"The Public/Private Mix for Health"

HL Deb 27 April 1983 vol 441 cc969-1004

6.6 p.m.

Lord Hunter of Newington rose to call attention to the Nuffield Provincial Hospitals Trust publication entitled The Public/Private Mix for Health; and to move for Papers.

The noble Lord said: My Lords, the National Health Service has received much assistance from two organisations—the King Edward Hospital Fund for London and the Nuffield Provincial Hospitals Trust. It is to the latter that we are indebted for the report which forms the background to this debate.The Public/ Private Mix far Health will, I hope, do something to still the passions aroused by pay beds in the National Health Service and enable the future to see a constructive collaboration between the National Health Service and private medicine.

In May 1946 there were a number of vitally important meetings between the representatives of the British Medical Association and Aneurin Bevan. These meetings showed clearly the continuing opposition of the BMA to the National Health Service plans. One thing that Bevan agreed to do was to consider more protection for private hospital practice. In spite of opposition from some of his colleagues, he was anxious to encourage consultants to direct their private as well as their public practice in hospital premises by allowing some private beds to be used without any limit on the fees charged by the consultant. He rejected any amendment to the proposed hospital structure.

Undoubtedly this concession made a great difference to the attitude of consultants to the National Health Service. There was clear confirmation of the favourable view to Bevan's proposals in the speeches made by Lord Moran in your Lordships' House. In only a few hospitals were there private wings, and in none a separate administration. Though the system worked reasonably well between 1948 and 1968, there were difficulties, not the least of which was the remuneration of nurses and other staff of the private beds.

The formation of the Department of Health and Social Security in 1968 had no direct effect on this problem, but inevitably this great new department was in the forefront of the political scene. This did not help. Nor did the changing attitude of the trade union movement. I remember in 1970, when I was vice-chancellor of Birmingham University, talking to one of my militant student leaders. When asked what he was going to be, he replied "hospital orderly". In response to being asked why, he said that the future—his political future—was with the health and social services.

In the 1970s we had a situation where two out of three Secretaries of State were interested primarily in the social services, and one at least had profound sympathy for the criticisms voiced against the pay bed situation and private medicine in the National Health Service.

In contrast to this, the present Government have encouraged private medicine, and now there are wild stories that the National Health Service is threatened, that private medicine will ruin it, that private medicine should be squashed, and that a frank objective assessment by the "Think Tank" cannot be examined objectively. Recently, all doctors in the National Health Service have been allowed 10 per cent. of their time for private practice. It is therefore most opportune to have a study such as that conducted by the Nuffield Provincial Hospitals Trust examining objectively the public/private mix for health in the United Kingdom and elsewhere.

It has been said many times that our health service is the best in the world. It is certainly unique. Perhaps no others have copied it because they cannot afford it. One thing is certain: this conflict about private medicine must be stilled if possible. It contributes to tensions and difficulties in an already beleaguered service—beleaguered because it is subject to financial restraints, which restraints are not being rigorously applied on the clinical side of the service. The Royal Commission on the National Health Service said in 1979 that the private sector probably responded much more directly to patients' demands for services, and often provided a useful pointer to areas where the National Health Service was defective.

In the summer of 1981 Dr. Vaughan, then the Minister of State, talked optimistically of change, including change in funding. In the same year the Department of Health and Social Security issued a memorandum of guidance on contractual arrangements with independent hospitals and other forms of co-operation between the National Health Service and the independent medical sector. The bar against co-operation with profit-making bodies was lifted. It is with some surprise that one finds in the report of the Nuffield Provincial Hospitals' Trust similarities, not differences, between the health systems and their problems. The characteristics are that the health market is monopolistic, not competitive, and the primacy of the doctor in making decisions about resource allocation operates in both the public and private sectors; in fact, the most important basic factors are the same.

The current debate about health policy, wherever it takes place, is against a background of severe public expenditure constraints, little knowledge about the efficacy with which health care is produced, and ill-defined distribution goals in the National Health Service. The state, in all Western countries, has given the medical profession considerable monopoly powers to influence the quality and quantity of the service and its own remuneration. The general view would be that the profession has used its powers responsibly and in the public interest, and to some extent in its own self-interest.

In both the National Health Service and the insurance system the doctor has a crucial role as an allocator of resources. In the National Health Service he decides who will be treated, and how. In the insurance system the doctor also decides who will be treated, and how. Because of his training and responsibilities to the individual patient the doctor tends to seek to maximise the benefits of health care without considering cost. As the Secretary of State commented in the foreword to his publication Health Care and its Costs, the costs of treating patients cannot be measured and the figures in the report cannot measure, the human care for each individual patient and the concern for quality that must be central to any health service worthy of the name". This, inevitably, cannot be reflected in the statistics about the quantity of services increasing, as they have done, by 1.6 per cent. a year since 1976. One thing is clear: the main responsibility for cutting costs and improving productivity will lie with the medical profession. Are they really ready and equipped to do it?

The United Kingdom provident companies, about which I think we shall hear a good deal, are not fully developed insurance carriers in that their monitoring and rationing of demand is limited and unsophisticated. In the present limited United Kingdom market for private health care BUPA and the others generally meet all expenditures, and the financial burden on patients is lifted apart from their contributions. If the market for health care expands and insurers carry a wider burden of risk, escalating expenditure will lead to some devices to ration the demands of patients.

The commitment of the National Health Service as defined in the 1948 and later Acts is far wider and more comprehensive than any insurance scheme. There really cannot be rivalry between the two sectors; they are not comparable. But I believe that co-operation and the disappearance of conflict—political conflict—between them is in the interests of all. One has also to recognise the wide role of the National Health Service in preventive medicine and health education. Private health care has little or no part in this sector of the health economy, and it is of the greatest importance. The good health of our country today is the consequence of good public health and preventive measures of the past. The gap created by the loss of the medical officers of health in 1973 still remains to be filled.

The whole field of clinical research and other aspects of curative medicine are based on the National Health Service. Cancer research is primarily supported by the public sector, not the private sector, though much of it is by private funds given as voluntary subscriptions. If one had to identify the greatest needs, they are, first, the equitable distribution of resources with a greater professional, input at all levels; and the radical alteration of the philosophy behind the undergraduate curriculum so that doctors see themselves as having additional wider responsibilities, not just to the individual patient. They are responsible for the use of scarce resources, and though the circumstances are often agonising they must realise that waste means that someone else who greatly needs help gets less. The other skill that they require is linked to the use of resources and the complex delivery of medical care by the different professions, and that is in management.

It is sad to see the discussion about the public private mix for health dominated by oversimplified ideological concerns. The Nuffield investigation shows that whatever the mix-50–50, or 98 per cent. of one or the other—partnership between public and private providers is inevitable. Shifting the public/private mix does not diminish the need to regulate and control resources, and there is a good deal of evidence that partnership can be cheaper. My Lords, I beg to move for Papers.

6.18 p.m.

Lord Wells-Pestell

My Lords, it is always a delight to listen to the noble Lord, Lord Hunter of Newington, because, although we would not see eye to eye on this particular matter, he can always be relied upon to put a case much better balanced than most of us who have, shall I say, very strong opinions. The subject of this debate is of supreme importance in view of the Government's thinking in respect of the future of the National Health Service. I feel at some disadvantage because I was not able to get a copy of the Nuffield Trust report until last Saturday, and I believe that a number of my noble friends are in a similar position. Therefore, although I have read part of it I have been, and am, dependent on a wide variety of comments and observations which one has found in professional journals as well as in newspapers.

I want to make one thing perfectly clear. I do not want there to be any misunderstanding that we on this side of the House are very suspicious of possible Government action and handling of the National Health Service. We need to examine any report and any recommendations from the standpoint of the effect upon the mass of the people. I want to make perfectly clear that we in the Labour Party regard the National Health Service as the most sacred of all cows. It is our sacred cow, and woe betide anybody who attempts to destroy it, even in part. As a result of that, it is no secret that we on this side of the House view the private sector with considerable suspicion and we feel, rightly or wrongly, that, if the present attitude towards private medicine were allowed to develop without control, it could in some measure harm the National Health Service.

The Cabinet Paper which was prepared by the Central Policy Review Staff, which is not available to Parliament, suggests replacing the National Health Service with private health insurance. This would provide health insurance, which in turn would provide savings of between £3,000 million and £4,000 million. This was the suggestion of the Central Policy Review Staff Paper. As I understand it, the suggestion was made to try to stop poor people from under-insuring. It was also suggested that there would be a compulsory minimum of private insurance, not to mention charges for visits to doctors and even higher prescription charges.

I know that that report has not seen the light of day so far as Members of Parliament are concerned, and that to all intents and purposes it has been shelved. However, I understand that the Secretary of State for Health and Social Services has ruled out—I venture to suggest only for the time being—financing the National Health Insurance by insurance.

I was able to get a copy of the Lloyds Bank Review, and I should like to quote from it. It says: Public reaction was hostile and the Conservative Government responded by apparently rejecting this option"— the option of privatisation. It continues: Most people believe that this rejection was a temporary measure, as the Government continue to advocate 'partnership' between the public and private sectors, and various pressure groups continued to demand 'competition' in health care markets, the 'reduction of bureaucracy' and 'greater choice' for consumers". Nevertheless, in a speech to the Members of the Office of Health Economics on the 23rd September last, the Secretary of State made it clear that there should be an alternative to the state system. We need to remember that in health insurance systems rationing is by ability, or non-ability, to pay, and in those cases it is the poor who always suffer. They need the National Health Service and, so far as I can see, will continue to need the National Health Service.

As I say, I have very grave reservations about the private sector. In a democracy I accept that people should have the right to choose, but I also believe that in a democracy people should have the best possible care when they need it and should not have to go on a waiting list and wait their turn, which can be harmful to them. It is no good people denying that there are waiting lists, because there are. My own view is that the private sector must be rigidly supervised and controlled, otherwise the National Health Service will become a kind of Cinderella of the medical services.

My noble friend Lord Hunter of Newington made reference to pay beds and said that Bevan had to agree to pay beds. But let us be frank about it, Bevan had to bribe the consultants at that particular time and agree to have pay beds, otherwise he would never have got the National Health Service scheme through. It was not the doctors being generous: it was a bribe that he had to give way to. Already we have seen that the number of pay beds has increased by about 200 or 300 since this Government have been in power.

