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Welfare Reform on the Web (April 2008): National Health Service - funding

1.8bn surplus forecast for NHS after cutbacks in patient care

N. Hawkes and D. Rose

The Times, March 4th 2008, p. 4

Details announced by the Department of Health indicate that a 2.3 per cent turnover in NHS spending points to an under-spend of 1.8billion. The DoH announced yesterday that all surpluses would remain within the NHS, following legislation in 1999 which relaxed rules on carrying forward surpluses from one year to the next.

Comparing total hip and knee replacement costs

M.A. Lemon, P.D. Hamilton and R.E. Field

British Journal of Healthcare Management, vol. 14, 2008, p. 108-112

Before 2003, all NHS trusts charged locally determined prices for the provision of hip and knee replacement services to their primary care trust. In 2003/04, the Department of Health introduced a national tariff system so that hospitals would charge PCTs a fixed price per treatment performed. In 2004 a new NHS treatment centre, the South West London Elective Orthopaedic Centre, opened, running autonomously with its own high-dependency and intensive care beds. This research calculated the in-hospital costs of total hip replacement and total knee replacement in this stand-alone centre and compared them to their reimbursement under the national tariff.

Era of brain surgery sponsored by Nike may be just around the corner for NHS

N. Hawkes

The Times, March 20th2008, p.11

A plan published by the Department of Health yesterday has suggested that hospitals will be free to enter into deals with the private sector to increase funding. Sponsorship deals must be limited to companies which do not produce health damaging products.

(See also The Independent, March 20th 2008, p.7)

ISTC contract guarantee will saddle NHS with a 187m bill

S. Gainsbury

Health Service Journal, Mar. 6th 2008, p. 4-5

'Residual value guarantees' were included in the contracts for 14 of the 27 independent treatment centres in wave 1 of the programme. These deals oblige the NHS to buy back the buildings used by the centres at the end of the five-year contracts, to minimise the risk to the private investors and will cost 187m.

Payment by results or payment by activity?

G. Hinchley and others

British Journal of Healthcare Management, vol. 14, 2008, p. 105-107

In 2005, the government introduced a new method of funding for secondary healthcare providers in England, known as payment by results. For emergency departments this meant that funding would be based on cost per case rather than on a traditional block contract. Each case was to be funded using a set national tariff, with more complex work attracting a higher payment. This study investigated the impact of the new system using a retrospective random sample of 500 patients attending the emergency department at Chase Farm Hospital, London, in 2005/06. The results illustrated how poor management data had a negative effect on the financial viability of the service. Human error led to failure to note investigations done on the clinical record, or to failure to transcribe these onto the computer system. This led in turn to the hospital not being paid for them. To avoid such errors, hospitals need to create links between the emergency department attendances database and the radiology and pathology databases.

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