The problem is that the people promoting this policy never back up their policy with evidence. We have no proof that moving care into the community is any cheaper than if the care is delivered in a hospital. If the treatment involves an expensive resource (a costly piece of equipment, or an expert clinician) it makes sense that the patients go to the centralised resource, rather than replicating this resource.
Indeed, there are some suggestions that hospitals are cheaper. In 2008 McKinsey (PDF) produced a report outlining the excessive costs in US healthcare.
[outpatient care] accounts for more than 40 percent of overall health care spending and 68 percent of spending above expected. This category expanded at 7.5 percent per annum from 2003 to 2006 - a faster pace of growth than observed in any other cost category - to add more than $166 billion in costs during this period. ... Same-day hospital care is the fastest growing of all outpatient cost categories at 9.3 percent per year.
The significant size and growth in spending on same-day hospital care is attributable to a number of factors. First, the United States delivers a higher percentage of care on an outpatient basis than on an inpatient basis, compared with most other countries. For example, nearly 90 percent of hernia surgeries in the United States are performed on an outpatient basis, verses about 40 percent in the United Kingdom.What this says is that a large proportion of US health care is delivered "in the community" and it is carried out in a costly way. McKinsey acknowledge that the care would be delivered cheaper if it were delivered in a hospital. Indeed, they say that the care delivered in the community costs 68% more than if it had been delivered in a hospital, costing the US an extra $166bn over four years. In a rare admission, McKinsey gives the NHS as an example for the US to follow.
A few years ago I had some basal cell carcinomas on my back - a minor type of skin cancer which can cause ulcers that do not heal. The dermatologist told me that a common cause was sunburn before the age of ten; which brought back fond memories of hot 70s summers, holidays on the beach and my back peeling from sunburn. The treatment is photo-dynamic therapy (PDT) where a magic cream is put on the skin cancer. This cream makes the cancer cells more sensitive to infra-red light and is only half of the treatment; the other half is the patient spending time under an infra-red light while the cancer cells are (I guess the only appropriate word here is), cooked. The cream that attached to cancer cells also fluoresces under UV lamp, so it gives a good indication of the amount of cancerous skin cells there are. PDT is a very common treatment, NHS data show that in 2011-12 there were 387,000 separate episodes, at an average cost of £84 per episode.
I was referred to a hospital clinic to have PDT. On the day, there were 4 other people waiting for the treatment and luckily I was first in the queue. The nurse explained the procedure: the cream would be applied and then to allow the cancer cells to be sensitised I would return the next day and then have the infra-red treatment. Then the nurse took the tube of cream out of a cupboard. It was tiny. The nurse explained that the tube of cream cost £250 and would treat 5 people. She also explained that once opened, the cream had to be used immediately. This was the reason for the 4 other people outside: they would each have a fifth of the tube.
This is a treatment that could be carried out "in the community". The equipment was fairly basic: an infra-red lamp for the treatment, a UV lamp to "see" the cancer cells. The treatment was also straightforward and didn't need a consultant: it was delivered by a nurse. All of this meant that very little investment was needed, so it could be delivered in a GP surgery, or a converted storage room at Boots. The major problem is the cost of the tiny tube of cream. The hospital where I was treated covers a population of 300,000 so it was possible to get together 5 people who would be able to put aside the same two consecutive mornings. The NHS targets for treatment for cancer (treatment must be within 31 days of consultant deciding treatment is needed, and within 62 days of first being referred by a GP) complicate this further, because you have to have a large enough population to be able to find 5 people who have been referred for this treatment within a few days of each other.
If there are 387,000 treatments of PDT in England every year, then this means for a population of 300,000 there would be about 230 treatments, say, one PDT clinic treating 5 people once a week. A GP practice, on average, covers a population of around 7,000. Using the same figures, such a practice would expect 5 people a year to need PDT. Clearly one clinic a year would not meet the cancer targets, and if each patient were treated individually then that would mean each treatment would cost at least the cost of one tube of cream (£250). This is why PDT is not given "in the community": the cost would be too high.
Treatment "in the community" where the treatment is closer to the patient's home may well be better for the patient in some cases. But in today's NHS - like it or not - cost of care is the most important priority. Until care "in the community" delivers treatment at a lower cost than in a hospital, it will never happen. So remember this the next time a politician whines on about moving care out of hospitals.