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Hey big spender: can we stop the splurging in the NHS?

1 June 2006

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Lee Rotherham
BA MPhil PhD

Dr Lee Rotherham, by background a linguist and historian, has advised numerous shadow frontbenchers. He was “chef de cabinet” to a leading Eurosceptic delegate on the European Convention and has been widely published. He is coauthor of The Bumper Book of Government Waste

E [email protected]

Eighty-two billion pounds is a lot of money. A ridiculously large amount of money, in fact. But that’s the sum of money that we have calculated in our book as being wasted at all levels of government that’s retrievable. Money that could and should be going to other purposes, or – even better – should be staying in the taxpayer’s pocket in the first place.

The trouble with this figure is that it is simply too big, even for the most superexperienced GP manager to grapple with. It’s certainly too big for the Treasury team. Let’s try to visualise it. Eighty-two billion pounds works out as about 7,790 tons of gold at today’s value. That is approximately 636,152 gold bars, which I estimate  would make a six-foot garden fence three inches thick running for a mile and two-thirds.

According to NASA’s own stats, it would be enough money to put a Brit on the moon, with enough spare change to buy two new entire aircraft carrier battle fleets for the Royal Navy and to conduct an effective global antimalaria plan. And that’s just from one year of waste.

Where does it come from? Well, from right across the board. But as you’re reading a medical journal, let’s just concentrate on a few examples that have cropped up while researching our book in an area that is, sadly, an increasing component of the sum.

Send for the lawyers
Few people – outside the medical profession at least – are aware that the NHS has its own litigation authority (NHSLA). This is of itself no small pointer to contemporary trends. Two other indicators are that it has a dedicated section tasked to monitor compliance with human rights legislation, and that its website has an inbuilt option for the viewer to add it to their favourites.

The NHSLA estimates that its total liabilities (including claims that are in the pipeline) run to £6.89bn for clinical claims and £110m for nonclinical ones.
It started in 1995, yet one in six cases remains outstanding today. This is a tremendous weight of liability 11 years on. It suggests one of two things. Either cases are dragging on, or the number of cases is increasing as liability culture grips this country. Both add up. As the NHSLA admits, it’s not unusual for costs to be claimed in the region of £1m.

The developing body of law is not setting helpful precedent. Take the case of Chester v Afshar.(1) The House of Lords held that, even though back surgery had been carried out competently, the fact that the surgeon did not provide adequate warning of a possible non-negligent serious complication beforehand rendered the surgeon liable for the adverse outcome – even though the patient was unable to indicate whether the surgeon’s warning would have led to her withholding her consent.

Crucially, the same principle holds true for the GP. We are slipping slowly towards the stage where every piece of advice will have to be accompanied with a bodyguard of caveats. Your practice may be seen as the next weak spot once the hospitals get wise. Recent policy announcements may not help. Let’s be really controversial: with what’s seen in some circles as privatisation of local healthcare to foreign businesses over the next 10 years, ambulance chasers may look at a practice in the same light as a successful and wealthy US company, and think it is now fair game for litigation. You could get caught in the crossfire.

Cui malo?
Where one person gets blown up for Queen and Country and receives 10 grand in compensation, another person trips over a bucket and claims half a million. There is inequity in the system, and greed. Isn’t it time to ban ambulance-chasing adverts designed for sofa dwellers who fake mental anguish over their own thoughtlessness? Shouldn’t legislation let people take responsibility for their own mistakes? That way compensation can go to the genuinely needy and deserving.

One does not like to just point the finger at individuals. Higher legal costs have been recognised by the NHSLA as a key contributory factor:

“The Authority and its panel of solicitors have striven over the years to stem the tide of claimants’ costs, but with only limited success. If negotiation fails to achieve agreement, claimants’ costs are assessed by the Courts, which permit high hourly rates and uplifts for alleged complexity – rates and uplifts which are not paid to the Authority’s panel. That claimants’ lawyers persistently seek higher and higher costs (despite low inflation), and frequently decline to accept our offers to mediate, suggests that they are either endeavouring to make good the loss of fees because of the reduced number of claims to which I have referred above, or are simply greedy.”(2)

One example they give is a claim for £4.5m that was settled for a tenth of that:

“The saving to the NHS was £4,049,957, which remained available for patient care. Whilst exceptional, that example highlights the problem described by some not as ‘compensation culture’ but ‘vulture culture’.”(2)

Brussels spouts
The increasing part that the EU is playing in the domain of health has been documented elsewhere.(3) This can be summarised by the simple observation that the Health and Consumer Protection Commissioner and the judges at the European Court of Justice have for several years been involved in a competences power grab, which will have long-term effects on how the NHS is run, not least over foreign provision of healthcare to patients who are on a waiting list. GPs could start to get dragged into this.

Something that people have paid even less attention to (if that is humanly possible) is the effect of the Charter of Fundamental Rights on the way the NHS will operate. The Charter itself is currently, technically, not a binding document. After being drafted, it took a year for it to be grabbed and put into the new EU Constitution. That in turn has stalled with the Dutch and French vetoes. However, Brussels often sidesteps such inconveniences, by using the text as an “inspiration” for legislation; by legislating based on catch-all clauses that are nothing to do with it; or by basing laws in anticipation of retrolegalisation. So it behoves us to keep a beady eye on the Charter, because you can bet your bottom dollar that the best lawyers are already keeping watch for cases where they can use particular clauses to make a buck and a name for themselves.

So what’s at issue? Box 1 contains some examples of possible litigious situations:

Many of these cases that will emerge over the next 10 years will be laughed out of court. But some will make it through, and they will cost a lot of money. That’s the point. You never know what will happen until the lawyers fight it out, and that process itself will cost. My advice is to consider that you may have to budget for legal uncertainty in the long term. Or even better, team up through your trade associations to get good legal advice and start lobbying before the directives and court cases come through.

The bills go on
So far we have loitered around just two examples, but there are so many more. There’s the NHS consultants – not the cinematic Dr Prodd or Sir Lancelot Spratt, but the private sector advisers brought in. Funnily enough, the government ducks questions on how much these cost. The “Your Health, Your Care, Your Say” survey alone cost £1.2m, and the commercial directorate over 2004–5 took consultancy and legal advice costing £38.4m, plus another £28.6m in 125 other contracts. NHS Professionals is recorded as having spent £2.5m over that period on external consultants. Targeted consultancy pays dividends to the NHS. But under current management practice, the dividends now go the other way. These are resources that could have been better spent on patients.

Then there’s fraud. The individual cases obviously make great reading and often show some criminal ingenuity. To this we can add the gigantic costs to the public purse of benefit fakers. And we haven’t even touched on some of the great white elephants of state spending – political correctness and disastrous computer projects. It is truly a massive field.
And now we strike issues in which your management practices can make the difference. Are any of your referred patients complaining about being messed around on hospital waiting lists, are their complex (and painful) ailments being deprioritised while bunions are fast-tracked as part of the hospital managers’ stats game? That practice will only stop if the news gets out. Time perhaps to review your preferred hospitals. Are patients blithely ignorant of the cost of wasted drugs, not simply in financial terms (although this is massive), but through the effects of drug tolerance and the dangers of superbugs? We must all play our part in stopping the squandering of antibiotics.

There’ll always be waste, but this is no excuse for inertia. It will take a concerted heave by all of us, from the frontline to the policymakers in government, to really tackle it.


  1. Available from URL: best_practice/cardiac05/consent.html
  2. Available from URL:
  3. Rotherham L. Health and the nation. Available from URL: