"The NHS will last as long as there are folk left with the faith to fight for it"
Aneurin Bevan

Sunday, 16 December 2012

AQP Madness

The current Operating Framework says that every PCT Cluster must offer three community services through Any Qualified Provider. The PCT cluster determines what the services are, and for each one it determines what the "qualified" means. That is, the PCT Cluster produces a specification for the services outlining what the provider is expected to be able to do (and just as importantly, what it is not supposed to do). The AQP services were then advertised and providers where invited to register to provide the service, which involved the PCT Cluster determining of the provider was "qualified". AQP providers can be existing NHS providers (which have a lot to lose) as well as voluntary and private providers (which have a lot to gain).

The Department of Health's website that was set up to privatise the NHS is called Supply2Health (henceforth known as the NHS Privatisation website). This website has the list of currently registered AQP providers. The providers for Adult Hearing include Ealing Hospital NHS Trust. This trust provides acute services for Ealing and community health services for Ealing, Brent and Harrow. The following image is a Google Maps image of the area covered by Ealing Hospital.

The NHS Privatisation website says that Ealing Hospital will provide Adult Hearing Services as an AQP provider for the following PCTs:

Hammersmith and Fulham
Kensington and Chelsea

The area covered by the hospital as an AQP provider is shown here:

The image shows Ealing in the top left, but it also shows that the trust is providing hearing services for a much larger population to the south, east and west. It may be easier to visualise the greater area covered when the two images are combined:

The NHS Privatisation website says that in the area covered by Ealing borough there are three AQP providers of Adult Hearing: Ealing Hospital, West Middlesex University Hospital and InHealth Ltd. Inevitably, Ealing Hospital will lose patients to these competitors, so the only way that the trust can maintain its income is by providing services outside its catchment area, and hence this is why it is an AQP provider from Hounslow in the west to Westminster in the east.

One such "competitor" is West Middlesex University Hospital NHS Trust which covers Hounslow and Richmond-upon-Thames:

The NHS Privatisation website says that West Middlesex University Hospital will provide Adult Hearing Services in the same areas as Ealing Hospital. The combined image for this trust is shown here:

The NHS Privatisation website says that the AQP providers for Hounslow are: West Middlesex University Hospital, Ealing Hospital, InHealth Ltd and Scrivens Ltd.

Thus Ealing Hospital is competing for patients in Houslow who would have gone to West Middlesex Hospital, and West Middlesex is competing for patients in Ealing who would have gone to Ealing Hospital. In both areas there are private AQP providers (InHealth and Scrivens) and the "host" trust will lose patients to them. So to make up for patients lost to them, both NHS trusts are providing hearing services in Hammersmith and Fulham, Kensington and Chelsea, and Westminster.

AQP madness? Sure. Rationally, Ealing Hospital should provide services for Ealing and West Middlesex Hospital should provide the services for Houslow, but AQP is not rational.

Sunday, 28 October 2012


In August Ali Parsa went on a PR campaign to try and get the media to think that Hinchingbrooke and Circle were doing well. He succeeded, the compliant media reported what Parsa said rather than report what was actually happening (Hinchingbrooke was behind plan financially and Circle had to beg for extra capital from its shareholders telling them it was insolvent).

In an interview with the Today programme Parsa was asked about the finances at the trust (4:30):
Justin Webb: and you're still on course? my interest is when you expect to begin to be able to take some profit from your activities at Hinchingbrooke?
Ali Parsa: we are still on course, we think the hospital should balance its books next year, it should finish this year on a balanced book, that is what we are working on
Parsa is saying that by next April the trust will have a "balanced book". Webb, unfortunately, didn't have the then recent July finance report which said that the trust was doing badly financially, and so didn't challenge Parsa on this point. (It's not Webb's fault: the quality of research in the health section of the BBC news department is extremely poor, as we have seen during the passage of the Health and Social Care Act. BBC health journalists have little knowledge of the NHS or what is happening to it.)

On Thursday Hinchingbrooke gave its finance report for quarter 2 and their finances are no better than before. HSJ report that a spokeswoman for Circle said:
"We’re confident that we're now on track to reach a sustainable break-even position by the end of the next financial year."
That's the next financial year, Parsa said that the "balanced book" would be achieved this year. So Circle are now saying that their plan has slipped by a year.

Monday, 8 October 2012

Filed under "Interesting"

I'm working through the various documents that FTs have submitted to Monitor and I came across the following in the Forward Plan (next year's plan) for Cambridge University Hospitals Foundation Trust.

