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1149 CONSULTANT CONTRACTS Commenting on the changes introduced in NHS consultant contracts on Jan. 1, 1980, the report says that the Health Departments have pointed out that not all whole-time consul- tants will be able or will want to take advantage of the new arrangements for private practice and that the change is not intended to affect the service to NHS patients. However, in many areas, opportunities for private practice are limited or virtually non-existent, and the new arrangements may make these areas less attractive than before to whole-time consul- tants : the result could be a fall in the quality of service to N.H.S. patients in those areas. The Review Body has doubts, too, about the adequacy of the controls over the extent of pri- vate practice by whole-time consultants. It understands from the Health Departments that those whole-time consultants whose annual income from private practice for two consecutive financial years exceeds 10% of their whole-time salary (includ- ing the value of distinction awards where applicable) will be regraded as maximum part-time at the end of the third year unless, by that time, they can show that they have taken effective steps to reduce their private-practice commitments and this is confirmed by the next earnings return. When a con- sultant has been regraded in this way, an option to return to whole-time status will not be available until two consecutive years have passed in which it can be shown that private prac- tice earnings have not exceeded the 10% limit. The report adds: "We question whether these controls are sufficient: at the least, it appears that a whole-time consultant may be able to exceed the 10% limit substantially for three years." The report also expresses reservations about the arrange- ments for controlling the new temporary extra sessions. The Health Departments have not provided a precise definition of "temporary" or of "exceptional circumstances". These mat- ters are to be left to the individual employing authorities who are expected to take a stringent approach because of the cur- rent restraints on their expenditure. This seems to the Review Body to be unsatisfactory. As it understands the position, in each case the sessions will normally be reviewed only annually and may be terminated unilaterally only with three months’ notice. It is open to question whether such arrangements pro- vide adequately for the intended "temporary" and "excep- tional" nature of the extra sessions. Commentary from Westminster Goodbye to the Limited Prescribing List ALTHOUGH drug costs to the N.H.S. are likely to con- tinue to rise, the D.H.S.S. will rely simply on doctors’ restraint in prescribing and on education of the public to keep the drug bill down. The idea of a limited pre- scribing list was knocked on the head when Sir Patrick Nairne, Permanent Secretary at the D.H.S.S., gave evi- dence recently to the House of Commons’ Public Accounts Committee. The committee was investigating cost control of pharmaceutical prescribing in the N.H.S., and the chairman, Mr Joel Barnett, raised the limited list suggestion. Sir Patrick said the idea had considerable attractions, which was why his Department had taken another look at it following the recommendations of the Merrison Committee, but there were two big drawbacks. Firstly, it would be unlikely to be cost-effective, because it would require a national scheme, kept regularly up to date, and would need primary legislation. "It would be a bureau- cratic approach", Sir Patrick said, with no certainty of cost savings. Secondly, officials were not impressed with similar schemes in other countries: in Australia the list itself had grown very rapidly and savings were soon lost, and in Sweden there was no evidence of significant savings. But the Department was still keen on encouraging self- imposed limitations by general practitioners and hospi- tal doctors. Many group practices and hospitals had formed committees, said Sir Patrick, where there was an agreement not to introduce new drugs unless all con- cerned were agreed about their usefulness. This was a self-imposed limited list. In 1979, total N.H.S. expenditure on the dispensing of all prescriptions was z1084 million, a rise of z134 million on 1978. But between 1971 and 1979 the cost of pharmaceutical services had only risen from 10% of the total N.H.S. bill to 11%. The gross cost of drugs to the N.H.S. was likely to go on rising, but net costs might level off, said Sir Patrick. On the credit side, drug ther- apy reduced length of stay in hospital, kept people out of hospital, and kept many people at work who would be unable to work otherwise. The D.H.S.S. role should, he said, be to operate the drug pricing arrangements as efficiently as possible; to inform doctors fully about the cheapest ways of prescribing; to encourage doctors to "move in the direction of seif-audit"; and to hammer home the messsage of the Secretary of State, Mr Patrick Jenkin, that the public should not expect "a pill for every ill". The Department is to talk with the British Medical Association and the Royal College of General Practitioners with a view to finding new ways to control the rise in N.H.S. drug costs. Mr Barnett asked why some 400 prescribers ixi Eng- land and Wales apparently regularly exceeded average prescribing costs by 25%. Sir Patrick said that while the Department deplored wasteful prescribing, there were often good reasons for exceeding the average-such as practising in a heavily industrial area or in an area with a high proportion of elderly people. He did not favour withdrawing remuneration from over-prescribers unless the circumstances were exceptional. "We regard that as something ancillary to our main strategy, which is one of support and education". The procedure for withhold- ing payment was cumbersome, and had not been used in England for seven years. Withdrawal of payment would make it harder to get the cooperation of doctors gener- ally. Drug Prices and Profits Sir Patrick was closely questioned on the Depart- ment’s role in fixing prices charged for drugs by the manufacturers. Companies were now required to submit detailed financial forecasts of profits, and this enabled the Department to "negotiate price reductions to bring profits to an acceptable level for the coming year". The first full financial year of this scheme was 1978-79, so it was too early to say how good the scheme was, although Sir Patrick thought it had strengthened the Department’s hand. Under persistent questioning from Labour M.p. Mr Robert McClelland, Sir Patrick con-

