Budget Process 2004-05
The second item on the agenda is further consideration of the budget process for 2004-05. As previously agreed, we will consider issues surrounding performance assessment in health, in the context of how what has been learnt in health can be applied to other areas of the budget.
I welcome Dr Andrew Walker and Professor Kevin Woods from the University of Glasgow. Members will have received copies of the written submissions from both Dr Walker and Professor Woods, and I shall offer them both the opportunity to say something in addition to what they have written. Perhaps Andrew Walker can go first.
Dr Andrew Walker (University of Glasgow):
Thank you for inviting me. In my written submission, I initially tried to explain roughly what the performance assessment framework is, just in case anybody was not clear about that. Members will probably have gathered from listening to the previous witnesses that Alistair Brown, who was sitting at the far end, is the man who is responsible for that. Perhaps the committee should have kept him here and quizzed him as well.
Most of the health services that we know and love locally are provided through 15 geographically defined NHS boards, and the performance assessment framework is how the Scottish Executive Health Department checks that the 15 local health boards are doing their job and are meeting the targets that are set down for them. Alistair Brown said that there are around 90 numerical quantitative indicators. I think that there are about 109 indicators in total, so there must be around 20 qualitative ones. The number grows quite a lot from year to year.
In my written submission, I tried to set out for the committee what all those indicators are so that members know what we are talking about when we talk about the PAF. You can imagine that, when everything is added together, it amounts to quite a chunky set of data. Numerical indicators are available on the Executive's website, although the qualitative ones are not currently available.
There are seven different headings. The first one is "Health improvement and reducing inequalities", which covers mortality rates, smoking rates and so on. The second heading is "Fair access to healthcare services", where we would have our waiting time targets and the number of GPs. The third heading is "Clinical governance, quality and effectiveness of health care", and that is where we would have NHS Quality Improvement Scotland's standards. The fourth heading is "Patients' experience, including service quality", which is largely assessed by boards themselves against Executive strategies to see whether or not they are achieving those aims.
The fifth heading is "Involving public and communities". Again, that is largely self-assessed by health boards against pre-defined Executive criteria. The sixth heading, "Staff Governance", falls into the same category, as it is largely self-assessed. Under the seventh heading, "Organisational and Financial Performance Efficiency", there are a variety of things such as length of stay and financial indicators.
One of my other hats is as budget adviser to the Health Committee. I was an adviser on the budget two years ago and I am an adviser this year as well. When the minister gave evidence to the Health and Community Care Committee a little while ago, he said that the PAF was part of a change in the culture of the NHS that would look for improvement in a transparent way. He suggested that the framework would pick up problems prospectively—I am not completely convinced by that—but he emphasised that the process is evolving. He said that the PAF is not completely perfect at the moment but that it is moving on. By and large, I think that that is a fair assessment.
On the impact of the PAF, the oral evidence that health boards gave to the Health and Community Care Committee certainly suggests that the framework is quite central to their thinking. When Lothian NHS Board and Highland NHS Board gave evidence to that committee last year, they certainly said that the framework was right in the middle of their thinking. As the career path of NHS managers might well depend on how well they hit a lot of the targets, one imagines that the framework will be very central indeed to the thinking of the management team.
I had not really thought about this until I wrote the document, but it is interesting that not many people beyond the small NHS world that I partly inhabit are aware of what the PAF is. When the latest delayed discharge figures came out the other day, people in the Parliament obviously wanted to comment on them, but when there is a big data release for the PAF, I do not see the Parliament being flooded the next day with questions about different indicators and why different boards behave in different ways. The Parliament may be at least partly aware of the PAF, but the public is hardly aware of it at all. I realise that the nature of the scoring for the indicators is quite technical—the statistical methods are appropriate, but they are quite hard for the lay person to understand. The fact that we have not gone down the English route by producing league tables and traffic-light performance systems, and the fact that the qualitative assessments are not publicly available might suggest that the Scottish Executive Health Department sees the PAF, at this stage of its evolution, largely as an internal management tool.
If I may continue to speak from the NHS point of view—in a previous incarnation, I was a health economist at Greater Glasgow Health Board—I think that it is helpful for a health board to know what it is aiming for. When a health board gets its annual assessment from the Health Department, it is helpful to know exactly what will be discussed, what data will be available and what the evidence base for reaching decisions is. That is terrifically helpful.
My concern about the PAF is, first, that largely it still compares performance with national averages. For instance, if Scotland does not compare very well nationally for a particular type of cancer survival or a particular smoking rate, it may not be a terribly challenging or desirable target to reach the Scottish national average. It would be good if we could progress to more absolute targets about reducing things. Once boards have reached the Scottish national average, there might a tendency for them to think that they are now in what might be called a comfort zone, although if we take a step back, we might say that that is not really a very good comfort zone.