I think the Government sees the private medicine field as productive and the National Health Service as a drain. If we are going to have a private medical service, then we must see that it pays for the services which it uses in the National Health Service. I am sure that noble Lords are going to tell us that it does, but many of us know that it does not. I believe that there is ample evidence that the private medical services use our hospitals and do not always pay the proper rate. For example, pay beds in the National Health Service are not charged at their full economic rate, because overheads and capital expenditure must be taken into account, and if we are going to have a private medical service it must be prepared to do that.

The Minister might say that more is being spent on the National Health Service than hitherto, but that does not answer the fact that in some respects medical services are being reduced and wards are being closed. In fact only this week a maternity ward in one of the large hospitals has been closed—I am referring to Stoke Mandeville. Although we may be spending more on the National Health Service, we are spending more for a restricted service.

My noble friends and I believe that a second Thatcherite Government would seriously consider dismantling the National Health Service. I believe they recognise the National Health Service to be an electoral evil, but one which they have got to accept.

The Nuffield Trust report is a book of essays on the public/private mix for health in seven countries and in the United Kingdom. In view of the time, I cannot say very much more, other than that Dr. Alan Maynard, one of the principal contributors, says that the Conservative policy of a partnership between the public and private sector is little more than political rhetoric. Another contributor, Professor Culyer, a distinguished professor and scientific adviser to the Chief Scientist at the DHSS, says: A combination of part-time salary in the National Health Service plus private practice provides a direct incentive to generate the National Health Service waiting list in order to bolster demand for more private beds.". I could continue to give examples of people who have given this evidence, quoting what they have said, in order to point out that a widespread development of private medicine in this country could be a liability, but I will rest there.

6.29 p.m.

Lord Wigoder

My Lords, I am grateful to the noble Lord, Lord Kilmarnock, for agreeing that he and I should change places in the order of speakers. The Nuffield Provincial Hospitals' Trust is a curious name to give a body which has never had any connection with any hospital either in the provinces or in London. It is in fact a small research organisation which occasionally produces a curate's egg of a symposium such as the one that we are discussing today. Thanks to the noble Lord, Lord Hunter of Newington, it has enabled us to have what I have no doubt will be a stimulating discussion on the relationship between the public and the private sector. In the 10 minutes or so at my disposal, I want simply to seek to demolish some five myths that are currently circulating about that relationship between the two sectors. I declare an interest as being chairman of BUPA and I shall do my best not to make my observations sound like a television commercial.

The first myth is that, in some way, the private sector wants to see the end of or to destroy the NHS. Nothing could be further from the truth. Everyone in the private sector is full of admiration for the work the NHS does. We all recognise that it is a cornerstone of the welfare state. That, I think, does not stop us from recognising at the same time that it is not in any way a free service. It is a service that has to be paid for; and the existing stock of doctors, nurses, hospitals and equipment will all have to be paid for, whatever system of financing it is used. Whether we finance it out of general taxation, as we do at the moment, or whether we go over to some sort of insurance-based method of financing seems to me to be a very marginal issue indeed and certainly not worthy of the furore which was caused a few months ago by the publication of the "Think Tank" report.

The second myth which circulates is that, in some ways, the private sector acts as a drain on the resources of the NHS. The fact is that, of our total expenditure on health care, 2 per cent. goes on the private sector and 98 per cent. on the NHS. It is a curious 2 per cent. that acts as a drain on 98 per cent. Of course, the NHS is short of resources and we all know and deplore that. It is partly due to the fact that we live in times of economic recession, partly due to the fact that there is an ever-increasing proportion of elderly people in the population, partly due to the rapidly increasing cost of the latest technological equipment. But the shortage of resources in the NHS is not due to the existence of the private sector.

May I give some illustrations of that? The question of nurses is sometimes raised. The facts are that in the NHS there are 430,000 nurses. In the acute private sector there are 7,500 nurses. That is a smaller number than the number of nurses currently registered as unemployed and seeking work. The figures speak for themselves. There are some 1,500 doctors unemployed at the moment. There are a large number of people who, because they are out of work, are only too happy, to obtain employment in private hospitals in the various administrative grades and all the degrees of staff employment.

The third myth, and one which I think ought to be scotched once and for all, is that private medical care is, in some ways, the prerogative of the wealthy on some sort of class basis. The facts are these. A middle-aged man can comprehensively cover by insurance himself, his wife and his children for an average cost, outside London, of a packet of cigarettes a day or, inside London, of a packet and a half of cigarettes a day. It is no wonder in those circumstances that there are some 4 million people covered by the various provident associations; it is no wonder that some 350,000 trade unionists are themselves subscribers to the provident associations and that does not take account of all the trade unionists who, very sensibly, use the Manor House Hospital, which is entirely outside the NHS. Private medicine is not a privilege in these circumstances; it is simply the offering of freedom of choice to people, the great majority of whom are in the position, if they so choose, financially to afford it. Perhaps I ought to add that slightly different considerations may apply to the extremely highly profit-motivated American hospitals which have begun to come here. But they affect only the most minute proportion of health care in this country.

The fourth myth—which the noble Lord, Lord Wells-Pestell, raised in the course of his observation—is that, because the private sector uses doctors and nurses who have been trained by the state, the private sector ought to pay the state in some way for that training. This is an odd concept: that those who use skilled labour should be obliged to pay the party that has educated that labour. Indeed, the NHS itself uses a vast amount of skilled labour that comes from the Indian sub-continent. They would be somewhat startled if it were suggested that the NHS is, therefore, under some obligation to pay the governments of India or Pakistan for training the resources that are now being used in this country.

The fact is that we all recognise in our society that the state undertakes the technical training of young people and that once they are trained they are entirely free to go as they please into the public or private sector in any way they choose. I should add that the private sector recognises that there are obligations upon it to assist in such training and it does its very best to do so. I have a list here of some 27 private hospitals already, where there are training schemes in progress in co-operation with the local health and education departments, to many of which NHS staff in the vicinity and invited and take part.

The fifth myth—and that is not the easiest expression to utter in the English language—is that the private sector does not look after long-stay patients but confines itself to the short-term highly profit-making operations. The facts are simple. There are altogether 34,000 beds in the private sector; 27,000 of those beds are occupied by long-stay patients, geriatric or psychiatric; and that is a substantially higher proportion of private accommodation devoted to that end than exists in the NHS.

In my remaining three minutes, may I say just a little about the areas of assistance and co-operation between the two services. First of all, let us not overlook the fact that those who use private medicine contribute somewhere in the region of £1,000 million a year by way of tax and national insurance to the National Health Service and, for the most part, seek nothing at all in return; in other words, some 7 per cent. of the total of the NHS budget is provided by people who, quite voluntarily, do not use the NHS and who use other services instead. Secondly, the income from pay beds is £50 million per year. Thirdly, the private sector carries out approximately 250,000 operations a year. Most of those people would have to be added to the present NHS waiting list of some 750,000 if they were not dealt with in that way.

There are ways in which the private sector helps directly. The noble Lord, Lord Wells-Pestell, mentioned Stoke Mandeville Hospital, the very hospital to which, a couple of years ago, BUPA gave a quarter of a million pounds as a donation and provided the complete cost of the acute admissions ward as a gesture of co-operation with the NHS. We have given recently a mammograph machine for the early detection of breast cancer to the Elizabeth Garratt Anderson Hospital. We sponsor lectureships in medical schools. Our whole body scanner which we have in London is used frequently—and we are delighted that it should be—by NHS patients. There are some 4,000 NHS patients at this moment in beds in the private sector in one way or another.

In addition to that, the existence of the two sectors stimulates competition, competition in design and building of hospitals, competition in the use of day surgery, developments in preventive medicine, and so forth.

The NHS for its part co-operates, too, in many ways. We share in many parts of the country pathology facilities, we share the blood transfusion service, although a higher proportion of private patients give their blood to the blood transfusion service than the proportion of the population as a whole. I believe that the Government are right to have attempted to set out along the path of co-operation between the two sectors. It is not always easy to co-operate when one partner is willing and, sometimes, the other partner, for reasons of political dogma, is not so willing. Our experience all over the country has certrainly been that when you speak to doctors, nurses and administrators they are not interested in political dogma; they are interested in medical care, and the co-operation between those in the private and public sectors flourishes substantially and I believe that, with Government encouragement, it can continue to flourish to the great benefit of the future of medical care in this country.

6.40 p.m.

Lord Auckland

My Lords, the House will be grateful to the noble Lord, Lord Hunter of Newington, with his considerable medical expertise, for raising this very important debate this evening. I should like to preface the few remarks which I have to make with a tribute to Mr. Albert Spanswick, whose tragic death was recorded yesterday. It so happened that he and my wife sat on the same magistrates' bench; and although his views and mine, and those of many of my noble friends, will be considerably at variance, I believe the contribution which Mr. Spanswick made to COHSE and to the Health Service in general should be put on public record. I believe that the Health Service will be the poorer for his passing.

I suppose I have taken part in more debates on the National Health Service and similar Motions connected with medicine since I first entered your Lordships' House than almost any other subject. I should like to pay a special tribute to the author of this Nuffield Foundation Trust Report. Like most of your Lordships, I have read only excerpts from it because the whole document is a pretty formidable piece of reading which I, for one, in the time available would not have been able to digest.

When the National Health Service came into being, my late uncle was the Secretary of the Kingston Hospital in Surrey. He had a great deal to do with the late Mr. Aneurin Bevan, whose sterling work for the National Health Service and for medicine as a whole, in retrospect—even by those who may violently have disagreed with his views and his methods—is something for which the nation can and should express much gratitude. I recall several stories told to me by my uncle of the meetings between consultants at that time and the then Minister of Health on the vexed question of private medicine and the coming into being at that time of the National Health Service. Certainly there were acrimonious remarks made on both sides but always in the end friendliness seems to have been restored.

I do not think it is too naïve a point to make that there must be very few countries throughout the world where there is not some form of private health service—even, I would suggest, in the Comecon countries, two of which I have visited. For example, in Czechoslovakia and in Rumania there are clinics which are frequented by the hierarchy of those countries. Is it seriously to be supposed that if a senior minister in Bucharest were taken ill, he or she would queue up at the equivalent of a National Health Service clinic? I make this point in no sense of facetiousness but I just try to put it into perspective a national health service and a private medical health service, as the noble Lord, Lord Wigoder, in his admirable speech, has tried to show.

