District General Hospitals

There is a view that the NHS costs too much because too many treatments are performed in hospital. The theory is that we have to move treatment out "into the community" and most likely that means to your GP. This is not suggesting that your GP (a "generalist") will be performing kidney transplants or brain surgery: there will still be specialist hospitals for that. Instead, minor surgery and some clinics will be moved to the GP who will be paid less than the hospital. The services that cannot be moved are those provided by specialist hospitals. The services that can be moved are those provided by District General Hospitals (DGH). This means that there is a distinct possibility that some DGHs will close.

There is a lot of faith that moving care into the community will cut costs. Indeed, the McKinsey report estimates that it could save £800m to £1.6bn by moving treatments out of hospitals (the phrase they use is "shifting care to lower cost settings"). McKinsey further estimate that by better management of chronic conditions fewer patients will be referred to hospital for treatment and this could save £1.9bn to £2.5bn. Finally they estimate that further savings can be made by not performing treatments that are ineffective or which has limited effectiveness (£800m to £1.5bn, generally known as the "Croydon List"). DGH are paid to treat patients, if there are fewer patients, they will be paid less; if hospital incomes fall, they will close clinics and wards and may become financially non-viable and eventually close completely.

The British love the NHS and in particular, they love hospitals. When I give a talk about the government's NHS policy I often start by asking people to say what most embodies what they think is "the NHS". It is not GPs; it is always hospitals. Politicians know this and they are careful when it comes to suggesting that a hospital has to be downgraded or even closed. In some cases politicians even campaign against their own party's Secretary of State because they know that however ineffectual the campaign is to prevent the final outcome, it will help shore up their vote.

A wise Secretary of State, recognising how sensitive the subject is, would get together all the cleverest people in the NHS and ask them to review hospital provision. These clever people could look at which areas have too many hospitals and identify which of the hospitals should go. It is then the responsibility of the wise Secretary of State (as a professional politician) to include the stakeholders and the public in the locality in the review and convince them that services would need to be changed. The wise Secretary of State may even argue that such a review is not be a bad thing since closing one hospital could result in more investment in a neighbouring hospital resulting in a better service for all. The important point is that a wise Secretary of State would make a strategic decision based on the collective advice of people who know the local area.

The last government attempted such a review in 2007, there were a series of Acute Services Reviews around the country and recommendations were made to re-configure services. These recommendations were sent out for consultation, so that service providers and service users could comment. The result was protests around the country wherever a hospital was to lose a service. The leader of the opposition, one David Cameron, campaigned against the re-configuration saying on the Today programme:

"I can promise what I've called a bare-knuckle fight with the government over the future of district general hospitals. We believe in them, we want to save them and we want them enhanced, and we will fight the government all the way."

That is unequivocal: David Cameron supports District General Hospitals. Note that there was not even a tinge of mentioning the huge swathes of waste that he has since claimed are infesting the NHS right now. No, in 2007 he expressed his great love for DGHs and even produced a list of 29 hospitals that he claimed were "at risk":

Chase Farm (London), Frenchay (Bristol), Grantham (Lincolnshire), Horton (Oxford), Huddersfield Royal Infirmary, King George (Essex), Princess Royal (Telford), Royal Surrey County, St Richard's (West Sussex), Worthing and Southlands, Princess Royal (Haywards Heath), Eastbourne, Conquest (East Sussex), University Hospital (Hartlepool), University Hospital Lewisham (London), Queen Mary's (Sidcup), Queen Elizabeth (Woolwich, London), Scarborough General, Trafford General, Hemel Hempstead, Queen Elizabeth (Hertfordshire), Lister Hospital (Hertfordshire), George Elliot (Nuneaton), Hospital of St Cross (Rugby), Warwick Hospital (Warwickshire), Epsom General (Surrey), West Cumberland (Cumbria), Queen Elizabeth (King's Lynn), City Hospital (Birmingham)

Altrincham General was included in the original list, but the Conservatives later said this was an error. They replaced it with Trafford General.

It is easy to argue that if the reconfiguration had been carried out in 2007 these trusts would be more efficient, their local PCTs would have more money, and there would be less need to close hospitals now. However, Cameron campaigned against A&E and maternity ward closures and made it an election issue so that the Conservative manifesto in 2010 said:

"We will stop the forced closure of A&E and maternity wards, so that people have better access to local services"

Then after the election the new Secretary of State, Andrew Lansley outline four criteria that had to be met before a service would be closed:

First, there must be clarity about the clinical evidence base underpinning the proposals.

Second, they must have the support of the GP commissioners involved.

Third, they must genuinely promote choice for their patients.

Fourth, the process must have genuinely engaged the public, patients and local authorities.

Health Policy Insight points out that only the second of these is actually measurable, the others are merely opinions. (And as I have mentioned before, when Lansley was first tested on these four criteria he failed: 97% of local GPs in Maidstone did not want their local maternity unit downgraded, but Lansley chose to do it anyway.)