In a previous evidence session, a question was asked about what the highest priority was. When the minister gave evidence to the Health and Community Care Committee in, I think, November 2002, he admitted that the financial target was still important, on the ground that, if boards did not balance and have control of their budgets, they would find it hard to do everything else. Having seen Tayside's example, we would probably accept that.
When the minister was in front of the Health Committee last week, he picked out service redesign and public involvement as two of the key priorities for the next year or two. Incidentally, I notice that those priorities are two of the hardest to measure and two of the ones that it would be most difficult to disentangle from the PAF.
The second perspective I have tried to give is from the health gain point of view. The Health Committee often tries to pin down the minister on the difficult concept of outcomes. When politicians talk about outcomes, they are talking about what I might call political outcomes, such as reductions in waiting times. My training is as an economist, and my idea of an outcome would be better health: do people live longer and do they have a better quality of life? The Executive would acknowledge that that is one of the areas where the PAF is weakest.
If I was looking for more general lessons, I would go beyond the Health Department. Let us not get too bound up in the existing data. Let us try to think about what we want to measure and the ways in which we can measure it, not just about what data we have and how we can divide one figure by another to get another indicator. In that context, although figures such as those on cancer survival rates and post-operative mortality are helpful, they are largely about death and, fortunately, death does not affect most of the people who use the NHS, contrary to reports in the tabloids. A lot of people go to the NHS when they are in pain and want the pain to be reduced. That is not covered as an outcome measure at the moment: how many people's pain are we reducing and to what extent?
The final perspective I tried to give was in my mind as adviser to the Health Committee—I am sure that it is also in members' minds—and is the national budget assessment point of view. I can see that the PAF gives the health service a broad direction of travel, certainly in relation to some long-term targets such as reducing deaths from heart disease in people below the age of 75 by 50 per cent between 1995 and 2010. We can measure and track progress on such a target. A major issue for the Health Committee is what the NHS boards do with the £5 billion that is devolved to them. That takes a lot of the committee's time, as Kate Maclean knows. The PAF gives local NHS boards a broad direction of travel, but it is not integrated with the budget process or linked to expenditure, and it is retrospective, whereas the budget is prospective and looks forward a year or two. We are considering the expenditure plans for 2004-05 and the performance data that we have are from 2001-02. There is a bit of a gap.
As an internal management tool, to try to keep the health service delivering technical efficiency and getting more out of the existing resources, the PAF provides a helpful set of indicators, depending on how they are used. As an economist, I would like to take a step back and would like there to be more information on how many people are getting better and to what extent they are getting better—I call that health gain. That is probably the gap in the information and I hope that we can make more progress on that.
Professor Kevin Woods (University of Glasgow):
Thank you for inviting me to contribute to the committee's consideration of these matters. I submitted a paper and subsequently received a letter from the clerks raising a couple of questions. The first question was whether health spending can be linked to individual objectives and tracked. The second was how the performance management process in health works, and whether it would help with the first question. I would be happy to elaborate on both of those if it would help the committee.
Feel free. That would be useful.
Do you want me to launch into that?
That would be helpful.
I will deal with the first question. The short answer is yes, but it is not straightforward; it is potentially time consuming and costly. The formal name that is given to such methodologies is programme budgeting and marginal analysis. The marginal analysis component is somewhat easier in that all we have to do is obtain information that indicates how people are proposing to use additional resources. The difficulty is in constructing a detailed analysis of the health programme by breaking it down into component parts in terms of the cumulative historical spending.
There is a good example in the public domain of the kind of work that can be done at the margin. I have with me the 2002-03 monitoring report of the south east Scotland cancer network, which includes an annex that indicates what has happened to the additional resources that the organisation received. It sets out clearly the amount that was made available, what was proposed should be done with the money, why that was proposed and what the impact of that spending should be in relation to a number of objectives and targets that have been set for that network. In theory, a similar approach could be taken to any objective.
On the performance management process, it is important to say that the indicator set that Dr Walker has just described is, in a sense, a set of resources that feed the process and help it along. I will try to explain briefly how I believe the process operates.
The Scottish Executive sets the strategic direction for the national health service. It sets targets that it believes are achievable and describes a set of objectives relating to how services should be improved and changed, some of which will have specific targets attached to them. Traditionally, the department has issued priorities and planning guidance on a yearly basis relating to where it wants energy to be devoted. That is how the statement of 12 priorities that was referred to earlier is arrived at.
