms Hewitt: I completely agree with that and, through the follow up to the Peter Bradley report, we have been trying to spread that best practice. I have asked Professor Sir George Alberti, who is our Tsar on emergency access, to prepare a report for me on how emergency medicine and urgent care are changing, and that includes the changing role of Ambulance Trust staff as well.

  Q168  Charlotte Atkins: When will that be completed?

  Ms Hewitt: Soon, and we will publish it when it is ready.

  Q169  Anne Milton: Presumably, along with that work, there will be work on what happens next—if somebody is treated by ambulance men in their own home, which has to be preferable—also the tie-up with social care is extremely important, particularly for the elderly. Whereas the ambulance might be able to get there within an hour, you possibly also need the social care start-up within the hour as well and the district nursing support and possibly the equivalent of Meals on Wheels and all the rest of it. Could you just confirm that you will be producing some reports on that as well?

  Ms Hewitt: I am not sure whether there will be a specific report on that, but your point is absolutely right. Where the Primary Care Trust or the GP practice has been able to identify more accurately patients with long-term conditions who might be at real risk, for instance, of repeated falls and put a proper package of care in place for them, you will already have a community matron or a community nurse and the appropriate social care staff working with that person, but where somebody dials 999 and that support is not already in place, then I agree, you will need to mobilise it very quickly if you are to avoid an emergency admission. One of the points that we are stressing in the new commissioning guidance and the operating framework for Primary Care Trusts is the need to work absolutely hand in hand with local authority social services, with much more joint commissioning, in some cases joint provision of services, so that you do not get that mismatch between the very fast response of the Health Service and sometimes a much slower response of social care services.

  Q170  Anne Milton: My concern is that it would be nice if there was some work going on because it is such a big hole, and so many people fall into it and often they do not have social care going in. The same comes up when you have got an elderly person as a carer. I would have thought it was as urgent as George Alberti looking at emergency care delivered in people's homes?

  Ms Hewitt: It is hugely important, and there is some very good practice that I think other people could learn from, and that is what we are trying to spread right across the country.

  Q171  Chairman: We will move on to a nice easy area now, Secretary of State, future commitments. What level of funding do you expect the National Health Service to have beyond 2008?

  Ms Hewitt: I am sure we will have a very fair settlement from the Comprehensive Spending Review, but we have not completed the CSR process yet. By April 2008 we will have caught up with the average healthcare spending in the EU 15, which was the target that we set ourselves and therefore I think everybody knows that the growth in the NHS budget after April 2008, although it will continue, will be at a significantly lower rate than the growth that the NHS is currently enjoying.

  Q172  Chairman: What implications do we have for that when we look at the big spending commitments at the moment on PFI, on LIFT, on the IT programme and also what we have now got, and we have discussed this earlier, a much larger staffing base in the National Health Service than probably ever before in its history. If overall funding growth slows down after 2008, potentially there could be major implications for that, could there not?

  Ms Hewitt: On the issue of staffing, we have had a very fast, a very substantial increase in staffing, around 300,000 more staff in total, in the NHS compared with 1997, but, for obvious reasons, we do not expect that growth to continue. It was never going to continue indefinitely and, for obvious reasons to do with the overshoot on the finances, it is not going to continue from now on, but the NHS budget will be, in cash terms, about 9% bigger next year than it is this year and it will continue to grow and will therefore enable the NHS to go on meeting new needs that will emerge, particularly with an ageing population, providing, of course, that we also go on making the improvements in quality and value, the productivity improvements that we were talking about earlier. In terms of PFI, every PFI is assessed for value for money and long-term affordability, and it was to ensure that that we started before the end of last year reviewing every outstanding PFI to make sure that it was affordable over the long-term, because any major building programme, whether it is publicly or privately financed, is a long-term commitment and it has to be affordable; but even as we get up to about 100 new Acute Hospitals, it will still be a very, very small proportion of the total NHS budget that is spent on the annual payment for the PFIs.

  Q173  Chairman: I am going to ask you a couple of questions about PFI in a minute. Do you think that these commitments, three or four areas really, the staffing base as well being the highest ever, are going to limit, even if it is affordable, the flexibility that the NHS will have in years to come, particularly bearing in mind certainly the last two White Papers where we are talking about moving services out of the acute sector into the primary side?

  Ms Hewitt: In relation, first of all, to staff, one of the reasons for Agenda for Change was to ensure that we did have a more flexible staff who had the opportunities individually to grow their own skills and make an even greater contribution to the NHS, but also to enable the NHS itself in each local area to respond to all the changes in clinical practice by changing the skill mix and so on. So, Agenda for Change actually gives us a great deal of scope for flexibility around skill development and the skill mix. With the growing move of care and treatment out of Acute Hospitals and into the community, we are already looking at the implications of that for nurse training. Typically nurses begin their training—Alan Milburn is the expert on this—in an acute hospital. Modernising Nursing Careers, which is being led by the Chief Nursing Officer, is a programme of reform to nurse training that will make it much easier for more nurses to start their work in the community, if that is what they want to do, or support hospital nurses who want to move into the community, as many are already doing. So we are trying to build in more flexibility in that way as well. On the building programme, I think it is very important with the next generation of both Acute Hospitals and other capital developments that we build in perhaps more flexibility than we have sometimes done in the past just to take account of the fact that medical technology is changing even faster than I think people expected, say, 10 years ago. There are a number of ways of doing that which include, for instance, greater use of mobile facilities which can either be moved around from location to location, for instance, to take diagnostic tests or minor surgery, or sometimes less than minor surgery, out into a rural area, but can also be used, and they are being used like this in my own city at the moment, to give you a fixed facility that can be put up much more quickly and much more cheaply than a conventional permanent build. The lifetime of that kind of operating theatre, which has been rudely described as a Portakabin but it is a modular facility that is then put into a proper brick foundation and so on, is about 20 to 25 years compared with 35 years for a normal permanent hospital, and it gives you much more flexibility because you can, if you need to, move it and you can more easily switch it to a different use. That is the kind of thing we are applying to the new PFI schemes as we review them.

