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Welfare Reform on the Web (March 2011): National Health Service - funding

Accident waiting to happen

A. Moore

Public Finance, Feb. 2011, p. 28-31

There is growing Treasury concern about cost control in the NHS. Many primary care trusts are heading for overspends in 2010/11, which they are seeking to control by rationing treatments, lengthening waiting times and reducing management costs. The new GP consortia, which will take over commissioning from primary care trusts in 2013, may be forced to close facilities to remain within budget.

Aid for heavy drinkers could save NHS 1.7bn

S. Boseley

The Guardian, Feb. 14th 2011, p. 7

The NHS could save 1.7bn if it invested in treatment for the soaring numbers of people who abuse alcohol and endanger their own lives and those of others, according to a report by Alcohol Concern. 'Whereas successful action has been taken to reduce rates of smoking and illegal drugs, successive governments have failed to act decisively in treating the country's drink problem' said Don Schenker, Alcohol Concern chief executive. According to the report, putting an alcohol health worker in every hospital and GP practice, to give counselling and advice to anybody with alcohol related problems, would save the NHS 3 for every 1 it cost.

(See also The Guardian, Feb. 21st 2011, p. 11)

Britain faces dementia catastrophe

M. Beckford

Daily Telegraph, Feb. 9th 2011, p. 1

Alzheimer's Research UK calculates that dementia costs the UK economy 23bn per year, more than cancer (12bn) and heart disease (8bn) combined. However, only 50m per year is spent on research, compared with 590m on cancer research and 169m on heart disease. The charity has launched a campaign to raise this pitifully low investment in dementia research.

Coalition 'backtracking' on NHS pricing reforms

M. Beckford

Daily Telegraph, Feb. 18th 2011, p. 2

The Health and Social Care Bill and the NHS Operating Guidance for 2011/12 published in December 2010 both opened the door to price competition among healthcare providers. However a letter from the NHS chief executive to the heads of all NHS trusts in January 2011 stated 'Services subject to tariff will continue to compete on quality: there is no question of introducing price competition'.

The data vacuum in emergency and urgent care

T. Hughes and others

British Journal of Healthcare Management, vol. 17, 2011, p. 8-15

Emergency departments in the UK have seen a marked rise in demand over recent years. Until 2008, this activity was paid for by block contracts between commissioners and providers. However, in 2009 the payment by results system (PbR) was implemented for emergency medicine. In the past, the data collection system for this activity was inaccurate and consequently funding under PbR has not followed the patient. This paper describes the current situation with respect to PbR, assesses the problems that currently exist and describes an initiative by the College of Emergency Medicine to improve the accuracy of data collection.

Dozens of hospitals at risk from PCT efficiencies

S. Gainsbury

Health Service Journal, Feb. 17th 2011, p. 4-5

HSJ used a model developed for the Department of Health to calculate the impact of primary care trust plans to restrict access to low-priority treatments such a knee surgery on hospitals. The model calculates how expected reductions in the volume of hospital procedures will increase unit costs as departments lose economies of scale and are left with fixed costs, such as buildings. Results show that whole departments at 58 hospital trusts will cease being able to cover their costs if commissioners cut low priority treatments at just half the rate recommended by best practice.

Hospitals begin axing frontline staff despite government's pledge

D. Campbell

The Guardian, Feb. 18th 2011, p. 1

The government's repeated pledges to protect frontline NHS services have been dramatically undermined by the announcements that two London hospitals, St. George's and Kingston, are to axe almost 1,000 jobs, including hundreds of nursing posts. Job losses are mounting across the NHS as hospitals in England struggle to cope with the 20bn efficiency drive and the government's decision to restrict budget's increases to 0.1% a year and reduce the fees that hospitals receive for treating patients.

Impact of the A&E targets in England

R. Jones

British Journal of Healthcare Management, vol. 17, 2011, p. 16-22

The costs of Accident and Emergency (A&E) services is in excess of 6bn per year and accounts for around 21% of non-admitted acute costs. In England, the introduction of the four hour target for A&E attendance has led to the diversion of increasing numbers of patients into medical assessment units where the patient is admitted as an emergency and is therefore outside of the scope of the target. Both A&E and emergency assessment unit costs must be combined to reveal the true average cost of an A&E attendance. Less efficient trusts appear to be shifting large amounts of A&E work into emergency assessment units, where the higher price paid creates a large profit margin. This represents a classic case of unintended consequences of policy implementation based on performance targets.

Leadership needs of medical and clinical directors

R. Giordano

British Journal of Healthcare Management, vol.17, 2011, p.23-29

The NHS is facing one of the toughest financial periods of its history. This article reports the findings of a King's Fund survey of clinical and medical directors which sought to find out what skills they believe they need to face the challenges. Results show that clinical and medical directors see an urgent need for clinicians and managers to share a single mindset on maintaining quality efficiently. They have high levels of confidence in their influencing, negotiation and leadership skills, and in their ability to use resources to maintain the quality of care. However, clinical directors believe that they are largely cut off from the decision-making and planning processes.