In addition to that, the department produces a substantial amount of other detailed guidance on the way in which services should be developed and resources should be used. After a local consultation process, NHS boards prepare detailed plans to invest those resources in changes to services in response to that guidance once they know their budgets or based on an assumption of what the budget might be. At that point, the department engages in a process of cross-examination and monitoring of the boards and of testing the proposals through the accountability review process. Those discussions are informed by the evidence that is gathered through the performance assessment framework. The process involves examining the extent to which boards are doing the things that they said they would do and testing the extent to which investment and service development are being linked. It is a cyclical process that goes on throughout the year, culminating in an annual meeting between the department and the NHS board.
Dr Walker, you said that you would expect that your papers would be a puzzle for the committee because they are nuanced and complex and present no easy answers, which is not the sort of thing that politicians are used to. I therefore ask you to expand on two areas.
You said that service redesign, which is currently a major consideration and should be a major driver of management time in the NHS, is not adequately reflected in the PAF and perhaps cannot be. How can we build in sufficient recognition of service redesign over the next five years? We must make progress in that regard as, obviously, one result of that could be considerable health gain.
You suggest that we are in danger of measuring what we have data on rather than what matters objectively, which is health gain rather than politically chosen statistics or mortality statistics that are chosen because they are available. My second question is about how much we know about measuring health gain. The committee can recognise your points, but we cannot drive forward that agenda or propose alternatives to the PAF or the system to which we migrate unless we begin to get clarity about health gain. I do not want to do you a disservice, but your paper only touches on the difficulties of integrating the findings of the National Institute for Clinical Excellence—NICE—and other issues into that.
First, given that service redesign should be a top priority in the next five years, how should that be recognised in the performance management process? Secondly, do we know enough about how to measure health gain and how can we learn more about that and integrate it into the PAF?
Given that the PAF will reflect the impact of elements of service redesign such as length-of-stay shortening and prescribing of different drugs, I would not say that the two are completely at odds with each other. Although we all think that service redesign is a good idea, it is not a well-defined policy and it is hard to know what it means. I am not clear that the exact meaning of service redesign is set out anywhere, which means that, until the policy is better defined, its meaning will be a little in the eye of the beholder. To make a decent performance indicator, we must know exactly what the policy is in a measurable way.
As I have alluded to, the way in which we have handled difficult numbers issues in the PAF to date has been through qualitative indicators, which means that the data are a bit softer. At the moment, the data are not publicly available, although, having talked to colleagues earlier, I think that that is an oversight rather than a deliberate policy. The answer to your first question is that qualitative indicators would have to be used. I cannot see easy ways in which to quantify such a broad and diffuse policy.
Your second question was about how to integrate health gain. At the moment, we concentrate on mortality, because that is an objective measure—observers can usually agree on whether someone is dead. Unfortunately, around 60,000 Scots die per year and about a million use the NHS, which means that there is a considerable mismatch between the number of cases in which mortality is a relevant indicator and the number of users of the NHS. You rightly say that measuring health gain is not as easy as it sounds, although it can sound simple and attractive. My favourite fact about Florence Nightingale is that, 150 years ago, she had a system of classifying patients into relieved, not relieved and dead; today in the NHS we do not have anything so sophisticated.
Economists, sociologists and psychologists have views on measuring health gain. With another hat on, I am an economic adviser to the Scottish medicines consortium, which decides whether to recommend new drugs to the NHS. We ask pharmaceutical companies to make a submission that quantifies the cost and the health gain of new drugs in terms of how many people will be made better and the extent to which they will be made better, either on a pain or disability scale or by trying to combine those into a more general measure of quality of life. Companies achieve that. Ways to measure health gain are already used in our decision making, although I admit that they are imperfect.
That model for new medicines is a good one and perhaps we could consider integrating it into other areas of the health service. I do not advocate measuring outcomes for all the million people who use NHS Scotland every year. I am saying that we should pick out the services that give us a lot of health gain for a moderate amount of money and then monitor how much of those each health board buys. To some extent the PAF does that, in that it talks about, for example, hip and knee replacements and heart surgery. I would like that to be extended to such matters as anti-smoking interventions, which are incredibly cost-effective, according to NICE. I would ask health boards how many of those they are buying, because at the moment they are not included.
At the other end of the scale are services for which the case is not proved or which do not offer good value. Those services should be indicated in the budget and it should be stated that they will not be bought because that would mean spending money for no provable health gain.
There should be a central body that goes beyond NICE and which should have two lists: the first would indicate which services are excellent value for money; and the second would indicate which services are unproved or offer poor value for money. The PAF could then have indicators showing whether local health boards are investing in services in the first list but not putting much money into services in the second list.
