First year report on the coalition government’s major NHS shake-up – part three
Hospitals were the one major part of the NHS in England not directly affected by the Lansley restructuring through the Health and Social Care Act. But during the past year, hospitals have been in the eye of an NHS storm – not least because of their finances.
Last month the trusts’ regulator, Monitor, announced that the number of NHS Foundation Trusts in England in financial difficulty had doubled over twelve months from 21 to 39 - of these 33 were acute hospitals.
They have been caught in the down-draught from the Act – most notably from the requirement to put services out to tender and the increasing moves to favour commercial providers.
Acute hospitals – like the Great Western – are reeling under the pressures of increasing demands for treatment at a time of highly constrained budgets. This may be partly because of the restructuring and partly because of other more general causes.
This unparalleled demand stems also from the growing population and its increasing longevity, from increases in chronic disease like diabetes (often connected to obesity), coronary and respiratory conditions – and the costs of new treatments.
The restructuring has undoubtedly given unprecedented commissioning power to GPs who are keen to enhance local primary care services and keep as many patients as possible away from expensive hospital beds and even more expensive hospital operating theatres.
But it was the aftermath of the Mid-Staffordshire hospital scandal in the shape of the Francis Report that has concentrated minds within hospitals and given politicians free rein to take pot shots at them.
That hospitals should have sufficient numbers of nurses was one of the key points of the Francis Report. During the first years of the coalition government, nursing numbers fell disastrously – between 2010 and 2012 the NHS lost 4,028 full-time equivalent qualified nursing posts. The GWH has been running a costly and successful recruitment campaign.
When reports on Mid-Staffs were published, nurses became the target of criticisms by right wing politicians and newspapers, not just because they were employed in the public sector, but because they were ‘too posh to wash’ or were not being ‘taught compassion’.
As winter approached the number of nurses (like GPs, many nurses choose to work part time, so these numbers are in terms of full time equivalents) rose dramatically: between September and November last year the NHS employed 4,500 additional full-time equivalent nurses for acute and older people’s wards – a three per cent increase in staffing levels at April 2013.
Even so, hospitals reported their budgets for agency nurses were going through the proverbial roof. And it was only in January that the government allowed an increasing in student nursing places.
The general slide towards privatisation of NHS services reached its peak when the chairman of the Care Quality Commission, David Prior, (a former deputy chairman and chief executive of the Conservative party and a former Conservative MP) announced recently that ‘failing’ hospital trusts should sold off to European or American ‘hospital chains’.
He said up to thirty hospitals could end up being sold off to private operators. This puts hospitals, whether they are Foundation Trusts or not, on notice that the government’s preferred way of solving costly problems in the NHS is by ordering fire sales.
As if the Health and Social Care Act was not enough, there will soon be the Care Act (which is expected to become law later this year.) This Bill has had tacked onto it a clause (Clause 119) that may affect all hospitals.
Health Secretary, Jeremy Hunt is changing the law so he can close down hospitals without reference to troublesome things like local opinion and competition issues. This Bill - with its Clause 119 safely approved by MPs - is about to go back to the House of Lords for its final parliamentary scrutiny.
The NHS’ first year under the new regime ends just as winter pressures are beginning to ease. GWH has not had an easy winter.
It bid for £4.2 million to help it through the winter – and got nothing. The RUH in Bath got £4.4 million and Oxford University Hospitals NHS Trust got £10 million.
For many weeks over the winter GWH has failed to hit the target figure that 95 per cent of people coming to A&E should be seen within four hours. And it has suffered from all the connected problems of overcrowded emergency departments – ambulances queuing, trolley waits and blocked beds.
One Commentator has called A&E “the canary in the mine; it tells the story of what is going on elsewhere in the service.”
GWH has been working closely with GPs to make sure patients are referred directly to the right department and do not just show up at the emergency department. A new urgent care centre managed by SEQOL opened on the GWH site in September. SEQOL is a Swindon based social enterprise organisation – “a business with a social purpose”.
And GWH is working with Wiltshire CCG on the Choose Well campaign – another way of encouraging patients not to use the emergency department as a first port of call.
Then in November NHS England found more money to prevent a winter breakdown at hospitals. £711,000 went to Wiltshire CCG and was passed on to Salisbury Foundation Trust hospital which used it for seven projects to help directly with winter pressures:
• extending their discharge lounge to help the flow of patients.
• establishing a unit for rapid assessment of the frail elderly.
• an enhanced paediatric service.
• extra support for its seven day service.
• additional bed capacity.
• extra ward staff to help reduce length of stay.
• addition weekend trauma surgery capacity.
In November Swindon CCG received £1.208 million pounds for winter pressure. This was not passed on to the Great Western Hospital and we have not heard in detail how it was spent. We do know that the CCG’s board was told the money “has now been fully committed.”