I know that figures can be misleading but it is an interesting point, at a time when the present Government have been accused of trying to dismantle and destroy the National Health Service—and I speak as one who, with his family, uses it and will continue to use it and, generally speaking, derives much benefit from it—that £14.5 billion will be spent on the National Health Service in the year 1982–83: that is an estimated 7 per cent. increase in manpower.

Here I should like to ask my noble friend a question, and I have not given him notice of it, so I do not expect an immediate answer. I would ask him: how much of this 7 per cent. will be reflected in the increase of nursing staffs, especially in the grey areas? I am not thinking so much of the London teaching hospitals, where I believe there are quite considerable waiting lists for nurses, but of areas such as the Potteries and the North-East, where hospital conditions are not perhaps quite so salubrious as in the newer hospitals which have been built nearer London and elsewhere. I think that is an important point.

I have myself visited a number of National Health Service hospitals. As your Lordships know, I have served on house committees of both paediatric and mental hospitals so that I have had some experience of discussions on the various matters being considered. It is a fair point, of course, that nurses in the private sector within BUPA, within Western Provident and other organisations should have in due course (and perhaps already have) their own private nursing training schemes. I have mentioned this point during discussions with representatives of these hospitals and they agree in principle.

I do think that, as in industry and in other walks of life, the training of nurses in the National Health Service should include some training within the private hospital schemes and vice versa, in order to get used to various grades of patients and of equipment. But, having said that, I have always believed, and I have always said to your Lordships, that when it comes to the provision of equipment, the National Health Service should have the first call on anything coming from private funds.

Mention has been made also of the latest Lloyds Bank Review, and Alan Maynard, who is concerned with York University—I believe on their Medical Faculty—has written a very interesting article. I must admit that I have only had an opportunity of skating over it, but I would like to quote very briefly from the final paragraph, entitled "Overview", as follows: The time for superficial polemics is surely over and the time for sustained research and improved management, public and private, is surely dawning? Health care in this country is something of which we can well be proud; and anybody who has been to Canada, which I visited very recently on Parliamentary business, or the United States of America, and knowing the enormous costs of health care and of insurance if an accident happens, is brought down with a sober bump to conditions in this country.

It is generally recognised that the National Health Service in this country is here to stay. I believe that all political parties are committed to seeing it function in the best possible way. Co-operation between the National Health Service and private nursing and private medicine, just as in the public and private sector of industry and commerce, is in the best interests of the best results.

6.51 p.m.

Lord Kilmarnock

My Lords, it is unusual, I think, in your Lordships' House to debate a book of essays. The noble Lord, Lord Hunter of Newington, referred to it as a report, but in fact that is what it is. Perhaps this will become a precedent. I might, for example, put down Keynes' Essays in Persuasion, or Roy Jenkins' Nine Men of Power, (a very readable book), or the collection on the Mixed Economy, edited for the British Association for the Advancement of Science by Lord Roll of Ipsden, which I have just taken out of your Lordships' Library. But whether or not the practice catches on, we are grateful to the noble Lord, Lord Hunter of Newington, for concentrating our minds on an important and topical issue and for illuminating it by foreign comparisons which we do not usually make.

The only contributor to this volume whom I had previously read is Professor Culyer of York who contributed a robust essay, called Health Services in a Mixed Economy, to Lord Roll's collection which I have just mentioned. He came down firmly in favour of a National Health Service type solution, while acknowledging the role of a relatively small private sector, treating not more than, say, seven to eight per cent. of patients. If, for example", he wrote there, it were to treat 25 per cent., as some have suggested would be desirable, that would have a creaming-off effect, leaving the National Health Service the geriatric, mental, chronic and costliest cases. It would remove most of the articulate and critical middle-class clientele from the National Health Service. It would also make the planning of an overall effective health care system a good deal more hard. In short, the market for health care in Britain performs a useful function so long as it is small … That is Professor Culyer's view.

The first thing to emerge loud and clear from the present collection is that a very high proportion of national income is devoted to health care and a very high proportion of the working population is devoted to its delivery in most industrialised countries. Costs are mostly within the range of 8 to 10 per cent. of national income, and health care employs between 4 and 6 per cent. of the working population. In the United States of America, expenditure rose from 5.3 per cent. of GNP in 1960 to 9.4 per cent. in 1980. Although there is a universal preoccupation with rising costs, my guess is that these orders of magnitude are not likely to decrease significantly. We have dramaticlly prolonged life and improved technology, but we have also raised expectations correspondingly. And though we have routed many old plagues and slain some ancient demons, the stresses and strains of modern industrial life take a different sort of toll.

The next thing to emerge from these essays is the almost universal commitment to equity in health care, at any rate in theory, whether the writer approaches the matter from a free market or a collectivist point of view. But it is pointed out by the editors on page 526 that the private solution to health care problems is unlikely to lead to the attainment of equity goals, unless purposefully directed—I repeat, unless purposefully directed. Indeed, it is another theme, running through a number of contributions, that private insurance schemes in almost all countries where they exist give rise to the need for Government regulation, and that private sector regulation tends to be more contentious and more administratively difficult—and more costly—than the regulation of the public sector. I would add, myself, that some marketeers talk of restricting Government intervention to the provision of a "safety net", but in my book a "safety net", meaning rock bottom minimal emergency provision, is not the same thing by any means as social justice for all.

I was further struck by some other considerations. Though the National Health Service has come in for mounting criticism on account of its total costs—some of it certainly justified—it remains cheaper to run than any other system under survey. Its administrative costs in the mid-1970s were only 2.6 per cent. of the total health expenditure, as compared at that time with 10.8 per cent. for France, 10.6 per cent. for Belgium, 6.5 per cent. for the Netherlands and 5 per cent. for Germany. I have this afternoon obtained a more recent figure of 3.71 per cent. for 1981–82, but the corresponding costs have no doubt risen in the other countries that I have mentioned.

Even if the proportion of National Health Service administration to total cost has crept up, it is clear that revenue collection for a tax-based system is bound to be cheaper than for an insurance-based system. There is also the question of the main cost falling on any health system, which is that of wages, salaries and fees. I am not suggesting that British doctors are greedy. The noble Lord, Lord Hunter of Newington, spoke of power used responsibly by the profession, and I think that this is an entirely justified claim. But it is not unnatural that any professional group in a monopoly position should seek to increase its earnings, and in my view professional monopoly is best balanced by monopsony—that is, the sole or predominant buying power of the National Health Service.

The state is not of course the employer of doctors—they have, very understandably, resisted this—but it is by far and away the largest agency with which they can contract and this arrangement is almost certainly more cost-effective than a plurality of insurance schemes bidding against each other. In his essay, entitled The Semantics of Health Care Policy, Gordon Forsyth reminds us on page 73 that: In Europe, governments of countries with insurance-based health service systems are not yet in a position to control costs". Your Lordships might say: does that matter? Why should people not invest as much or as little as they like in their health? This is a free society. The noble Lord, Lord Wigoder, has made an extremely good case for the activities of BUPA. He made the very fair point that the private sector provides 7 per cent. of National Health Service income but makes no claim, or only a limited claim upon its services. Certainly I agree with him that the present "mix" is perfectly satisfactory in our society.

One of the problems, I think, is that if we have a great extension of insurance-based schemes, employers, finding that they have to foot a part of their employees' health bill, either will turn to more capital intensive forms of production or will claim compensation or relief from public funds. I was interested to read, in the essay by Mr. Walter McNerney from the United States in this volume, (his subject was the control of costs in the United States of America) that the chambers of commerce in that country regard health care expenditure as their number one problem. We have not reached that point in this country, but it is possible that widely extended privatisation could create similar problems for the CBI.

I did not scour these essays for reasons against a major switch to an insurance-based scheme, or schemes, in this country. I read them, I hope, objectively and in search of enlightenment. The arguments I have just deployed are just some of those which rose to the surface and lodged in my mind. It also struck me forcibly that my party's commitment to a health policy rather than a sickness policy—that is, preventive medicine, early screening, primary care, et cetera—would not be helped very much by a widespread extension of unco-ordinated private health schemes, whose accent would essentially be on sickness and repair rather than on a positive promotion of health. I have no particular quarrel with other versions of the public-private "mix" which have developed, for historical or other reasons, in other countries, but I could not find in this volume any very good reason for a major switch away from the current balance in this country.

For these reasons, I support the statement in our White Paper that: The SDP rejects on grounds of both equity and efficiency any plan to dismantle the NHS and replace it with an insurance-based scheme". This does not mean that we would seek to abolish the private sector, but we would seek to ensure that the development of the private sector did not make it more difficult for the National Health Service to achieve its aims and that resources mobilised by the private sector were additional to those of the NHS, rather than merely representing a shift from one sector to another. We agree, in fact, with the policy option advanced by Professor Rudolf Klein in his essay in this volume, entitled Private Practice and Public Policy: Regulating the Frontiers. This would involve the revival of something like the Health Services Board, of which the noble Lord, Lord Wigoder, was a distinguished chairman, which operated from 1976 to 1980. But to avoid over-centralisation it would now have an appellate function only. All proposed developments in the private sector of health would be subject to regulation by the district health authorities to ensure that the two sectors are genuinely complementary, with the health services board acting as a final court of appeal in case of dispute.

Finally, I return to Professor Klein's contribution. On page 125 under the sub-heading Where is the Critical Point? he points out that public policies designed to encourage the growth of the private sector are substitutable, in terms of their effect on the PBSR, with expenditure on the NHS. He goes on to ask: At what point, then, does the active encouragement of the private sector threaten the survival of the NHS as a viable institution? The same point can be made in political, as well as financial terms. At present the private sector acts as a useful safety valve for the NHS … But if the private sector continues to grow, the risk is that the overflow mechanism may turn into a waste-pipe: that the exit of the most articulate, politically resourceful customers of the state sector will drain away effective political support for it. This would suggest that there is a point at which the growth of the private sector would threaten the whole balance of health care in Britain. tilting it away from the social equity model to the market model. We would restrain private growth well before such a point is reached. What I want to ask the noble Lord, Lord Trefgarne, when he comes to reply, is: where do the Government situate Professor Klein's critical point?