Both papers are interesting, as are the tables of indicators, which seem to fall into different categories. There are services that are measured because they are easy to measure, such as the number of particular operations that are performed in a health board area; there are health improvement measures, such as screening and detection, which could have a greater health gain; and there are measures that might prevent people from being ill and having to use the health service in the first place.
The difficulties lie with the preventive measures, which are often not under a health board's control. Also, how robust are the statistics, for example on the proportion of adults who exceed weekly limits for alcohol units? How do we know that such statistics are accurate? We certainly know that people are untruthful about such matters. Another example is the taking of exercise. It is difficult for a health board to influence that, but the lack of sufficient exercise may be the most fundamental aspect of the ill health of the people of Scotland.
We know about such matters because of the data generated through the Scottish health surveys, which are very rigorous. We know the level of confidence that we can have in the results for any particular category.
More generally, it is difficult to measure some health gain aspects because they are necessarily long term. Actions that are taken today might not bear fruit for many years, so it is important to have monitoring services that enable us to assess whether we are making progress. That is why the PAF has a series of indicators that consider health targets longitudinally in order to assess how year-on-year performance is changing.
Outcomes are necessarily long term, but it is possible, through the qualitative process and discussions with health boards, to develop a sense of the extent to which boards are implementing processes that are believed to be valid and to make a difference. The technical jargon we use for such measurement is interim outcomes, or interim steps. What is measured is the number of people who are taking advantage of a particular service that is believed to have a long-term benefit—for example, the reduction of coronary heart disease.
Within the health budget there are four objectives and 14 national targets. There is also a proliferation of clinical guidance and standards for each board. The relationship between the centre and the locality is a fundamental problem. The pressure comes from the centre, but we would all hold up our hands in horror if it were proposed to abolish local boards and local accountability. There seems to be a major structural difficulty in getting a clear idea of what we would term our national clinical priorities and how services are designed at a local level to implement them. Is it possible that there is too much work going on in this area? Dr Walker suggested taking a more targeted approach in our priority areas to assess what is effective, which may not necessarily be the most expensive or the cheapest service. This is where the Finance Committee has a problem when it examines the budget. We look where the money goes and think that the Government is committed to that area because it is spending a lot of money, but that may not be the most effective way.
I think that you are right. I sometimes feel that the Executive, especially when it appears before a committee that is scrutinising it, tends to say that the money goes down to local level and that what is then done with that money is a matter for local decision making. The Executive leaves it to the 15 health boards to make their own decisions and then gets upset when they come to 15 different decisions—hence the postcode prescribing problems. In fairness to the Executive, I say that the group that I work for—the SMC—is about to try to address those problems.
Personally, I do not have any strong feelings on where those decisions should be made, but my training tells me that they should be evidence based. Making one decision centrally in a group such as NICE or the SMC, using the best evidence, at least has arguments to do with economies of scale behind it. The trade-off from doing that is that when the SMC or NICE recommends something and local health boards are committed to spending money on it, neither the SMC nor NICE considers what is being crowded out locally as a result. Glasgow gave the example that funding the multiple sclerosis drugs was crowding out local investments that it thought were more important.
There is no easy way round that trade-off. If the members of the SMC are sitting in a room in Glasgow, they cannot consider the local implications in 15 or more different places. I know that that issue exercises all of us, whether it arises in local government, education or the health service. Personally, I would not mind as long as we had two things: first, an evidence-based decision; and, secondly, some idea of the local crowding out and the local public's views. I am sure that Kevin Woods will say more about that in a minute. We need some way to get the public involved in the priority-setting process, because that is lacking at the moment.
I would like to reflect on what you just said about priorities. I sit on the cross-party group in the Scottish Parliament on ME. No one in the medical field knows exactly what myalgic encephalomyelitis is, yet it costs the economy of this country a fortune. Something has to be laid aside for research on that problem, to see whether we can cut down on that economic waste. People are suffering and no one knows why, or what ME is. The medical profession just shrugs its shoulders and pushes the issue into the corner, which is not good enough.
I would like to go back to the previous point, because there is something that I wanted to add. Inevitably, there is a degree of tension between national and local priorities. That is the nature of the service that we have, with 15 NHS boards with powers of decision making. In addition, there are great pressures on ministers, from institutions such as this one, to change health services from a national level.
