DoH is a ‘complete and utter cock-up’ over Payment by Results
Managers have reacted with disbelief and fury after the Department of Health withdrew the national tariff for payment by results and admitted that the sums behind it did not add up. Last week the DoH withdrew the tariff - due to go live in April - admitting that ‘underlying errors in the calculation’ had been identified.
Acute and primary care trusts have been left unable to finalise their business plans just a month before the start of the new financial year. Nineteen foundation trust applications will be delayed.
Without next year’s prices, managers have been left in limbo, with PCTs unable to plan how much work to buy from their provider trusts.
Chief executives are railing against the ‘complete and utter cock-up’ which has rendered three weeks of planning on the basis of the tariff published on 31 January ‘totally worthless’.
The DoH would not say where the error lay, or when the new tariff will be issued, although HSJ sources said they were expecting something imminently.
The blunder was revealed on the day that the DoH issued a diktat instructing all NHS organisations to take immediate action to tackle deteriorating finances revealed in January’s financial returns. The timing of the two revelations left many chief executives and finance directors reeling.
The letter, penned by DoH payment by results deputy director of policy and strategy Liz Eccles and sent out last Wednesday, thanks NHS managers for drawing problems with the tariff to the DoH’s attention. It says ‘underlying errors in the calculation’ have been detected and that the tariff will be withdrawn until further notice, following ‘testing’ with NHS colleagues.
NHS Confederation policy director Nigel Edwards said: ‘There’s real anxiety and disbelief about what has happened.’
He said that as well as facing an immediate period of limbo, in which managers will be unable to agree local delivery plans or service-level agreements with partners, they would also need to gear up to cope with the possible implications of an altered tariff.
PCTs had been expecting to submit final planning submissions to the DoH this week, setting out the services they intend to commission next year. Ms Eccles’ memo says this deadline would now be extended, with details provided with the new tariff.
In January 2005 the DoH postponed roll-out of payment by results for emergency services after last-minute calculations highlighted a £1.5bn ‘imbalance’.
NHS Alliance modernisation and commissioning lead Nicola Easey told HSJ that this latest debacle meant that NHS managers were being forced to do their jobs ‘with their hands tied behind their back’.
King’s Fund chief economist Professor John Appleby described the tariff saga as ‘a real mess’.
‘We are a few weeks away from the beginning of the new financial year; it is not just about trusts applying for foundation status having to redo all their forecasts. PCTs and other trusts will be relying on these numbers to get some idea of the levels of predicted income and expenditure. These numbers are really crucial,’ he said.
‘All the planning is worthless’
NHS managers have been unable to contain their rage about the Department of Health blunders that led to the recall of the tariff.
Alerted to the news by HSJ last week, one acute chief executive from the North was stunned: ‘What the hell do they think they are playing at this time?’ he asked.
And a southern counterpart rounded on the government for its ‘complete and utter cock-up of this year’s tariff,’ and demanded that the DoH officials responsible be named and shamed.
Another acute trust chief executive from the South told HSJ: ‘All the planning that has gone on has come to a stop. All of it is worthless. It’s a total cock-up. It’s just mind-blowing.’
A finance director said: ‘My staff have put a lot of time in on the tariff - working weekends and literally until midnight in some cases.’ He said maintaining morale was proving difficult.
In the East, one chief executive said he found it ‘incredible’ that the government ‘could have got the tariff so wrong for the second time in a row’.
Several chief executives said they would expect to be sacked in the event of making a mistake of these proportions, but they had ‘no confidence’ that this would happen at government level.
Delays for 19 foundations
The foundation trust programme faces severe delays following the Department of Health’s decision to withdraw the tariff structure for next year, according to Monitor, the foundation trust regulator.
Last week Monitor chair Bill Moyes sent a letter to foundation trust applicants detailing the set-backs.
In it he confirmed that the six acute trusts hoping for authorisation in April will have to wait until June, and the further 13 aiming to gain foundation status in July would be pushed back to August.
And Mr Moyes warned that even these timings were subject to the DoH reissuing the tariff by mid-March.
In a separate letter to chief executives and finance directors of existing foundation trusts, Mr Moyes expressed concern about the ‘deeply unsatisfactory state of affairs,’ brought about by the withdrawal of the tariff figures. He added that Monitor would be ‘seeking to understand from the DoH exactly how this could have arisen’.
Five mental health trusts due to be authorised in April and July are likely to go ahead, as they are not yet covered by PbR.
The DoH’s suspension of the current tariff has left current and aspirant foundation trusts unable to create credible business plans for the next year.
