Supplementary evidence by the Department
of Health (PE 2)
NHS FINANCE
1. Which SHAs are in deficit? (Dr Taylor,
Q15)
The information requested is provided in the table
below.
(Deficit/Overspend)
Surplus/underspend
|
Provisional
Accounts
Total
| Total
Revenue
Resource
Limit
|
% Under/
Overspend
|
| SHA Name | £000s
| £000s | £000s
|
| Norfolk, Suffolk and Cambs | (10,373)
| 2,148,833 | -0.48 |
| Bedfordshire and Hertfordshire | 2,088
| 1,479,170 | 0.14 |
| Essex | 3,320 | 1,506,212
| 0.22 |
| North West London | (12,923)
| 2,248,023 | -0.57 |
| North Central London | 11,375
| 1,631,732 | 0.70 |
| North East London | 9,083 |
1,874,964 | 0.48 |
| South East London | 4,332 |
1,985,018 | 0.22 |
| South West London | 6,819 |
1,350,976 | 0.50 |
| Northumberland, Tyne and Wear | 8,489
| 1,737,446 | 0.49 |
| County Durham & Tees Valley | 1,207
| 1,321,101 | 0.09 |
| N & E Yorks and Northern Lincs | 1,666
| 1,558,352 | 0.11 |
| West Yorkshire | 4,825 |
2,332,259 | 0.21 |
| Cumbria & Lancashire | 4,345
| 2,356,399 | 0.18 |
| Greater Manchester | 13,233
| 2,948,893 | 0.45 |
| Cheshire & Merseyside | 9,990
| 2,693,646 | 0.37 |
| Thames Valley | 10,124 |
1,944,384 | 0.52 |
| Hampshire & Isle of Wight | (9,235)
| 1,714,173 | -0.54 |
| Kent and Medway | (4,702) |
1,505,496 | -0.31 |
| Surrey and Sussex | (5,342)
| 2,605,188 | -0.21 |
| Avon, Gloucestershire & Wiltshire | (4,231)
| 2,218,894 | -0.19 |
| South West Peninsula | (14,210)
| 1,605,089 | -0.89 |
| Dorset & Somerset | 8,735
| 1,174,011 | 0.74 |
| South Yorkshire | 8,944 |
1,537,005 | 0.58 |
| Trent | 10,957 | 2,633,335
| 0.42 |
| Leics, Northamptonshire & Rutland | 4,738
| 1,414,121 | 0.34 |
| Shropshire & Staffordshire | 3,423
| 1,389,603 | 0.25 |
| Birmingham & the Black Country | 617
| 2,518,252 | 0.02 |
| West Midlands South | 5,238
| 1,451,903 | 0.36 |
| Total | 72,532
| 52,884,478 | 0.14
|
| | |
|
2. Details about allocation of extra funding to growth
areas of Thames Gateway, Stansted Corridor, Milton Keynes and
Ashford. (John Austin, Q21)
The Department of Health has given its backing to providing
a proper health service infrastructure to support the development
of Sustainable Communities with access to high quality health
services.
The Department has agreed to provide an extra £20 million
of revenue funding in 2004-05 and 2005-06 to be allocated to Primary
Care Trusts (PCTs) and £20 million of capital resources in
2005-06 to be allocated to Strategic Health Authorities (SHAs).
The additional £20 million has been allocated to PCTs
pro rata to the number of net additional dwellings in the Growth
Areas over the past three years weighted by the Market Forces
Factor. Data on the number of net additional dwellings has been
provided by the ODPM and is considered the best available data
to use.
This additional funding is specifically targeted at the ODPM
Growth Areas (Thames Gateway, Milton Keynes/South Midlands, Ashford
and London-Stanstead-Cambridge).
3. Details about changes in market forces factor banding
system, and specifically when these are likely to be introduced
(John Austin, Q49)
In order to be equitable, the weighted capitation formula
takes account of the fact that the cost of providing healthcare
is not the same everywhere. The Market Forces Factor (MFF) equalises
the commissioning power of PCTs by adjusting for unavoidable variations
in NHS Trust costs directly related to location.
The Advisory Committee on Resource Allocation (ACRA) makes
recommendations on any changes to the weighted capitation formula,
and also looks at issues of equity in resource allocation. The
development of the MFF has therefore been overseen by, and reflects
recommendations made by ACRA.
Work has commenced on the next round of allocations, which
will cover the period up to 2007-08. ACRA has held a series of
meetings to look at specific areas in relation to the next round
of allocations. One of these was to review the MFF in relation
to Payment by Results (PBR).