  Q174  Charlotte Atkins: You have convinced me. I will have one of those mobile ones. We could do with one, or two would be excellent. You have said that you think the PFI schemes are affordable. I think for the currently approved schemes we are talking about in 2010, 2011 something of the order of £2.5 billion worth of payments. Although you may be confident that the NHS can afford that, there may be a rather different impact on local hospital trusts. Are you convinced that those hospital trusts, many of whom have gone into deficits at a time at which they are planning or beginning to pay for their hospitals, will be able to sustain this sort of level of payment when you have said that the overall growth in NHS expenditure will tail off a bit?

  Ms Hewitt: When the original value for money assessment and affordability assessment were made nobody expected these extraordinary rates of increase that we had enjoyed for seven years to continue indefinitely. So that mistake, if you like, was never made. The figure I have is that for 2009, 2010 we are predicting unitary payments of around 1.29 billion, and that would cover 95 PFI schemes. We have 58 that are up and running at the moment, and so we will see a very big increase by 2009, 2010, and that will include some very large ones—the University Hospital of Birmingham, for instance, with a capital value of just under 700 million, but still a very small percentage of overall NHS budgets. In relation to deficits, we have on the last full financial year's accounts 174 PCTs and NHS trusts in deficit. Only 19 of them have an operational PFI scheme. Three are in Foundation Trusts. So, of the 55 currently open, only 19 are in trusts with a deficit, and so I think this idea that PFI is the cause of deficits is simply wrong and trusts that have got a deficit and also have a wonderful new building for their staff and their patients need to look at the polity and value indicators and other benchmarking data to see how they can make themselves more effective in the way they use their new building and their excellent new facilities.

  Q175  Charlotte Atkins: In my own area, North Staffordshire, the PFI scheme has been substantially reduced in size, I think, from something like 1,200 beds to over 800 beds, and that seems very sensible in view of the fact that we are moving increasingly towards care in the community and much more activity at the primary care level. What I am surprised about is that we have still got this very high level of investment in major hospitals given that the department is rapidly shifting towards many more LIFT projects, the mobile project you were just talking about. It just seems odd that we are going to be still investing massively in these major hospitals, a few of which are going hugely over budget, at the same time as the department is going full steam ahead towards focusing much more, rightly so in my view, on primary care?

  Ms Hewitt: We need both. We certainly need more care and treatment for people in their own homes or GP's surgeries or community hospitals or LIFT projects. We also need very good care in Acute Hospitals. It comes back to the changes that are taking place in medicine. On one hand, they are enabling the NHS to do more for people in the community, but they are also enabling a transformation of the care given to critically ill patients. I had the opportunity in Southampton last week to open the new cardiac centre, which includes a superb cardiac intensive care unit where they are able to do, for instance, primary angioplasty for people who in the past might well not have had access to that facility, and it is serving not just Southampton but a much broader region as well. We still need the Acute Trusts delivering part of the secondary care that they are currently providing, but also probably growing provision of very specialist tertiary care, reflecting the greater ability of medicine to do more for people who are critically ill.

  Q176  Charlotte Atkins: So it is not a matter of the acute sector being very much in control of the NHS, an area we want to get out of. We want to make sure that the real control is at the primary care level where it is much closer to a patient?

  Ms Hewitt: I think that is a very important point, because the NHS, I think like most health care systems, has been dominated by the acute sector. The development of commissioning and really giving responsibility for budgets to GP practices and Primary Care Trusts will help redress that balance, and that does require strong expert commissioning in relation to the Acute Hospitals. It also requires GPs and others in primary care to work very closely with the consultants and other staff in the Acute Hospitals so that they re-organise services in the way that is best for patients. For instance, there is a great deal of routine orthopaedic work being done in out-patient sessions in hospitals that would be much better done in the community with the consultant overseeing it but actually carried out by a GP with special interests and physiotherapists. It is happening in some parts of the country to the great benefit of patients. It means less routine work in the hospital, which means the consultant can do more surgery and the waiting times for the surgery come down and the consultants see the complex patients where their skills are really needed. In some cases, we find hospital consultants reluctant to make that change and the local Primary Care Trust and the local practices have to work on that relationship to ensure that the right care is delivered to the patient in the right place by the right staff person at the right time, and sometimes that is in the Acute Hospital but not always.

  Q177  Charlotte Atkins: Given how much we are paying consultants, I would hope they would be a bit more co-operative!

  Ms Hewitt: Consultants are, indeed, very well paid, and I am proud of that, better paid than any other country in Europe, but certainly hospitals need to make sure that they are using those skills to the very best effect.

  Q178  Mike Penning: Is there a distinct correlation between trusts that are in deficit and the PFI projects that are proposed in that area not going ahead? Are you saying that if the trusts are in deficit PFIs are unlikely to go ahead in those areas?

  Ms Hewitt: We would not sign off a PFI unless we believed it was affordable for the trust and good value for money. Therefore, we would have to be absolutely satisfied about the recovery plan and the progress that the trust and the local health community were making towards balance. It would be irresponsible to allow a trust to take on a whole series of possibly rather big long-term commitments.

  Q179  Mike Penning: Where trusts are spending huge amounts of money putting together a PFI project and they are in deficit, they are wasting their time?

  Ms Hewitt: No, not at all.