March 3, 2011 12:09 am

Reform will hit reshaping of services warning

Andrew Lansley’s plans to hand over the commissioning of £80bn of care to GPs will stymie the major reshaping of hospital services that is needed in many parts of the country, warns a report from the King’s Fund health think-tank.

With NHS spending frozen in real terms and the need to generate £20bn, or 15 to 20 per cent of efficiency savings by 2014, it is “highly likely” that some hospitals that are just about breaking even will “slide into deficit”, the research, published on Thursday, says. This will produce “a downward spiral of falling income, growing deficit and declining quality that will cause hospitals to fail”.

But the evidence from south-east London where four NHS hospitals have seen that scenario play out is that even in the existing system it is very hard to solve such problems, according to the study by Keith Palmer, a former Rothschild banker who until recently chaired the St Bartholomew’s and London NHS Trust.

After 2005, the six small primary care trusts that commission care from Queen Elizabeth in Woolwich, Queen Mary’s in Sidcup and from the Bromley and Lewisham hospitals struggled to resolve the problem and it was only firm intervention by the London strategic health authority that led to any sort of resolution, he says.

Even then, that involved a “temporary” closure – that has now become permanent – of accident and emergency, and maternity services at Queen Mary’s.

But the evidence is that relying purely on market forces, or on GP commissioners to tackle such issues, will fail, Mr Palmer says.

“GP commissioners will be much smaller than primary care trust commissioning groups, with less expertise,” he says. And with the abolition of strategic health authorities it is “highly unlikely that GP consortia will be successful in driving major improvements in emergency and network services”.

The answer, he says, is to give the NHS commissioning board statutory powers to undertake strategic planning, in conjunction with the regulator. At the same time, successful foundation trusts, or even the private sector, could take over financially challenged hospitals, changing what they do and introducing the best models of care – but only if big legacy debts, and overlarge PFI commitments are written off.

The net cost of doing that “is likely to be much less than the cost of continuing to fund the deficits of financially challenged trusts so that they can continue providing sub-standard care until they fail, and then picking up the pieces,” Mr Palmer says.

The changes are needed, he says, because there is good evidence that for some services “larger units serving a wider catchment area produce better outcomes and are more cost effective”. As a result consolidation on to fewer hospital sites “can be expected to drive up quality and drive down costs”.

Relying purely on market forces will not do, he insists, since that is likely to lead to deteriorations in the quality of care for services, such as emergency, not open to competition.

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