Examination of Witnesses (Questions 120
MONDAY 21 OCTOBER 2002
120. You also gave useful information on delayed
discharges from hospitals and you said in your note the reason
for delays in discharge are complex and it difficult to determine
which delays are the responsibility of social services and which
are outside that responsibility. It is often assumed that 50 per
cent are due to a lack of social services. If you are finding
it complex to analyse it, is this not a problem about the supposed
charter system for discharges or social services?
(Mr Denham) I do not think it is complex to analyse
the reason for a particular delay, however it is not so easy on
a national collection system to always get the details that underlie
it. One of the incentives I suspect in a system like the one proposed
is it will encourage people to think about what the real cause
is. As you know, some of the delays are collected under a generic
Julia Drown: By the time it gets together it
becomes a problem.
Mr Burns: On the question of delayed discharges,
as you know your Report does refer to it, I am interested to know
how is fining social service departments going to help reduce
Chairman: That might be a question to put to
the Secretary of State.
Mr Burns: It might be but I thought as the civil
servants are advising ministers they might have a view.
121. I think it is more a political question
(Mr Denham) The simple answer is one about incentives
and responsibilities in terms of responsibilities for all patients
or users of services at a particular point.
122. That is not an incentive. Would it not
be better to give extra money if they manage to reduce delayed
discharge rather than penalise them by fining them if they do
(Mr Denham) They are getting resources. I am sure
the Secretary of State will give you the precise figures.
123. The question is, are they going to use
those resources on providing the services that would help to reduce
the amount of delays because it comes back to the interests of
individuals in hospital?
(Mr Denham) Is it not in their interest to be in hospital
where they could be looked at after at home or intermediate care
or in other ways and the question is how do you incentivise the
provision of services to make that change. I think that is what
lies behind the proposals on reimbursement.
124. Can I ask a question on activity and the
way in which activity is recorded . I recently met with some of
my colleagues in the local health service and we were discussing
the issue between the secondary care sector and primary care and
a point came out which concerned me that services delivered by
primary care are not counted against local activity targets. Is
(Ms Edwards) They have not been historically.
We have started to do that for the first time this year as a planning
process and we projected a baseline figure. We now have an economy
starting baseline and we are beginning to collect information
against that. It is fairly basic and crude at the moment and we
are working on the definition. We are encouraging more to be done
appropriately in primary care and we need to start collecting
to make sure that we have a lot of activity that could otherwise
be done in secondary care is not lost in statistics.
125. Why historically has that never been picked
up before? It does seem, in a sense, to reinforce the role of
the hospital sector, it is more extensive, acute provisions when
primary care could and does indeed undertake a significant number
of interventions, surely that should be counted?
(Mr Douglas) Historically the issue was it was not
significant enough to be picked up. Our data collection has not
moved sufficiently quickly alongside changes in the way that the
service delivers. There is a recognition from us that our data
collection has fallen behind the service changes that we have
126. Right. What will be the term for equivalent
treatment undertaken in primary care?
(Ms Edwards) We are collecting it on number of patients,
equivalent of an FCE at the moment. We are doing quite a bit of
work with small groups to look at what the appropriate definition
would be. We want something that is comparable otherwise we cannot
127. How soon do you anticipate that will come
(Ms Edwards) I do not think we have made any decisions
yet. This year we are collecting data for the first time, but
we have not made any decisions really at this stage.
128. This concern will be addressed fairly quickly?
(Ms Edwards) Yes.
Chairman: Thank you very much.
129. I found the section on inflation in the
National Health Service very interesting. It is quite clear that
the NHS pay prices which consistently rise faster than the general
inflation rates does that not mean, Mr Douglas, that it is misleading
to present future growth plans in terms of extra real terms cash?
(Mr Douglas) We present them in two ways,
in terms of cash and the real terms deflated by the GDP deflators.
We use the GDP deflator as a well recognised and accepted way
of presenting these. We have not got forward projection for NHS
specific inflation so we could not present on that basis.
130. Would it not be better to present those
in terms of extra real terms volume, which you say you will be
making some kind of estimate of? It is clear consistently over
the last few years inflation has been different from base rate
(Mr Douglas) The key issue is that I took the figure
to be a cash uplift rather than a real term or volume uplift.
We would have to make assumptions about what future pay levels
will be. We have to make assumptions what about the level of incremental
change in pay is going to be and we should not be making that
sort of forecast.
131. It would be bad human resources to do that
kind of projection, nonetheless it is a bit misleading and it
leads people into thinking you are going to get that volume increase
for that money, which does not happen.
(Mr Douglas) It depends how people use the figures.
If you purely take the NHS inflation figure without any adjustments
at all for efficiency, because you would expect to have that in
the economy anyway, I think you could argue that that would be
a misleading figure as well.
132. I suppose it is back to statistics again.
(Mr Douglas) Cash everyone understands, they know
what cash is.