The Department of Health is now considering these recommendations
in relation to the next round of allocations.
TREATMENT OUTSIDE
NHS
4. What is the current unfunded spare capacity in NHS
treatment centres, including NHS Elect? (Dr Taylor, Q74)
In the financial year 2003-04, for the four treatment centres
which are members of the NHS Elect network (Central Middlesex
ACAD; Ravenscourt Park; Kidderminster; Weston-super-Mare) management
information shows that they were working at 81% of their planned
activity. So far in this financial year (to August), management
information shows that they have working at 78% of their planned
activity.
Treatment centres play a vital role in helping the NHS to
meet waiting times targets and offering increased patient choice.
PCTs commission services from them as appropriate to meet the
needs of their local populations.
EXPENDITURE ON
INDEPENDENT SECTOR
PROVIDERS
5. Estimate of the total cost of using the private sector
to treat NHS patients over and above what it would have cost had
they been treated in the NHS, since the introduction of the concordat
with the private sector (Chairman, Q93)
The total expenditure on the purchase of healthcare from
non-NHS bodies was £2.3 billion in 2002-03.
We can only make direct cost comparisons for expenditure
that is covered by the 2002-03 reference cost data. This shows
that for £100 million of activity purchased by the NHS from
the independent sector the equivalent NHS cost would be £70
million, so the premium for commissioning this activity from the
independent is £30 million. We would expect this disparity
to reduce considerably as longer term commercial arrangements
between the NHS and the independent sector for the treatment of
NHS patients come on line. This activity principally represents
purchasing under traditional short term and low volume arrangements
from the independent sector. Similar data will become available
for 2003-04 with the publication of the 2003-04 reference costs.
6. Information about the cost of NHS patients being treated
in the private sector by the same consultant who would otherwise
have provided care to them within an NHS setting (Chairman, Q101)
We have no information about the cost of NHS patients being
treated in the private sector by the same consultant who would
have treated them in the NHS. We are aware that some NHS commissioners
are still using spot purchasing with the private sector which
may lead to NHS consultants who also work in the private sector
treating patients in private hospitals. As already indicated elsewhere
the cost of spot purchasing can be as much as 40% higher than
the equivalent NHS cost for the treatment. Through the ISTC programme
and other policies we are seeking to discourage the use of spot
purchasing to improve greater value for money for the NHS when
using the independent sector.
EXPENDITURE ON
PRESCRIBING
7. What estimates has the Department made of the national
economic burden of illness induced by the adverse affects of medicines
overall? What resources has the Department applied to establish
such costs? (Dr Naysmith, Q107)
A recent study, funded by the Medicines and Healthcare products
Regulatory Authority and published in the British Medical Journal,
provides relevant information.
Of 18,820 patients aged over 16 years admitted to hospital
over a six month period and assessed for cause of admission, there
were 1,225 admissions judged to be related to an adverse drug
reaction (ADR), giving a prevalence of 6.5%. Of these 1,225, the
ADR was judged to lead directly to the admission in 80% of cases.
The median bed stay was eight days, accounting for 4% of the hospital
bed capacity. The projected annual cost of such admissions to
the NHS is £466 million.
[BMJ. 3 July 2004; 329 (7456): 15-9 Adverse drug reactions
as cause of admission to hospital: prospective analysis of 18,820
patients. Pirmohamed M, James S, Meakin S, Green C, Scott A K,
Walley T J, Farrar K, Park B K, Breckenridge A M. Department of
Pharmacology and Therapeutics, University of Liverpool, Liverpool
L69 3GE.]
MANAGEMENT AND
ADMINISTRATION COSTS
8. Table of figures showing cost of abolition of CHCs
and establishment of new system of patient and public involvement
(Chairman, Q114)
| Year | CHCs |
CHC
redundancy | CPPIH
set up
| CPPIH total budget
(including patients' forums and
Forum Support Organisations FSOs)
|
| 2002-03 | £23m | 0
| £2.5m | £0.77m |
| 2003-04 | £13.981m |
£15.332m | 0 | £30.192m
|
| 2004-05 | 0 | 0
| 0 | £33.3m |
| | |
| |
PERSONAL SOCIAL
SERVICES RESOURCES
AND ACTIVITY
9. Are Social Security costs quoted in table 4.1.4 gross
or net? (Mr Burns, Q145)
The figures quoted in table 4.1.4 are gross of charges—it
is a total spend including government and client money.