Lord Denham

My Lords, before the noble Lord, Lord Prys-Davies, begins his speech, it might be worth while reminding your Lordships that this is a Short Debate. We are not running very much overdue but we are running at an average of 11 minutes per speech and this should be 9½ minutes if every noble Lord is to have his say.

7.1 p.m.

Lord Prys-Davies

My Lords, I value the essays very much because they have identified in an objective sense the problems which face all the health care systems, be they private or public; and they have established in an objective way that the major problems are common to all health systems. Those problems are efficiency, escalating costs, limited resources, an unequal distribution of services which favours the better off and some groups and regions at the expense of others, and unlimited demands from the medical profession and from the public.

One of the lessons of this book is that there are no quick solutions. The NHS is a huge vessel which does not respond quickly to the rudder. Neither are there any easy or simple solutions. The other day the Secretary of State for Health spoke of the, immense contribution that can be made by private health care". The other day the Chancellor of the Exchequer advocated that private provision, can supplement or in some cases, possibly, replace the role of Government in health". I prefer to return to the objectivity of the Nuffield studies. The Nuffield authors are clear in their advice: it is simply not sufficient to pledge more support to private practice. They hammer home the point that more privatisation may well be completely irrelevant to the problems of the NHS. But neither must we on these Benches be complacent about the public health care system. There are difficulties which we have to face.

These are the critical question which arise from the studies. How can one close the gap between the supply of health care and demand? How can one facilitate equality of access to the health service? How can one improve its efficiency at the point where it all happens—at the surgery, the clinic, the ward, and the theatre? The answers have eluded us. They have also eluded health services across the Western world.

The way forward is not easy. I shall not concentrate on destroying five myths: I shall concentrate on constructing five signposts. First—and the noble Lord, Lord Hunter of Newington, has already made this point—the doctor must appreciate that he is not a law unto himself. The influence of the medical profession within the service, quite naturally, is of necessity overwhelming. It calls the tune. But most doctors do not think in cost-benefit terms. We know—and I know this as the former chairman of a hospital regional hoard—that there are wide variations in the workloads of doctors involved in the same speciality and doing the same kind of work.

But the system has to follow the doctor. It is estimated in the studies that each United Kingdom consultant makes decisions which may cost the NHS about £500,000 a year. Herein lies the main awkwardness of the health system. But for how long can the clinician remain a law unto himself? The editors conclude that clinical freedom, interpreted as the freedom to do that which is best or convenient to the doctor and be subject to no appraisal, is probably in the process of ending. That may be over-optimism on the part of the Nuffield essayists—indeed, they put it bluntly: It is necessary to establish health profiles so that the characteristics and costs of medical practices of individual doctors can be identified and any 'deviance' from practice norms 'remedied'. That is challenging language. It is new language; but I believe that it makes common sense.

The authors plead for a place to be given in the curriculum of every teaching hospital to educate medical students to think in cost-benefit terms. This point has been made very well by the noble Lord, Lord Hunter of Newington. I should like to ask the noble Lord the Minister: is the Secretary of State pressing this case on teaching hospitals regularly? Secondly, we need to develop an efficient management structure serviced by adequate information. Throughout the book a great deal is made about the need for appropriate information flow if informed decisions are to be taken. However, I am racing against the clock and will not elaborate upon that point.

Thirdly, much depends upon competent and imaginative managers at all levels within the system. This calls for a questioning and yet constructive approach; and it calls also for vigorous leadership. Many questions come to mind. Is it necessary for clinics to be called for nine o'clock although the doctors will probably not turn up until half-past nine or quarter to ten? Is it necessary for a patient to be hanging around the clinic for about three hours before he is seen? We know this happens. How can we reshuffle resources in order to prevent a build-up on the waiting lists of two years or more? Some noble Lords may ask: to what extent can a non-commercial organisation produce greater incentives to make the best possible use of resources? I turn to the objectivity of the book. The experience of this book shows that the private sector is probably less efficient in the use of resources than is the public sector.

The fourth signpost is that central Government must play a more active part in monitoring the performance of their agents. In the debate on the partially deaf a few weeks ago I mentioned the district in Wales where people were kept waiting for two years between referral by their GP and an appointment with a consultant. I was told then, in effect, by the noble Lord the Minister that this was a matter for local management. But surely there must come a time when the central Government department, be it the DHSS or the Welsh Office, must intervene to see whether more effective use can be made of resources. If a two-year waiting list does not justify intervention by a central Government department, at what point will central Government consider that intervention is justified? Will it be when the waiting list reaches three years, five years, or even longer? Notwithstanding the pressures from the Committee of Public Accounts, it is still not clear to what extent central Government are playing an active part in monitoring the performance of their agents.

Fifthly, the service needs to encourage innovation in preventive measures. In a free society that can never be easy, but we already know that the beneficial results of seat-belt legislation are dramatic on the workload in the accident departments.

Finally, the major worry facing the NHS during the next decade is the ageing population. To meet the foreseeable demand we need to increase the whole range of services—day hospitals, community services and beds—and to mobilise the services of voluntary organisations. But we should also be asking whether the service is equipped to pioneer and to experiment in the care of the elderly. The NHS is right to ask for every penny that it can possibly get, but the justification for such a demand is to ensure that we are providing best possible value for money. The service must be planned so that we can make the best possible use of its resources. While this begs the crucial question of how we achieve this end, it is now clear that it is in this direction, and not in the reshuffling of the mix of public private health, that the health systems must now proceed. To this end we must will the co-operation of doctors, nurses and managers.

7.12 p.m.

Lord Richardson

My Lords, I wish to speak upon one point and one point only, but it has a direct bearing on the private/public mix. It concerns private practice within the NHS hospitals. I wish to make it quite clear that I am unequivocally committed to the continuation of the NHS, and have spent my life in it. My views are, therefore, entirely based on my wishes for the prosperity, in a wide sense, of the NHS, and they are not influenced by any interest in private practice, although I have practised privately and in hospital. Simply expressed, I am convinced that private practice within the NHS is for the good of the NHS and its patients.

Section 5 of the 1946 Act allowed part-time contracts for consultants and made provision for pay beds. The noble Lord, Lord Wells-Pestell, attributes this to successful blackmail upon Mr. Aneurin Bevan. I take a different view of Mr. Aneurin Bevan's character and ability. I think it was because he was a very intelligent man; and in fact he said that he wished to keep the best specialists in the hospitals so that they worked there and did not dissipate their time in travelling around to private hospitals and to nursing homes. He was perfectly right, and in the early days of the National Health Service, when we had a small number of contract periods—half-days, or whatever they were then—the National Health Service benefited quite enormously from a very large amount of time that was put into the hospitals by those very part-time consultants without them really noticing it; and this was possible because they could see their private patients and could go back to the wards, or see them after their clinics, and not watch the clock in any sense. His concept was years before the term "geographically full-time" became widely canvassed; namely, to keep people in one place—not to waste their time but to allow them to distribute their time properly to their private patients and to their hospital patients, and what was left over would doubtless go entirely to the hospital patients.

The new contracts for consultants of 10 per cent. of their time to be used as they wish only strengthens the case for this concept. The noble Lord, Lord Wigoder, has told your Lordships most fairly of the advantages that BUPA and like organisations can provide. I will not, therefore, touch on any material matter; I will touch on a more subtle one, and that is the promotion of goodwill—goodwill for the hospital, and even fame for it. This can be the more easily promoted by the intimate nature of the contact, and the expenditure of time, that is possible for private patients—time over and above that which is technically required to be given, and which I believe is practically always given, of course, to all patients.

Why should the goodwill, the influence and the fame be debarred to the National Health Service? Such goodwill can only lead to support in a material sense for appeals for research and the provision of personal services—personal service that can lead to so much interest and to local pride. Of course, the National Health Service can provide such service and promote such local interest; of course it can. But it would be idle to pretend—and your Lordships' House would be the last place in which anybody would be so stupid as so to pretend—that influence does not bear some relation to the position of those who will exert it. Although, as the noble Lord, Lord Wigoder, has said, the private sector is not the sole province of the wealthy or the powerful, it has a large proportion of influence in it.

This goodwill is no small thing. It can be a very present help in trouble. But it must be goodwill that is not earned at the expense of promoting bad will within the hospital itself. I think it is hardly surprising that there was a considerable degree of bad will in some quarters to private medicine within the hospitals when no local advantage at all was apparent to those serving in the hospitals. The money went back to the anonymous source—right to the top; right back to the Treasury. I think it is essential that if the private practice of medicine in hospitals is to continue, to the benefit of the NHS, the staff should be aware of the benefits to them, to their patients and to their own hospitals.

I hope that the Minister will be sympathetic to this particular point, and, indeed, to the general one that private practice should be encouraged actively within NHS hospitals, and not encouraged solely outside them. I feel very strongly that the NHS benefits from private practice within its walls. I have 35 or more years' experience in this matter, and for that reason I feel justified in putting it to your Lordships in, I hope, fairly strong terms.

7.19 p.m.

Lord Ardwick

My Lords, I must thank the noble Lord, Lord Hunter, for introducing this subject for debate. I myself had the idea of doing the same thing, but I did not quite see the way to do it; I was not bold enough. But, as there has been some suggestion that it is an innovation that we should debate a book of essays, I may say that I have a dim recollection that many years before I came to this House a book of essays was debated under the leadership of the noble Lord, Lord Walston, who organised a team each of whom took one chapter of the book. Thus he got a highly structured debate. I am sorry that we did not have time in this short debate for any such device to be adopted.

I have a much softer spot for this report, and for the Nuffield Hospital Provincial Trust, than has the noble Lord, Lord Wigoder. I worked for it over 25 years ago, when we had joint staffs for the Nuffield Foundation and the Nuffield Hospitals Trust. But for a quarter of a century the trust has been an independent body professionally headed by Mr. Gordon McLachlan, one of the editors of this efficient, sensible and useful volume.