Goodbye to the Limited Prescribing List

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1149

CONSULTANT CONTRACTS

Commenting on the changes introduced in NHS consultantcontracts on Jan. 1, 1980, the report says that the HealthDepartments have pointed out that not all whole-time consul-tants will be able or will want to take advantage of the newarrangements for private practice and that the change is notintended to affect the service to NHS patients. However, inmany areas, opportunities for private practice are limited orvirtually non-existent, and the new arrangements may makethese areas less attractive than before to whole-time consul-tants : the result could be a fall in the quality of service toN.H.S. patients in those areas. The Review Body has doubts,too, about the adequacy of the controls over the extent of pri-vate practice by whole-time consultants. It understands fromthe Health Departments that those whole-time consultantswhose annual income from private practice for two consecutivefinancial years exceeds 10% of their whole-time salary (includ-ing the value of distinction awards where applicable) will beregraded as maximum part-time at the end of the third yearunless, by that time, they can show that they have takeneffective steps to reduce their private-practice commitments

and this is confirmed by the next earnings return. When a con-sultant has been regraded in this way, an option to return towhole-time status will not be available until two consecutive

years have passed in which it can be shown that private prac-tice earnings have not exceeded the 10% limit. The reportadds: "We question whether these controls are sufficient: at theleast, it appears that a whole-time consultant may be able toexceed the 10% limit substantially for three years."The report also expresses reservations about the arrange-

ments for controlling the new temporary extra sessions. TheHealth Departments have not provided a precise definition of"temporary" or of "exceptional circumstances". These mat-ters are to be left to the individual employing authorities whoare expected to take a stringent approach because of the cur-rent restraints on their expenditure. This seems to the ReviewBody to be unsatisfactory. As it understands the position, ineach case the sessions will normally be reviewed only annuallyand may be terminated unilaterally only with three months’notice. It is open to question whether such arrangements pro-vide adequately for the intended "temporary" and "excep-tional" nature of the extra sessions.

Commentary from Westminster

Goodbye to the Limited Prescribing ListALTHOUGH drug costs to the N.H.S. are likely to con-

tinue to rise, the D.H.S.S. will rely simply on doctors’restraint in prescribing and on education of the publicto keep the drug bill down. The idea of a limited pre-scribing list was knocked on the head when Sir PatrickNairne, Permanent Secretary at the D.H.S.S., gave evi-dence recently to the House of Commons’ PublicAccounts Committee. The committee was investigatingcost control of pharmaceutical prescribing in the

N.H.S., and the chairman, Mr Joel Barnett, raised thelimited list suggestion.

Sir Patrick said the idea had considerable attractions,which was why his Department had taken another lookat it following the recommendations of the MerrisonCommittee, but there were two big drawbacks. Firstly,it would be unlikely to be cost-effective, because it wouldrequire a national scheme, kept regularly up to date, andwould need primary legislation. "It would be a bureau-cratic approach", Sir Patrick said, with no certainty ofcost savings.

Secondly, officials were not impressed with similarschemes in other countries: in Australia the list itselfhad grown very rapidly and savings were soon lost, andin Sweden there was no evidence of significant savings.But the Department was still keen on encouraging self-imposed limitations by general practitioners and hospi-tal doctors. Many group practices and hospitals hadformed committees, said Sir Patrick, where there was anagreement not to introduce new drugs unless all con-cerned were agreed about their usefulness. This was aself-imposed limited list.

In 1979, total N.H.S. expenditure on the dispensingof all prescriptions was z1084 million, a rise of z134million on 1978. But between 1971 and 1979 the cost ofpharmaceutical services had only risen from 10% of thetotal N.H.S. bill to 11%. The gross cost of drugs to theN.H.S. was likely to go on rising, but net costs mightlevel off, said Sir Patrick. On the credit side, drug ther-

apy reduced length of stay in hospital, kept people outof hospital, and kept many people at work who wouldbe unable to work otherwise. The D.H.S.S. role should,he said, be to operate the drug pricing arrangements asefficiently as possible; to inform doctors fully about thecheapest ways of prescribing; to encourage doctors to"move in the direction of seif-audit"; and to hammerhome the messsage of the Secretary of State, Mr PatrickJenkin, that the public should not expect "a pill forevery ill". The Department is to talk with the BritishMedical Association and the Royal College of GeneralPractitioners with a view to finding new ways to controlthe rise in N.H.S. drug costs.Mr Barnett asked why some 400 prescribers ixi Eng-

land and Wales apparently regularly exceeded averageprescribing costs by 25%. Sir Patrick said that while theDepartment deplored wasteful prescribing, there wereoften good reasons for exceeding the average-such aspractising in a heavily industrial area or in an area witha high proportion of elderly people. He did not favourwithdrawing remuneration from over-prescribers unlessthe circumstances were exceptional. "We regard that assomething ancillary to our main strategy, which is oneof support and education". The procedure for withhold-ing payment was cumbersome, and had not been used inEngland for seven years. Withdrawal of payment wouldmake it harder to get the cooperation of doctors gener-ally.

Drug Prices and ProfitsSir Patrick was closely questioned on the Depart-

ment’s role in fixing prices charged for drugs by themanufacturers. Companies were now required to submitdetailed financial forecasts of profits, and this enabledthe Department to "negotiate price reductions to bringprofits to an acceptable level for the coming year". Thefirst full financial year of this scheme was 1978-79, soit was too early to say how good the scheme was,although Sir Patrick thought it had strengthened theDepartment’s hand. Under persistent questioning fromLabour M.p. Mr Robert McClelland, Sir Patrick con-