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Welfare Reform on the Web (May 2006): National Health Service - funding

A. Iggulden

Daily Telegraph, April 3rd 2006, p.1

A drop in qualified staff appears inevitable as leaked documents suggest reduction by a third, with qualified nurses replaced by unqualified staff. While NHS Direct attracts millions of calls, website visitors and digital television viewers, seventy per cent of enquiries are passed back to the commissioning care trusts according to critics.

R. Lilley

Daily Telegraph, March 28th 2006, p.16

Reflecting on similarities between problems in healthcare for the young and old now and twenty years ago, the author asks about moral, ethical and personal perspectives in deciding how to prioritise health funding.

P. Wintour

Guardian, April 19th 2006, p.1

The parliamentary Health Select Committee is preparing to inquire into how NHS trusts acquired deficits despite extra funding. The article provides comments on costs and the progress of the reform programme.

C. Adams

Financial Times, April 13th 2006, p.4

Tony Blair was warned at a Downing Street summit with local health heads that clearing the NHS deficit may take more than a year. Further job losses are anticipated as are cutting agency workers and shifting care outside hospitals as heavily indebted trusts seek cost saving measures. The article also touches on a think tank report’s assertion that moving care away from hospitals will result in ten per cent job losses.

[See also Daily Telegraph, April 13th 2006, p.6; Times, April 13th 2006, p.4; Guardian, April 13th 2006; p.7; Independent, April 13th 2006, p.5]

A. Taylor

Financial Times, April 21st 2006, p.4

Poor and delayed NHS procurement procedures are adding £2.4m to the cost of PFI hospitals according to the Confederation of British Industry. The article looks at the process and provides comments.

N. Hawkes & G. Hurst

Times, April 18th 2006, p.2

“Vital specialist paediatric capacity” is threatened by an insensitive tariff which leaves four children’s hospitals with a £22m shortfall in income. The situation was revealed by a letter from the hospitals’ heads, and supports criticisms of the national tariff’s lack of sophistication.

[See also Daily Telegraph, April 18th 2006, p.4; Guardian, April 18th 2006, p. 13]

A. McKeon

Public Finance. March 24th-30th 2006, p.20-23

Part of the blame for the current financial crisis in the NHS has been laid at the door of the new payment by results system. The author argues that payment by results should in the long run lead to efficiency gains and greater transparency in NHS management. Problems are to be expected in the implementation phase until the new system settles down. These include difficulties with calculating the national tariff, problems for trusts adjusting to a single national price for treatments, and perverse financial incentives for hospitals to do unnecessary work.

J. Carvel

Guardian, April 3rd 2006, p.1

Challenging the free at point of service stance, and calling for an urgent multiparty review of health policy, the “Doctors for Reform” pressure group claims that a service funded only by taxes will result in rationing and fail to meet patient expectations. The group which finds disillusionment with the current NHS system among voters, proposes an insurance-based alternative.

[See also Independent, April 3rd 2006, p.6; Times, Monday April 3rd 2006 p.2]

R. Darwall

Financial Times, April 19th 2006, p. 15

The lack of an adequate commercial costing system half way through the implementation of “payment by results”, and conflicting policy directions underlie the current NHS deficits according to Darwall who asks whether internal markets can work, and whether Whitehall has the policy design capacity, and implementation skills needed for change on the scale required for NHS reform. The article looks at inaccurate data, management skills and alignment of incentives with efficiency.

L. Donnelly

Health Service Journal, vol.116, Apr. 13th 2006, p.5-7

Reports on plans to achieve financial balance in the NHS in London. These include draconian measures to save money by reducing the number of referrals of patients for hospital treatment. GP decisions could be overruled by PCT referral panels.

N. Hawkes & D. Charter

Times, April 12th 2006, p.8

Cuts to the annual spend on drugs and temporary staff are proposed by the new NHS chief as a think tank report predicts 100, 000 job losses following reforms. The article looks at training and recruitment levels.

