Hospitals in cash crisis
One reason is that they have been successful at meeting government targets to shorten waiting lists and hasten patients’ progress through Accident and Emergency departments.
This has increased their workload, without a comparable increase in funding.
If a hospital completes a year’s planned operations in 11 months, it does not get paid for the extra month, so is forced either to cancel operations — as in the case of Great Ormond Street — or to go into deficit.
A&E targets have generated a second pressure: to meet the target that patients should not wait more than four hours in A&E, many hospitals have admitted patients to wards. The numbers admitted through A&E rose 23 per cent, year-on-year, increasing costs.
At the same time, A&E attendances rose sharply, for reasons that are less easily explained. One suggestion is that patients believe that GP out-of-hours services are unavailable and have taken to going straight to A&E instead. But this can only be part of it.
Some trusts, particularly those of the Avon Strategic Health Authority, including Bristol and Bath, face special and longstanding difficulties.
Attempts to balance their budgets have failed for several years. Yesterday a spokesman for North Bristol NHS Trust, said that in 2003-04 the trust had broken even after receiving support from the NHS Bank.
Another factor, overlooked by some hospitals, was the new consultant contract, which raised pay significantly. Consultants may have worked harder — nobody really knows — but if they did, it could make things worse: if a hospital is being paid for a given number of operations and does more, then it will run up a deficit. In principle, this problem should be eased by payment by results, a new arrangement which means that extra work will be matched by extra resources.
In a recent poll in the Health Service Journal, 80 per cent of finance directors said that they regretted the fact that the phasing-in of this new policy was being delayed.
They clearly believe that payment by results will get them out of the present financial difficulties. But, according to Nigel Edwards of the NHS Confederation, they may be being too sanguine.
Payment by results is paired with Patient Choice, which means that patients can choose where to go for their operations and the money will follow them.
Potentially, this is the most destabilising policy launched by the NHS. “It means that every case you lose, you lose the full payment,” Mr Edwards said. “So hospital income could fall if lots of patients chose to go elsewhere, but hospital costs cannot possibly be reduced as quickly. Their costs simply aren’t that variable.”
If he is right, then today’s deficits may quickly be dwarfed by tomorrow’s.
http://www.timesonline.co.uk/article/0,,8122-1530947,00.html
