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Department of Health

I assure the hon. Gentleman that it is happening. It is certainly happening in my constituency, in my practice and in my primary care trust area. Of course there are teething problems; of course it is taking longer than we thought it would take; of course there are massive difficulties with an IT system that is as enormous as the new NHS IT programme. I am not saying that the arrangements are perfect. I am not saying that the NHS has achieved nirvana, because clearly it has not. Nevertheless, it has travelled a long way. That is not to say that there are no issues of concern. There certainly are such issues, and I should like to raise a couple. My local hospital, which is involved in the private finance initiative, has a turnover of about £100 million, with a PFI access charge of about £18.9 million this year. Yes, it is in financial difficulties. I met the chief executive last week to discuss how that would be managed, and heard about his robust programme to keep the deficit at least to a reasonable level. It is not a crisis, but it is a matter of concern, and of course it matters to patients. The hospital is having to scale down some of the elective operations scheduled for this side of the end of the financial year, because in 10 months it has engaged in the amount of activity that would normally have filled 12 months. The results have been excellent, with improved efficiency and productivity, but of course budgets are stretched towards the end of the financial year, and some operations will need to be postponed until April. That is worrying for patients, but I have been assured that they will still be treated within the six-month time scale set by the Department. That is much better than anything that happened in earlier times. I believe that there are things that we can do to improve NHS efficiency and reduce some of the worrying overspends. I should like acute trusts and primary care trusts to work far more closely together, with regular updates and meetings to plan expenditure and activity, so that we do not see, year after year, February deficits and end-of-financial-year meltdowns and disasters that are avoidable and foreseeable, and should be a thing of the past. If the PCTs and acute trusts sat down together to plan expenditure over the year, many of those difficulties could be removed. There is also a need for acute trusts to work together. All too often, an acute trust that finds itself in difficulty will ignore what other trusts are doing down the road and will duplicate services, trying to increase income by concentrating on what they see as their strengths, regardless of what else is happening in the local health economy. That is inefficient, and I believe that it destabilises some areas. I feel that payment by results encourages hospitals to generate as much business as they can in order to stay healthy. It has encouraged some hospitals to adopt the approach that the more patients they admit, the more money they can earn. That distorts local priorities. An analysis of the impact of the system, which was introduced in 2004, found that it had led to an increase in the number of short-stay admissions to foundation hospitals—as opposed to non-foundation hospitals, which were still operating under the old block contract payment system. Between April and September 2004, the number of short-term admissions rose by an average of 24 per cent. in the 10 foundation trusts, and by only 17 per cent. in similar non-foundation trusts. Research by the Audit Commission found that overall hospital activity in foundation trusts had increased by 1 per cent., and that the number of short-stay admissions had risen by 7 per cent. Some of those hospitals are driving up activity in a way that does not necessarily reflect local health need, and could destabilise and undermine PCTs’ efforts to keep their budgets under control. The accident and emergency waiting target may also cause problems. Because some hospitals have found it impossible, or very difficult, to discharge patients within four hours, there is an increasing tendency to admit patients. Not only does that avoid the four-hour target, it increases hospitals’ income significantly. There is a driver in the system which, in some hospitals, has caused inefficiency to push up the costs to the local health economy. There is also a tendency for some hospital trusts to exaggerate the complexity of patients’ illnesses, which again pushes up the tariff for the care that those patients receive. Those are not acute structural problems, but they should cause concern. I should like Ministers—especially when they engage in discussions with trusts and others—to think about how the distortions can be levelled out. Many of the overspends are not all that enormous, but they can build up over a period, and such levels of inefficiency in the system can cause unnecessary destabilisation. There are also far too many follow-up out-patient appointments; indeed, my research shows that some two thirds of all NHS out-patient appointments are follow-up appointments. I do not know what research has been done on how unnecessary they are, but my understanding and belief is that many could easily be carried out by the GP or practice nurse, and some of them are probably not even necessary. They give rise to significant cost pressures in an acute hospital setting, where many patients simply do not need to be and, frankly, do not want to be. Many would probably be happier at their GP’s surgery, and if the GP feels that the problem is beyond his or her capability a referral back to the hospital would be a much more efficient use of facilities and finance. I shall not dwell on these issues, as other Members wish to speak in this important debate. This is not a crisis, a meltdown or a catastrophe, but it is worrying that the health service should end up with yearly deficits, despite the record amounts of money going in. It is very important for Members to reflect on the significant improvements in patient care. Patient satisfaction is rising and all GPs now have to conduct yearly independent patient satisfaction surveys in order to show the PCT that they are doing a good job. The vast majority are indeed doing a good job, and through the new pharmacy contract pharmacists are making significant improvements. Moreover, nurse practitioners and specialist nurses are making incredible improvements in health service care. Our patients have never had such a good health service. The Government are rightly praised for the huge efforts that they have made and the sums that they have invested in the NHS. Instead of soundbites and shouting, we should have a responsible debate that reflects the fact that a great deal of work has been done, but that does not mean that there are no concerns or issues that need to be dealt with. I shall be interested to hear the rest of this debate.