[See also Guardian, April 12th 2006 p. 8]

A. Jack

Financial Times, April 19th 2006, p.4

Given the discounts that pharmacists obtain from wholesalers and manufacturers of generic drugs, analysis finds the NHS paying up to 78% over the source price. Generic drugs account for 80% of NHS prescriptions while prescriptions overall make up 11% of the NHS budget according to the article.

N. Timmins & J. Burns

Financial Times, March 31st 2006, p.4

Although pay awards will be phased in for the NHS and other public services, the cost of the rises will consume almost a third of the extra money allocated to the NHS. The article provides comments from representative bodies including the British Medical Association which has described the awards, which will raise health workers’ pay by between 2 and 2.5 per cent, as “vindictive” and likely to alienate the profession.

[See also Times, March 31st 2006 p.26; Guardian, March 31st 2006 p. 7]

H. Mooney

Health Service Journal, vol.116, Apr. 6th 2006, p.14-15

Article reports on a study of the early rollout of the payment by results system in South Yorkshire, where all acute trusts had achieved foundation status by June 2005. The study found that primary care trusts had too little control over hospital activity. Although a wide range of local initiatives had been put in place to try and control activity levels, no overall strategy has been developed to address demand pressures. At the same time, the hospitals had financial incentives to increase activity, and were also beginning to stop running unprofitable services.

London: TSO, 2006 (Cm 6752)
Key recommendations and conclusions of the Review Body are: 1) an increase in the Agenda for Change pay rates of 2.5 per cent from 1 April 2006; and 2) and increase of 2.5% in the existing minimum and maximum High Cost Area Supplements for Inner London, Outer London and the Fringe. The Review Body also recommends that the health departments ensure that a comprehensive survey is conducted annually to identify the earnings of the remit groups and their location within pay bands.

London: TSO, 2006 (Cm 6733)
The Review Body took into account the following economic and general considerations: 1) that the health departments were critically concerned about the affordability of the uplift; 2) the continued growth in the number of medical and dental staff in the Hospital and Community Health Service; and 3) that the latest NHS Staff Survey for 2004 showed some improvements in terms of staff satisfaction. The Review Body stated that doctors such as consultants and GPs have benefited financially from new contracts and the pay of doctors compares well with comparator groups. Analysis of figures from the Office of National Statistics indicates that doctors' pay has increased at a much faster rate than the average for high earners in the economy. The Review Body stated that there was no indication that there was a problem in recruiting in London, so there was no reason to increase London weighting

K. Sikora

Times, April 4th 2006, p.18

The question of which services should remain in a tax-funded core and which are appropriate for co-payment should be the focus of a multi party review of NHS aspirations according to Sikora of Doctors for Reform. Dropping failing areas like provision of hearing aids from the NHS would allow for a modern, innovative system based on insurance and co-payments, while increased rationing would decrease equity as the wealthy could queue jump by going private.

J. Carvel and W. Woodward

Guardian, March 24th 2006, p.1

Guardian figures show 4000 NHS job losses in the previous fortnight including 700 announced in Prime Minister Blair’s constituency. The Shadow Health Secretary has accused the government of allowing the NHS to sink under financial pressures and Chancellor Gordon Brown of ignoring the NHS in his budget. Plans for dealing with deficits have been submitted to the Healthy Department.

[See also Times, March 24th2006 p.28; Independent, March 24th 2006 p.11; Daily Telegraph, March 24th 2006, p.8]

D. Martin

Health Service Journal, vol.116, Apr.6th 2006, p.5

Money intended public health improvement has instead been spent on NHS staff salary hikes which far exceeded the recommendations of the 2002 Wanless report. The report set out a vision of a “fully engaged” scenario in which people took control of their own health care. Achieving this scenario would require increased productivity, better health improvement services and action to tackle the wider determinants of ill health. In order to support this staff pay rises of 2% per year over 20 years were recommended. Instead, the Department of Health agreed immediate large salary increases under the new GP and consultant contracts and the Agenda for Change programme.

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