Examination of Witnesses (Questions 60
MONDAY 22 APRIL 2002
60. I thought you, as an expert, might have
answered it. All right, let us have another side of the track.
Do you agree with Wanless that, from what you know of the NHS,
a 7.4 per cent real terms growth is about the most it is capable
(Mr Appleby) I suspect it is.
61. You think that is right?
(Mr Appleby) Yes. I think I should say, just to add
in terms of my earlier answer, that one of the issues that Wanless
deals with is, in a sense, describing the Health Service in the
future, the sort of Health Service we would like to see. Some
of the elements of that include, for example, much shorter waiting
times, and of course part of the NHS plan is to reduce waiting
times. Wanless takes it as far over the next 20 years as to reduce
the waiting times to a maximum of two weeks to get into hospital.
At the moment we are looking at a maximum wait of around 15 months.
So one of the things that Wanless does is to try to model how
much money we need to spend to start to erode waiting times. Unfortunately,
it is very difficult from the Wanless Report to understand quite
what sort of model they used to try to cost this out, it is a
bit opaque in terms of the report. That is why I was a bit uncertain
in terms of my first answer. Meeting some of these targets is
actually quite difficult to quantify.
62. Does the King's Fund have a model of its
(Mr Appleby) In terms of waiting times, for example?
63. In terms of putting money into the NHS and
getting output out of it. Do you have some way of judging what
you get for the money?
(Mr Appleby) No, we do not. I have to say that nobody
64. In Wanless, page 84, there is a very interesting
paragraph about productivity in the NHS. It is paragraph 5.31,
where he has some very telling figures on what happens if the
productivity performance of the NHS varies by 1 percentage point
up or down. He does project it all the way up to 2022, so we are
actually dealing with a pretty wide divergence by the time we
get to the end of a 20-year span. That divergence is worth a couple
of points on GDPin today's terms, £30/40 billion.
What does the King's Fund think about this central assumption
about productivity in the NHS? Do you think it is reasonable?
As a rider to that, which way do you think the risk goes? Is there
a chance of seeing increased productivity in the NHS, or is there
a downside risk that it will be worse than he forecasts?
(Mr Appleby) I am afraid again this is a very difficult
question to answer. You are right to say that about the only sensitivity
analysis done in Wanless is around this productivity issue. As
you rightly point out, it creates an enormous funnel of uncertainty
the further ahead you go. 1 per cent a year cumulated over 20
years translates into a large proportion of GDP and a larger proportion
of the NHS budget. You only have to vary those percentages minutely
to see some big changes. There is a view that the NHS is a big
institution spending a lot of money, there must be some significant
productivity gains to be made. It has some examples where productivity
has gone the wrong way. In certain specialtiestrauma and
orthopaedicswe now have more orthopaedic surgeons, but
they seem to be doing fewer operations per surgeon. There is probably
substantial room to improve productivity substantially, but it
is not at the margins, it probably requires some big changes in
working practices, some of the things that Wanless suggests himselffor
example, nurses taking on more of the role of doctors, more of
their jobs and so on. Nurses come cheaper than doctors, of course,
and so this leads to increases in productivity and efficiency.
So there is one view that you can actually squeeze out some very
big changes in productivity in healthcare. On the other hand,
there is another view that it is very difficult in practice to
do some of these things. Some of the groups you have got to persuade
to change the way they work, the institutions and so on, are pretty
well entrenched, but they have got their own interests at heart,
and it is very difficult.
65. Overall, are you pessimistic or optimistic
about getting productivity improvements in the NHS over the next
(Mr Appleby) I think that in terms of the simple assumptions
Wanless has made, they are perfectly credible and perfectly achievable.
66. The assumptions are achievable, you think?
(Mr Appleby) Yes.
67. Professor Wilcox, do you have any views
(Professor Wilcox) Not on Health Service issues, no.
68. Anybody else?
(Mr Troup) No.
(Mr Dilnot) No.
69. Could I ask Mr Appleby a few questions about
the overall impact of the increase in health spending? How far
behind are we really? Are we behind other countries? We know that
waiting times are a mess. We know that there are high levels of
infection in hospitals. We know there are very specific areascancer
is often citedwhich are high. Let us start with the question
of life expectancy, the life expectancy at birth for males and
females together in the populationI know they are broken
up, because the female figures are worse than the male figures.
Taking the life expectancy in Britain compared with other countries,
how far behind are we?
(Mr Appleby) To be honest, I cannot remember the figures.
What you find when you look at these broad figures like life expectancy,
and another one would be infant mortality used by epidemiologists
to get a picture of the nation's health, is that you get quite
a different picture. Again, when you split it by males and females
you get a very mixed picture. If you look to the graph of life
expectancy across the world, the UK, along with a number of other
industrial nations, are right at the top, crowding up there. The
differences are actually pretty small when you get to that level.
70. So on the crude life expectancy measure,
we seem to be in an area where the differences are pretty small?
(Mr Appleby) Yes.
71. Can I ask you another question which isI
am sure you are aware of these figuresthat Euro Barometer
do an annual survey of opinion of the respective health services
throughout Europe. I would be interested to see whether you do.
Do you know who comes bottom in that?
(Mr Appleby) I do not, no. There are a number of organisations
and academics who do that sort of thing.
72. I think you will find that it is Italy.
Do you happen to know how many doctors, as a proportion of the
population, Italy has compared with Britain?
(Mr Appleby) Certainly higher than the UK.
73. It happens to be four times higher. Do you
think that it is conceivable that increasing the number of doctors
might not, of itself, generate a higher subjective measure of
well-being about the Health Service?
