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Welfare Reform on the Web (June 2012): National Health Service - funding

Acute trusts struggling with savings and deficits targets

C. Dowler

Health Service Journal, May 24th 2012, p. 6-7

Figures obtained from the Department of Health under the Freedom of Information Act revealed that at December 31st 2011 65 of the 69 non-foundation acute trusts were behind on cost improvement programmes; 16 trusts had made less than half their planned savings for 2011/12, and five had made just a third or less. All but eight had previously forecast that they would finish 2011/12 in the black, but 27 (30%) were in the red at the end of December. In contrast with the acute sector, the 31 community and mental health trusts that provided useable data were 1% ahead of their savings plans at the end of December, and were forecasting a net surplus for 2011/12 of around 64m, or 17% higher than planned.

Circle needs 70m surpluses to clear debts

C. Dowler

Health Service Journal, May 3rd 2012, p. 4-5

Circle took over management of Hinchingbrooke Health Care Trust in February 2012, making it the first district general hospital to be run by a private company. Under the contract, the first 2m of any surplus is paid to Circle. The company takes a quarter of surpluses between 2m and 6m, and a third of surpluses between 6m and 10m. The terms also mean that the minimum surplus that Hinchingbrooke needs over the next ten years to clear its 40m debts is 70m.

Dentistry: an OFT market study

Office of Fair Trading


Under government regulations, dentists offering NHS treatment must charge a set price for basics such as fillings and crowns and can only impose higher fees for cosmetic treatments. This investigation found that NHS patients were routinely asked by dentists to pay vastly increased fees for bridges, crowns, root canal treatment, extractions and dentures despite the work being covered by the national pricing structure. As a result they were likely to incur financial detriment if they chose to pay for private treatment or damage to their health if they chose to forgo treatment. Despite an estimated 500,000 instances of patients being given inaccurate information about NHS treatment, the General Dental Council appeared to have taken little action against offenders. The report also criticised: 1) a lack of information on the potential cost of treatment; 2) dentists pressurising patients into buying expensive payment plans; 3) patients being prevented from seeing hygienists or technicians without referrals from dentists; 4) a complicated and time consuming complaints procedure; and 5) poor NHS contracts making it difficult for new dentists to open up or successful ones to expand, meaning that there is little competition.

Dentists' fraud costing 70m a year

T. Ross

Daily Telegraph, May 8th 2012, p. 2

An investigation by NHS Protect, the agency set up to tackle crime in the health service, uncovered appalling levels of fraud by dentists. In one year, 2009/10, an estimated 73.1m was paid out in fraudulent claims for dental work that was never done. Under changes introduced in the 2006 dental services contract, payment was no longer tied to a particular treatment such as a filling. Instead, treatments were grouped into three broad bands. Officials feared that this had made it easier for dentists to submit claims for a dental treatment in a higher band than the one they actually delivered.

Keep track of your every move

R. Simkiss and A. Hadayah

Health Service Journal, May 10th 2012, p. 22-23

The use of tariff in costing community services has been expanded to feature a multidisciplinary team specialising in neurorehabilitation. The disability options team working in Tower Hamlets, East London, has developed a tariff system that allows them to reflect on time spent undertaking all activities so that efficiencies can be improved. It also provides clear summaries of resource use for commissioners. Team members have developed the habit of reporting their activities in detail throughout their week. Each individual's data contributes to their profession's data and, in turn, to the information held on the team. This becomes a monthly record of team activity, which becomes an invoice. Thus the tariff tool allows commissioners access to the true cost of service provision.

Lansley is right: age trumps poverty

S. Asthana

Health Service Journal, May 17th 2012, p. 16-17

Andrew Lansley's announcement that areas with a high proportion of older people but little deprivation should no longer be penalised with respect to NHS funding has been met with predictable outrage. Deprived urban areas have the highest mortality and morbidity rates in standardised terms. However, because their populations are younger, they have lower burdens of chronic disease and disability. Allocating more funding to them than affluent areas with ageing populations does not promote equal access for equal needs, nor the goal of health equity.

North-South divide

D. Campbell

The Guardian, May 23rd 2012, p. 13

Research revealed that ministers were planning to switch billions of pounds of NHS spending from the north to the south of England in a move that would hit poorer areas that already had the highest rates of ill health. Health secretary Andrew Lansley wanted the age of residents to replace an area's level of deprivation as the main basis for how the NHS's 104.2bn budget in England was allocated. Labour condemned the plan as "cynical, politically motivated, unethical and immoral" because it would benefit more prosperous parts of southern England where there were more older people and which often had a Conservative MP, at the expense of poorer places in the north which had a Labour MP.