The evidence internationally is that when there is a publicly funded health service run by a Government minister and his department through statutory bodies, it is inevitably drawn into more and more sophisticated attempts to measure performance. The proliferation of indicators and measures is observed in nearly every system. There is no short cut. For example, there are always people who want to know a lot about the subject that John Swinburne just raised. If a public health service that seeks to provide a comprehensive service, from dealing with newborn infants to the care of the elderly and treating the terminally ill, is to be held to account—and it is the notion of accountability that is driving the growth in the systems, indicators and processes—there will be a search for more appropriate measures of virtually every aspect of performance.
The Executive has been trying to take a balanced approach and to find a way of measuring aspects of the service without bringing the system to a grinding halt through people having to continually feed information upwards.
Am I right in saying that the existing mechanism in the PAF for reporting back to the boards is an annual letter?
That is the outcome from the accountability review process.
The letter is from the minister or the chief executive.
It is usually from the chief executive of the NHS.
It goes to the local boards and tells them where they stand and the areas in which they need to make improvements. If that is a two-way process, it might be an area where we can gain a bit more understanding about local pressures and the crowding out that Dr Walker talked about.
Indeed. It is a two-way process—a dialogue. The final paragraph in my submission says that the indicators should be regarded as a tool for informing a process of dialogue and discussion. They should be prompts that cause people to reflect on what is happening and take appropriate action. In a sense, the review meeting is the pinnacle of that process. The board and the chief executive come together to consider the extent to which progress has been made, using those indicators to inform the process.
How much is that review about boards having to correct areas where they have not done what was agreed or have not performed well during the past year, and how much is it about how they will be operating during the year ahead? In your evidence, you said that there is no equivalent. That is the forward planning and the proactive work.
In my experience, the process is a combination of two things. There is the backwards look—the process of accountability that asks how the local boards did. That might well lead to challenging discussions. The other component of the discussion is what the boards propose to do in the forthcoming year and how they intend to use the resources that have been given to them. They are asked to show how they intend to make investments and use resources to further the agreed objectives. That is where we get into the detailed scrutiny of local plans. The letter from the chief executive of the NHS generally contains both those components in that it looks back as well as forward.
Professor Arthur Midwinter (Adviser):
I found both presentations to be very helpful to the committee's struggle to develop the performance side of the budget. They gave us some insights for next week's meeting, when we will try to sharpen up the performance information that we get.
I have a question for Andrew Walker and one for Kevin Woods.
There are indicators in the budget for falling death rates from cancer and other diseases. The technical support notes suggest that there has been annual improvement in those rates each year since 1995. Despite what Andrew Walker said about measuring death, can we assume that those figures are a reasonable proxy for improvement in health given that standardised mortality ratios are used as such a proxy in other aspects of health care? Would we be justified in making a link between the additional resources that have been allocated to the health service during the past six or seven years and those improvements?
The health improvement measures for long-term reductions in mortality are in the budget. The rates are improving year on year and the Executive says in the draft budget that it anticipates that the 2010 target will be met.
Are the mortality figures a proxy for health gain? They show a long-term trend that arguably pre-existed the setting of the target for the fall in premature heart disease and cancer mortality, which we think has probably come about because of a gradual decline in the smoking rate and a gradual improvement in the diet and wealth of society. They probably also show that we have got our act together on heart-disease services, such as the use of statins—drugs that lower cholesterol levels—and the number of interventions that we do for people who have heart disease. However, cardiology is only one area of the health service. Although we can say that it is going well, as Mr Swinburne said we have to consider the ME service, the multiple sclerosis service, the chronic pain service, the rheumatoid arthritis service, the asthma service—arguably—and the diabetes service. Nothing in the mortality stakes will help us with that. The trick will work for particular areas of the service. It is arguable that it might work for cancer and oncology, but there are big areas that it will not work for and that is what I am trying to get at.
The difficulty that is raised is the issue of attribution. Death rates might be going down and investment might be going in, but we cannot be absolutely sure what the connection is. The best that we can do—this is a perfectly reasonable line to take—is to plan investments in accordance with the evidence that suggests that if we do X or Y, it should have a beneficial impact, perhaps some years down the track. There is an increasing amount of evidence about what should be done in relation to a number of health objectives and targets. Time may show that some of that evidence is not as good as it might have been, but the best that we can do at any particular time is to plan investments in accordance with the evidence base and observe what happens.
My second question relates to the issue of attribution. As you were speaking, I thought back to lectures that I had heard on decision making and the notion of a black box. That is what the Finance Committee faces with the budget plans. We get sums of money, targets and statements that the ministers cannot say how the money will be spent when it goes to the health boards. Conventional economic theory might suggest that if we get the inputs and put them in a black box and the outcomes are okay, we have nothing to worry about.
