Welfare Reform on the Web (April 2004): National Health Service - Funding

CONSULTATION ON PROPOSALS FOR SECONDARY LEGISLATION TO BE MADE UNDER THE HEALTH AND SOCIAL CARE (COMMUNITY HEALTH AND STANDARDS) ACT 2003 TO ESTABLISH A FAILURE REGIME FOR NHS FOUNDATION TRUSTS

Department of Health

London: 2004

The government will not guarantee the debts of a NHS foundation trust except in the specific case of a PFI contract. In the event of financial failure of an NHS foundation Trust, the Independent Regulator will initiate a failure regime which will ensure that essential NHS services continue to be provided. The regime will be established through application and modification of parts I and IV of the Insolvency Act 1986 which relate to voluntary arrangements and winding up respectively. The document sets out proposals for secondary legislation to establish this failure regime.

NHS BULK-BUYS PRIVATE SURGERY TO CUT WAITING LISTS

O. Wright

The Times, March 22nd 2004, p.2

Thousands of operations a year to reduce health service waiting lists are being sought by the Government in a secret bulk-buying negotiations with private hospitals. The paper believes ministers are preparing to announce the first long-term contracts with the private sector to provide routine care for NHS patients. The new contracts will significantly increase the amount of work the private sector does for the NHS.

PRESCRIBING BUDGETS TO THE RESCUE

S. Brown

Primary Care Report, vol.6, no.4, Mar.11th 2004, p.10-11

Growth in prescribing costs has been less than expected in 2003/04 thanks to an agreement with the pharmaceutical industry which lowered the cost of four generic drugs. This will help primary care trusts balance their budgets in 2003/04. However the new GP contact will exert an upward pressure on costs in financial year 2004/05.

PRESCRIPTION CHARGES - STOP TAXING THE SICK

C. Fox

SCOLAG Journal, March 2004, p.47

MSP Colin Fox explains why he is introducing a private member's bill to abolish prescription charges in Scotland.

THE PRIVATE FINANCE INITIATIVE: A REVIEW OF FUNDING AND MANAGEMENT OF THREE PROJECTS IN THE HEALTH SECTOR

Northern Ireland Audit Office

Belfast: TSO, 2004 (House of Commons papers, session 2003/04; HC205)

Reports results of an examination of three early private finance initiative projects undertaken by NHS bodies in Northern Ireland. Highlights a range of best practice points and key lessons including:

• the centrality of competition for getting value for money from PFI deals;
• the importance of appropriate risk allocation between public and private sectors;
• the necessity of producing a public sector cost comparator to show whether or not a PFI deal offers value for money.

REPORT 2004 [OF THE] REVIEW BODY ON DOCTORS' AND DENTISTS' REMUNERATION

London: TSO, 2004 (Cm 6127)

Recommendations on pay rises for GPs, dentists and hospital consultants.

RESULTS DRIVEN

A.P. Nacif

Health Service Journal, Vol. 114, Mar. 4th, 2004, p.33

Under the new payment by results system, hospitals will need to become cost conscious at all levels in order to survive. Clinicians will need to see their work in terms of a production unit with inputs and outputs. Organisations will need to be able to swiftly expand and reduce capacity in response to patient demand. Treating a high proportion of expensive, complex cases may make a unit uneconomic.

SUSPENDED SENTENCE

K. Walshe

Health Service Journal Vol. 114, Mar. 11th, 2004, p.16-17

The article exposes three design flaws in the new system of payment by results being introduced in the English NHS. Firstly, the system of fixed price tariffs for treatments will give low cost providers a lot of extra money for no discernible benefit. At the same time it will prove difficult to take resources away from those trusts whose costs are above the tariff. Secondly, 100% of acute trusts' income will be tied to the new tariff. Treating fewer patients will reduce their income while not affecting the fixed costs of building maintenance and staff salaries. This may lead to financial instability. Finally, the system contains a perverse incentive to maximise income by increasing inpatient episodes of care. This may lead to money being wasted on unnecessary treatment.