On the front line in a city where a lack of funding can be a matter of life and death

R. Ramesh

The Guardian, May 23rd 2012, p. 13

Ramdeep Ramesh reported from Great Homer Street surgery, Everton which according to the database maintained by the Department of Health, served the most deprived population in England. Dr Simon Abram's surgery - a grim, squat, brick structure topped with barbed wire and with bars on the windows - sat just off the main thoroughfare going north from the city centre below the wide expanse of Everton Park. Given that the Health and Social Care Act 2012 for the first time put a duty on the government to "tackle and reduce" health inequalities, it was in surgeries such as Abrams' Great Homer Street where lives would need to be saved. With coronary heart disease and lung cancer rates particularly high, men in Everton died about eight years earlier than the average in England. Abrams said he had mixed feelings about the government's radical plans for England's health service. He believed bringing in local authorities to administer public health was, from his perspective, a good thing and "long overdue". He was also a fan of clinical commissioning, whereby family doctors would hold the purse strings and buy care directly for patients. However, he had real concerns over "private money" within the NHS - pointing out that the GP computer system now offered patients three options for further treatment: choosing their own hospital, the local hospital and private referral.

An opportunity to make our money work harder

G. Belfield

Health Service Journal, May 24th 2012, p. 19-21

Once they are responsible for authorising 60bn of healthcare spending from April 2013, clinical commissioning groups (CCGs) will face pressure from the NHS Commissioning Board and the public to demonstrate that decisions are being made in an effective and transparent way. CCGs have two budgets that offer different opportunities for maximising value and making the best use of resources available to them: the running allowance to cover the cost of the CCG itself and the commissioning allocation to spend on local health services. For the running cost allowance, they will need to decide which administrative functions to keep in house, which to outsource and which to share. For the commissioning allocation, they will need to get hold of better data, focus resources where they are most needed, fund services to keep people with long-term conditions living independently for longer, increase the productivity of community services, promote telehealth solutions and master procurement spending.

Patients are denied al-Megrahi drug

S. Adams

Daily Telegraph, May 11th 2012, p. 2

Abdelbaset al-Megrahi, the Lockerbie bomber, survived for almost three years after a doctor said he had only three months to live, thanks to the prostate cancer drug cabazitaxel. However, the National Institute for Health and Clinical Excellence decided against allowing its use by the NHS because it claimed the drug only extended life by three months and was too expensive at 22,000 for one course.

PCTs taken to court over use of cheaper drug

S. Calkin

Health Service Journal, Apr. 26th 2012, p. 10-11

Lucentis is the only drug approved by the National Institute for Health and Clinical Excellence for use in treating wet age-related macular degeneration. However, a cheaper drug, Avastin, is widely used in the USA and Europe and has been found to be effective in treating the condition. The Southampton, Hampshire, Isle of Wight and Portsmouth primary care trust cluster has decided to encourage use of Avastin instead of Lucentis. This decision is being challenged in court by Novartis, the manufacturer of Lucentis, which is seeking a judicial review.

Translation of remuneration arrangements into incentives to delegate to English dental therapists

R.V. Harris and N. Sun

Health Policy, vol. 104, 2012, p. 253-259

UK dental therapists are one group of auxiliaries allowed to work in dental practice: they are permitted to undertake any type of care provided they have the knowledge and technical competence to do so. In 2006 the dental remuneration system in England changed from a fee-for-item model to one based on Units of Dental Activity (UDAs) and there are indications that this change has led to fewer referrals being made to dental therapists. This study aimed to investigate the disincentives to delegation in dental practice arising from the UDA remuneration system through interviews with staff at a sample of nine practices. Results showed that dental therapists were seen as a cost to the team, rather than as part of the team as a whole, within a system where individual contributions, rather than the performance of the team as a whole, were evaluated according to a cost-volume-profit business model

Road to recovery? Row erupts over privately-run NHS hospital

R. Ramesh

The Guardian, May 4th 2012, p. 12

Stock market-listed company Circle was given the right to run the 276-bed Hinchingbrooke hospital trust for ten years, which ministers described in Parliament as a "financial and clinical basket case". The hospital would need to make surpluses of at least 70m in the next decade if it was to clear debts and meet Circle's contracted share of profits. The shadow health secretary, Andy Burnham, said he was concerned the plan could not be safely delivered. "Taking a massive 70m out of a small and fragile acute hospital is akin to asking the impossible," he said. "Circle has a financial incentive to make eye watering efficiencies and the onus is on ministers to ensure this doesn't compromise the quality and safety of patient care." Circle was clear that its culture shift will make cash - and, remarkably, pay off the public debt. According to Ali Parsa, Circle's founder, if nothing had been done Hinchingbrooke would have lost 230m in the next decade. But Circle was now confident the hospital would make at least 60m in "surpluses" from 1bn in NHS revenues over 10 years, with the private firm netting 20m and the remaining cash used to wipe out its dues.

Volatile inpatient costs: CCG financial stability

R. Jones

British Journal of Healthcare Management, vol. 18, 2012, p. 251-258

In England, health service reforms have placed GPs in charge of the majority of NHS resources to commission healthcare for their patients. Under the 'localism' agenda, GPs have been encouraged to form clinical commissioning groups, based on small clusters of practices. While the theory of localism insists that small is effective, there may be a hidden flaw in the argument. The flaw arises due to the dual effects of size and environment (weather, air quality, infectious outbreaks) on volatility in costs. Smaller organisations experience high volatility due to the fact that standard deviation associated with healthcare events is equal to the square root of the average. Financial planning (including retaining of surpluses) and risk instruments of considerable complexity will be required to enable clinical commissioning groups to remain financially stable over long periods of time. Indeed, it is questionable if any commissioning organisation of less than one million head can be financially viable in the long term.

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