Foundation Trust Network director Sue Slipman told HSJ that the implementation of the tariff had been ‘far too rushed’, and the situation was ‘completely chaotic’.‘Some foundation trusts will have some major wobbles over this; it will severely affect their business plans’.
Ms Slipman suggested some trusts were considering withdrawing their applications following the withdrawal of the tariff.
One chief executive, whose trust had been expecting authorisation in April, said that if the DoH reduced tariff costs any further he could not guarantee his trust would be able to proceed with its application.
‘If the tariff is further reduced [then] business plans that are just about affordable will become unaffordable - and there will be no time to review them for June. I would not be surprised if there were numerous casualties.’
He said he was ‘amazed that, despite the DoH withdrawing the tariff for emergency services last year, this year’s tariff had not been managed in such a way as to avoid another massive mistake’.
One foundation trust finance director said that he was ‘completely gobsmacked’ that the DoH had taken such a drastic measure: ‘It beggars belief that they would have done this unless there is something fundamentally wrong with the whole tariff structure for this year.’
‘Myself and my staff have been working late into the evening for the past three weeks to get business plans written; this announcement is soul-destroying and hugely frustrating,’ he added.
Another foundation trust chief executive questioned how the DoH had published an incorrect tariff. ‘If it had been a trust chief executive that had engineered such chaos, heads would roll. It’s been cock-up after cock-up - but it’s one rule for the DoH and another rule for us,’ he said.
A year in the life of the troubled tariff
Jan 2005 The Department of Health halts plans for the full roll-out of payment by results, due for April 2005. Emergency and outpatients are excluded from the tariff after the DoH discovers a £1.5bn ‘imbalance’ in the NHS. The sudden change sees trusts and PCTs scrambling to recalculate forecasts for 2005-06.
April 2005 Original full PbR deadline missed.
Dec 2005 DoH misses deadline for publication of 2006-07 national tariff.
26 Jan 2006 DoH publishes NHS operating framework for 2006-07, detailing a 1.5 per cent uplift for inflation.
31 Jan 2006 DoH publishes national tariff for 2006-07.
22 Feb 2006 DoH admits to ‘underlying errors in the calculation of the tariff’.
No date set for publication of revised tariff. DoH only says it will be published ‘as soon as practicable’.
http://www.hsj.co.uk/nav?page=hsj.news.story&resource=4455211
http://www.hsj.co.uk/nav?page=hsj.news.story&resource=4455126
Acute and primary care trusts have been left unable to finalise their business plans just a month before the start of the new financial year. Nineteen foundation trust applications will be delayed.
Without next year’s prices, managers have been left in limbo, with PCTs unable to plan how much work to buy from their provider trusts.
Chief executives are railing against the ‘complete and utter cock-up’ which has rendered three weeks of planning on the basis of the tariff published on 31 January ‘totally worthless’.
The DoH would not say where the error lay, or when the new tariff will be issued, although HSJ sources said they were expecting something imminently.
The blunder was revealed on the day that the DoH issued a diktat instructing all NHS organisations to take immediate action to tackle deteriorating finances revealed in January’s financial returns. The timing of the two revelations left many chief executives and finance directors reeling.
The letter, penned by DoH payment by results deputy director of policy and strategy Liz Eccles and sent out last Wednesday, thanks NHS managers for drawing problems with the tariff to the DoH’s attention. It says ‘underlying errors in the calculation’ have been detected and that the tariff will be withdrawn until further notice, following ‘testing’ with NHS colleagues.
NHS Confederation policy director Nigel Edwards said: ‘There’s real anxiety and disbelief about what has happened.’
He said that as well as facing an immediate period of limbo, in which managers will be unable to agree local delivery plans or service-level agreements with partners, they would also need to gear up to cope with the possible implications of an altered tariff.
PCTs had been expecting to submit final planning submissions to the DoH this week, setting out the services they intend to commission next year. Ms Eccles’ memo says this deadline would now be extended, with details provided with the new tariff.
In January 2005 the DoH postponed roll-out of payment by results for emergency services after last-minute calculations highlighted a £1.5bn ‘imbalance’.
NHS Alliance modernisation and commissioning lead Nicola Easey told HSJ that this latest debacle meant that NHS managers were being forced to do their jobs ‘with their hands tied behind their back’.
King’s Fund chief economist Professor John Appleby described the tariff saga as ‘a real mess’.
‘We are a few weeks away from the beginning of the new financial year; it is not just about trusts applying for foundation status having to redo all their forecasts. PCTs and other trusts will be relying on these numbers to get some idea of the levels of predicted income and expenditure. These numbers are really crucial,’ he said.