No sooner is winter over than hospitals will have to turn to coping with the Better Care Fund (BCF - see the second article in this series.)
The Fund will not start in earnest until 2015-16, but in the coming year it will begin to change how NHS money is used – with a switch of quite large sums away from acute hospitals to the joint CCG-Council BCF.
Will the BCF be able to keep enough of the frail and elderly out of hospitals to allow the hospitals to reduce their capacity – as, with less funding, they will be forced to do. NHS bosses believe that the switch in funding will only work if hospitals can reduce their activity by 15 per cent – and yet hospitals, even without the pressures of winter, are at full stretch.
Not only are they at full stretch as regards staff and patients. They are also at full stretch as regards their budgets.
For some full stretch has given way to over spend. It was reported last week that trust hospitals are seeking £376 million in bailouts for the financial year just ending. These hospitals are not yet being named, but they include five in the south of England which are asking for a total of £73 million.
Great Western Hospital is likely to break even. With the Better Care Fund about to start gnawing at its funding, how long will it be able to stay out of the red? And how loudly will GPs howl when services at the hospital are reduced because of the BCF?
First year report on the coalition government’s major NHS shake-up – part one:
A year ago root and branch changes in the NHS’ structure – embodied in the coalition government’s Health and Social Act - came into force.
Having promised in the coalition agreement there would be no more top-down NHS reorganisations, the coalition allowed Andrew Lansley free rein – given a few bumps along the way – to embark on the most radical NHS reorganisation since 1948, re-shaping most of the national service’s institutions.
At the important level of commissioning of health services for Wiltshire, out went the Primary Care Trust (PCT – known as NHS Wiltshire) and in came Clinical Commissioning Group (CCG – known as Wiltshire CCG) designed to be run by doctors from the county’s 58 general practices.
The respected NHS Managers blogger, Roy Lilley, reported in March on ‘the mood music I hear from Number 10’: “Lansley’s reforms have been a disaster; they have to be fixed by 2015 and competition isn’t going to help. The only issue is money.”
At their March Board meeting, Wiltshire CCG were very upbeat about their progress and achievements. Their chairman, Dr Steve Rowlands, declared they had in their first year made significant achievements and were “On the brink of a very exciting time for the CCG.”
They certainly achieved a good financial result ending their first year spot on budget with a £5 million surplus put away for even rainier days – unless (see below) it is snaffled by the Treasury.
Two of the coalition Act’s aims were to increase transparency and decrease ‘bureaucracy’ and its cost. The former simply has not yet happened at the local level.
And in Wiltshire the latter certainly did not happen – the cost of running the CCG is significantly higher than for the PCT which had a considerably larger share of the budget and of commissioning to administer.
The Wiltshire CCG chose to organise itself into three ‘locality’ groups – the one covering the Marlborough area is “NEW” (for North and West Wiltshire.) And a continuing problem is that these localities meet in private and give only fairly broad reports to the CCG’s (public) board meetings.
One year on the Lansley NHS at our local level looks much like the mirror image of the proverbial swan – beneath the surface the CCG is quietly paddling away at their task of re-shaping primary care services to GPs’ design plans.
To absurdly tight timetables from the top, they have produced strategic plans for two years, five years and for the Better Care Fund [see Part Two]. And they are working closely with Wiltshire Council on joint commissioning plans.
Above the water there is some chaos and turbulence which will have distracted some CCGs.
First there was the NHS 111 debacle. This was a government wheeze to save money by scrapping the NHS Direct telephone service and substituting it with a cheaper model for non-emergency inquiries.
Problems with the system were so great that in most parts of the country the introduction of the service was delayed until it was safe for people to use. NHS Direct which had successfully bid for some of the contracts said the model was economically unsustainable and walked away from their contracts.
For Wiltshire, the contract holder was the private company Harmoni and the service was supposed to go live in April. It took until October 28 for the CCG to accept the NHS 111 was safe.
In the process Wiltshire CCG had to pay out an extra £590,000 to support the service – all but £200,000 of this should be reclaimed from other CCGs using this Harmoni contract.
After NHS 111, the Department of Health now has another crisis on its hands. The introduction by the newly formed Health and Social Care Information Centre of the care.data scheme was so badly bungled that its introduction has been delayed by six months.
This scheme will upload all medical records held by GPs into a central data bank - giving researchers access to all the pieces of the health care jigsaw.
The information will be anonymised at various levels so it can be used for researchers trying to design new drugs and treatments.
It has still not been made clear exactly who can access or buy information from these records.
The phrase that has been put forward is that release of information will only happen where there is a “clear health benefit”. But, opponents of the scheme say, that could surely provide a criterion for any private insurer or health provider to gain access to the data.
