David Cameron: More listening

Again from one of yours:

RECONFIGURING HOSPITAL SERVICES

Lessons from South East London

Keith Palmer

All four DGHs in South East London were in chronic financial deficit, despite rapid growth in both NHS funding and hospital activity. In 2005/6 the aggregate underlying deficit of the four DGHs was more than £50 million and legacy debt exceeded £160 million. Analysis undertaken at the time indicated that they were expected to remain in deficit, and legacy   was expected to increase further to exceed £300 million by the end of the decade, despite aggressive cost-cutting measures.

Consequently all four DGHs had been formally designated by NHS London as financially challenged trusts.

Analysis of the financial and operational performance of the six acute trusts in south-east London in the mid-2000s revealed:

• the two trusts with whole-hospital private finance initiative (PFI) schemes, Queen Elizabeth, Woolwich and Bromley Hospitals NHS Trust, had large income/expenditure and cash flow deficits and the highest legacy debt

• average productivity of the four DGHs was significantly below the top quartile performance of hospital trusts in England
• there was aggregate excess bed capacity in South East London of more than 400 acute beds – the equivalent of approximately a whole DGH’s bed capacity.

Of the six lessons the rest of the NHS can learn from South East London the fourth stands out:

“…….competition and choice in contestable services may inadvertently cause deterioration in the quality of essential services provided by financially challenged trusts, and therefore widen the quality gap between the best and worst performers. Market forces alone will rarely drive trusts into voluntary agreement to reconfigure in ways that will improve quality and reduce costs. In most cases, the most likely outcome is that financially challenged trusts will suffer a downward spiral of continuing financial deficits, deterioration in the quality of care and a further widening of the quality gap. The NHS will have no alternative but to continue to fund these deficits or allow the trusts to fail.”

Few, if any of them, will ever become foundation trusts. This conclusion is important in view of the considerable emphasis placed by the coalition government on ‘making the market work’.

The coalition government’s decision to transfer commissioning responsibility from PCTs to smaller GP consortia will further weaken commissioning levers to effect service improvement across trust boundaries in emergency and network services. GP consortia will have even less expertise and commissioning experience than PCTs; information asymmetries will be even more pronounced; and understanding of how to shape the ‘quasi-market’ will be even less developed. Since GP consortia will be much smaller than PCT joint commissioning groups, and SHAs are to be scrapped, it is unlikely that GP consortia will be successful in driving major service improvement in emergency and network services.”