‘All the planning is worthless’
NHS managers have been unable to contain their rage about the Department of Health blunders that led to the recall of the tariff.
Alerted to the news by HSJ last week, one acute chief executive from the North was stunned: ‘What the hell do they think they are playing at this time?’ he asked.
And a southern counterpart rounded on the government for its ‘complete and utter cock-up of this year’s tariff,’ and demanded that the DoH officials responsible be named and shamed.
Another acute trust chief executive from the South told HSJ: ‘All the planning that has gone on has come to a stop. All of it is worthless. It’s a total cock-up. It’s just mind-blowing.’
A finance director said: ‘My staff have put a lot of time in on the tariff - working weekends and literally until midnight in some cases.’ He said maintaining morale was proving difficult.
In the East, one chief executive said he found it ‘incredible’ that the government ‘could have got the tariff so wrong for the second time in a row’.
Several chief executives said they would expect to be sacked in the event of making a mistake of these proportions, but they had ‘no confidence’ that this would happen at government level.
Delays for 19 foundations
The foundation trust programme faces severe delays following the Department of Health’s decision to withdraw the tariff structure for next year, according to Monitor, the foundation trust regulator.
Last week Monitor chair Bill Moyes sent a letter to foundation trust applicants detailing the set-backs.
In it he confirmed that the six acute trusts hoping for authorisation in April will have to wait until June, and the further 13 aiming to gain foundation status in July would be pushed back to August.
And Mr Moyes warned that even these timings were subject to the DoH reissuing the tariff by mid-March.
In a separate letter to chief executives and finance directors of existing foundation trusts, Mr Moyes expressed concern about the ‘deeply unsatisfactory state of affairs,’ brought about by the withdrawal of the tariff figures. He added that Monitor would be ‘seeking to understand from the DoH exactly how this could have arisen’.
Five mental health trusts due to be authorised in April and July are likely to go ahead, as they are not yet covered by PbR.
The DoH’s suspension of the current tariff has left current and aspirant foundation trusts unable to create credible business plans for the next year.
Foundation Trust Network director Sue Slipman told HSJ that the implementation of the tariff had been ‘far too rushed’, and the situation was ‘completely chaotic’.‘Some foundation trusts will have some major wobbles over this; it will severely affect their business plans’.
Ms Slipman suggested some trusts were considering withdrawing their applications following the withdrawal of the tariff.
One chief executive, whose trust had been expecting authorisation in April, said that if the DoH reduced tariff costs any further he could not guarantee his trust would be able to proceed with its application.
‘If the tariff is further reduced [then] business plans that are just about affordable will become unaffordable - and there will be no time to review them for June. I would not be surprised if there were numerous casualties.’
He said he was ‘amazed that, despite the DoH withdrawing the tariff for emergency services last year, this year’s tariff had not been managed in such a way as to avoid another massive mistake’.
One foundation trust finance director said that he was ‘completely gobsmacked’ that the DoH had taken such a drastic measure: ‘It beggars belief that they would have done this unless there is something fundamentally wrong with the whole tariff structure for this year.’
‘Myself and my staff have been working late into the evening for the past three weeks to get business plans written; this announcement is soul-destroying and hugely frustrating,’ he added.
Another foundation trust chief executive questioned how the DoH had published an incorrect tariff. ‘If it had been a trust chief executive that had engineered such chaos, heads would roll. It’s been cock-up after cock-up - but it’s one rule for the DoH and another rule for us,’ he said.
A year in the life of the troubled tariff
Jan 2005 The Department of Health halts plans for the full roll-out of payment by results, due for April 2005. Emergency and outpatients are excluded from the tariff after the DoH discovers a £1.5bn ‘imbalance’ in the NHS. The sudden change sees trusts and PCTs scrambling to recalculate forecasts for 2005-06.
April 2005 Original full PbR deadline missed.
Dec 2005 DoH misses deadline for publication of 2006-07 national tariff.
26 Jan 2006 DoH publishes NHS operating framework for 2006-07, detailing a 1.5 per cent uplift for inflation.
31 Jan 2006 DoH publishes national tariff for 2006-07.
22 Feb 2006 DoH admits to ‘underlying errors in the calculation of the tariff’.
No date set for publication of revised tariff. DoH only says it will be published ‘as soon as practicable’.
http://www.hsj.co.uk/nav?page=hsj.news.story&resource=4455211
http://www.hsj.co.uk/nav?page=hsj.news.story&resource=4455126
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