The word wise is not often associated with the current Secretary of State, and I will not make the association here. In place of wisdom we have a Secretary of State with a blind faith in the free market. His theory is that if there are too many hospitals and not enough money, the best hospitals will survive and the weaker, poor quality hospitals will naturally wither away and die. The problem is that hospitals take a long time to die and so to help them along Lansley has created an artificial deadline: 1 April 2014. This date is when NHS Trusts will be abolished. All trusts that are NHS Trusts at the moment must become Foundation Trusts by that date. The problem is that the criteria for becoming an FT includes financial governance - being able to at least break even, being able to make 6.5 to 7.1% cost improvements every year, and not to be saddled with debt.

Private Finance Initiative is a large drain on some (not all) hospital trusts and in April HSJ published a list of 22 trusts where the "private finance deals that are 'an obstacle to them achieving FT status by April 2014'". It has since come to light that the Department of Health have contracted McKinsey to investigate how to alleviate the challenges of PFI. HSJ lists the 22 trusts (the HSJ-22) as:

Mid Yorkshire Hospitals, North Cumbria University Hospitals, St Helens and Knowsley, Sandwell and West Birmingham, University Hospitals Coventry and Warwickshire, Hereford Hospitals, Walsall Hospitals, University Hospital of North Staffordshire, Worcester Acute Hospitals, Mid Essex Hospital, Barts and the London, Barking, Havering and Redbridge University Hospitals, South London Healthcare, West Middlesex University Hospital, North Middlesex, Royal National Orthopaedic Hospital, Dartford and Gravesham, Maidstone and Tunbridge Wells, Buckinghamshire Hospitals, Portsmouth Hospitals, Oxford Radcliffe (and Nuffield Orthopaedic Centre), North Bristol

Interestingly, there is no overlap with the 29 hospitals that Cameron gave. The reason is that many of these are large hospitals with PFI, and not DGHs. It has since been suggested that the Treasury may even provide extra funds for these hospitals so that they achieve FT status since it would be too costly to allow these hospitals to close:

"The Department of Health and the Treasury between them are going to have to twist arms as much as they can, but you have to assume that some money is going to have to be involved. [One] way to do it is to try and make a one-off bullet payment to bring down the ongoing costs. That clearly does require some money and my expectation is there’s likely to be a few of those needed."

These trusts are clearly too expensive to fail.

Today, the Financial Times produced its own list (the FT-17):

Financial Times research that suggests up to 17 NHS hospital trusts are so cash-strapped they will have to impose deep cuts in services if they are to survive.

The interesting thing is that there is little overlap (7 trusts) with the HSJ-22:

Mid Yorkshire Hospitals, North Cumbria University Hospitals, Barking, Havering and Redbridge University Hospitals, South London Healthcare, West Middlesex University Hospital, Buckinghamshire Hospitals, North Bristol, Trafford Healthcare, Hinchingbrooke Healthcare, Royal United Hospital Bath, Winchester and Eastleigh Healthcare, Royal Cornwall Hospitals, Heatherwood and Wexham Park Hospitals, Surrey and Sussex Healthcare, North West London Hospitals, St Georges Healthcare, Whipps Cross University Hospital

These trusts are mostly DGHs and the type of work they do is the reason why they are at risk:

The root of the hospitals’ problems vary and in many cases are multiple. All but three of the 17 are classified as “district general hospitals” – organisations that do not specialise in any particular area and are being squeezed from all sides as specialist care is moved to regional centres of excellence, NHS commissioners place some restrictions on more routine procedures and technology allows some care to be provided more cheaply in GP surgeries and patients’ homes.

These "restrictions" on treatments are the McKinsey "efficiency savings" mentioned above. The FT-17 are hospital trusts that have generated large debts over the last 6 years:

But in the past six years 17 NHS trusts, named by the FT today, have needed to be bailed out with £625m in as yet unreturned loans and other forms of cash support ... Much of that money was paid over soon after 2005 when the NHS ran a financial deficit. But between them the 17 clocked up another £287m in fresh bail-outs over the past two years, when the rest of the NHS reported surpluses.

But note the following point made by the FT:

The impending financial meltdown at the trusts means local communities could lose their accident and emergency departments and maternity services, forcing patients to travel further for certain treatments.

Does this remind you of something? Yes, right at the top of this post I mentioned the Acute Services Review, Cameron's "bare-knuckle fight" and the Conservative manifesto's pledge to "stop the forced closure of A&E and maternity wards". The difference is that the Acute Services Review was planned and backed by evidence, but any closures due to Lansley's unnecessary 2014 FT deadline are not planned. In fact, they can involve otherwise well run hospitals because, as the FT points out, if one of these hospitals is a DGH with PFI it is likely to be spared by transferring work from neighbouring hospitals who themselves may have to close services:

Paradoxically, however, some hospitals with large PFIs may find their biggest problem is also their saving grace. The Treasury and the department of health will not want these new facilities to go to waste. So services at neighbouring hospitals which may not themselves be in financial difficulties are more likely to close to ensure that best use is made of the PFI unit.

The free market when it comes to re-configuring local health services is neither strategic, thought out, nor fair. But then the free market never is.