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

NHS spending: local variations in priorities: an update

J. Appleby and S. Gregory

King's Fund, 2008

This analysis of spending on care of patients with a range of diseases by primary care trusts reveals wide variations across England. Figures from 2006/07 show that while some trusts spent more than nine per cent of their budget on cancer care, others spent as little as 3.6%. For circulatory disease, spending ranged from 5.7% of budget to nearly 11%.

Charity plan to keep PFI debts off NHS trusts' balance sheets

S. Gainsbury

Health Service Journal, Sept. 4th 2008, p. 4-5

NHS trusts may hand their PFI hospitals over to specially created charities to avoid reporting the debts owed to their private partners on their balance sheets. These plans follow the Treasury's decision to adopt new international accountancy rules from April 2009 that will see up to 16bn of debt added to NHS balance sheets as PFI liabilities are made transparent. The Department of Health is concerned that the new rules could put otherwise sound NHS trusts in deficit.

Health inequalities row is shrouded in secrecy

S. Gainsbury

Health Service Journal, Sept 11th 2008, p. 12-13

The NHS currently gives higher levels of funding to deprived urban areas at the expense of rural areas with ageing populations. The question of whether this funding model which discriminates against wealthier rural areas with rising numbers of older people should continue is being debated behind closed doors at the Department of Health.

Is PFI on the critical list?

M. Hellowell

Public Finance, Aug. 29th-Sept 4th 2008, p. 20-23

New Labour's NHS Plan promised to build 100 new hospitals by 2010, largely through the private finance initiative (PFI). Government figures suggest that this target will be met, but the programme will then come to an abrupt halt as funding is redirected to primary care. PFI schemes create extra estates costs for trusts which are not reflected in payment by results tariffs through which hospitals are paid for the work they do. Those with large PFI schemes are at greater risk of running into deficits than those with less expensive estates. PFI is therefore falling out of favour with NHS managers. Government enthusiasm may also be waning due to the impact of the move to International Financial Reporting Standards in 2009/10. Under the new accounting scheme, it will no longer be possible to keep private finance off the state balance sheet. This means that the prime advantage of private finance from the Department of Health's point of view will be lost.

Limitations of the HRG tariff: day cases

R. Jones

British Journal of Healthcare Management, vol. 14, 2008, p. 402-404

The payment by results system for reimbursing hospitals for work done was intended to reduce costs with the primary tool being a common price for elective overnight and day case activities. However acute trusts have found a loophole which allows them to 'make a quick buck' by rebadging outpatients activities as day cases and claiming the full tariff.

Pay drug firms by their results, say Tories

R. Winnett

Daily Telegraph, Sept. 11th 2008, p. 14

The Conservatives have floated the idea of encouraging the NHS to use new drugs which are clinically effective and to pay pharmaceutical companies subsequently according to the therapeutic benefit to patients. This is preferable to the present practice of refusing new treatments which are deemed to be too expensive.

PCTs dispute discrimination findings

C. Santry

Health Service Journal, Sept. 11th 2008, p. 7

Yorkshire and Humber BME Panel, an independently funded regional panel, has obtained figures under the Freedom of Information Act which suggest that the NHS is underinvesting in services for ethnic minorities by 2bn a year. Figures were obtained from seven primary care trusts. They are based on 1.3 million hospital spells covering a population of 3.4 million and indicate that the spending gap between BME and White patients is maintained from the age of 20.

Surge of acute contracts puts strain on PCTs' spend targets

A. Moore

Health Service Journal, Sept. 11th 2008, p. 4-5

Many primary care trusts overspent on their budgets for hospital care in the first three months of financial year 2008/09 and are now looking to make savings in other areas to ensure they meet financial targets. Hospital referrals increased by 12.7% compared with the first quarter of 2007/08.

Up to 92 trusts may be culled over 20 years

S. Gainsbury

Health Service Journal, Sept. 18th 2008, p. 4-5

The Department of Health estimates that 2.1% of NHS and foundation trusts will fail financially every year. By slashing the amount of time that financially challenged trusts are allowed to remain in deficit by three years, the Department estimates it could save 200m a year. The savings would be achieved by reconfiguring services more rapidly, and sacking the failing trusts' boards, leaving them to be taken over by more successful neighbours. The failure regime would be triggered for trusts deemed to be challenged which had not improved after a year. A 'special trust administrator' would draft a report on the failing organisation's future, followed by a thirty day consultation. The Health Secretary would make a final decision about the organisation's future in 35 days.

Where are all the patients?

A. Moore

Health Service Journal, Sept. 18th 2008, p. 12-13

Under-use of the first wave of independent treatment centres looks set to cost 350m more than paying NHS units to do the same work. It is predicted that the centres will end up doing only 85% of the work for which they have been paid under their contracts, equating to 220m of unused capacity. As treatment centre providers are paid above tariff for the work that they do, the NHS will be out of pocket by 350m.

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