What I found really interesting was hearing you describe how the PAF operated. If I have picked you up right, it is not just about the indicators but about the discussion round them. That stage is missing in our process. We have a spending review process, the grand launch of the document and the indicators, but we do not have a meeting with the ministers at the end of the process where we can discuss informally how things worked in practice, in the same way that you had meetings with the boards in your health service days. In the light of your experience working in the NHS, do you think that that would be practical for us?
I had a notion that the PAF might offer us lessons and, having heard what you have said, I am almost convinced that it does. How would the department feel? I am not asking you to speak for the department, as that would put you in a different position.
I would be cautious about doing so. The PAF is an information source. What you are driving at here is that it serves a set of management processes between the department and the boards. The point to emphasise is that the dialogue continues throughout the year. There is an annual meeting, but if you were to go through the detail of the qualitative indicators in particular, you would see that the department indicates the frequency with which it will engage in formal discussion through monitoring visits and so on with the individual boards. I have not bothered to tot up how many visits there will be, but it is safe to assume that NHS boards will receive many visitors from the Executive inquiring about a particular aspect of performance. That is the only way in which that can be done. To that extent, the PAF is quite a costly process.
To answer the latter part of your question, I am not sure, but I suspect that Mr Chisholm might say that he continually appears in front of the Parliament to give an account of his stewardship of the NHS. I am not sure that I would like to comment on whether there should be engagement in a more detailed process.
Towards the end of the process, if the Executive has flagged up certain indicators as targets, it would seem perfectly reasonable that we should want to see whether progress has been made against those targets before going on to a new spending review process.
I can well understand why you may not want to speak on behalf of the department.
We talked earlier about the link between objectives and spending and whether it was possible to make such a link. Having been through one and a half rounds of the budget process with the Health Committee, I can say that that has been incredibly difficult to do.
When the Health Committee took evidence from the chief executive of the NHS in Scotland last week, he admitted that the Executive does not know how much the waiting times policy will cost in total. The Executive knows what the cost is for the waiting times unit and for the Golden Jubilee hospital, but the amount that is spent on waiting times at local health board level is not known. This committee's experience from this morning, when it tried to find out the cost of the National Health Service Reform (Scotland) Bill, reflects entirely the experience of the Health and Community Care Committee two years ago and, probably, of the Health Committee this year. The line from the Executive is always, "We give £5 billion to the health boards. What they do with it after that is within their control. We do not know the exact details of that, although we obviously set targets." I just wanted to make the point that it will not be as easy as we may think to link objectives and spending.
In view of the time, I will keep my question brief. The submission from Kevin Woods seems to be a plea for a more balanced view of performance. As he points out, there is clearly a tension between striving for ever-greater sophistication of the performance measures and not undermining the motivation of staff within the service. Julian Le Grand's comments on that issue are pointed out in the submission.
I do not invite Kevin Woods to comment specifically here—we have neither the time nor, indeed, the information—but his submission seems to hint at a reform of the draft budget's 13 targets over the medium term, so that we capture a more whole and balanced view of performance. I simply say that that matter is of interest to the committee and I ask him to keep us in touch with that as that work evolves. However, I do not know how much further we can take that issue just now.
The issue that Julian Le Grand points to is the scale, weight and style of the process. As I say in my paper, information that can be extraordinarily valuable in helping people to chart how they are getting on becomes—some have said—a stick with which to beat them, which undermines the intrinsic motivation for doing a job very well. That issue needs to be thought about carefully. The Executive has produced what it calls a performance incentive framework. The framework is in its early days and so perhaps it should not be judged too soon, but it signals an awareness of that danger. It is welcome that people are alert to that set of issues.
In a sense, the issue was put very neatly in a letter in this morning's edition of The Times, which I will quote from if members do not mind. The context is the suggestion that GP performance should be published. The letter comes from a GP in Northumberland who writes that GPs in Northumberland have voluntarily been comparing and publishing their performance for some time. They chose to do that. The letter states:
"This was implemented by GPs themselves when they were part of the Primary Care Group, and not at the diktat of politicians or managers.
This has resulted not in any mass exodus of either patients or doctors from those practices at the lower end of the scale, but rather in a spirit of friendly competition between the individual practices."
The interesting point—which is the argument that Julian Le Grand makes—is that those people have voluntarily chosen to put powerful information in the public domain and to use it for the purposes of continuous performance improvement. The practitioners have reached that decision themselves; they have not done so in response to top-down pressure.
In the literature on performance management and performance assessment, a number of people have flagged up the danger that such things might turn from being useful devices that support intrinsic motivators to become things that are punitive and that undermine the sense of vocation and commitment that is vital to continuous improvement.
That is a valuable point.