Legal danger over LIFT contract transfers

B. Clover

Health Service Journal, Feb. 24th 2011, p. 10-11

This article summarises the content of an internal Department of Health briefing on what to do with Local Improvement Finance Trust (LIFT) contracts after the abolition of primary care trusts (PCTs). These public-private finance programmes have led to the delivery of 2bn in property improvements. The document recommends either relocation of the contracts to the NHS Commissioning Board or to a new 'health infrastructure company'. If the contracts are not properly relocated investors could demand compensation or even evict their NHS tenants.

Millions spent on surgery that never took place

S. Adams

Daily Telegraph, Feb. 15th 2011, p. 4

Under minimum payment contracts, 25 Independent Treatment Centres (ISTCs) in England were paid a set fee, regardless of how many operations they actually carried out for the NHS. Figures obtained under the Freedom of Information Act show that two centres were paid a combined total of 21m more than the value of the operations they performed in the five years to April 2010. Nationwide, this means that the centres have probably been overpaid by about 260m, or 50m a year. ISTCs were introduced in 2003 to carry out routine operations and reduce NHS waiting times. Private firms were encouraged to set up the clinics with fixed five-year contracts with minimum payment guarantees.

Nasty side-effects anticipated

N. Edwards

Health Service Journal, Feb. 24th 2011, p. 16-17

In December 2010 the health secretary announced government plans to reform the UK's drug pricing system. The reforms aim to replace the current pharmaceutical price regulation scheme and National Institute for Health and Clinical Excellence technical appraisals with a system in which drugs are assessed on the value they add to treatment, the innovation they deliver to the market, and the extent to which they deal with unmet need. This article critiques the proposals.

NHS managers block operations to save cash

R, Ramesh

The Guardian, Feb. 24th 2011, p. 8

Hospital managers are blocking hospital referals to save cash, a survey of family doctors has revealed; with at least one health trust proposing to stop sending obese people and smokers for routine hip and knee surgery because their unhealthy lifestyle lowers the chances of operation's success.

Overspends raise fresh fears over efficiency

C. Dowler

Health Service Journal, Feb. 3rd 2011, p.4-5

Research has shown that twenty-five primary care trusts had overspent their 2010/11 budgets by a total of 145m by December 2010. This means that the number of PCTs forecasting that they would finish the year in deficit had more than doubled since the last report by the Department of Health, published in December 2010. The figures raise fresh concerns about commissioners' ability to achieve 4% efficiency savings per year, while managing the major structural reform of the NHS planned by the government.

Pay freeze for jobs: deal or no deal?

P. Smith

Health Service Journal, Feb. 24th 2011, p. 26-27

There has been much debate about a national enabling agreement on NHS pay. The idea is to freeze increments under Agenda for Change for two years in return for a guarantee of no compulsory redundancies. This article presents arguments for and against the proposals.

Paying GPs to improve quality: auditing payments under the Quality and Outcomes Framework

Audit Commission


This report explores how well primary care trusts (PCTs) monitor practice reporting on their performance against the Quality and Outcomes Framework (QOF), which is linked to 1bn a year in bonus payments. It specifically examines the proportion of patients each practice excludes from QOF by describing them as exceptions, and how well their PCT scrutinises that. Excepting patients can improve a practice's overall performance, as the treatments and outcomes of excepted patients do not count towards the number of framework points the practice accumulates. The analysis of 2009/10 figures shows that the average overall exception rate at the PCT level ranged from 3.8% to 7.7%. The report found that some PCTs did not investigate high exception rates and seek justifications for them. Other PCTs were not applying guidance properly, did not visit practices often enough, and did little or nothing to follow up problems in QOF reporting. The report concludes that PCT management of QOF varied significantly and that transfer of responsibility for monitoring practice performance reporting to the NHS Commissioning Board in 2013 should lead to more systematic and rigorous scrutiny of payments.


The procurement of consumables by NHS acute and foundation trusts

National Audit Office

London: TSO, 2011 (House of Commons papers, session 2010/11; HC705)

England's 165 NHS hospital trusts spend about 4.6bn a year on consumables such as surgical dressings, uniforms, pacemakers and replacement hip joints. Because there is no central procurement system, managers in individual hospitals purchase from 17000 different suppliers, often in small quantities. In some areas, individual hospitals are buying 177 different types of surgical gloves and putting in hundreds of small orders for A4 paper. Price variation is common, and the report estimates that up to 150m a year could be saved if it was eliminated. In some cases, the amount paid varied by as much as 183%. The report recommends that the Department of Health should make it easier for trusts to compare prices of products and that hospitals should collaborate to buy in bulk and save money.


Union leaders warn cuts will see 50,000 NHS jobs lost

N. Morris

The Independent, 23rd Feb. 2011, p. 19

The article reports that more than 50,000 posts are to be cut across the NHS. These include doctors, nurses, midwives, dentists, and managers. The number of the forecast job cuts is much higher than previously expected and will further motivate unions to protest. Although NHS spending has been ring-fenced, managers are still under pressure to find savings because of the pressing demands on their budgets. The research forecasting the cuts was compiled by 'False Economy' a new, anti-cut website (; the findings have been branded 'scaremongering' by the Department of Health. According to False Economy the cuts are going to happen across the country. Both the TUC and the BMA agree with the conclusions of False Economy, and so does the Royal College of Nursing.

(See also The Guardian, Feb. 23rd 2011, p. 1; Daily Telegraph, Feb. 23rd 2011, p. 1+2)

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