Risk Pool

I missed this during my read of the NHS White Paper.

"[Monitor will have] powers to levy providers for contributions to a risk pool;" (4.27)

The reason for this is that Monitor will have

"powers to protect assets or facilities required to maintain continuity of essential services; [and] authorising special funding arrangements for essential services that would otherwise be unviable" (4.27)

in effect, Monitor will demand a payment from every provider and this will be used only to provide essential services should a provider goes bankrupt. In effect this means that if your local hospital goes into debt (which will become more likely under the new funding plans) then Monitor will be able to step in and save A&E and nothing else.

Prof Maynard at Health Policy Insight has this to say about the situation:

Monitor – the provider insurer of last resort
Monitor is also to tax all providers, public and private, to create a risk pool which can be used to bail out failing trusts. What will be the basis of this taxation?


If the greater risks are taxed more, these marginal entities will be driven further into insolvency. Or are the best endowed to be taxed more, to keep the marginal and often badly-run trusts in business?


Why should Plain Crap FT be bailed out by Staggering Along FT? And if this is judged right and Plain Crap cuts its quality to stay in business, how will Monitor and CQC reconcile their anxieties about patient safety?


Remember Mid Staffs?!

Further, if the hospitals who perform the most risky procedures will be taxed more, then wouldn't this be an incentive against performing those procedures?

A similar situation occurred at Mid Staffs, and I recommend that you read the Francis report for more details. Volume 1, Section G, paragraph 50 says:

The latest figures for Mid Staffordshire show an astonishing apparent recovery. The HSMR from the Dr Foster Unit for 2008/09 was 89.6. In the Good Hospital Guide 2009, produced by Dr Foster Intelligence, the hospital is now in the top band as one of the top 14 hospitals with a patient safety score of 93.83 against the top performer (100) and the lowest of 0.00. This is, of course, a different measure than mortality, though the patient safety score does include it. The figures were announced during the period when the Inquiry was holding oral hearings in Stafford and were touched on by witnesses at the Inquiry. Mr Sumara told me that:


"I think there are four elements in why Dr Foster is different… which I have no evidence for and I can’t give you any detail. One is that the coding is just better now. The second one is we don’t do strokes any more. The third one is we don’t do MIs [myocardial infarctions] any more and the fourth one is actually because we have improved that emergency care pathway, your chances are you will get to see the right doctor quickly if you are medically ill. I think that will make a big difference to outcomes eventually. But I have got no evidence to say that has done the trick. In many ways do I care because all I am interested in is can I get it right every time? It is a bit of reassurance."

The HSMR figure for April 2007 was 127, but this fell to 89.6. What does this mean? Well HSMR is essentially a measure of greater mortality at the hospital. The expected mortality is indexed at 100 so 127 means that mortality is 27% greater than expected (I caution you against regarding this to mean that those 27% more people died "needlessly").

So what caused the fall? Look at the items I have highlighted in Mr Sumara's reply. The hospital have stopped doing two types of work which have high risks of death - those patients are now someone else's problem. Mid Staffs had to do something about their HSMR figures, especially since the dumber-than-dumb tabloid press were making out that the hospital was some kind of charnel house killing 400-1200 people (a nonsense figure that the Francis Report dismisses). So they simply stopped doing risky work. Problem solved.

If Monitor's tax on a hospital is too high for the hospital to pay then won't they have the incentive to stop doing risky procedures to reduce their "risk pool tax"? If so then where do those sick people go?