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NHS - The Perfect Storm

A number of changes are being driven through the NHS which could be considered like the "Perfect Storm".

One most talked about the PbR or Payment by Activity. This has been accompanied by the removal or moreso phasing out of the purchaser protection adjustment. The DH was well aware of what hospitals faced difficulties, but nothing was done until too late.

The financial impact of the new consultants contract was not properly costed by the Department of Health and Agenda for Change also has a substantial impact on costs.

There is a sensible attempt to move care into primary care from secondary care, but this is being done at the same time as everything else and in a relatively insensitive manner in terms of handling staff who could be redeployed rather than made redundant.

The Costs of PFI are excessive and concealed by the use of optimism bias.

There is a bit of good news

The introduction of strong market participants in Foundation Trusts before Commissioning was fully established was the wrong way around whatever one's view about Foundation Trusts.

There is a bit of good news in that the government's pressure to move to 15% of commissioning from the private sector has disappeared off the agenda. Eastern Birmingham spends between 1 and 2% at the moment on specialist services where required. Such as Forensic Mental Health and services for people with Learning Difficulties. The 15% figure is managed through the Local Delivery Plan and the Strategic Health Authorities.

The nature of the first wave ISTC contracts such as the one in Burton where an amount of "activity" payment is guaranteed and, therefore, hhospitals such as Good Hope in Birmingham are likely to have reductions in Activity to move it to Burton. This will hit the new NE Birmingham PCT. Second wave contracts are more sensible, however.

In the mean time PCT budgets have been top sliced by SHA. In Birmingham it is about 2.6%.

The real problem lies in the reorganisation fo the PCTS. The PCTS have an aggregate commissioning budget of 64.309 billion. To put people into job uncertainty causes planning difficulties.

Meltdown occured with PbR in the Czech republic as hospitals found ways of getting extra money from the system.

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