I am interested in what you said about putting information in the public domain. I am also interested in how the burden of seeking health gain can be spread and how its achievement might more readily be progressed. Have you any thoughts on how best to produce, present and publish outcome data and recommended best practice to encourage health boards, GPs, employers, individuals, schools and other entities whose activities impinge on health care to do the right thing in order to maximise the chance of optimal future health care?
Through the Scottish medicines consortium and partly through NICE, we already have systems that have started to do that. Things get formalised in guidelines, then NHS Quality Improvement Scotland comes along and checks up. I argue that our approach should be much more fundamental. New medicines might make up—I am guessing—between £50 million and £100 million of the NHS bill every year. Although they are very important and attract a lot of attention, they are actually quite a small part of the story—there is a whole lot more going on out there. I advocate a system that starts to work through all our existing services and which puts them into different lists according to how much we should invest in them.
For three years, we had the Health Technology Board for Scotland, whose style of working was to spend a lot of time getting together a very weighty report—in three years it produced about six assessments. What was needed was much quicker working in slightly less detail to produce a much wider range of health technology assessments, so that we could start to see a wider range of health gains. In a way, we might have lost that opportunity because of the style of working that was selected for that organisation.
In addition to medicines, do you see there being an equal, or maybe even weightier, emphasis on nutrition, good diet and exercise?
Absolutely. The old adage about an ounce of prevention being worth a pound of cure is backed up by most of the economics that we know about. NICE says that anti-smoking interventions are among the most cost-effective approaches that we can take. Dispensing drugs to people in the last days of their lives is one of the least cost-effective things that we can do, but we continue to spend money on those drugs for humanitarian reasons. The performance assessment framework would ideally encourage health boards to stop people smoking and perhaps place less emphasis on putting drugs into people who are basically dying.
Is it possible, from an economist's point of view, to assess the balance of advantage of different forms of expenditure and to build that into how allocations are considered?
I think so. As a result of last year's budget, the Health and Community Care Committee asked the Health Department to start to examine the different programmes in the budget and to say what the outcomes of those programmes were. That way, when the Finance Committee asks us the perfectly reasonable question about what would happen if we moved £100 million from one part of the budget to another, we would know what we would gain in the programme that benefited and what we would lose somewhere else.
For some reason that we are not quite clear about, that recommendation seems to have been lost along the way, but I can guarantee that it will be repeated again when our paper comes to you in a month's time. Without it, we will be using our instincts and judgment as to the right thing to do. Our instincts and judgment may be well-motivated, but they do not give us a sound evidence base for the outcomes for the health of the population of Scotland.
The key point that Dr Walker has just mentioned is evidence, of which there are varying levels. We know rather more about what works in some areas than we do in others. The evidence base needs to be expanded to enable us to consider the trade-offs that were described. On the other hand, it is sometimes difficult to say that we will do nothing until we have the evidence. There might be good theoretical grounds for proceeding in a particular way, and it is important that we proceed in a way that enables us to evaluate and test the impact of the changes in order to add to the evidence base.
Is it not the case that the quality of evidence that can be gathered about, for example, mortality or the causes of mortality is of a significantly higher technical level than the evidence that we might have about the effectiveness of various health solutions? Michael Marmot produced a paper that identified and traced exactly the causes of various death rates and health outcomes internationally. However, less effort is put into examining localised health solutions and the effectiveness of particular types of intervention, whether smoking cessation, exercise or whatever.
It is easier to be precise about evidence when the outcome evidence is either "dead" or "not dead". Unfortunately, the illnesses that most of us will deal with in our lives are of a chronic nature and will be to do with pain, immobility and so on. While it is more difficult to gather evidence relating to those areas, it is arguably more important to do so, as they will affect more people to a greater extent.
Where there is good-quality evidence, it should guide investment decisions. However, where there is uncertainty, the Health Department has tried to reach a view based on advice, opinion and so on, while recognising that that evidence might not be as good as evidence gathered through clinical trials, for example. National statements about cancer, heart disease, mental illness and other such priority areas will be based on a blend of evidence that is underpinned by high-quality research but which also reflects a consensus of interventions that show promise and which are believed to be the appropriate way forward.
My point is that, especially when interventions are being tried in an experimental way, there should be a framework that enables the evidence base to be extended and improved.
I am indebted to both witnesses for the stimulating discussion that the paper and their evidence have produced. However, I am unclear as to the utility of what is being proposed. In particular, I am unconvinced about the idea of adding more performance assessments to the 109 indicators that we already have. Obviously, more staff would be needed to administer the assessments and, as paragraph 7 of your submission indicates, possibly even a new quango.
