Dec 7 2005
According to a new report, the financial problems being experienced in the National Health Service in the UK are all set to worsen over the next few years and a number of hospitals could fail.
The King's Fund, an independent NHS think tank, says that far from healing the problem, the government's planned reforms could exacerbate it.
Apparently the health service urgently needs a more flexible financial structure to deal with failing hospitals and to prevent problems occurring in the first place.
The King's Fund report says that more than a quarter of NHS Trusts in England were in the red in 2004/5 despite record levels of funding.
The report, "How should we deal with hospital failure?" says that over a fifth of hospitals were likely to experience large and persistent deficits in the next few years and it was likely that a significant number of these would fail, putting the quality of patient care at risk.
The report's author Dr Keith Palmer says a key lesson to be learned from the private sector is that failure is the end of the road.
The report warns that the government's plans for a market-based system for health care, designed to allow greater patient choice, will only make matters worse.
Allowing the independent sector to run some services would also further reduce the income for some existing NHS bodies, says the study.
According to the government, its plans would allow patients to choose from a list of providers, meaning the best ones would get more business and poor performers would have to improve or face the consequences.
However Niall Dickson, the King's Fund chief executive says that the trouble is that market incentives will inevitably create further instability as a by-product of trying to stimulate improved efficiency and responsiveness.
The report calls for a package of rescue measures to be applied to NHS trusts with large deficits before they do in fact fail.
It also says trusts that fail to meet targets for patient care or financial performance, should lose control over their destiny, with an independent administrator appointed instead.
The Department of Health said the planned reforms would ensure investment was used in the most effective way, and says it already has a well-established regime in place to monitor and address problems in NHS Trusts.
This week the NHS Chief Executive Nigel Crisp is due to publish the annual report on the NHS performance which is all set to say extra investment and reform has brought real improvements for patients.