In the section "Goals and milestones to deliver vision" and under "Financial strategy and goals for the the three years" it says:
Developing a mutually beneficial relationship with Circle Health, with CUH providing and/or supporting a number of services either on the Hinchingbrooke site or CUH campus.
and later on under "Strategic Position"
Hinchingbrooke Hospital The Trust is committed to seeing a sustainable future for Hinchingbrooke as part of the regional family of healthcare organisations and to this end we will develop a mutually beneficial relationship with Circle Health, with CUH providing and/or supporting a number of services either on the Hinchingbrooke site or CUH campus.
CUH runs Addenbrooke's which is local to Hinchingbrooke and, depending on your point of view, is either a partner in delivering healthcare to the local community, or a competitor.

The phrasing of the statement is important. First the "beneficial relationship" is with Circle, not with Hinchingbrooke Healthcare NHS Trust. The hospital is owned by the trust, not Circle. Circle are merely management consultants brought in to run the hospital for the next 10 years. Any relationship should be with the trust. Instead CUH has decided to have a relationship with Circle.

The second point is the statement "providing and/or supporting a number of services" does not name the services and doesn't even indicate the site for the "services" (it says, either your place or mine). That shows that the services are unimportant. It is the "beneficial relationship" that is important. Since Circle Holdings is bankrupt, it is difficult to see what could be beneficial to CUH in a relationship with Circle.

Finally, the Health and Social Care Act says that Monitor has to act to prevent "anti-competitive behaviour". Two neighbouring trusts striking up a "beneficial relationship" does not sound competitive. Monitor have had three months to look at this plan and as yet have not complained. remember this if/when Monitor comes down heavy on your local trust for being "anti-competitive" and ask why CUH and Circle are allowed to have a cosy relationship and your trust isn't.

Saturday, 6 October 2012

AQP Nonsense

As part of the government's NHS privatisation plans they have produced a policy called Any Qualified Provider. They "sold" this to the electorate by saying it is "patient choice" it isn't, it is commissioner choice. And what's worse, the government are forcing it upon commissioners by telling them they have to provide at least three community services via AQP.

This is having stupid effects. The Forward Plan for Berkshire Healthcare FT (BHFT, a provider of community health services) says this:
"NHS Berkshire is extending patient choice during 2012 by offering some audiology services and podiatry services through the Any Qualified Provider initiative. Audiology services will be offered from September 2012, and podiatry services in the autumn 2012. BHFT is mitigating the potential loss of business by focussing on enhancing service quality, and patient outcomes and satisfaction levels. The Trust will also apply for AQP status to offer services in new geographical areas where the Trust can offer high quality accessible services with minimal risk."
So BHFT fear that they will lose the income for audiology and podiatry because NHS Berkshire (the commissioners) will use another provider via AQP. Like many NHS organisations they cannot afford to lose this income so they intend to register as an AQP themselves are supply these services elsewhere!

What a load of bollocks this policy is.

Tuesday, 2 October 2012

Leader's Speech

In spite of a slight wobble on Saturday (which was more due to a misunderstanding than anything else), the overarching theme of the Labour conference is that the next Labour government will stop the marketisation of the NHS that the Coalition government is introducing.

This is an apt time because the government have just announced the third phase of Any Qualified Provider (AQP): 398 services will be opened up to private providers. It is now that private companies will be making the decisions whether to seek the investment so that they can become an AQP provider.

Incidentally AQP has nothing to do with patient choice as was touted at the last election. It is commissioners’ choice. CCGs will be allowed to commission any provider, and in some cases will have to use private providers since the government regards a choice for the NHS to be an invalid choice. The investment providers ill make is not insignificant. Yes, there are some that are relatively low risk investments (for example audiology, where there are already providers in the private sector, who will presumably seek to expand their business by providing NHS services). But other services, for example MRI and CT diagnostics, there are significant investments needed.

Ed Milliband’s conference speech said that the next Labour government will repeal the Health and Social Care Act, and significantly, it would stop the marketisation of NHS service: the NHS ill be the preferred provider. Private companies invest to make a profit and profit depends on gaining business. In the environment of flat funding it is even more difficult for a private provider to make a profit. To make a return on their investment they will need a sustained profit over a long period of time, and that includes the time after the next election. Ed Milliband said that when a Labour government is elected that profit is not guaranteed. It is possible that Ed’s statement could curtail the number of companies willing to become an AQP and could limited the policy.