I wanted to put forward what seems to be a fundamental criticism of that approach. In paragraph 6, you say that, while the NHS can tell when people die, when they go into hospital and how long they spend on a waiting list, it cannot tell whether people get better. Once I go to my GP, I will go back to my GP until I am better, dead or have received a clear prognosis. The same applies to going to hospital, because people return to the hospital as outpatients. I presume that we accept that the vast range of medical treatments, whether they are acute or primary and whether they involve operations or drugs, are effective—we are a long way from leeches—and that, if they are not effective, there are systems to deal with that, including disciplinary and other internal procedures.
Paragraph 7 of the submission says that
"we need a clearer national view on which services are particularly cost-effective".
What would be the point of such an exercise and how much would it cost? As it would inevitably add to the cost of administration, would you at least accept that there is a strong argument that the money would be better spent directly on treatment or, as Mr Swinburne said earlier, on research into those serious conditions, such as ME, for which there is no cure? I am afraid that I am a bit of a sceptic, but if you could give a specific, clear example of a new indicator that you would like to be used, which would add to the common weal and which would be money well spent, I would be most curious to know what that is.
On what you said about adding to the number of indicators, I would be happy to get rid of some if you would like, although it is not in my power to do so.
Perhaps you could tell us later which ones. That sounds like a good idea.
To me, it is all about outcomes; it is not so much about processes, inputs and so on. If the patient gets better, that is the point of it all. A lot of this is about outcomes that are not specific.
You said that, if you had a problem, you would go back to your GP until you were better, dead or had a clear prognosis. My comments sprang from the experience of the health service of a number of friends and relatives who had more or less unsatisfactory outcomes. Their experiences were of, for example, back pain and being diagnosed with diabetes. The people concerned were certainly not dead and were probably given a clear prognosis, but, in my judgment, they were not in the best health that they might have been in had they received the best service that they could have got. There is perhaps an issue of quality and of whether people are getting the best outcomes that they can.
I understand that point, and I do not mean to belittle those experiences in any way, or to simplify them. Some people will of course be dissatisfied or unhappy if some pain remains. However, given the difficulties that Dr Murray has described with the subjective nature, sufficiency and reliability of data, I am not sure about how the existence of a new performance assessment framework would help your friends who felt that they did not get the top service that we would all like them to have received.
I understand that. You questioned the cost of having another quango, and I accept the Parliament's sensitivity to the idea of further quangos. We are spending £7.5 billion of taxpayers' money, so it must make sense to spend a very limited amount of it on a means of ensuring that the funding is spent in the best way. At the moment, it is hard to resist the introduction of a new service, and it is difficult to make checks or to question its cost-effectiveness right at the outset.
The most cost-effective measures that we know about in this area are probably anti-smoking interventions; one of the least cost-effective measures in terms of health gain for money spent is probably beta interferon, the drug for multiple sclerosis. If I had £1 million to spend, by my conventional way of measuring health gain, I could get at least 100 times as much health gain from anti-smoking interventions as I could get from spending that money on beta interferon for multiple sclerosis.
I think that we would accept that, but how would gathering data result in more people giving up smoking?
Because I am arguing for funding interventions by health boards that will help people to give up smoking. We have measures of proven effectiveness that NICE has evaluated, such as nicotine patches. How much are health boards putting into those measures to ensure that they are actually available to people? The measures are not in the performance assessment framework, but I am arguing that they should be in it. How many such processes of proven cost-effectiveness are health boards buying?
The health service is incredibly complex. If we rely on performance management processes of the sort that I have described, there will be an increasing tendency to want additional indicators to inform assessments of performance. One area in which more might be done is the patient experience of the health service. That is not necessarily the same as the performance assessment framework per se; I am referring to a means of informing local services about how well they are doing. Some of the examples that the committee has just touched on might be relevant to that.
There are some valid, useful techniques around to support change processes locally. I am not talking here about patient satisfaction questionnaires, which generally show high levels of satisfaction; I am talking about techniques that allow us to discover the experience of the health service that patients have had. Without wishing to create an additional layer of bureaucracy or anything like that, but taking into account the balance in the current range of indicators, I would say that more might be done in using indicators that deal with patient experience to support local change processes.
John Swinburne will ask the final question.
The discussion has been stimulating and interesting. My generation would be better served if the Executive would take a quarter of it out of poverty; that would do more to help the health care of that quarter of a million people in Scotland than would anything else. Some of the money that is available should be pushed in the direction of taking my generation completely out of poverty.
That is a rhetorical question.
There is no answer to that, by the way.
I thank the witnesses for coming along. We found the session stimulating.