A hospital trust will save £14million after becoming the first in the country to buy its way out of a Private Finance Initiative (PFI) deal.
The NHS body was due to pay £2m a year for the next two decades to the private firm that built West Park Hospital in Darlington, County Durham.

But after reviewing the costs, Tees, Esk and Wear Valleys Mental Health Foundation Trust decided to take advantage of a break clause in the deal.

It paid £18m upfront to get out of the PFI contract 23 years early, but it now owns the hospital outright and expects to save £14m over the course of the deal once maintenance and inflation is taken into account.

The move, disclosed in the Health Service Journal, comes after The Daily Telegraph uncovered evidence that hospitals are closing accident and emergency departments in order to pay the interest on PFI deals for new buildings.

Some PFI hospitals – built and run by private firms and effectively rented back to the state – will end up costing taxpayers more than 10 times their capital value.

“We concluded that the best option was to exercise what exists in the PFI projects, which is a clause called ‘voluntary termination’,” said Colin Martin, Director of Finance at the Tees, Esk and Wear Valleys trust.

“It effectively means we pay off the mortgage early.”

However he added that the trust – which runs mental health services in County Durham, the Tees Valley and along the North Yorkshire coast – did not regret the original deal and was committed to two other PFI deals.

“We wouldn’t have had the hospital if we’d waited for the traditional financing route,” Mr Martin said.

PFI deals became the preferred way of paying for public sector infrastructure projects under Labour, as they allowed new buildings to be constructed while avoiding large initial outlays of money.

Under the complex deals, private contractors carry out the building work then own the structure for up to 35 years, while the public sector body gives them annual interest and repays the capital sum as well as paying for maintenance.

However because of the length of the deals and the amount of interest involved, taxpayers end up paying several times the original value of the project.

In the first known example of an NHS hospital buying its way out of a PFI deal, the North-East mental health trust decided to purchase West Park Hospital outright.

It had agreed a 32-year deal with Norwich Union Public Private Partnership Fund to build the 116-bed facility, which opened its doors in 2004.

The hospital – which is also home to the trust’s headquarters – cost £16m to build but under the deal, the trust was paying the contractors £1.4m a year in interest payments and a further £600,000 in maintenance and paying back the principal.

In 2009, the trust reviewed its PFI deals and decided it had enough cash in the bank to pay the £18m break clause and so buy West Park outright. It gave the project company the required statutory notice and after the legal process was completed, the deal ended in December.

Treasury figures suggest it would have the remainder of the deal would have cost a further £32m, so it has saved £14m by getting out of it.

However it is unlikely the pioneering move will be copied by many other trusts, as most PFI deals are so large as to make early repayment impractical.

Aviva, the company that now runs the PFI firm that built West Park, was unavailable for comment.

From: http://www.telegraph.co.uk/Hospital-saves-14m-by-getting-out-of-PFI-deal

Emergency patients are being let down by the health service because managers are more concerned with meeting targets by treating those with appointments, the heads of Royal Colleges warn.

In a letter to The Daily Telegraph, some of the country’s most senior doctors say they are “deeply frustrated” at the low priority given to Accident and Emergency.

Targets concerning waiting times and cancelled operations, introduced under Labour, result in managers pushing doctors to operate on patients whose care has been pre-planned, in order to avoid financial penalties. But they can also mean that those who come in as emergency cases are stabilised and admitted but then left to wait for surgery.

Studies have shown that elderly people with fractured hips who do not undergo surgery within 48 hours are less likely to regain full mobility. Younger patients with shattered pelvises, from motorcycle or horse-riding accidents, are less likely to walk again if their operations are delayed.

A report published on Thursday criticised care for the elderly, finding that two thirds of those who died within a month of surgery had not received proper care and that they had often been left in pain.

Most of those patients were being treated for bowel conditions or broken hips, which are usually admitted as emergency cases.

John Black, president of the Royal College of Surgeons, said the report echoed concerns that surgeons had been raising for some time.

In the letter, Mr Black said: “It is a source of deep frustration to our members that hospitals have become organised to deal quickly with elective operations at the cost of properly managing emergency care.”

