British Health Secretary lists top hospital losers

Jan 26 2006

As part of the shake up of the National Health Service in Britain the health secretary Patricia Hewitt has named the top worse managers.

Eighteen NHS trust hospitals in the most unsolvable financial mess were named by Hewitt in what is being viewed as a tightening of her policy of zero tolerance of financial deficits.

Hewitt is threatening tough action in some parts of England and the switching of services from expensive hospital buildings into smaller units, closer to the patients community.

She says there is no question of an amnesty to bail out trusts with huge debts.

Although Ms Hewitt has not threatened the closure of inefficient hospitals, she talks of a reconfiguration of services and possible "difficult decisions."

The Health secretary appears at present keen to involve the public in the decision making process.

The top 18 of the worst performing trusts were identified by the management consultants KPMG out of a group of 62 which forecast the largest deficits in the current financial year.

Ms Hewitt says their financial problems are such that "even the best management would need additional support to turn the situation round".

The government plans to send in teams of accounting experts to help eradicate overspending.

Accountancy firms are expected to be invited to tender for the work shortly.

At the top of the list were Surrey and Sussex Healthcare NHS trust, which forecast a deficit of £41m by the end of 2005/6 -equivalent to 33% of its turnover.

Runners up Hammersmith Hospitals forecast a £37m overspend (9% of turnover).

Other trusts with big deficits apparently escaped being named because they were supposedly more responsive.

Ms Hewitt did however praise the overall standard of NHS management, but said many of the trusts in the greatest difficulty had already been put under new management.

The Department of Health has issued a rulebook for NHS managers for 2006/7, in order to help them navigate "a year of transition", promising more patient choice and less certainty for trusts about how much they will earn.

Some of the language in the document was changed following claims the intention to make strong financial discipline the "top priority" appeared to be more important than treating patients.

Subsequently financial rigour was removed from the top of the list of priorities including tackling health inequality, reducing waiting times and combating the MRSA hospital superbug.

Excellent financial management is now "a prerequisite", rather than a priority.

One of the key changes to NHS finances in the rulebook, advises trusts to plan to make a small surplus every year to build up a contingency reserve.

Ms Hewitt has apparently assured chief executives that surpluses would not be then raked off to bail out over spenders in other parts of the NHS.

The NHS Confederation, which represents the trusts, says the government faces a stark decision between continuing financial stability and tough political decisions.

Dame Gill Morgan, chief executive for the organisation, has called for a restructuring of debts and a review of hospitals to allow services to develop without "a fixation with buildings".

She also said the loss of beds does not necessarily result in a decline in services.

The Health secretary also says that the government has 'written a very big cheque for the NHS, but it is not a blank cheque, and money that is wasted or spent inefficiently means less for patients who need treatment'.

Surprisingly it seems that affluent areas in the south-east, such as Maidstone and Tunbridge Wells, had bigger deficits than in deprived regions, and Hewitt suggests this might be because wealthier areas had more GPs who made more referrals to hospitals.