10. Why does Competition Tribunal Decision in Belfast
not apply in England? (Mr Burns, Q158)
BetterCare (an independent provider) alleged that N &
W Belfast Health & Social Services Trust was in breach of
the Chapter 2 prohibition imposed by the Competition Act. The
OFT decision on this does not apply in England because the basis
of the decision was unique to how care homes operate in Northern
Ireland. These considerations do not apply in England. Thus, we
can infer nothing about the operation of the care home market
in England from this decision.
The detail of contracting arrangements between local authorities
and independent sector providers of care is a matter for local
decision. The Department does not set or recommend rates at which
local authorities contract with nursing and residential homes.
We think it is important that local authorities are able to tailor
contracts as necessary to specific local circumstances.
FEES AND
CHARGES
11. Information on the value of and the numbers of people
using charges levied on their estates rather than having to sell
properties to pay for residential care costs (Dr Naysmith, Q176)
There is no detailed information available at present on
the number people using deferred payments, however the Deferred
Payments Grant 2003-04 returns so far show that approximately
£1.5 million worth of care was provided in 2003-04 through
charges placed on homes.
DENTISTS
12. How many NHS dentists are there? What proportion
of their work is NHS work? (Dr Taylor, Q191)
13. How many NHS dentists work full-time for the NHS?
(Dr Naysmith, Q193)
The number of NHS dentists is at a record level. There were
19,300 dentists in general and personal dental services at June
2004 which is 3,000 more than in June 1997. The estimate for the
number of whole time equivalent dentists is about 13,000. This
has been estimated from average fee earnings of NHS dentists.
Dentist numbers will increase by 1,000 whole time equivalent
dentists by October next year.
Measures to increase dentist numbers include an extra 170
training places.
Figures for private work for NHS dentists are not routinely
available and it is not possible to judge the proportion of time
that is spent on NHS work.
Most NHS dentists are self-employed and can do both NHS and
private work. A survey in 2000 found that about 25% of these dentists
spent all of their time doing NHS work. A full breakdown is given
in the table below:
Ratio of GDS: Private work
BASE: ALL RESPONDENTS (1,762)
| % of GDS work | Proportion of dentists (%)
|
| 100 | 25 |
| 90 | 33 |
| 80 | 8 |
| 70 | 5 |
| 60 | 2 |
| 50 | 3 |
| 40 | 3 |
| 30 | 5 |
| 20 | 7 |
| 10 | 6 |
| 0 | 1 |
| |
A workload survey of general dental practitioners carried
out in 2000, found that dentists spent an average of 25.13 hours
doing general dental service work. 7.91 hours were spent doing
private work. 1.16 hours were spent on shared GDS/private time.
There was 0.72 hours on other paid clinical time and 3.05 hours
of other dental time with 0.87 hours for travel between workplaces.
FURTHER QUESTIONS
FROM THE
COMMITTEE
1. You have acknowledged the substantial variation in
unit costs between local authorities. You suggest that such wide
variability of individual local authority figures "points
to issues of data quality", and that there is misreporting.
Indeed, this comment recurs throughout your observations on PSS
expenditure information. You also acknowledge that even if the
more extreme figures (which may be incorrect) are discounted "significant
variation remains". Firstly, what are you doing to address
issues of data quality and misreporting? And secondly, could you
indicate what you believe lies behind the existing variation,
which persists even when more extreme figures are discounted?
To what extent does this indicate supply-side problems, and how
much is it a failure of local authorities to adequately manage
the market?
Firstly, we are improving validation procedures but improvements
in the resulting data are still dependent on councils responding
to queries raised and supplying amended data where appropriate.
For some councils residential and nursing care costs are
distorted by the inclusion of cases of care provided by the NHS.
These are being separately identified from 2003-04 onwards.
The unit cost of home care is calculated by dividing the
annual expenditure by the hours of home care provided in a sample
week. From 2003-04 we are also calculating a cost based on annual
home care hours for those councils that can provide the information;
this will remove any error arising from the fact that the sample
week may not be typical.
We would expect to see variations in the provision of social
care across the country, both in terms of actual provision and
the cost of that provision. This is because input costs, levels
of dependency and market conditions vary across the country. For
example, it costs more to provide the same care service in London
because of higher wages and in areas where there is an undersupply
of provision, and in rural ares with high travel costs.