Monday, 24 September 2012

Citizen Coders

This article is interesting:
Speaking to Government Computing, [Tim] Kelsey [Director of information at NHS Commissioning Board] said: "We want to help people to innovate and make best use of the data that is running through the veins of the health service, taking a leaf out of the very accessible and brilliant campaign launched by Code for America."
As a software developer and someone who has spent 20 years writing books, magazine articles and training courses (and spoken at conferences and given hands-on courses) on how to programme, I have some interest in this area. I am a C++/C# programmer and before the .NET framework was released I developed Windows applications using the Windows SDK (which is a library that gives you access to just about every feature of Windows). At conferences there would always be a discussion, either officially (as a panel discussion as part of the conference), or unofficially (in the conference hotel bars), of which was better: VB (Visual Basic) or C++. Clearly C++ is better, but I was always willing to take part in a good natured discussion with VB developers to prove them wrong.

There was always one point that I would concede: VB3 was the reason why Windows 3.1 became popular. VB3 was a drag and drop environment where basic components of a program (visual controls like buttons and list boxes, or functional collections of code like timers or database access) were packaged as visual objects that you could drag from the toolbox of controls and drop on the window (or Form) that you were developing. You then wrote a small amount of code to connect the objects together: handle the user clicking on the button to read data from the database and put it in the list box. In C++ I would have tens or hundreds times more code to write to do the same thing because the Windows SDK gives fine grain access to functionality. This makes SDK development very flexible, but you had to write a lot of code.

When VB3 was released it became very easy to write software for Windows, and almost overnight huge numbers of applications appeared as shareware or freeware. Business were also keen to use VB since it was easy to teach developers and it took much less time to develop a VB application than a C++ application. At that time (93/94) I taught both VB3 and C++ courses. The VB3 courses were three days to learn both the language and the objects that you could use. The C++ courses were two five day courses: one course to learn the language and the other to learn the library (Windows SDK or a C++ library called MFC). The cost per day was also cheaper: the company I worked for charged two thirds the C++ daily rate for me to teach a VB3 course. Consequently, for every C++ course I taught I taught five VB3 courses.

VB3 meant that there was a huge number of applications and this meant that somewhere, if you could find it, was one that did exactly what you wanted. The problem was that, as a hobbyist language, the quality of most applications was poor. They were bug ridden and the user interfaces were not designed with (dare I say it) any taste. Since it was so easy to make a form background shocking pink and all the text italic putrescent green, people did.

VB3 applications only ran on Windows so people bought Windows computers and, for the fairly reasonable cost of the VB development environment, they could be creating applications within days. Or, if they did not want to develop code themselves, people could find somewhere on bulletin boards or in the classified ads of computer magazines, a VB3 application that would do what they wanted. The popularity of Windows 3.1 came from VB3.

Tim Kelsey's idea is similar, he plans "to launch a 'mass training programme' in basic data coding across health and social care with the aim of creating thousands of applications to open access to NHS data". He does not say what language or framework will be used, nor how the "mass training programme" would be carried out (hint: I can recommend an excellent developer to author and delivery the training). However, I am somewhat cautious. Developing useful apps comes in two parts: having the idea and developing the code. As a developer I am skilled at the latter. The thousands of "doctor, manager or patients" that Kelsey identifies, are skilled at the former.

I am always in favour of training people new skills (hint: and looking for a job right now!) but it has to be done in an economic way. If a surgeon had an idea of a robotic surgical instrument would he go back to university and take an electronics degree so that he could design the device himself? No, the surgeon would find someone who could design the device and explain the idea to the engineer. The important point is to get the new, innovative ideas to the people who have the skills to implement them. The implication that you can teach anyone to programme an innovative idea is also rather demeaning to skilled developers: it implies that there is no skill in development. However, as with VB3 applications, it will fairly rapidly become apparent that there is a lot of skill in developing and this will show in the quality of the applications created. I suspect that the idea to train thousands of people in "basic programming" will result in thousands of very basic, buggy applications and the challenge would be to trawl through them all to find the one that does something innovative and is reliable.

A more powerful idea would be to get the ideas people to connect with the coding people. Create a virtual "dating agency", a website where a "doctor, manager or patients" can post their ideas and developers can take up those ideas and produce a working application. I would go one step further. I think such a website should also include a toolkit that developers would have to use. Such a toolkit would ensure that all the applications had the same look and feel and would be compliant with standards of reliability and accessibility. This would ensure that all patients (regardless of their disability or their mother tongue) could use any application created with the toolkit.

And just in case I've been too subtle: I am available at reasonable rates to help design such a programme.