(Mr Appleby) Perhaps dissatisfaction, as you tend
to be suggesting from these figures. I did have written down here
for my own benefit "Will we all be happier?"
74. That is a shocking suggestion. What you
are suggesting is that we have to get hospital doctors down in
order to increase satisfaction. Is that what the King's Fund is
(Mr Appleby) No, I am not, although there are examples
around the world where there have been strikes among the medical
profession and the mortality rate has actually gone down. I was
going to say that for my own benefit I had written down "Will
we all be happier and more content in 2007/08 or 2022, once we
are spending all this extra money?" By 2007/08 we will be
spending around 9.4, 9.5 per cent of GDP on healthcare. That is
the sort of level that France is spending and has been spending
since 1998. It is also the level that the Canadians are spending.
The Canadians are not noticeably happier with their healthcare
system than we are. The explanation is not necessarily that the
money is wasted, it goes down a black hole, as we heard earlier;
it is, in my view, to do with public expectations primarily, but
they tend to ratchet up.
75. Let us talk about black holes for a moment.
Can I preface this question by saying that I am not against increases
in health spending and I am not against increases in pay for the
people in the Health Service. I put that on the record before
I ask my next question. What proportion of the total increase
do you think will find its way into pay?
(Mr Appleby) It is very difficult to make a prediction
about that. What we have tended to see over the last few years
is that last year the NHS got something in the region of a 9 to
10 per cent increase, and of that about 40 per cent went on increased
pay and prices in the NHS. I would expect a similar sort of proportion
this year and the year after.
76. Obviously I would expect it to rise. Can
I say that we are embarked here on the biggest single increase
in public spending, other than for military, other than for purposes
of protecting the country, probably ever undertaken in this country,
and we now need to think about this. Andrew Dilnot can think of
another case, if he wants to come forward with one.
(Mr Dilnot) I was thinking of the post-war period,
with the introduction of the Butler Act on education.
77. That was in 1944.
(Mr Dilnot) The Act was in 1944, so that the spending
was in the late 1940s and early 1950s.
78. Since the post-war economy was unwound,
can you think of another such increase?
(Mr Dilnot) No, public spending as a share of GDP
grew rapidly effectively from 1948 to 1975.
79. You have not listened to me. You are challenging
me on something I did not say. I am talking about the biggest
single increase for a specific issue or a specific policy in spending
that I can think of since the war. I acknowledge that there were
these big increases just after the war. So I would like to change
what I said and make it 50 years, therefore I am nicely covered.
Then I can go back to Mr Appleby. We have this massive increase
which I feel that the Wanless Report has singularly failed to
justify. We all feel there is something wrong within the NHS,
but we would all like some more objective messages about what
really is wronglife expectancy falling, the mortality rates
not that different across the board. The subjective measures also
show people are about as happy in Britain as they are in France,
they are rather less happy in Italy, they are rather more happy
in Germany, and the Euro Barometer survey has shown that has been
consistent over many years. It is also consistent with what a
survey has shown when people come out of the St Richard's Hospital
in my own constituency, they have a very high satisfaction rate,
though one should not draw too many conclusions from anecdotal
evidence. If we are transforming policy in this particular area,
if we are spending more money on a single issue than we have for
over 50 years, I would like some harder evidence that something
really is that wrong and needs such dramatic action. I cannot
help being drawn to the conclusion that part of the demand for
these polices, part of the reason for them, derives from politics
rather than from health economics, but I was hoping you were going
to disabuse me of that fact, that you would come forward with
some hard statistics to show me that there are some reasons as
to why that is fundamentally wrong. I will give you another go.
What are they?
(Mr Appleby) There are a number of points. One of
the things that we want from the King's Fund is for the Treasury
to publish all the data and all the models that Wanless has used
in arriving at their figures. As I was saying earlier, it is actually
very difficult from the published report and data to work out,
as you are hinting at, a justification for these suggested spending
paths for the NHS over the next 20 years. So that is the first
thing. It is very difficult to comment on these things, because
we just do not know. I do not know how they have costed out reducing
the waiting times, because that is clearly a big element. I do
not know how they have factored in improving quality in general
in the NHS, it is not clear from the report. So my plea would
be for the Treasury, in a spirit of answering this, to publish
the data, publish the models, and I think that would actually
start to improve the work behind this. I think Wanless has undertaken
a heroic thing here. You could say the whole fundamental issue
of how much you should spend on healthcare does not have a right
answer, does not have a technically correct, objective answer
that is out there somewhere if only we gather enough data and
compare ourselves in the correct way with other people. In the
end, it is a value judgement, it is a political judgement. What
Wanless has tried to do is, in a sense, set the broad parameters
as to where that judgement should fall. At least Wanless has not
fallen into the trap of going into two or three decimal points
in the figures. Throughout the report he states his uncertainty
of the figures, his uncertainty of the analysis and so on, but
this is the best that can be done. My personal view is that one
way out of this dilemma of trying to make some suggestionsbecause
clearly a decision has to be made about how much we spend, and
some justification has to be constructed to defend the decision
madeis that we can do no worse than compare ourselves with
international benchmarks. That is one way of doing it. For instance,
we know that there is actually a very strong relationship between
how much a country earns in terms of its GDP and how much of its
earnings it spends on healthcare. If you plot the healthcare spend
against the GDP per head, then you get quite a strong relationship.
We can fit the UK on there and we can see, in a sense, how far
below that we expect to spend, given how much we earn as a country.
That is one way of doing it. That can supply another set of guideline
figures, but I am not convinced that