However, local authorities are expected to commission care
services that deliver Best Value. Best value is the key element
in our agenda to improve the quality of all local authority services,
including social services, and the efficiency and economy with
which they are delivered. Best Value will ensure that local authorities
commission community care fairly and openly on the basis of a
full consideration of costs, quality and outcomes for users.
Unit costs are taken into account as part of star ratings
assessment of local authority performance. When deciding how many
stars to award CSCI will look, among other things, at the costs
of providing services.
The Department is also working with local authorities as
part of a drive to release £6.45 billion across local government
to benefit front line staff over the next three years. The Care
Services Efficiency Delivery programme was established following
recommendations by the Gershon Independent Review of Public Sector
Efficiency and aims to develop a partnership with local authorities
to improve the quality of services for vulnerable adults and deliver
efficiency gains back to frontline services.
2. In looking at the Performance Assessment Framework for
Personal Social Services, 11 of the 50 indicators relate to cost
and efficiency. Indicators B8 and B12 (cost of services for children
looked after, and costs of intensive social care for adults and
older people) were part of the Best Value Performance Indicators
requiring annual improvements. You indicate that these targets
"have now been withdrawn because of concerns that driving
down costs could damage quality." This is a very disturbing
admission; could you indicate the basis for those concerns and
what impact you believe this has had on service quality overall?
It is important that councils achieve Best Value, this includes
quality as well as cost. They must be able to demonstrate that
the best services possible are provided to their local people,
taking account of both quality and cost. The basis for concern
was that the targets associated with the indicators B8 and B12
were entirely based on cost and may have posed a perverse incentive
to drive down the prices to the detriment of the quality of services
provided.
These indicators are now monitored so that those with very
low costs as well as those with very high costs must review their
performance and ensure that quality and availability of services
are not suffering. Residential homes are inspected and with the
implementation of National Minimum Standards, there are systems
in place to ensure that the quality of services is maintained.
3. There are considerable variations between authorities
in their use of the independent sector although clearly the trend
since the Community Care Reforms of 1993 has been towards greater
use. What—as far as you are concerned—is the policy
on this now? Are you expecting use of the independent sector to
continue to grow and the direct provider role of the local authority
to become increasingly residual or non-existent, and is there
a change in the balance between private and voluntary sector providers?
The policy remains that the balance of roles is to be locally
determined on the basis of Best Value review. There has been and
continues to be a trend over time of provision growing in the
independent sector. Councils are directly providing very few services
in comparison to the total.
The balance between the private/voluntary sector varies greatly
between councils and should be a reflection of the local commissioning
strategy.
4. Your recent planning framework document sets out a new
framework for standards and aims to reduce the burden of targets.
Is there any real difference with the current situation, or are
these changes just superficial? Won't Trusts still have to contribute
towards a large number of current targets, meet old targets that
have been altered into ongoing standards, develop their own local
targets and meet new core and developmental standards?
NHS organisations have made major progress over the last
few years and we can be confident that they will continue to do
so without the same degree of direction from the centre. Therefore,
we are able to take a more devolved approach to planning and performance
management, and to create more headroom for organisation to address
the needs of their local populations.
The Planning Framework represents a genuine reduction in the
burden of national requirements on NHS organisations. It reduces
the number of new national targets for the NHS and social care
by 2/3 from 62 targets in the last three
year planning round to 20 in the next three years.
There is also a shift in emphasis from targets based on input
measures in the previous planning round, to targets focused on
health outcomes and improving the experiences of patients and
service users. Whilst the strategic direction will continue to
be set from the centre, there will be greater local determination
of how to achieve the desired outcomes.
As well as meeting the 20 new national targets, organisations
are expected to maintain performance against existing commitments
and the levels of service that patients have a right to expect.
Altogether, this means there are 20 new national requirements,
nine achieved targets which have become core standards to be maintained
and 11 continuing targets. This contrasts with 62 national targets
in the previous PPF underpinned by capacity assumptions.
The new healthcare standards, included within the Planning
Framework, aim to safeguard and improve standards of quality,
equality and safety across the full spectrum of healthcare to
achieve the levels that public and patients expect from a 21st
century health system. They will, in fact, reduce the burden of
guidance on the NHS by consolidating and clarifying existing requirements.
Core standards set levels of service quality and safety that
healthcare organisations should already be providing. Developmental
standards set the agenda for improvements in quality in all healthcare
services over the coming years.
Performance against the standards will be assessed by the
independent Healthcare Commission from April 2005. It will be
for the Commission to develop assessment criteria and to inspect
NHS organisations' progress against the standards.
November 2004
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