My Lords, I declare an interest as chair of an NHS foundation trust, president elect of GS1 UK and a consultant and trainer with Cumberlege Connections. I am grateful to the Minister for his explanation of these regulations. I want to put a few points to him.
I start with Part 2 on licensing, specifically paragraph 3 concerning monetary penalties. Can I ask the Minister about the logic of fining providers, when all that happens is that worse care will be provided for patients as the organisation will have less money? I think that the figure of up to 10% of turnover would virtually bankrupt most providers. While I certainly accept the need for penalties and consequences for failure, I wonder whether they would be better being not financial, as the reality is that they will not happen in many cases because the people who suffer will be those who get services. I just wonder about the logic of that.
It took NHS England months to wake up to the fact that the A&E problems were to do with the failure of systems, but for months it was pressing CCGs in some parts of the country to fine hospitals for poor A&E performance. I think that NHS England has completely lost the plot when it comes to understanding what is happening in the health service. I cannot think of a more hopeless response to the crisis than to come along and say, “We should fine hospitals”. I worry about this whole approach to fining. I say to the Minister that there are very limited signs that systems understand the winter problems and there is a real reluctance to get to grips with what needs to happen. This is a worry for the future which may not have much to do with the regulations, but my seeing the Minister here represents a good opportunity to raise them with him.
Does the Minister think that fines and targets can lead to some perverse incentives? Of course, it is right to issue targets, but I wonder whether the Minister might comment on a very interesting section of the Chief Medical Officer’s Report for 2013, published earlier this year, where she refers to the low number of instances of MRSA and C. diff. I do not think that there is any doubt that the targets that were set for the health service have been responsible for the focus that has led to this very welcome improvement. My understanding is that part of the response to this by the NHS has been to use antibiotics which should have been reserved for hard-to-treat infections. There is now real concern that the antibiotics that go with those hard-to-treat infections have been used rather widely, which is causing great problems in more general infection control. According to the CMO, while the typical, large, 1,000-bed acute NHS hospital has two to three MRSA bacteraemias per year and 50 to 60 C. diff cases, 400 to 500 bacteraemias involving Gram-negative bacteria can occur in a 1,000-bed-type hospital,
10% to 15% of them being due to strains resistance to those antibiotics for hard-to-treat infections. You can reach a point where individual targets become counterproductive because the focus of the NHS is simply on C. diff and MRSA and not on the wider infections which clearly need to be tackled as well.
Will the regulations lead to more specific targeting which can in turn lead to perverse incentives, or is a more sophisticated approach likely to be taken? It is clear that the Chief Medical Officer is concerned about the way in which some MRSA and C. diff targets are leading to perverse behaviours.
On Part 3, the rationale for each of the thresholds described for penalties, prices and licence changes has not been explained in relation to an evidence base. In other words, why are the thresholds where they are? What work has been done to suggest that those are the right thresholds? Of course, now they will only be tested post-implementation, but it would have been good to have seen a clearer review mechanism that enabled a sensible approach.
In respect of the mechanisms to lodge an objection to the pricing methodology, my understanding is that the Foundation Trust Network has stated throughout the development of the policy that the 51% threshold for an objection, together with the denominator comprising all tariff services, is too high a threshold to be met. Is the noble Earl prepared to look at this? That might be a reasonable approach for general objections to the general approach, but it is insufficiently sensitive to address sections of the tariff that may be inadequately compensated—cancer services, for example. The noble Earl will be aware that there were issues around the tariff for children’s services and women’s services. My reading of that is that if you were a specialist adviser your chances of reaching the 51% threshold would be very limited. Could this be looked at?
If my noble friend Lord Warner were here I am sure he would raise this. It is the question of what happens to non-foundation trusts. I know that Monitor is working closely with the NHS Trust Development Authority, but I would welcome clarity about what will happen to trusts outside Monitor’s remit to ensure that there is an even-handed approach across all providers in the sector. No one is more admiring of the work of Sir Peter Carr as chair of the NHS Trust Development Authority. The noble Earl knows that Sir Peter has held chairmanships under both Governments for many years. While he is a marvellous person, there is a fear that he will hold the chairmanship of the NHS Trust Development Authority for many years to come because of the issue about what on earth will happen to those non-foundation trusts that are clearly not going to reach FT status any time soon.
The noble Earl mentioned the Competition Commission.
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