The Coalition’s reforms of the NHS could help by making hospitals more accountable to GPs for the care they provide, he said.

The letter was signed by Peter Nightingale, president of the Royal College of Anaesthetists; Peter Kay, president of the British Orthopaedic Association; Finbarr Martin, president of the British Geriatric Society; Mike Horrocks, president of the Association of Surgeons; and Clare Marx, the Royal College of Surgeons’ lead representative in matters of patient safety.

Mr Horrocks said: “In recent years, the NHS has been set targets for elective operations to bring down waiting lists.

“This has been fantastic for patients with non-emergency conditions, but came at the detriment of those who require urgent treatment as hospitals focused on hitting those targets.

“The new government has committed to moving away from targets and towards measuring and rewarding hospitals who deliver good outcomes and this report should provide further evidence that this approach is correct.”

Under Labour, patients had to be treated within 18 weeks of a referral by their family doctor.

Surgeons have told the Telegraph that this resulted in extreme pressure to operate on any patients in danger of failing to meet that target, ahead of cases that came in as emergencies.

Any pre-planned operation that was cancelled was recorded and the data published. The patient then had to be rescheduled within 28 days, adding to the pressure to give elective operations priority, doctors have said.

Mr Black added: “Surgeons have been saying for some time that emergency surgery is a Cinderella service in the modern NHS.

“We will only solve these problems if focusing on emergency care becomes a priority in the boardroom as well as the ward.”

Katherine Murphy, director of the Patients Association, said: “It can be so debilitating for someone who has a fracture to be left for a couple of days or longer, waiting for an operation when the trust is focused yet again on meeting these pernicious targets. It is an appalling way to determine who gets care. An emergency should be an emergency.

“The financial rewards for elective surgery are more lucrative for the trust than for emergencies and that is why trusts continue to focus on elective treatment. We cannot make savings by putting patients through unnecessary pain and suffering.”

From: http://www.telegraph.co.uk/Emergency-patients-let-down-by-targets-say-surgeons

Labour chair of public accounts committee laments ‘bad story of missed opportunities’ in tackling health inequality.
Labour’s stewardship of the NHS produced an alarming health gap that saw people living in the poorest neighbourhoods in England die almost two years before those in the rest of the country, in what the head of the public accounts committee today calls a “bad story of missed opportunities”.

Margaret Hodge, the Labour chair of the committee, said that despite the doubling of the NHS budget and rising prosperity levels there had been “lots of reports and inaction about health inequality”.

“New Labour came in in 1997 and announced it would put reducing health inequalities at the heart of tackling the root causes of ill-health. But it was unacceptable that health inequalities only became a NHS priority in 2006, and primary care trusts not required to report on it until 2007. It was too late.”

The committee’s report found that, as a result, the gap in life expectancy between the poorest areas and the national average grew by 7% for men and 14% for women, and Labour missed its own targets on public health. It says that the Department of Health did not have enough resources and lacked leadership and a “clear focus on health inequalities”.

“This was a bad story … of missed opportunities,” said Hodge, who said the premature mortality amounted to 3,335 excess deaths across the country. There were not enough family doctors in poor areas and no ideas to prevent public health problems rather than reacting to crises in, for example, obesity.

The report says two-thirds of the poorest places in the country still had “lower levels of GP coverage than the national average of 60 GPs per 100,000 population”. In the north-east, the report said, this dropped as low at 25 per 100,000.

Hodge, a minister in the last government, said Labour should have forced GPs in “single-handed practices” to band together in bigger practices in poorer areas, and paid new doctors more money to work in difficult areas. Single-handed practices make up 22% of all GP surgeries in poor areas.

“We should have drawn up new contracts, closed down single-GP practices and basically told them who to hire and how much to pay them,” she said, pointing out 10 of the 146 measures outlined in a doctor’s contract rewarded physicians for focusing on the neediest groups.

