Lansley is Bullish

In a FT interview with the FT today Andrew Lansley is bullish about the scale and speed of the changes he proposes:

People, he argued, “woefully overestimate the scale of the change”. Practice-based commissioning, choice of provider, an NHS price list and foundation trusts already exist, he said.

Well, yes, but Lansley has already argued vociferously that GP Commissioning is not Practice Based Commissioning (since PBC had indicative budgets and GP Commissioning has real budgets); choice of provider at the moment is choice of NHS provider, not any private provider; NHS "price list" is set at average actual cost, not the minimum cost conjured up by Monitor as suggested by Lansley; and trusts become Foundation Trusts only when they are deemed to be capable, and not forced into the status by an artificial timetable suggested by Lansley. So yes, he's right, but he is also very wrong.

Mr Lansley acknowledged there would be some minor changes to the timetable. It is thought, for example, that the date by which all hospitals will be expected to have reached foundation trust status might be slightly extended.

The Foundation Trust programme under Labour was that an NHS Trust could become a Foundation Trust if it met certain criteria on financial, quality and governance. As with any such programme, those best able to meet the criteria will be the first to achieve the status. The following graph shows how many FTs were created in each year from 2004 to present (132 in total).

What is immediately obvious is that the rate of gaining status as an FT has slowed. This reflects the fact that those hospitals that had the best financial governance have already gained FT status - the low hanging fruit - and the remaining acute trusts (currently 74 of them) are the more difficult cases. Most of these remaining hospitals have financial issues (with some, the extent of the debt is hidden) and so achieving FT status will be a long, difficult process in the best of years.

The problem is that the NHS is being cut rather savagely. The "£20bn efficiency saving" is a 4% cut every year. Further, most hospital income comes from the National Tariff, which Lansley intends to cut from the average to the minimum value. Finally, in response to GP's objection to inheriting PCT debt Lansley is likely to cut the tariff further. All of these will make life extremely difficult for the best hospital trust, but they will mean that the weaker trusts have almost no chance of reaching balanced budgets and achieve the level of financial governance to become a Foundation Trust.

So when Lansley suggests "some minor changes to the timetable" it is likely to mean in the region of years rather than weeks.