In addition doubts over the ability of the NHS to prevent leakage of personal information remain a problem for care.data.
Hovering over the post-Lansley landscape has been the spectre of further and further privatisation of the NHS. The debate about which services must be subject to open tender (costing the CCG a great deal of staff time and money) is still going on and will run well into 2015 as existing contracts run out.
One argument was over the Wiltshire-wide community health care contract held by Great Western Hospital: the Council believe that re-tendering this will disrupt the introduction of the Better Care Fund (see separate MNO report.) The CCG fear a legal challenge if they do not put it out to tender and has decided it will go out to tender.
Perhaps the picture of the CCG quietly paddling away beneath all this turmoil is a little too benign.
Throughout the year, most CCGs have suddenly found holes in their budgets as NHS England scooped up millions of pounds to pay for the specialist services (treatments for rare cancers and other rare diseases) they commission. This was a major deficiency in the coalition government’s reorganisation.
No one thought to define which treatments are specialist services. Wiltshire CCG lost £2 million in September and now stands to lose another £3.9 million. Keeping to the agreed annual surplus (as required by the Department of Health) becomes even trickier with this kind of uncertainty.
There have been other problems following the reorganisation. One neighbouring CCG suddenly found itself being charged by PropCo (the company the Health and Social Care Act set-up to look after all NHS land and property) for the CCG’s headquarters which happened to be owned by Swindon Council.
In another blow to CCGs’ finances, NHS England has proposed that all England’s CCGs should contribute to a £250 million fund in 2014-2015 to cover any ‘legacy debts’ left over from the PCT regimes – mainly unclaimed, retrospective costs of continuing health care.
The Wiltshire CCG is putting aside £2 million as its share of this fund. This will be especially galling for them as they inherited a handsome reserve from the Wiltshire PCT and have been working hard to pay off continuing health care claims.
This proposal goes directly against the promise made by Andrew Lansley that CCGs would not inherit liabilities from previous organisations. NHS Clinical Commissioners, which represents the CCGs, says the proposal is a “significant concern” for its members.
Wiltshire CCG has been making steady headway in its commissioning plans – particularly in its plan to transform services so more people can be treated at home or nearer to their homes. One example is the introduction of 23 Care Coordinators across the county to strengthen the Neighbourhood Nursing service and support the Council’s somewhat under-funded Help to Live at Home scheme.
Some of the Care Coordinators are trained in social work, some are trained nurses. In some ways they foreshadow (or pre-empt?) the BCF – acting as links between GPs and at risk patients.
Apart from some ‘teething problems’, the only reported issue for Care Coordinators in our area is that one of them was given a workload she considered beyond her capacity.
In another innovation, the CCG has made a distinct difference in introducing much faster diagnosis of dementia – now less than four weeks rather than many months under the PCT. This scheme is costing £600,000 and involves training for GPs.
The only question to ask is why it took so long for GPs to push for faster diagnosis of dementia in this way.
And in the background is another coalition agreement promise: that the NHS’ annual budget would rise in real terms during the five year Parliament. Whichever way you cut the figures the NHS is struggling within its tightly constrained budget.
Whether, for instance the budget went up by 0.09 per cent in 2011-2012 or up by 0.02 per cent depends on how and when you view the figures. What is certain is that the budget has had to cope with the £2-3 billion costs of the Lansley restructuring – with its huge redundancies bill to be followed by many of those paid off returning to NHS employment.
And there have been annual repayments at year end to the Treasury of £1.9 billion (2010-2011), £1.4 billion (2011-2012) and £1.5 billion (2012-2013.)
This last repayment included provisions made by the outgoing PCTs to pay for those claims for historic continuing health care money. The Department of Health’s accounts say it was returned to the Treasury to “help in wider fiscal deficit reduction.”
Losing these provisions and having to fund the ‘legacy debts fund’ (mentioned above), local commissioning is being made to pay twice for such costs.
From April 1 another method of funnelling NHS money back to the Treasury comes into force. Changed guidance on old regulations for the VAT payable on outsourced services could lose the NHS £500 million a year.
You can go on adding sums of money that need to be spent and give NHS finance officers more sleepless nights: the government’s instant reaction to the Francis Report on Mid-Staffs was that student nurses must spend time as healthcare assistants: this may well cost £225 million.
Just as the government has eased private providers’ access to the NHS pension fund, employer contributions will be going up by £125 million.
And then the Care Quality Commission, the health service regulator, asks for an extra £40 million to employ 700 more staff (yes, that is about £57,000 in employment costs each.) Remember the promise to cut back room staff and push funds to frontline staff?
What is beyond dispute is that the NHS spend as a percentage of GDP is falling – the Office for Budget Responsibility’s chart shows this clearly. And at least one expert expects there to be an NHS funding crisis before the 2015 General Election.