The committee’s response comes as the health secretary, Andrew Lansley, is preparing a white paper on public health to be published this month. The report says that at present around 4% of the NHS budget is spent on public health, although actual spending is not easy to identify. It calls on the government to develop “transparency and accountability for this [money]“.

Hodge said the committee had identified three public health prevention strategies – stopping smoking, high blood pressure and lowering cholesterol – which cost £24m out of a total budget of £3.9bn. “But it was not spent. We are too reluctant to spend on prevention in this country and end up spending billions on treatments.”

The government welcomed the report, saying it was committed to renegotiating doctors’ contracts so that disadvantaged areas could deal with their population’s health needs. “We’ve already set out proposals for how areas with the poorest health will be given money to help them be healthy, and public health budgets will be ringfenced,” said Anne Milton, the public health minister. “We need a new approach to improve the health of the poorest, fastest.”

From: http://www.guardian.co.uk/health-inequality-labour-margaret-hodge

The £12.7bn scheme to give every patient in England an electronic medical record will cease to be a centralised national programme, Simon Burns, the health minister, has announced.
Instead, the job will be devolved to the NHS, with hospitals allowed to introduce “smaller, more manageable change” using “a more plural, supplier base” than the two main contractors BT and CSC.

The moves will save another £700m on top of the £600m that the Labour government said it would cut from the cost of the programme, Mr Burns said in a written ministerial statement.

According to Christine Connelly, the health department’s director-general for informatics, the £1.3bn savings to reduce the programme’s overall estimated cost to £11.4bn will come from a variety of sources.

They include an anticipated – though still to be negotiated – £500m cut in the cost of CSC’s £3bn deal to supply systems to most of the north, east and west of the country; a £112m saving already booked from reducing the scope of BT’s deal in London; and £200m being taken out of the national programme’s own costs.

In addition, there will be an anticipated £500m reduction on an estimate that it would cost the NHS locally £3.5bn to install the systems.

The “core assumption” of the programme will now be one of “connecting all systems together rather than replacing all systems,” Mr Burns said, allowing NHS trusts to keep those that match modern standards while moving forward “in a way that best fits their own circumstances”.

The promise of a more devolved approach was welcomed by critics of the programme and the NHS Confederation. But both struggled to be clear about the implications.

Richard Bacon, a Conservative member of the Commons’ public accounts committee, said: “The big unanswered question is when it is all finished, what will we have got for all the money? There is still some £5bn in the programme to be spent, but it was meant to deliver something very special.”

Mr Burns said that in spite of “more plural” suppliers, the existing contracts with BT and CSC that have huge penalty break clauses “will be honoured”. Frances Blunden, the NHS Confederation’s IT specialist, said it was “a fair question” to ask “where will money come from for a wider choice of suppliers if the existing deals are to be honoured?”.

The statement does, however, represent something of a U-turn for the Conservatives, who had threatened ahead of the election to scrap all the programme’s central databases. The existing national infrastructure is to be kept, although a review of the national summary record is still underway, focusing on its contents and patient consent.

“The early indications [from the review] are that we are past the point of should we or shouldn’t we have one,” Ms Connelly said, “although that question will be asked”.

From: http://www.ft.com/cms/s/0/785e2f70-bc41-11df-8c02-00144feab49a.html

The government has confirmed it is planning to scrap the NHS Direct telephone service in England and replace it with an alternative service.
Nick Chapman, chief executive of NHS Direct: “The new helpline will be better and more cost effective than NHS Direct” A new 1-1-1 helpline is already being piloted in north-east England.

It was previously reported that the new service may replace NHS Direct, but now the Department of Health has confirmed it will definitely do so.

The move comes as the government curtails public spending, even though it has promised to protect the NHS.

The change will not affect existing NHS helpline services in Scotland and Wales.

Health Secretary Andrew Lansley announced the plan to scrap NHS Direct in England during a hospital visit.

NHS Direct currently employs more than 3,000 staff, 40% of whom are trained nurses. It is understood the ratio on the 1-1-1 helpline is “slightly less” in the pilot, but no figures are yet available for what will happen when the scheme is rolled out nationally.