Saturday, 15 September 2012


Joe Farrington-Douglas tweeted last week an article on Lib Dem Voice posted at the time that Norman Lamb  took over the Lib Dem health brief. Lamb wrote a paper about his thoughts and followed up with interviews with newspapers. In particular Lamb said:
"If you get rat-arsed on a Friday night and get taken to A&E where you are foul and abusive to staff, is it right for the taxpayers to fund your life-saving treatment?"
The implication being that it isn't and we shouldn't and hence there should be a charge for A&E in these circumstances. The Guardian said:
He called for wide public debate on whether the community should pay for the excesses of the individual. There was a strong case for charging drunks for stomach pumps or treatment of injuries, and pubs and clubs should also be made to contribute if their complicity could be proven.
This is not only wrong, but it is very unliberal. Lamb was suggesting that we create a concept of deserving patient and undeserving patient. Under Lamb's plan the undeserving patient has to pay for their treatment. Where does it stop? Do we charge smokers for their treatment? Do we charge drunk drivers for the injuries they receive, or the injuries they cause?

What happens if someone is foul and abusive but sober? Is Lamb concerned with people's behaviour, or their condition? If a person does something illegal (they are foul and abusive to A&E staff) then the legal system can be used: they will be punished for their behaviour. But what if they are drunk but polite, do those drunks get a discount, or get the treatment free? Who decides what is foul or abusive, will there be national standards or will some areas be allowed to be more sensitive? What if the patient has mental health issues which is the cause of the abusive behaviour and is unrelated to the alcohol they consumed?

The whole idea was poorly thought out.

It didn't matter that this policy was unworkable because Lamb wanted to get a different message out to the public. The message came straight out of the Lib Dem's Orange Book. Lamb wants to deliberately break the cherished free-at-the-point-of-delivery principle of the NHS. Once you start charging for treatment, regardless of the reason, that principle has been broken and charges will spread throughout the NHS. Imposing charges will encourage the development of an insurance market. Insurance companies will produce products so that you pay a small premium every month (say, for the cost of 5 pints) and the insurance company will pay your A&E bill if you get injured when rat-arsed. Of course, this may backfire. Just as some people are rather "clumsy" with a paint pot "accidentally" knocking it over the carpet that they want replaced, or like some people foolishly put all their valuable electronic items in one bag which they lose "by accident" so that they are replaced with the latest models. Just as there are always people who will abuse insurance, there will be people whose behaviour will be worse if they have "A&E drunk coverage" because they know that whatever they do, whatever injuries they get, they will be covered. Indeed, since they have paid for the insurance they may well want to get their money's worth.

Such ill-thought-out policies are fine for a spokesperson for a party that will never be elected, but these were the policies of Norman Lamb, who was just appointed Minister of State in the Department of Health. It is a cause for concern for health policies in the future.

Friday, 7 September 2012


What is the point of being "independent" on a committee? Surely it is so that you can use your abilities, expertise and knowledge to form your opinions, rather than to simply parrot the opinions of the people who have appointed you?

The Future Forum is described as "independent". It isn't. It is appointed. Nick Timmins "Never Again" says
[Prof Steve Field said that Sir David] Nicholson told him "that the chancellor, the prime minister and the deputy prime minister had met and decided that because of the reaction in Sheffield and the noise in the system, they wanted to get a better understanding of what the problems were. He told me my name had been discussed about potentially chairing this Future Forum and that they were going to make a decision, but if I was asked by the minister would I do it?" He [Prof Field] said yes and was told to expect a call from Number 10, while the department worked hard on assembling names for four working groups
The Department of Health "worked hard on assembling the names" of the four working groups of the Future Forum meaning that they appointed the forum. Timmins goes on:
Finally on a train back to his home in Birmingham a call came through from Simon Burns, on behalf of Cameron and Lansley, formally asking him [Field] to chair the new Forum.
Hence Field was asked by Burns on behalf of Cameron and Lansley to be the Chair of the Future Forum.

The Future Forum (FF) is a committee appointed by the Department of Health. Even if the FF was not told what to think (and I have doubts about that) it is clear that the composition of the forum is important and if the department chose people that agree with the thinking behind the bill they would provide a report that agreed with that thinking. It is a classic move that could have been a plot line of Yes Minister: need an "independent" report that agrees with you? so appoint a committee of people who agree with you to write it and tell them they are "independent". The FF report only made cosmetic changes to the Bill.

Now we are told that Prof Field has been appointed to the National Commissioning Board as Deputy National Medical Director. But he is still the Chair of the "independent" Future Forum. How can the FF be independent when the Chair is Deputy National Medical Director?