The work of the trust has changed. It was wrong of the noble Lord to say that it has no connection with hospitals. It has been intimately connected with hospitals over the years. It is now largely a research organisation, it is true, but in the easy years when there was not so much pressure on resources it could explore the possibilities of improvement in the hospital services. If adopted, these inevitably added to the costs of the National Health Service. In these days of financial restraint the trust is more concerned with the best use of limited resources, and it is very much concerned with the health of the health service, including its mental health. For controversies, charged with emotion, such as have arisen in recent years, must affect the morale of the staffs of the Health Service; and the efficacy of its services is largely dependent on the maintenance of a high morale.

The hospital service is labour intensive. In times of inflation the wage bill becomes, inevitably, an increasing burden and when cash limits are applied the staffs must see either a decline in their relative pay, or a decline in their numbers. One can understand the fears and the anguish that they have shown in recent years.

As this study reminds us, the problem was once to ensure that the health service retained its share of an increasing GDP. The new problem is whether the NHS can increase its share of a static or a falling GDP. This study shows that the problem is not just a British one. It is universal to the Western world. It exists in every country, no matter what national health system they have. It is rendered more difficult because neither the customers nor the medical people who operate the health schemes are responsible for paying the bills. They are not responsible for the costs.

The study we are reviewing today is most useful to those of us who are not or who are no longer experts on the health service. All our welfare services confront the thoughtful citizen with difficulties, since one administrative change has followed another and particularly, say, in the case of housing, one piece of legislation has been built up on top of another. In the end, only the expert can find his way through the maze. The ordinary intelligent citizen can do little more than speak out of his limited personal experience.

This book is of enormous help to everyone who is not an expert but who wishes to concern himself with policy. For a start it shows that there are no simple solutions. One cannot sell off the assets and privatise the hospital service. Nor is there an acceptable solution by way of social insurance. That would just add to the costs and add to the complications. And, because it would be regressive, it would make the poor poorer. As regards private insurance, this too could touch only the corner of the problem but the size of this corner is of absolutely supreme importance.

Private medicine, as one of these writers suggested, might be the tempter in the National Health Service's Garden of Eden. Yet it must be tolerated. People will always insist on being free to spend their own money on their own bodies, even if it includes such bizarre means of treatment as getting a Chinaman to stick little needles into them or buying some kind of witches' brew from a herbalist.

The danger is, as one of the authors points out—and here I, too, shall quote the words so appropriately quoted by the noble Lord, Lord Kilmarnock—that private medicine, acceptable as a safety valve, could grow to be a wastepipe, the exit of the most articulate and politically resourceful of customers of the state sector, and could draw away public support for it. That is the danger and that is the fear that we have on this side of the House.

I am very glad to say that the editors of the study do not believe that that is likely to happen. They reach the rather cheerful conclusion that: After reviewing the evidence"— and they are perhaps the only ones among us who have read all the 250,000 words of this great book— we both feel that despite its faults, the variety of complex services which is termed the National Health Service constitute a unique and precious national asset. It provides basic services of a high standard at a very low proportion of GDP compared to other countries. Above all, it retains a vital core of the ideal regarding equity in service with which it was launched in 1948". Finally, the authors conclude: The fears of any dismantling of the NHS, or the slipping eventually into a two-tier system, whatever that may mean, are to our minds ill-founded given the present proportion of the mix and the nature and order of private service likely to be developed in the foreseeable future". When I see the provident associations going out trying to recruit wholesale I sometimes fear that this corner could easily become too big, but the authors of this book do not. I hope they are right. They would prefer a partnership between the private and the public sectors rather than separation; a separation which is in vogue today. The challenge as they see it is to find the right mix. That, of course, is the problem—it is by no means the solution.

The Lord Bishop of Norwich

My Lords, before the noble Lord sits down, does he feel that his phrase "a witches' brew' from a herbalist" may have been a hyperbole about a particular item that might be obtained at a herbalist and did not seek to smear the whole health-giving useful homoeopathic work of other herbalists?

Lord Ardwick

My Lords, I regarded that as a piece of verbal fun and not a serious charge.

7.29 p.m.

The Countess of Loudoun

My Lords, although the private sector is more likely to be concerned with acute surgery than with chronic illness, there is clearly a certain amount of private enterprise in caring for the elderly and mentally ill. There are a few voluntary and private homes caring for a considerable number of these patients. Due to the failure of the National Health Service to provide sufficient beds, many elderly people or their families are making their own arrangements to use private nursing homes. But statutory authorities are also using these places, sometimes at the client's or patient's own expense, owing to this lack of sufficient NHS hospital beds. According to the most recently published figures from the DHSS, in 1975 there were more than 22,000 elderly people living in registered voluntary homes and a further 19,000 elderly people living in registered private homes.

At present the private provident associations exclude many chronic cases and the elderly from their services. There is also the problem of mentally handicapped people who are refused admission to a hostel over the age of 55 but who do not qualify for a place in an old people's home for another five or even 10 years. The DHSS is currently reviewing the statutory control and supervision of both voluntary and privately run old people's homes and nursing homes. A working party on services for elderly people, set up by the Personal Social Services Council, has also pressed for a revision of both the legislation and existing regulations. Ideally, revised legislation and regulations should take account not only of broad physical provision but of all factors which affect the quality of life for residents.

There are discrepancies in what is provided. What is now needed is an urgent look at the overall mix of private and public sector, as both are vital. Without the private sector, the National Health Service and local authorities would be swamped. We have the finest National Health Service in the world and now is the time to examine it to improve standards and to make sure that our resources are being used in the best possible way.

7.31 p.m.

Lord Rea

My Lords, I think that the noble Lord, Lord Hunter of Newington, has been very ingenious—or perhaps I should say canny—to bring in a debate on the question of private practice by citing this book. I think I would like to thank him, because it has stimulated me to try to read it. I cannot say that I have been very successful: it is eminently respectable academically but pretty tough going for a non-economist. A general conclusion of the series of essays is that our system is much more economical than others in terms of cost in relation to gross national product, and no less efficient. It also seems that there is less continuous confrontation between the Government and the medical profession here than in most of the other countries, as the noble Lord, Lord Kilmarnock, has mentioned. I think that Aneurin Bevan's shrewd deal with the medical profession at the beginning of the National Health Service has turned out to have been both far-sighted and largely acceptable and workable.

The fact that in our National Health Service no money changes hands at each consultation or for each investigation, treatment or operation has not only saved administrative costs but has also led to economy in the use of clinical procedures and tests. It has also greatly improved doctor-patient relationships. In those countries where a fee is paid for each consultation or procedure there is a tendency for these to multiply and costs to escalate. There has been a greater tendency for costs to rise in those countries where the services are run by the "providers" than in this country. Over the last decade in all the countries described, Governments have had to step in with more and more regulations to curb the escalation of costs, so that the freedom of private medicine has more and more been curbed. Doctors' incomes in several countries have also been curbed, so that they are rising less than the national average.

In this country private practice, although still used by a very limited proportion of the population, has grown because of the difficulties facing the National Health Service. I suggest that these are in three main areas. The first two are largely due to under-funding. First, there is the speed of access to specialists and for non-urgent operations: in other words, the existence of waiting lists. Secondly, there is the lack of comfortable amenities and privacy for hospital in-patients. Thirdly, there is the difficulty of guaranteeing that one is to be seen or operated upon by a particular physician or surgeon. It is in fact questionable whether the actual treatment received is any better from a private doctor. It may in fact be worse—for instance, through less good post-operative observation in a single room rather than being in an open ward—but it may be more convenient and it may be done in "nicer" surroundings.

I consider that one of the most damaging results of an increase in private practice is that it leads to the exit of powerful voices which could effectively insist on National Health Service improvements. As Professor Bob Evans of the University of British Columbia writes in the book: Those most likely to exit are the wealthy, the well-informed and articulate, the politically most influential, the loudest voices". He goes on to show how in the United States the Reagan administration is able to slash funding for social programmes, including Medicaid, because its beneficiaries are a minority of the population: poor, black and generally voting Democratic, if at all. He goes on to say: When we are all in the same boat the boat is maintained more carefully". A further important objection to an increase in private practice is that it is socially divisive and may lead to a two-tier service, as has been mentioned by several speakers. Many middle-class people, and Members of this House, are full of praise for the skill, care and humanity with which they have been looked after in NHS practices and wards. When facing a common enemy—and here I am talking about ill-health and not the ward sister!—class barriers fall away.

It seems clear to me on reading the book that it would be more economical in terms of national resources to improve the National Health Service than to allow private practice to fill in the gaps, as well as being fairer and more socially cohesive. There is still much scope for increasing the efficiency of the National Health Service. This is particularly necessary now when we are in a period of slow economic growth. General practitioners, for instance, it is estimated, each cause approximately £100,000 to be spent per annum, while their own income is only one-fifth of this. As my noble friend Lord Prys-Davies has said, hospital consultants are thought to spend nearer to half a million pounds on more highly technical procedures. Other speakers, particularly the noble Lord, Lord Hunter of Newington, have mentioned how important it is that in medical education the economical use of scarce resources should be presented to students and that all procedures should be looked at from the point of view of cost benefit.

I have spoken in a previous debate about the need to identify and use incentives for good general practice, and the same applies—and perhaps even more so—in hospital. If doctors can practice good medicine, but spend measurably less National Health Service resources than average, could they not be rewarded? As a start, it would be very useful for all doctors, as my noble friend Lord Prys-Davies has said, to be given fuller details of the expenditures which they incur. A start has been made with hospital activity analysis, in which consultants arc given details of various aspects of their work, including the average duration of a patient's stay in hospital.

But with electronic data processing, all doctors could be given breakdowns of their activities: the number of patients seen, the number admitted to hospital, the drugs prescribed, investigations, treatment, operations, and many other things. These could be costed where appropriate. Clinical behaviour tends to change when this sort of comparative data is given. I think that the medical profession is now ready to participate in this sort of auditing activity, but it needs help and encouragement from the Department of Health.

Finally, I should like to quote a passage from the conclusions in this book. The editors state: The National Health Service constitutes a unique and precious national asset which provides basic services of a high standard at a very low proportion of the gross domestic product compared to other countries. Above all it retains a vital core of the ideal regarding equity in service with which it was launched in 1948". We have an opportunity to improve, and not to destroy, the National Health Service. Let us not waste this chance. It may be the last.

7.38 p.m.