Critics claim the change would undermine the quality of the service by reducing the number of qualified nurses answering calls, but chief executive of NHS Direct Nick Chapman told the BBC the new helpline would be better and more cost effective than NHS Direct.

In June GPs urged the government to get rid of NHS Direct, claiming it was not cost effective.

Roughly 14,000 people a day call NHS Direct for medical advice, with the service costing £123m a year to run.

Dr Peter Carter, chief executive and general secretary of The Royal College of Nursing , said reducing the number of specialist nurses who worked on the new helpline was “short-sighted.”

He said: “We urge the government to consult fully and look at all the evidence before enacting changes which could leave people without expert advice from trained nurses.”

From: http://www.bbc.co.uk/nhs-direct-to-be-scrapped

The NHS spends up to £86m a year on thousands of websites that are difficult to find, confusing for patients and which do not meet their needs, according to research commissioned for a Department of Health report.
Research for the NHS Digital Communications Review, conducted by communications agency Precedent and leaked to the Health Service Journal, found 2,873 nhs.uk websites that were in use and more than 1,000 other nhs.uk sites that were no longer active. A total of 287,300 web pages were accessible and Google listed 56 million pages within the nhs.uk domain.

The researchers concluded that the public would appreciate fewer contact points online but the digital communications review said there was not sufficiently strong evidence that there were too many NHS domains.

Instead the review said there was a need for a digital brand strategy with standards for all NHS sites. It said a central information role was “sound in principle but its adoption requires a general acceptance that it is the role of the centre to perform this organising function.”

EHI understands that the researchers suggested that the NHS may be spending too little on too many websites rather than too much.

The Precedent researchers said that two of most recognised health service websites, NHS Choices and NHS Direct, were often competing for attention and although NHS Choices focuses on health information and local service data and NHS Direct offers online diagnostic tools the differences in content between the two was not clear to patients.

They added: “NHS Choices and NHS Direct are both established as national sites with similarities of positioning, brand and audience. This confuses users about the ‘definitive’ access point for NHS information and the roles of each site.”

Research for the review also concluded that GP practices websites were also the weakest of the health service’s online offerings.

It added: “GP surgeries have by far and away the poorest sites, in that they have the largest percentage of problems identified. GP sites failed to provide the means to allow interaction with users.”

The researchers found that overall the NHS was failing to meet patients’ needs for online functionality such as online appointment booking, repeat prescription requesting, test result reporting and contact via email. Only 50.3% of sites included email addresses. “The NHS is not making itself easy to do business with,” the report said.

The research is also critical of the accessibility of websites and said that vulnerable members of the public were not been catered for with 30% of sites exhibiting at least one “notable deficit in standards” which might cover poor quality content, lack of NHS branding, poor navigation or out of date content.

The researchers said it was very difficult to estimate the cost to the NHS of the websites with responses to information on usage and cost received from only 188 out of 4,121 sites. However it estimated that the cost of running the sites “could be as high as £86m per year” and said costs could be higher as those figures did not include set up costs.

The digital review, however, said no broad conclusions could be drawn about value for money “given the relatively low cost of establishing and operating small, focused websites.”

The researchers claimed the public “struggled to locate the NHS online with a Google search” when searching on health-related terms and said the scale and depth of information on offer was daunting to many. It said patients also often ended up going to information offered by Wikipaedia, the charity sector and websites such as NetDoctor and PatientUK rather than the NHS.

The researchers said interviews with users revealed that the public wanted to see “one NHS” online which would tally with their perception that they were receiving care from “one NHS”.

The Department of Health said the white paper had outlined the government’s plan to being about an NHS information revolution to give people access to comprehensive, trustworthy and easy to understand information. Information on how this will be achieved is to be set out in the DH’s information strategy, due to be published in the autumn.

From: http://www.e-health-insider.com/nhs_%C3%82%C2%A386m_website_spend_confusing

Dentists are still encouraging patients to return for excessive appointments and follow-ups, putting income ahead of care, research suggests.Data gathered by the Conservatives shows dentists to be “gaming the system”.