What about NICE (the National Institute for Health and Clinical Excellence)? Its website says:
We provide independent, authoritative and evidence-based guidance on the most effective ways to prevent, diagnose and treat disease and ill health, reducing inequalities and variation.
NICE evaluates drugs and treatments, it uses evidence from peer reviewed papers to determine how effective the drug or treatment is. It is vital to the finances of the NHS that the service uses only those drugs that have been shown to be effective. The problem is that drug companies hate NICE. They hate NICE because the drug companies spend large amounts of money to create public demand for ineffective drugs which are then rejected by NICE.

It is vital that the experts who make the decisions on behalf of NICE are independent, they have a very difficult and important job to do. But now that independence is under threat, the following article is from Pulse:
Pulse has learnt that the Department of Health is set to table secondary legislation under the Health and Social Care Act so that the health secretary will personally approve all appointments to the panel of experts that consider appeals from drugs companies against NICE appraisals of drugs. The chair of the appraisal appeal panel will also have to be 'someone from outside NICE'.
Apparently, the Association of the British Pharmaceutical Industry wrote to Lansley and told him "Policy is made a long way from political accountability and the NICE Executive appears to have no remit or desire to challenge the decisions of independent academics." They were complaining that decisions were being made by independent academics! In the future the appeal panel members will have to be approved by the Secretary of State for Health (the completely, and totally incorruptible Jeremy Hunt someone who would never be influenced by large multinational companies).

If the 18th Century British politicians were anything like the current government it is no wonder that they fought a revolution to gain their independence.

Wednesday, 5 September 2012


QIPP goes by various names, "the Nicholson Challenge" and "efficiency savings" being the most common. The former was a phrase coined by Stephen Dorrell, the Chair of the Commons Health Select Committee and includes the name of the man who will be responsible for the programme: Sir David Nicholson, former member of the Communist Party and Chief Executive of the NHS and soon-to-be Chief Executive of the NHS Commissioning Board.

QIPP stands for Quality, Innovation, Productivity and Prevention. As a patient my priorities are Q-P2-I-P1 (that is, productivity last), with the Q and P2 (prevention) almost equal priority. However, the government's obsession with QIPP is on P1, productivity. This is because it is ingrained in Tory DNA that the NHS wastes money and is a waste of money. The Conservative zeal for QIPP is the last chance for the NHS to make amends for its waste. The idea behind QIPP is that the NHS must improve productivity through innovation and prevention while keeping quality high. There are some enlightened people in the NHS who point out that improving quality will, in the long term, reduce costs, but improving quality often requires investment and this is not a short term "efficiency saving" which is the government's obsession.

QIPP is steeped in mystery. The NHS has always been concerned with productivity, this is not surprising because, as a taxpayer funded system, the service is always under pressure from the Treasury to reduce its costs so that the taxpayer pays less. The most recent source of QIPP comes from the McKinsey slidedeck provided for the Department of Health in February 2009 and published in May 2010. The main points of the summary are here:

Notice that the "efficiency savings" are £13-20bn over 3-5 years. In March 2010 the Department of Health described QIPP as being "£15-£20bn [savings by] 2013/14", which is a 3 year efficiency drive if you assume that QIPP would start in April 2010. The 2010 Conservative majority government morphed QIPP into £20bn "efficiency savings" over the period 2011/12 to 2014/15. QIPP is expected to extend beyond 2015 and may last until 2017 or even 2020. It is not worth spending much time reading the McKinsey report because it is just a series of graphs and assertions with no cited evidence.

The interesting figure is that £20bn is the funding gap between what most economists say the NHS will need and the flat funding (in real terms) that the government allocated in the October 2010 Spending Review. That is, if NHS funding increased at the rate that is needed to take into account demographic change and healthcare inflation, the service would need £20bn more (real terms) in 2015 than it does now, but the Spending Review has allocated the NHS the same amount of money (real terms) as now. There is a lot of evidence that the NHS budget drives QIPP rather than the results of QIPP determining the NHS budget.

An example of the funding gap can be seen from the slidedeck McKinsey produced for NHS organisations in London (released to Health Service Journal via a Freedom of Information request). This graph shows the funding gap between flat funding and the amount of money needed to meet healthcare activity (ie the treatments needed by the population) for London. This gap is similar when extrapolated for the rest of the country.

The government eulogises over QIPP, and their favourite phrase is "We are delivering efficiency savings in order to reinvest every penny of that for the benefit of patients." This implies that when an efficiency is identified it results in a pile of cash which is then spent on something else, that we need. This is not the case. The "efficiency savings" is the grey area in the graph above: the area between the money that is available (the lower black line) and the money needed (the upper black line). It is money that does not exist. QIPP is ghost money.

