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

Acutes eye community assets worth 2.7bn

D. Williams and S. Lewis

Health Service Journal, July 28th 2011, p. 4-5

Acute trusts, many of them financially troubled, are set to inherit community service assets worth 2.7bn, creating the possibility that property will be sold off to hit short term savings targets. These findings are based on responses to a survey of primary care trusts in areas where acute trusts are taking control of formerly PCT-run services. It gives the first indication of the value of NHS estate likely to be transferred.

Commissioning brain drain 'stripping assets'

C. Santry

Health Service Journal, July 14th 2011, p. 4-5

Over the past year there has been a significant loss of expertise as primary care trusts pay off highly skilled and long serving senior clinicians, managers and experts in commissioning and finance. Despite the loss of skilled staff, with more than a quarter of those leaving having more than 15 years experience, figures suggest that the departures have not freed up as much cash to pay for the start up of clinical commissioning groups as had been hoped.

Cost of reforms already near quarter of a billion

D. West

Health Service Journal, July 21st 2011, p. 4-5

The Health Service Journal has collated information about spending on the Coalition government's commissioning reforms and has found that about 0.25bn was spent between July 2010 and June 2011. Analysis shows that: 1) some GP practices have received thousands of pounds for preparatory work on top of their contract income; 2) rules and amounts paid vary significantly; 3) the total annual cost of clinicians' time spent on commissioning could be up to 100m; 4) the level of spending on developing commissioning was not anticipated in the impact assessment; and 5) including exit payments and redundancies, at least 228m was spent on the transition between July 2010 and June 2011.

Delivering the Nicholson challenge

D. Carlisle

Health Service Journal, July 28th 2011, p. 19-22

The NHS is currently facing the challenge of making 20bn efficiency savings. An online survey run by the Health Service Journal in July 2011 showed that 55% of respondents were not confident that their organisation could hit its savings targets and 57% felt that financial improvement schemes would negatively impact on quality. Moreover, only 34% of respondents said that the benefits of financial improvement schemes are clearly identified and measured and 44% thought that at least some of the savings were imaginary or unreal.

Foundation trust borrowing hits 1bn

B. Clover

Health Service Journal, July 7th 2011, p. 4-5

Foundation trusts have secured loans worth more than 1bn from the Department of Health, prompting concern about the impact of their increased debts on their independence. The foundation trust finance facility within the Department has agreed a credit limit with more than 40 trusts. 725m of the 1.1bn loan fund had been drawn down by the end of 2010/11. The loans help trusts invest in capital programmes.

Funding the right care and support for everyone: creating a fair and transparent funding system

Palliative Care Funding Review


According to the Palliative Care Funding Review nearly 100,000 people with terminal illnesses die every year without properly planned care, so they are shuttled in and out of hospital. 'The current system is a mish-mash, without any defined model of what patients should expect.' The report makes recommendations on provision of a 'good death' and reduction of the numbers dying in hospital who would prefer to do so at home. The key recommendations include:

  • The introduction of national tariffs for the palliative care of patients, paid to any care provider and designed to incentivise the NHS and make the sector a priority
  • Use of a classification system for patients, based on the phase of illness (stable, unstable, deteriorating or dying) and including a dozen other classes. Each would carry a tariff, with the level of funding provided to a service would be determined by complexity and level of need of the patient
  • Assessments, on a regular basis, of the needs of the patient and allocated persons who will guide them and their family through the last period of life. This should include decisions on where they wish to die
  • A lead organization in every region, represented on the new clinical commissioning groups, to co-ordinate services. Each area would also have to guarantee round-the-clock services, such as nursing support

Greek ruin could come to the NHS

N. Bosanquet

Health Service Journal, July 14th 2011, p. 16-17

After ten years in which it became addicted to large annual increases in funding, the NHS risks being unable to make the savings necessary to remain solvent as its government grant is cut. In order for the NHS to remain solvent, a radical service redesign is required to reduce expensive hospital admissions. The new model of healthcare would involve a shift to prevention, early detection, ambulatory treatment and care programmes delivered in the community.

NHS charities 'nationalised' by the Treasury

D. Williams

Health Service Journal, July 7th 2011, p. 10-11

This article discusses Treasury plans that charities with the NHS as sole trustee will 'consolidate' their accounts from April 2013. This means that, while NHS charities will remain separate legal entities, their finances will be accounted for together with their linked trust. The change seems to have been driven by accounting rules rather than the protection of charitable purposes and could undermine people's willingness to give.

A patient approach

L. Phillips

Public Finance, June 2011, p. 36-38

Report of an interview with Lorraine Bewes, finance director at Chelsea and Westminster Hospital, in which she explains how the institution is finding savings. The trust managed to reduce expenditure by 10% in 2010/11. It will make further savings by reducing outpatient work and moving services into the community, and by sharing back office functions with neighbouring specialist hospitals.

PCTs ignoring bar on payment for emergency readmissions

C. Dowler

Health Service Journal, July 21st 2011, p. 6-7

On April 1st 2011 a new policy was introduced barring primary care trusts from paying hospitals for emergency readmission of patients within 30 days of their admission for elective procedures. An analysis of 2009/10 readmission rates found acute providers stood to lose 600m in 2011/12 if the new rules were strictly applied. However, a survey of 50 of England's 150 primary care trusts suggests that some are declining to pursue the policy and that the actual impact on providers will vary.

Review of the operation of 'any willing provider' for the provision of routine elective care: final report

Cooperation and Competition Panel


This investigation found that primary care trusts (PCTS) were excessively constraining patient choice as they tried to save money. It assessed complaints about PCTs from independent sector providers against the principles and rules of competition and cooperation and found widespread breaches. Results showed that PCTs had banned GP referrals to some providers and tried to negotiate lower prices or activity caps. They had also failed to produce evidence supporting claims that restricting choice saved money or protected NHS providers. While not imposing a blanket ban on such practices, the Panel said that it expected commissioners to explain why such restrictions had been adopted, why they should be allowed and for what period. It also recommended that the Department of Health re-examines the market forces factor payments added to the tariff for treatment in areas where running costs are higher.

(For summary see Health Service Journal, July 28th 2011, p. 5)

A strategic approach to cost improvement

L. Nazarko

British Journal of Healthcare Management, vol.17, 2011, p. 228-233

NHS managers are required to find efficiency savings of around 5% a year for the next four years. There are risks that organisations will fail and that care quality will suffer. This article examines the benefits of a strategic approach to cost savings and offers practical advice on how managers and clinicians can work together to improve efficiency and maintain quality.

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