The Tory analysis, based on figures for 2008-09, suggests that 6.8 million slots could have been made available to those without access to an NHS dentist had they not been used for excessive appointment-setting or needless splitting of courses of treatment into separate sessions.

The Tories calculate the cost to NHS patients of “unnecessary charges” at £117 million, up from £109 million the year before. The burden represents a fifth of the £572 million charged each year for treating NHS patients.

Andy Burnham, the outging Health Secretary, acknowledged last year that dentisty remained “unfinished business” after the failure of a new dentists’ contract to address problems with a so-called drill and fill culture.

An independent review ordered by the labour Government, led by Jimmy Steele, of Newcastle University, found that dentistry was too preoccupied with treatment rather than prevention, and that dentists should be paid according to the number of patients on their list and penalised for poor work that leads to repeated visits.

Professor Steele’s proposals, which were accepted by the Government and put into pilot schemes, include rewarding dentists for registering new patients and building relationships with existing ones. Income is determined by the size of the patient-list, quality of care and the number of courses of treatment.

Andrew Lansley, the Tory health spokesman, who acquired the figures from parliamentary questions in February, said that the lack of political drive to rectify problems with dentistry was shown by its absence from the manifestos of Labour and the Lib Dems.

From: http://www.timesonline.co.uk/tol/life_and_style/health/article7115298.ece

The NHS is facing upheaval and cutbacks as a decade of budget increases comes to an end and £20 billion of savings must be found over the next five years.

Despite pledges from Labour and the Conservatives to protect front line services, there is evidence that their promises may have come too late.

A list of cuts has already been identified – including job losses, banning certain operations, closing casualty departments, downgrading maternity services and reducing the number of junior doctors. But these have been mostly quietly ignored by the three main parties.

The Conservatives pledged to stop all closures until they could be reviewed but, with billions of pounds of savings needed to cope with growing demand, cuts and closures are almost inevitable.

David Cameron emphasised that he was personally in favour of the NHS, after his experiences with his disabled son Ivan, who died last year, to combat arguments that the health service was not safe in Tory hands. The party manifesto contained promises about dentistry and round-the-clock GP services which appear too expensive in the current climate.

Both the major parties were accused of chasing the “fear of cancer” vote. The Tories said they would fund cancer drugs turned down by Nice, the health rationing watchdog, but did not mention drugs for other illnesses such as arthritis or dementia.

Labour said cancer patients would see a specialist and have test results back within a week. The party was criticised for unveiling its manifesto at a new hospital in Birmingham. It is against the rules to use NHS premises for election events.

But Labour pointed out that the hospital was still in the hands of the private finance initiative organisation – a policy which means the NHS will be repaying billions of pounds for new hospitals for decades.

Nick Clegg refused to ring-fence NHS spending given the size of the national debt.

The Liberal Democrat campaign focused on cutting waste on managers, scrapping regional strategic health authorities and pledging more power to communities to direct the health service locally.

From: http://www.telegraph.co.uk/General-Election-2010-cuts-inevitable-as-NHS-must-make-savings

NHS bosses are earning annual bonuses of tens of thousands of pounds on top of their six figure salaries as Anna Walker, chief executive of the Healthcare Commission, got £68,000 in bonuses.

Hundreds of chief executives, departmental directors and board members of hospitals and other NHS organisations have received extra payments of as much as £32,000 – the largest single year’s bonus unearthed by freedom of information requests submitted by the Liberal Democrats.

The £32,000 bonus went in 2008-09 to Beccy Fenton, deputy chief executive of the Heart of England hospital trust, who already earns £170,000 a year. She received it after generating almost £1m of consultancy work for her employers, including private sector contracts. The trust stressed last night that the £32,000 was a one-off sum for consultancy work.

Anna Walker, who was chief executive of the Healthcare Commission until it was disbanded last year, earned the largest combined amount in the past three years – £68,150 on top of her six-figure salary. She received £22,375 in 2006-07, £23,000 in 2007-08 and £22,775 in 2008-09 for running the then NHS watchdog in England.