Lord Hayter

My Lords, I was reminded by the debate before this one, on economics, of the time when I went to take my tripos examination and was met outside by Professor Clapham, one of my lecturers, who asked me why I looked so worried. I said, "Well, I do not know what the questions are going to be". He said, "My dear chap, in economics the questions are always the same; it is the answers that are always different". The same thing is true of health.

Over the years of the King's Fund, about every second year we have had a conference of European countries—sometimes as many as 17 of them, with people from behind the Iron Curtain. There you have the same patients and the same illnesses, but the ways in which those patients and those illnesses are coped with differ widely one from another. That was why I was so interested in this particular debate. The one point that is common to all these health services is contained in the wise remark that the noble Lord, Lord Porritt, made to me a long time ago: that there is no country in the world that can afford the health service that it wants. I am sure that that is still true today.

In connection with the book which we are considering, there were two statements that struck me. One was that, private medicine excludes many chronic cases and the elderly from their services". Some people have already given the lie to that one. Another statement reads: In all technically developed countries, no matter how the medical services are financed, governments have continued to support the poor, the elderly and the chronic sick". That is not absolutely true.

If there is one certain thing in this uncertain world, it is that we are all going to die; and as Dame Cecily, Saunders says, there is a right for people to die in dignity, surrounded by those who can provide tender, loving care. That brings me to my only point in connection with the debate, and it relates to the hospices that have grown up in this country. To my surprise, I find that there are 63 of them already in being, and that another 40 are in the pipeline. I find it very difficult to understand the policy regarding the grants made by the department. I am told that an average hospice would cost about £2 million, and I can quite understand that the department can truthfully say, "That is a private affair, and if you want to raise the money that is up to you". It is when it comes to the income side that I become so confused. I looked at an extract from Charity Statistics, and it was very difficult to tell what grants were going from the department to the separate hospices.

There was a lot of talk the other day about lobbying. I have not been lobbied at all. I merely have friends, as perhaps have other noble Lords, who have been mixed up with hospices. I am thinking of one hospice in particular, which is in the process of raising its £2½ million. Those involved in the hospice are saying to me that surely it is possible to get from the Government an indication of the income that will be provided from the department when the hospice is a going concern.

It may well be that in these days of economies the department cannot give that indication, and it might say that it will have to consult individually. I do not quarrel with that at all. But I believe that it is logical, reasonable and common sense that if a venture such as this is going to help people—and, incidentally, help the National Health Service, too—those involved have almost a right to obtain from the department an indication of the help that they will receive in due course.

It may well be that in some areas the surrounding hospitals can cope with the problem, though I doubt it myself because, as I understand it, a hospice is built on the supposition that the care of the terminally ill involves a very high ratio of nurses to staff it, which cannot be duplicated in the average hospital. So I would appeal to the noble Lord the Minister to try to give some guidance on what is the best way of indicating to the individual hospices as they are being developed how they will be able to manage in the future so far as their income is concerned.

7.44 p.m.

Lord Colwyn

My Lords, I am very pleased to be able to take part in the debate this evening. I have to say that, owing to having had rather too many patients this afternoon, I must apologise to the noble Lord, Lord Hunter of Newington, for not hearing his introductory speech, and also for missing the speech of the noble Lord, Lord Wells-Pestell, whose opinions I highly respect, but do not necessarily agree with. I have not been able to read the entire publication, having managed to obtain my copy only on Monday; and I must apologise for perhaps using my notes a little more often than I usually do.

I agree with the general recommendation of the publication relating to the need for constant review of total health services and the co-ordination and improvement of specific areas of service. The document tried to give us some advice for the future, and, while the authors confirmed their faith in the National Health Service, it was quite clear that they did not envisage any extra resources being available from the Government, despite constant calls for more money.

Our goal must be to use the money available more effectively, to control expenditures, increase efficiency, of services, and ensure equity of distribution of health care. However, provision of health services, is, and will become, an increasingly major cost to the taxpayers, whether it is under private insurance, or within the NHS. It is important to recognise that private health insurance companies are primarily a distribution agent for monies collected for health costs, and that increasing payments to medical care will equally affect the taxpayer's pocket, whether it is via the private system or the NHS.

I have to point out to the Government that under our present system of health care, which has its accent totally on the treatment of disease, the future appears extremely bleak. I do not have the exact figures, but the Government will be aware that a large number of our present population was born between 1946 and 1951. When in the next 10 to 15 years these war babies reach the age of chronic disease, the costs to the NHS and to the private insurance companies will rise dramatically. The increase will fall directly on the taxpayer, whether it be under private insurance or within the NHS. It is clear that it is the relatively healthy 30- to 40-year-olds who are subsidising, and will continue to subsidise, the more senior members of our society. In 10 to 15 years' time, these individuals must carry much of their own burden, because the future group of 30- to 40-year-olds will be substantially smaller.

I should like to give some advice to the Government, and I would recommend that they investigate the following four specific ideas in their consideration of the document which is the subject of our debate this evening. First, I suggest the production of a public education television series on disease development. The purpose of the series would be to inform the people of this country so they may be able to detect disease problems and consult their physician before major and costly medical care may be needed.

Secondly, I suggest that a further television series could be developed on the subject of home self-care. The purpose of the programmes would be to provide the public knowledge which would be self-administered by the patient to improve the chance of maintaining health with appropriate supervision and dialogue with his family physician. The television series could be created by a re-allocation of priorities within the budget of the BBC, with little, if any, immediate additional cost to the Government, and the series could be re-utilised within the public education system to ensure continued awareness of methods to prevent disease. Not only would such a series potentially reduce health care costs; it could also increase the productivity of our workers by substantially reducing the number of days away from work.

Thirdly, I suggest that the Government promote the scientific testing of existing drugs for the purpose of preventing disease. Some existing medications have effects on physiological functions which logically suggest that these drugs might create a human environment which will be better able to resist disease and increase tolerance to stress. In the past, extensive research has been conducted to treat disease. I suggest that efforts be made to utilise the same resources which have produced such superb methods to alleviate pain and suffering to develop applications which increase the quality of life and reduce the burden of health cost to the taxpayers.

Fourthly, I suggest that the Government promote the scientific evaluation of existing medical procedures that might be used to prevent disease progress. In the past, medical intervention has been focused on the time of greatest need, and care of the patient has been postponed until the individual perceived treatment was absolutely necessary. Perhaps the notion that an ounce of preventive maintenance saves several pounds of cure is as important a concept for the human organism as it is for the safety of aircraft travel.

In summary, I suggest that the Government direct their energies to prevention in health care, in a similar spirit to my own profession of dentistry. I suggest that physicians should be responsible for the treatment of disease while I encourage the people of our society to be better educated and motivated to be responsible for their health.

7.51 p.m.

Lord Wallace of Coslany

My Lords, I am sure that the House will wish to thank the noble Lord, Lord Hunter of Newington, for raising this debate. There has for some of us been a difficulty. I must apologise to the noble Lord. The noble Lord, Lord Colwyn, only obtained his copy of the book on Monday. My noble friend Lord Wells-Pestell seems to have been very devious and got his on Saturday. The books arrived in the Printed Paper Office only late on Friday afternoon. There was one copy in the Library. During the Recess, when I saw that this debate was to take place and guessing that I would be appointed to deal with it—I nearly said "lumbered"—I rang up the Library. I was told that there was one copy, that it had already been taken and that I came second on the list. That copy has not come back. I notice that the borrower has not even put down her name for the debate, so I do not know what has happened to the book. I have, however, been able to scan it. Thanks to my thoughtful and caring bank, Lloyds Bank, I was sent a copy, as a customer, of its review. An article written by Mr. Alan Maynard, who has also contributed to the book, gave me a useful outline. So far as delay in getting copies to Members is concerned, I wish to put on record that it is no fault of the officials of the House. Our respected Clerk of the Parliaments gave permission for copies to be obtained but the publishers did not send them until the last possible moment. I shall now take away a valuable book for further consideration.

What we are debating is not new, inasmuch as the public and private mix of the Health Service is already taking place in fairly considerable measure. I would hazard a guess that a sizeable majority of consultants with NHS contracts for specified hours are now considerably active in the lucrative private field. One cannot blame them, and I do not blame them. They have the skills and take the opportunities to obtain additional financial advantage. That is fair enough. I make no complaint whatever about it.

It is, however, a fact—I have given some degree of notice of this matter to the noble Lord, Lord Trefgarne—that, in many cases, NHS property and facilities are used for examination and tests of private patients: for example, physiotherapy, pathology and X-rays. This takes place in fair measure in a large number of hospitals. Of course, the consultants are not pursuing this work in their own hospital time. It is done, shall we say, for the sake of a good expression, during their free time. This involves expense. It may be possible for the Minister to say what charges are recovered by the NHS for such use of facilities and on what basis. It would be useful and helpful if he could give the total income received nationally each year from such charges. I am assuming that charges are made, because I believe that they should be made.

I have stated already that consultants, through their skills, have the opportunity to obtain further financial advantage. I wish to stress, however, that no financial advantage arises for other hospital staff providing facilities and services for private patients in the NHS. It has to be faced that the majority of such staff are underpaid compared to those in the private sector. New private hospital facilities have expanded rapidly. Indeed, they have expanded to such an extent that saturation point is possibly close. Here, I should like to raise a further point of which I have given notice. It is a serious matter.

I make no apology for raising an issue that is causing considerable concern in the area where I live. Situated in the grounds of Queen Mary's Hospital, Sidcup, is a mansion dating back to the 1600s. Frognal House is a listed building which, at one time, I believe, was the residence of the Sydney family who founded Sydney, Australia. It is a health service property. Problems have been experienced with the Department of the Environment in getting adequate repairs carried out. Eventually, a commercial arrangement was made by the regional health authority. A conversion was recently carried out, at a cost of £700,000, designed to create offices.

Now, however, the leaseholders, Housetrend, want permission to hand it over as a hospital for paying patients to a company called Hospital Capital Corporation Limited. This move is described by the Kentish Times, our local newspaper, which is certainly not politically biased, as an insult to Queen Mary's Hospital, where appeals for new equipment are being started all the time because, as the newspaper states, it is underfunded by a Government that pays lip service to a National Health Service. Those are the words of the newspaper, not mine.