It is a large amount of ghost money, too. The Year/The Quarter, which is the annual report of the NHS says that QIPP delivered £5.8bn of ghost money last financial year, 2011/12 (which, interestingly, it describes as "the first year of QIPP"). However, this document does not say that this money will be "invested" anywhere, because, of course, it does not exist: it is money that the NHS would have spent if it had not done the same work "more efficiently" than in the previous year.

So, are there any examples of QIPP? Yes, lots. The NHS Evidence website has a subsite devoted to QIPP. For example, Wrightington, Wigan and Leigh NHS Foundation Trust provided details of a project to reduce patient falls in hospital. In 2008 the trust had a high number of patient falls, 7 for each 1000 bed days, which is in the middle of the national variation between 3 and 12 falls per 1000 bed days. Patient falls are upsetting for the patient and they are dangerous, but are preventable. Falls are also costly because they lead to further treatment and longer stays in hospital. The National Patient Safety Agency estimates that falls cost NHS trusts in England £15m a year (or £92,000 for an 800 bed hospital). The costs of the project were estimated to be £15,000 startup costs and £5,000 maintenance costs per year. You can immediately see that if the project reduces the number of falls there will be an increase in Q and P2 (prevention) of QIPP and if the number of falls prevents more than £5,000 of extra treatment and bed-days then there will be a rise in the P1 of QIPP (rise in productivity through reduced costs). The project involved training staff, providing equipment (bed rails and non-slip shoes) and additional risk assessment to determine which patients were susceptible to falls. The actual results are that there was a 34% reduction in the number of falls over the whole trust in 9 months. The target was to reduce the number of falls by 50% and it was estimated that this would save £120,000, so a 34% reduction would save around £80,000.

This example is quite easy to understand, and reducing the number of falls is the right thing to do, even if it didn't save any money. However, hospitals don't have a separate "falls fund" from which they can draw money if someone needs treatment due to a fall and if the "falls fund" has money left over at the end of the year, an ability to spend it. Instead, the PCT will pay for the extra treatment: the saving is in less PCT spend. The hospital does not benefit from this QIPP saving because the saving is money they will not see. So it is disingenuous for the government to say that this money is "reinvested for the benefit of patients", it isn't. The £80,000 "saved" will contribute to the £5.8bn quoted by the Department of Health. Yet this is ghost money that does not exist.

QIPP is worth doing for the Q and for the P2: better quality care and prevention of illness. But some of the case studies on the NHS evidence site appear to take the  idea too far that QIPP is about productivity. For example, the first recommended example on the site involves the Royal Cornwall Hospital Trust providing intravenous iron to patients in their homes and community hospitals rather than in hospital. This is likely to provide better patient experience and hence increase the Q in QIPP, but the case study focuses too hard on productivity, to the point of producing what appears to be nonsense figures.

The example says that many patients have to travel up to an hour to get to hospital and that some patients needed hospital transport which was an additional cost to the treatment. The case study calculates the "savings" between treating patients at home or in a community hospital, compared to receiving the treatment in hospital. The calculations are (to say the least) a little dodgy. The case study says that the cost of the treatment in hospital is £113 per treatment (excluding the cost of the drugs) and one third of patients will need NHS funded transport at an average figure of £20 per treatment. They say that there are 163 patients receiving the treatment in a community hospital and 17 in their homes, so 180 people in total were not having the treatment in hospital. Each patient will have 6 treatments every year so that means that there were 1080 treatments not being carried out in hospital. Using the figures of cost per treatment and cost of travel they calculated that if those patients had the treatment in hospital it would cost £129,520 (1080 x £113 + 1080/3 x £20) [the QIPP document has a typo and gives a figure £1,000 less]. The issue is: is it cheaper to treat the patients in the community? To do this they should provide the cost of treating the patients in the community hospitals or in their homes. The QIPP document says:
"The cost calculation assumes a reduction in the cost of hospital appointments to the PCT, but does not appear to include any increase in costs at the community hospitals. The costs are absorbed into the daily costs of the community hospitals. The cost of consumables and healthcare professional time is met by the PCT. On this assumption the scheme generates savings of £29,000 per 100,000 population."
The population of Cornwall PCT is 450,000, so the QIPP saving is obtained by dividing £129k by 4.5.

It is naive to say that community hospitals will do the work for free, and really is not a sound basis for estimating "efficiencies". There will be a cost in providing the treatment in a community hospital or at the patients home, not least the cost of a district nurse travelling to the patients home and spending time that could have been spent on another patient. The treatment in the community may well be better for patients, who will have to travel less far, but there is no evidence presented to show this.

