Health and Social Care Bill

My Lords, I appreciate those points and I was coming to some words of comfort for the noble Baroness. Not only could Monitor provide technical advice to Public Health England, provided that that was resourced and managed through the framework agreements and the memorandum of understanding between the two organisations, which would be a given, but Public Health England and local authorities could develop their own tariff, if that is what they wanted to do. I understand the noble Baroness’s concern about the underfunding of sexual health services and that the mandate may not set out enough on that score. Her amendment is clearly a way of ensuring that public health services—particularly this type of service—have an agreed cost attached to them that cannot be varied by local authorities, unless they adhere to the rules around variation. I understand all that. However, what the noble Baroness proposes would significantly increase the remit of Monitor and the NHS Commissioning Board and cut across the roles of local authorities and Public Health England. I will, of course, reflect on what she said, but there are probably mechanisms to deliver the kinds of objectives that she is aiming for. Also on the subject of sexual health services, my noble friend Lady Tonge made some important points. I completely agree with the importance of the issue she raised. It would probably be best if she allowed me to write to her in response. My noble friend Lord Clement-Jones proposed in his Amendment 292ZA that Monitor should include variations to prices for individuals who experience disadvantage or who have complex needs. While I am sympathetic to his intention, this is already provided for in the broad provisions in Clauses 114(4) and 117(1). In addition, the inclusion of ““must”” rather than ““may”” would not provide Monitor with flexibility on when to specify variations and rules. I move on to the amendment of the noble Lord, Lord Davies of Stamford, who argued the case for competition on price, and I listened with interest to what he had to say. Let me explain what we are seeking to achieve. Overall, we want a system of fixed prices, set locally or nationally, that would ensure that competition was based on quality and patient choice, not on price. Only in specific circumstances could the prices determined by the tariff be varied. These flexibilities would not allow price competition but would rather, as I have indicated, prevent cherry-picking, allow innovation and secure continued access to services. Put simply, the flexibilities would be allowed only where the effect was to improve the efficiency or quality of services provided. The Government made amendments to the Bill in another place to make clear that the tariff would not be a maximum price. That is vital to avoid perverse incentives for providers to cut costs at the expense of quality. That is entirely different from the competitive tendering scenario to which the noble Lord, Lord Davies, referred. In that scenario, whereby services would be outside the tariff, it is quite reasonable to evaluate bids in terms of best value, not the cheapest price. Guidance published by the previous Government made that clear. I think that we are closer together than perhaps the noble Lord appreciates, but I am grateful to him for what he said. However, he will know that it was the firm view of the NHS Future Forum that competition should be based essentially on quality rather than on price alone. There is of course a danger that we have a race to the bottom if we go too far down that road. My noble friend Lord Clement-Jones in his Amendment 294M made some telling points. While I am sympathetic to some of them, I can reassure him that agreements for local modification of tariff prices under Clause 122 are intended not to introduce price competition but to sustain the provision of essential services. For example, a local modification may be necessary to sustain provision of A&E or maternity services in a less populated area. It would be inappropriate to remunerate all providers of an essential service at a modified tariff rate without assessing their circumstances on an individual basis. The noble Baroness, Lady Finlay, in her Amendment 294BZA proposed that it be explicit that Monitor, in establishing the national tariff, have regard to differences in costs of patients incurred by providers and differences between services provided. Clause 116 makes clear that when developing the draft tariff for consultation, both the NHS Commissioning Board and Monitor should have regard to the differences in costs of patients incurred by providers and differences between services provided. However, that amendment raises a valid point around whether Monitor should have regard to these differences when publishing, as well as when drawing up, the national tariff. I can tell the noble Baroness that this issue will be given consideration to determine whether further clarity is necessary in this area. I now return to Amendment 292ZA, tabled by my noble friend Lord Clement-Jones. He raised the issue of cherry-picking, which we define as something that occurs when providers undertake only the more simple interventions for less complex patients but are paid an inflated price, based on higher average costs. I hope that my noble friend would agree with that definition. Under the proposals in the Bill, Monitor would ensure that the price paid to providers was accurate and reflective of the services delivered. A comprehensive tariff with more reflective prices will prevent cherry-picking. In particular, Monitor and the board would need to consider among other factors the impact of variations in the range of services provided by different providers and the differing needs of the patients treated. My noble friend again asked why the Competition Commission should be used, and again my answer is similar to the one I gave him earlier. The commission is an expert independent body with experience in considering matters such as this—unlike the OFT. I now turn to Amendment 294AA, tabled by the noble Lord, Lord Warner. It would duplicate what is already stated in this clause, whereby Monitor must send a notice to other persons as it considers appropriate, which may include other clinical groups. Clause 59(8) makes explicit that Monitor must obtain appropriate clinical advice to enable it effectively to discharge its functions. Clause 116(1)(c) provides that Monitor must notify other appropriate persons of the proposed national tariff, which may include other clinical groups. Monitor must publish its consultation containing the draft tariff. As regards Amendment 294BA, the share of supply percentage that triggers a reference to the Competition Commission will be considered in secondary legislation and agreed through the affirmative resolution procedure. The share of supply percentage would ensure that providers of a service made up of only a few providers would still be able to object to a proposed national tariff and therefore trigger a reference for independent adjudication. Finally, on Amendment 291C. I listened with great interest to the noble Lord and am grateful to him raising the point. I agree that the principles of the tariff are extremely important. I am not sure that this is an issue to write into the Bill. I respectfully direct the noble Lord to paragraph 65 of our document Protecting and Promoting Patients’ Interests, which details a set of guiding principles about how Monitor and the board could collaborate to develop the tariff. I hope that I have covered most if not all the points that have been raised and that, with that explanation, the noble Baroness will feel able to withdraw her amendment.