I can vouch for the local efforts made in the area, which is not exactly wealthy. The Friends of Queen Mary's with whom I am associated—in fact, I am president—have raised about £80,000 in the last five years. Many hundreds of thousands of pounds have also been raised by numerous other efforts to provide much needed equipment that is not available due to lack of public funding.

The response has been simply magnificent. The hospital has gained the admiration and the support of the community. That is good. The Bexley District Health Authority is appalled by the plans and has expressed unanimous opposition. But the decision rests with the South Eastern Regional Health Authority. I take the view—rightly, I think—that the decision should be taken by the Minister following an inquiry locally. I am sure that the great majority of people in the area, which comes under the Bexley health authority, will simply not agree to, or support, such a venture. It is a proposed public-private mix of the worst possible type, constituting, as it would, a grave conflict for nursing and ancillary staff. It should not be forgotten that it is situated a mere few yards from the magnificent new hospital that we now have.

It is an insult to all those many people who have given effort, time and sacrifice to raise funds for a hospital endeavouring to maintain its high standards in spite of enforced financial cuts. The hospital staff, from consultant to ancillary, are giving a magnificent example of providing efficient assistance and service under extreme financial difficulties. I pay them tribute. In the industrial dispute that took place not long ago, which was, of course, regrettable, they did little to become involved. They gave their service to the hospital willingly.

The private hospital obviously would be an investment for financial reward, as indeed most are these days. In the main, they are not charitable organisations. I am sure that the noble Lord, Lord Wigoder, will agree that even BUPA has to pay its way and show a reasonable margin to operate. If people wish to pay for private treatment, I say emphatically that they are entitled to do so. Indeed, this is not the first time that I have said so. This is a country where one can choose and the choice is up to the individual. But the main benefit would be priority, however minor the medical need. To my mind, the standard of treatment would be no higher than in the National Health Service, where our standards are high and administration costs lower than in the majority of other countries. Two noble Lords at least have mentioned the summing up in this excellent publication and in the Lloyds Bank Review about the high standard here as compared with that in other countries.

It is fair comment to say that the advance of the private sector has been encouraged by the Government, in that, although claims are made that more is being spent on the National Health Service, widespread closures of hospitals and reductions of services are still taking place, which in turn obviously extend waiting lists and provide a ready bait towards the private sector. I say that in no derogatory way.

At present, private health care premiums can be offset against tax only for those earning less than £8,500 per annum—a policy which in 1982–83 will cost an estimated £4 million. To extend this would be a retrograde step as it would widen still further the social gap between the rich and the less well off. Even so, £4 million is lost to the Exchequer and indirectly—it is fair to say—to the National Health Service.

It is possible for both public and private sectors to develop a degree of co-operation in an exchange of facilities but not at the financial cost of the National Health Service. Co-operation is possible. I personally would not rule it out at all. But it must be very carefully worked out so that the National Health Service does not suffer financially.

As has already been admitted, facilities in private hospitals vary considerably, particularly in the field of intensive care. It seems that in any public/private mix, National Health Service hospitals would carry the burden of difficult cases. Therefore, costing would have to be carefully worked out to avoid disadvantage to the National Health Service.

Another difficult question is that of staff. Here perhaps to some extent I cross swords with the noble Lord, Lord Wigoder. A great many in the private sector have received their training in National Health Service hospitals. I understand that it costs about £60,000 to train a doctor, and there is also the cost of nurse training, as regards which I have no figures, but it must be considerable. As I have already suggested in a much earlier debate in this Chamber, the private sector should pay towards the training of nurses and doctors a levy to be determined and agreed. There is no logical reason why it should not do so. It is only fair and reasonable that the private sector should bear some of the cost of the benefits acquired in recruiting skilled staff trained by the National Health Service. As matters stand at the moment, let us face it, the National Health Service is subsidising the private sector in this particular section alone.

Whatever future decisions are made regarding the future of the National Health Service, it is inevitable that a clash of ideologies will arise in the forthcoming general election. I must honestly say that personally I wish it were not so and that the National Health Service might be regarded as a vital service to the nation to be fully expanded and restored without that idiotic new Conservative word "privatisation" rearing its ugly head in any direction. I detest that word as much as I detest their pet word "quango". One disservice which they have done to the country is to introduce the word "privatisation": it is detestable.

With some pride I number myself among the many unknown thousands who battled for a National Health Service and lived long enough to receive from it benefits beyond price. There can be no mistake about it that many others in this House can say the same. Therefore, to me, there can be only one priority: medical need and not financial advantage. However, I recognise that the private sector exists and will continue to do so. That being so, ways and means of co-operation between the two sectors must be found, with the main objective of advancing the health care of the nation, but not the overriding motive of profitable financial achievement in the private sector. Whatever happens, the extension and improvement of the National Health Service must be the number one priority of any Government, regardless of their political basis.

Once again, I thank the noble Lord, Lord Hunter of Newington. But it is regrettable in a way that we have not had a longer period for this debate.

8.7 p.m.

The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne)

My Lords, I have greatly welcomed the debate we have had today, for it has given us the opportunity to consider some of the wider questions concerning the future of health services—both public and private—that are sometimes crowded out in the discussion of more immediate issues and problems. The debate gives me the opportunity of restating our commitment to the National Health Service and to make clear how we see the relationship between the public and private sectors developing in the future.

I must start by paying two tributes. First, we are indebted to the noble Lord, Lord Hunter, for instigating the debate and, indeed, for his comments today. I am sure we are all conscious of the authority that the noble Lord brings to the subject following his lifelong involvement in medical issues, and in particular his contribution to the development of medical education.

Secondly, the Nuffield Provincial Hospitals Trust are to be congratulated for their role in producing this book. It is a most valuable bringing together of the information, arguments, and ideas underlying any discussion of the mix of public and private health care provision. The publication is in line with the concern of the trust to keep under review the effectiveness of the total health services available. The general message of the book is perhaps that, although different countries naturally have different ways of providing and financing health care, all industrially advanced Western countries face a number of common problems.

In recent years the generally difficult world economic situation has focused attention on the level of resources that can be made available to health services. In no country can the funding of health services be divorced from the general ability of the economy to pay the cost. This has applied however health services are organised and, in this country, has had to be faced by all administrations since the war. At the same time we are conscious of the continuing growth of demand for health services. Again this is a common experience. On the one hand, we have the demographic pressures: in particular, the growth in the numbers of the very elderly. On the other hand, demand for health services rises with increasing expectations and the emergence of new medical techniques. The development of life-saving procedures is of course welcome but we have to face up to the consequences, in terms of pressure on resources. These comments would be familiar to anyone in the Western industrialised world. How have the various countries responded? Clearly the exact response has been linked to the various methods of organising the funding of health care reviewed in the book. The structures vary; but between countries two messages stand out.

First, in all the countries involved there has come to be a considerable state financial contribution to the funding of health care. The proportion and the method of channelling the funds may vary but almost everywhere the state is to some degree involved in the provision of health financing.

Secondly, what is noteworthy is the extent to which systems abroad have been subject to regulations in recent years with the aim of matching expenditure to the ability of the economy to bear the cost. The book records actions, such as controls on the supply of things like beds, intervention in the price of health provision, and other means such as adjusting the coverage guaranteed to the insured person. Both intervention and the concern to ensure the best use of resources—that is, value for money—are common themes whatever the structure.

It is of course right to keep an eye on what is happening elsewhere. It would be arrogant to believe that this country has nothing to learn from foreign experience. And no doubt, given the similar issues, there are essays on the United Kingdom system in similar books produced in other countries. But there is no one system which in itself solves all resource and efficiency problems. We also have to take account of our own traditions and strengths. For example, our general practice service is rather different from that in other countries, where there is generally greater direct access to specialists. Further, while such comparisons are notoriously difficult, it does seem that our administrative costs compare favourably with those of other countries. It would not be sensible to move to any alternative system which, while theoretically meaning less Government involvement, in practice led to more bureaucracy and more involvement in the detailed regulation of health services.

The Government's approach was summed up last July by my right honourable friend the Secretary of State as follows: The Government have no plans to change the present system of financing the National Health Service largely from taxation, and will continue to review the scope for introducing more cost-consciousness and consumer choice and for increasing private provision which is already expanding".—[Official Report, Commons, 30/7/82; col. 860.] In the rest of my comments I shall deal with the three elements inherent in that statement: our commitment to the NHS, our concern to promote the efficient use of resources. and our approach to a developing partnership between public and private sector.

Our first aim is to strengthen and develop the National Health Service. The principle should be that good health care should be provided for everyone, regardless of ability to pay. Our support for the NHS is clearly demonstrated by our record on expenditure. Since we came to office, in England alone we have increased spending on the NHS from £6.5 billion in 1978–79 to £12.9 billion in 1983–84. Even allowing for inflation this increase has meant real growth in services of some 7½ per cent. over this period and growth of over 17 per cent. when measured against the Retail Price Index. The charge which we hear from some quarters that we are "dismantling the NHS" is therefore wholly without fundation. So far as activity to increase the efficient use of resources is concerned, the Government have recently taken or set in hand a number of initiatives. They include: changes to the structure of the NHS; a regional review system and the development of performance indicators to review authorities' use of resources; the setting up of a special inquiry into NHS management; a review of information; improvements in audit; a new scrutiny procedure for administrative and managerial functions, and measures to improve efficiency in specific areas such as purchasing goods and services. These are all part of our central concern to make the best use of available resources.

I turn now to the place of private care. I believe with total conviction that our people should be free to seek health care outside the NHS if they wish, that private medicine does not pose any general threat to the NHS, and that the independent sector, and the NHS under the "pay-bed" system, should be free to provide facilities to meet the demand for private care and treatment. Indeed, I greatly welcome the fact that over 4 million people are now covered by private health insurance, representing, as the noble Lord, Lord Wigoder, told us, over 7 per cent. of the United Kingdom population.

I should like to remind your Lordships that we have restored tax relief on employer-employee private medical insurance schemes to those earning less than £8,500 per annum, which was to correct discrimination against this benefit alone. This is an example, incidentally, which contradicts the assertion made by some of your Lordships on that side of the House yesterday during Questions that the Government's tax concessions have all been directed at the higher paid.