Norman Lamb, the Lib Dems’ health spokesman, condemned the payments as shocking. “These bonuses are utterly scandalous. People will be disgusted by the extent to which fat cats in the public sector have been enriched at a time when the NHS has denied people drugs that they need and access to treatments such as in mental health,” he said. “We thought it was just in banking, but the unacceptable bonus culture appears to be alive and kicking in the upper echelons of the NHS.”

This is the first time both the number of bonuses and their size has been disclosed. The Lib Dems sought information from every hospital trust, primary care trust (PCT), mental health trust and ambulance service in England, as well as other NHS bodies such as strategic health authorities.

While some pay no bonuses, many do. However, the figures do not reveal the full picture because some refused to disclose theirs and a few simply gave their chief executive’s salary band.

The £32,000 one-off bonus and the £68,150 over three years are large but not atypical.

Laura Roberts, chief executive of the Manchester PCT, received £25,732 extra in 2008-09, while Dr Patrick Geoghegan, her counterpart at South Essex Partnership mental health trust – who earns £170,000-180,000 – received £20,573 in the same year for helping it do well against NHS targets.

South Essex trust spokeswoman Maxine Forrest, said: “In 2008-09, to recognise the trust’s exceptional performance in national ratings, a one-off bonus was paid. Dr Patrick Geoghegan is chief executive of one of the most successful and highest-performing NHS organisations in the country.”

Paul O’Connor, a former chief executive of Birmingham Children’s Hospital, received a one-off £15,000 bonus in 2007 for helping it to achieve semi-independent foundation trust status within the NHS. He resigned late in 2008 after the Observer revealed doctors’ concerns that some care was sub-standard.

The chief executive of the Royal Berkshire hospital trust received £54,611 in bonuses over three years in 2007-09, while the chief executive of the Human Tissue Authority was given £37,895 in 2006-09.

Many chairmen, divisional directors and both executive and non-executive directors of NHS bodies also receive bonuses. The Royal Berkshire hospital trust spent £240,728 on bonuses in 2007-09, more than any other NHS body that provided figures. Eight executive directors shared another £186,117, as well as the £54,611 payment to the chief executive.

Large payments to senior figures in those three years were also made by the Healthcare Commission (£215,550), the London Ambulance Service (£130,646), the Hertfordshire Partnership mental health trust (£122,465) and Portsmouth Hospitals (£105,000).

All three main parties have pledged to slash NHS management and bureaucracy. “This is the first real analysis of the bonus culture at the top of the NHS, and it’s shocking,” said Lamb. “Bonuses of £20,000 or more are more than many NHS staff receive as their full year’s salary.”

From: http://www.guardian.co.uk/society/2010/apr/25/nhs-bonus-liberal-democrats

The NHS has wasted more than £11m using ambulances as “waiting rooms” to get around Labour’s target that patients should be treated within four hours of entering casualty.

New figures reveal the time spent by crews waiting outside hospitals for their patients to be admitted last year was the equivalent to funding 31 fully staffed ambulances to do nothing for 24 hours a day.

The statistics released by NHS ambulance trusts show the amount of time ambulances are forced to remain idle is increasing each year. In the first nine months of 2009 the total so-called “dead time” in England reached 284,000 hours — more than the whole of 2007.

The four hour target was introduced in 2004 in an effort to end the scandal of patients left on trolleys overnight waiting to be seen by doctors.

However, it has led to hard-pressed casualty departments refusing to admit patients until they can be sure they can be seen within the four hour limit. Waits of more than two hours occur in hundreds of cases each year.

Mike Penning, a shadow health minister, said: “It is a scandal that desperately needed frontline paramedics are trapped at hospitals around the country because of Labour’s fixation with the target culture.

“It can’t be right that bureaucracy has taken over from clinicians being able to put patients first, rather than watching the clock. Millions of pounds are being wasted and patients are suffering.”

The Conservatives have promised to slash the number of NHS targets and hand more power to doctors.

From: http://www.timesonline.co.uk/tol/news/politics/article7078867.ece