Dr Naysmith: I am not sure that is true actually,
not in the way it is used sometimes by statisticians.
133. On a specific within inflation, you gave
the net ingredient cost in tab 3.6.2 to show over the last three
years that the net ingredient cost per prescription item has gone
up per head from £60 to £125, that is partly people
having more prescriptions from 9 to 12 and also the cost per item
going up from £7 to £11. Does that reflect an increased
quality of drugssupposedly some drugs are going down in
price? The dramatic increase from £60 per head to more than
£120 per head can that be justified? Are the pharmaceutical
companies having too nice a time?
(Mr McKeon) It reflects a changing product
mix going towards more expensive and newer drugs. If you look
at the generic prescribing it amounts to about 70 plus per cent.
The bulk of the expenditure is on, if you look at the answer,
statins, which have effectively doubled in cost from about £180
million to £420 million. It would be clear why it was going
up with the same sort of trends being there on mental health and
134. You cannot be satisfied that it is likely
to be reflected in the quality of care?
(Mr McKeon) We are satisfied that the rising drugs
bill is being reflected in the quality of care.
135. Do you think there is a danger here that
people hear about sums of money flooding into NHS and pharmaceutical
companies think hard about encouraging people to use their drugs
and buy their drugs? Is that a danger? I have heard it said that
that is a potential problem.
(Mr McKeon) There are two points there.
Firstly, there are quite strict rules on advertising and direct
advertising to the consumer is not allowed. Also when disease
awareness campaigns are seen no specific drugs are mentioned.
If you look at where expenditure has been rising it has been in
the last two or three years or so and it has been rising particularly
in those areas where we have sought improvements in care through
national service frameworksCHD, mental health and so on.
136. These tend to be brand names.
(Mr McKeon) They tend to be branded products but not
exclusively. For example, some of the anti-hypertensives are generic
products and aspirin, for example, is a generic product and there
have been significant increases in those areas as well but, yes,
the tendency has been to use branded products.
137. We specifically asked about the amount
of money spent on statins in relation to the NSF on coronary heart
disease and those figures are quite clear and startling, but we
do not have any data linking changes in the medicines bill to
the introduction of the national service frameworks. How much
of the £545 million growth in the community medicines bill
and £123 million in the secondary sector medicines bill can
be attributed directly to the implementation of national service
(Mr McKeon) We have figures which we
did not show you which show fairly clearly that the main areas
of growth have come in through, as I was indicating, lipid lowering
drugs, the statins, which have gone up by 31 per cent and anti-hypertensives
have gone up by 21 per cent as a direct result of the CHD national
service framework, and diabetes drugs by another 22 per cent which
is again directly linked to the diabetes national service framework
and anti-depressives and antipsychotic and these are linked to
the mental health national service framework. These have been
the big drivers. I have not broken that down precisely in the
£545 million but there is clear evidence that the increase
in the rate of growth, which was eight or nine per cent a year
and is now 11 or 12 per cent, has been factored in as being driven
largely by the NSFs because that is where the significant growth
areas have been.
138. You mentioned the atypical anti-psychotics,
if I could come on to NICE, I realise that the NICE guidelines
only came out in June of this year so it may be too early to say
whether that estimate is going to be realised, but of the £467
million (or £495 million depending on which paper I look
at) identified by NICE, how much do you expect will be spent by
the end of the current financial year?
(Mr McKeon) We have not made an annual estimate of
the level of expenditure on NICE products per se. The £495
million is NICE's estimate which, by and large, reflects full
take-up in the light of their guidance, some of which they would
expect to occur over a number of years and sometimes two or three
years or longer as clinicians essentially pick up the guidance
and use it to identify the at-risk population. So it is very difficult
to make an annual estimate of what that will be. What we have
done is look in the SR rounds at what the likely impact of NICE
will be over that period, as it were, and make sure that there
is enough money in the pot in order to fund that kind of level
of growth. It is not all directly growth from NICE per
se because the NHS would have picked up an element of this anyway
because there has been spending on medical technology and new
drugs, so the total extra cost of NICE per se is not £40
million over and above what it would have been otherwise.
139. Can I ask you specifically about Alzheimer's
because the figure quoted there is a long run and obviously that
is going to hold up over time. Do you have evidence that suggests
that NICE recommendations on drugs to treat Alzheimer's is being
(Mr McKeon) Yes, I think there are two areas of evidence
that we could look for and a third that we are now hopefully going
to get our hands on. The two areas are principally in the evidence
we gave to the Committee for their inquiry into NICE. On their
chart you could see a kink reflecting when NICE guidance came
along, there was a slight break in the line. We would look at
GP prescribing as well to see how that is rolling out, but that
does not tell the full story because you have to look at hospital
data as well and we are now engaged in discussions with IMS to
have access to their data on hospital prescribing which would
enable us to get a better handle on what is happening with the