So this "evidence" says that £29,000 can be saved per 100,000 population, but there really is no evidence to support this. Presumably when a trust says "x% of our patients have their intravenous iron in a community hospital" this is entered into a spreadsheet that converts the number of patients into a "saving" based on this "evidence" and the "saving" is added to the grand total that, at the end of the year, appears as £5.8 billion. The question is: how much of the £5.8 billion is based on similarly dodgy evidence?

There is some doubt whether QIPP savings are savings at all since there are some quite unusual calculation methods. But even if the calculation was sound, the QIPP savings are not real money that can be spent because it is money that was never available to spend. QIPP is the grey area of the graph that does not exist.

Saturday, 1 September 2012

Cutting Bureaucracy

Remember that we were promised before the last election that a Conservative government would bring in the post-bureaucratic age? Well, there is little evidence that is what we have got, and there is a lot of evidence that we are going in the opposite direction: getting more bureaucratic.

For example, the botched NHS reforms have created two new levels of bureaucracy. It is interesting that at the time that the government were trying to push through the hideous monster of a bill that was the Health and Social Care Bill their main justification was that it would cut bureaucracy, yet their favourite management consultancy firm was saying the opposite.

Health Service Journal have published the results of a Freedom of Information request on the communications between Matthew Kershaw (Department of Health Director of Provider Delivery) and the main private providers (pdf). If you set aside that the emails read like a bunch of giggly teenagers trying to set up a blind date for a love-lorn friend ("this is fun!!!", "brilliant - it works!"), there are more serious concerns.

The document includes a slide deck from an event that McKinsey provided for stakeholders in London (the GLA, councils and NHS organisations). In this deck is a slide that compares the NHS before the Bill with the NHS after the Bill:

As you can see, McKinsey were saying in March 2011 that the new NHS would have a "More complex partnership as GP commissioning consortia [CCGs] and clusters [Local Area Teams, part of the National Commissioning Board] replace 31 PCTs". If McKinsey could see that the Bill would complicate the NHS, and make it more bureaucratic, why were ministers claiming that the Bill would make it less bureaucratic? So much for the post-bureaucratic age.

Monday, 27 August 2012

Cutting Red Tape

Whenever people talk about "red tape" I always wonder whether it is just an excuse for their own inadequacies: "we could not achieve the required outcomes because all of the red tape held us back". Not that I am justifying excessive bureaucracy, I am just questioning whether in some cases "red tape" is not the problem. So here's a suggestion to find out if this is the case.

I suggest that a website should be set up so that every time a public employee thinks that red tape is hindering their delivery of a service, they can go to the website and identify the regulation that is hindering them and give sufficient details to "explain" why they disapprove of it. There would be a committee (or probably, several committees) to go through each month's results and if the committee decides that the regulation is more of a hindrance than a benefit they will put a recommendation to Parliament to change the law. If the committee decide that there is a more important reason for the regulation they should contact the original complainant and explain the decision.

This way we can solve two issues: firstly we can (albeit slowly) remove unnecessary regulation and secondly educate the public why necessary regulation exists.

The only problem with this suggestion is the bureaucracy involved in doing all of this.

Thursday, 23 August 2012

A bankrupt policy

"As mentioned above the business model of the Group is such that the existing operations of the Group will not generate positive cash flows in the short to medium term. In such circumstances the Group is therefore reliant upon debt and/or equity funding to maintain its current operations. In terms of debt funding market conditions are very difficult and therefore equity funding is crucial to the Group. It follows that if the Resolutions are not passed by the Shareholders the Placing and the Subscription will not proceed and in these circumstances the Directors believe it would be likely that the Group would not be able to trade as a going concern which would be likely to result in the insolvency of all or part of the Group and such an outcome would, in the Board’s opinion, result in Shareholders receiving little or no value for their current shareholdings."
This is a section from the begging letter that Circle issued to its shareholders in May this year, asking for £46m. It clearly states that they are on their uppers, and that without this money the company would go bankrupt and not only that, but their assets are so few the shareholders will get no return on their previous investment. This is a company that cannot make a profit and handles its money so badly that it has no assets to speak of.

So what does the Department of Health do? It hands them NHS hospitals. First the DH hands them Hinchingbrooke, then Circle are sniffing over George Eliot, and now the Department of Health are asking Circle if they would be interested in South London Healthcare Trust.

A bankrupt company running a bankrupt hospital; a bankrupt policy.