A major aim of the Government is to encourage greater personal responsibility for health, and full recognition of the contributions of the voluntary sector and private health care. Part of the health care of this country has of course always been provided by the independent sector. In the past, however, Governments have too often neglected or ignored private care and the opportunities for co-operation between the independent and public sectors. We aim to encourage a more imaginative approach to the provision of services and a constructive partnership between both sectors.

Beside the National Health Service the private health care sector is still comparatively small. It is most important to bear this in mind in the context of the kind of issues explored in the NPHT publication. The total amount of money spent on independent health care represents but a few per cent. of what the nation spends on the NHS.

But the private sector has an important role to play. By increasing available health care provision, it relieves some of the pressures on the NHS. But there are other benefits, too. There are dangers in being a monopoly supplier or a monopoly employer, and the private sector provides a useful alternative to the NHS. It shows that there are different ways of doing things.

I disagree with those who argue that private health care should only be available outside the NHS. We shall continue to authorise private practice in NHS hospitals where there is a demand for it. There is no reason why it should interfere with the provision of services to NHS patients. We have reached agreement with the medical profession on six principles designed to ensure the equitable operation of private practice in the NHS, and there is a statutory safeguard which prevents private practice from being authorised in NHS hospitals if it would prejudice service to non-private patients. Further advice on the management of private practice within the NHS was given to health authorities in the circular we issued earlier this year.

So far as private practice outside the NHS is concerned, I recognise it is possible that a particular private development might, in certain circumstances, adversely affect, for example, the staffing of a local NHS hospital. We have therefore retained certain powers of control over private developments, with which I shall not trouble your Lordships now.

The qualitative safeguards provided by the Nursing Homes Act 1975 are on the whole working well. There is however a need for greater consistency of approach in the requirements of health authorities—something which has been highlighted by the creation of a large number of health authorities at district level. With this in mind we suggested that the National Association of Health Authorities might like to prepare further guidance on the registration and inspection of private sector premises. They responded promptly and constructively to this, and hope to be able to publish some guidelines later in the year.

We see the NHS and the private health care sector as essentially complementary. Co-operation and not competition is what we need, so that all health care facilities are used to capacity. Health authorities and managers of local private facilities will I hope increasingly develop close working relationships. There are many areas where there can be co-operation between the NHS and the private sector.

For example, a number of health authorities make use of private facilities as a way of providing NHS services where they can contribute economically and effectively to the care and treatment of their patients. I should like to see many more such arrangements introduced. For our part, we have lifted the administrative restriction on contractual arrangements with profit-making organisations and institutions, issued guidance to health authorities, and urged them to take present and planned private sector provision fully into account when considering the future pattern of their services. I hope that anyone in the independent sector with spare capacity will bring it to the attention of the health authorities in his area. On the other hand, several private institutions obtain pathology, radiology, and other services from NHS hospitals. Such arrangements can be mutually beneficial, and avoid unnecessary wasteful duplication of services.

Co-operation between the public and private sectors of health care should take place at all levels. I also hope for instance that many more joint training courses, seminars, and study days will be arranged. Activities of this kind can do much to promote better understanding, foster closer relationships, and encourage the exchange of ideas and information about good practice. I have been pleased to hear of some new training initiatives by the private sector and of the active consideration being given to ways of further expanding its contribution for the training of health professionals.

For our part, we shall continue to look for and promote ways of improving the total health care system in the country. Officials are, for example, keeping in close touch with representatives of the Nuffield Provincial Hospitals Trust and we have recently discussed with regional health authority chairmen the scope for co-operation between the public and private sectors and hope shortly to continue that discussion with district health authority chairmen.

May I turn now to some of the points raised during the course of the debate this afternoon? The noble Lord, Lord Wells-Pestell, referred to the problem of waiting lists, and more than one noble Lord referred to it subsequently. It is the case that, prior to the industrial dispute last year, in the three years that we had been in office waiting lists had steadily declined. Naturally, during the dispute that was not so. I hope, now that the dispute is well behind us, we shall see those waiting lists dwindling again.

The noble Lord, Lord Wallace, suggested that Government policies would extend waiting lists; but of course that is not so. Our policies in fact reduced the waiting lists. The noble Lord soft-pedalled the proposed policies of the Labour Government—should they ever come into office again—in this particular area. I have in front of me a document, recently published, called Labour's Plan: New Hope for Britain. I must say that there is not much hope for National Health Service patients under the proposals that the noble Lord and his colleagues are proposing to put before the nation.

The noble Lord, Lord Auckland, asked me about the percentage increase in nursing staff, in particular in the provinces. The increase in total health authority manpower between 1976 and 1981, taken on an annual basis, has been about 1.5 per cent.; that is, 1.5 per cent. per year over that period. The two regions with the highest increase were the Trent Region and the North Western Region, at 2.8 per cent. and 2.4 per cent. respectively. I am afraid I cannot give my noble friend the figures for nursing staff in those two regions, but I would expect them to be similar in percentage terms.

The noble Lord, Lord Wells-Pestell—and the noble Lord, Lord Wallace, underlined this—asked me about the way charges are calculated for private patients in NHS hospitals. Charges include overheads and an amount assigned to capital, so I think that the charges are calculated on the proper basis and I do not think that the fears of both noble Lords are justified. Indeed, we have recently altered the basis of charges, or at least are proposing to do so, so that the charges made at individual hospitals now more precisely relate to the costs incurred in those hospitals rather than to some general national formula which, in the past, has not necessarily proved particularly accurate.

Lord Wallace of Coslany

My Lords, would the noble Lord allow me to intervene? Is the noble Lord talking about charges for private beds? I referred to the other services given in various parts of the hospital.

Lord Trefgarne

My Lords, the other services, too, are charged for, broadly on the same basis. The noble Lord, Lord Kilmarnock, asked me in particular about the critical point. He asked: where is the critical point? I think he was wondering what was the point at which the growth of the private sector might threaten the public sector. I am not quite certain where that critical point is, but I am quite certain that we are a very great way from that point at this moment, when the private sector is some 2 per cent. or 3 per cent. of total health care in this country.

The noble Lord, Lord Prys-Davies, asked me about the question of teaching hospitals; about persuading the doctors of the future of the need to make efficient use of resources. I entirely accept the importance of doctors being aware of the cost as well as of the clinical implications of the treatment they prescribe or perform. The department is active in promoting a better understanding on this point. We support the management training of clinicians, and we are also promoting a study of the concept of clinical budgeting. However, the training and education of the medical and other health professions is not a matter which is ultimately within our control. It is, as many noble Lords in this House know so well, the medical schools and medical education bodies which determine what medical students are taught and to what extent they are educated in the resource as well as the clinical consequences of their work. I hope very much that the medical education bodies will give this aspect of medical education continued thought and emphasis.

The noble Lord, Lord Richardson, asked me about the private revenue, and in particular whether the revenue from private medicine could be retained by the hospital itself rather than perhaps tipped into the general, national kitty. This year's health circular repeats earlier advice that private practice income should be retained in NHS hospitals so far as is practicable for use on identifiable purposes where it is so earned. I would refer the noble Lord to paragraph 24 of the circular I mentioned earlier. It is No. 7 of 1983.

The noble Lord, Lord Hayter, asked me about the revenue funding for hospices, and asked me if I could give some assurances that we in the department would look favourably on making some commitment for particular projects. This is a matter for district health authorities and not for the department itself. District health authorities will want to look at each particular case in the light of the requirements of their particular district. I know that some districts make a commitment to take a certain number of beds in existing and presumably in planned hospices as well. Indeed, I was myself asked to consider a matter of that kind quite recently, and that is the sort of solution that was there being canvassed.

The noble Countess, Lady Loudoun, referred to the need to examine the legal basis of registering old people's homes. I can assure the noble Countess that this is contained in the Health and Social Services and Social Security Adjudications Bill, which started in your Lordships' House a few months ago, which is currently before the other place, and which will doubtless come back to your Lordships for consideration of their amendments in due course.

My noble friend Lord Colwyn made a particular plea for more preventive health care. In the United Kingdom preventive health care, which embraces health promotion and health education, forms part of the normal health care services provided by the National Health Service. There is some work going on in districts in this matter, but nationally the Government have produced a series of discussion booklets on prevention aimed at professional and informed lay readership, and will fund the Health Education Council to the extent of some £9 million in 1983–84. The council has an ongoing programme of health education relevant to the prevention of smoking-related diseases and to the promotion of healthy life styles.

The noble Lord, Lord Wallace, asked me particularly about the proposed use of Frognal House as a private hospital. Any proposal to change the use of Frognal House to a private hospital will require planning permission. Under the terms of the lease on which Frognal House is held the approval of the South-East Thames Regional Health Authority is required for the making of an application for change of use. I understand that the leaseholders did seek the RHA's permission to make such an application but in fact do not now intend to pursue the proposal. Had the request been pursued and had the RHA given its agreement, the proposal would then still have been subject to all the normal procedures and safeguards applying to planning approval and the control of private hospital development.

To sum up, I should like to say that we want the independent sector of health care to be seen as a small but growing and complementary part of total health care provision. Our view is that the number of pay beds and the number of private hospital beds should find their own levels in each locality, and that there should be the maximum of co-operation locally between the public and private sectors. The relationship between the NHS and the private sector of health care is an area not for ideological battle, but for common sense collaboration. I believe that all of us can make a contribution to a better understanding, to improved working relationships and, in the end, to the provision of better health services for all our people. I regard "partnership" as very much the key word for the 'eighties.

Lord Hunter of Newington

My Lords, I rise, first, to thank all noble Lords who have contributed to this debate. I thank them for raising the standard of debate, and I express the hope that if this topic arises outside the House, as it surely will, the standard of debate there, too, will be raised. I thank the Minister, particularly, for the clarity of his exposition, but would also say to him that to my mind the House has clearly said: "We accept that there must be a mix: find the right mix". So the Government are now fairly challenged by the situation as to what is the right mix and what role they themselves should play in this matter. For example, should they study the elderly and all the interconnections, and give advice to local district hospitals, or should they study hospital development and the share of private hospital development of the hospice kind which has been so clearly put to the House? I would have thought that one would like to see more action, more detail and more proposals for debate, because there is a natural anxiety in many quarters that the right mix must be found. My Lords, I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.