Monday, 20 August 2012


Ali Parsa, the chief executive of Circle, has an annoying habit of repeating a statement without explaining the evidence behind the statement. This is a common PR technique: by repeating a statement people believe that it is true, and by not explaining the evidence, listeners (particularly journalists) deduce and extrapolate their own "evidence": it becomes true because journalists make it true.

Nations Healthcare was one of the first companies to be contracted to run an Independent Sector Treatment centre (ISTC) the New Labour government's mechanism to privatise some NHS services. The company was created in 2002 and has its origins in the US. Nations Healthcare was contracted to open its ISTC in Nottingham in December 2007, but it missed this deadline and the facility opened in July 2008, by this time Nations Healthcare had been taken over by Circle. Thus, the Nottingham NHS Treatment Centre should be regarded as always being a Circle facility because it was not opened until after Circle took over Nations.

The IPA management consultancy group have produced a case study of Circle (Sept 2011). In this they say:
"Circle has only been delivering services at the Midlands Centre for three years, Nottingham for two years, and Bath for less than a year, so data on long-term productivity trends is limited. However, evidence gathered by the company shows that in 2009, Nottingham had a 22 per cent productivity gain, and the Midlands centre had a 17 per cent productivity gain. Data is not yet available for Bath. 
At the Midlands Centre the employees have been engaged in a turnaround operation, after a period of low performance under the previous owner, which has set a clear direction."
This says that the two facilities (Nottingham and the Midlands Centre in Burton) had poor productivity in 2008 and in 2009 there were similar productivity gains (of about 20%). The study lays the blame for the poor productivity of the Midlands Centre on Nations Healthcare. However, 2009 is two years after Circle took over Nations (ie they had been running the facilities for 2008 and 2009) and in the case of the Nottingham ISTC, Nations had never run the facility, so the 22% productivity gain in 2009 was an improvement on the poor running of the centre by Circle in 2008. It seems quite a coincidence that Circle (who ran the Nottingham ISTC badly in 2008) would also take over another facility that was also run badly, and that both facilities improved by a similar amount in 2009. It would be reasonable to conclude that Circle ran both facilities badly in 2008.

Even though the "evidence" is provided by Circle (it would be more believable if they used an independent organisation), this is only one year of productivity gain. The website for the Nottingham NHS Treatment Centre says this:
"This was achieved at the same time as staff redesigned patient pathways to deliver average productivity gains of 18% each year since opening,"
This year is 2012 and the facility has been open for 4 years. Is what they are saying seriously possible? Is it possible to increase productivity by 18% every year for four years? If that is the case, a procedure carried out now would cost 45% what it cost in 2008. Or put it another way, for the same money they are performing 94% more procedures than they would in 2008. Is this possible, because if it is, they were either seriously under-performing in 2008, or Circle have found a magic productivity potion!

Much more likely is that this refers to just one year and the website has either not been updated, or it is deliberately trying to deceive us. Circle love to throw out "statistics" and if these are not challenged, however unbelievable they are, the "statistics" become true.

Sunday, 19 August 2012

Healthcare on a budget

My grandfather moved to Shanghai in 1928 to escape the rising unemployment and industrial unrest in Britain. Like most people at the time he had basic schooling, but he had taken evening classes to train as a plumber. This meant that he was slightly higher than most in the British class system because he was a tradesman. His passport says that his occupation was "plumber" and the contract for his job in Shanghai said that he was "foreman class".

The class system in Shanghai was more complicated than in Britain and was heavily influence by empire. Inevitably the Chinese were at the bottom, but the British were resolutely at the top. The city that the Britons knew as Shanghai was the International Settlement, and formally it was the amalgamation of the British Settlement and the American Concession granted by the Chinese after the Opium Wars (Shanghai also included the French Concession, which was separate to the International Settlement). Nominally, the International Settlement was run by 12 countries (the Shanghai Municipal Council flag  had the flags of 12 countries: Great Britain, US, France, Germany, Russia, Denmark, Italy, Portugal, Norway and Sweden, Austria, Spain, and Holland), however, in practical terms, the city was run by British businessmen. Even the Americans recognised this, taking a subservient role to the British, and it was only after liberation by the Americans in 1945 that this changed, perhaps most symbolically by the change on the 31 December 1945 to make cars drive on the right, whereas up until then cars drove on the left, as was the case in Britain.

Within the British community there was a complex class system. For example, at my grandfather's company the senior staff were engineers and university educated, but significantly they were educated in Britain. The important point was that they had been employed from Britain. This was the case with my grandfather, he was skilled with evening classes qualifications, but because he applied to a job advertised in Britain and emigrated to Shanghai, he was regarded as being a rung on the class ladder above a similarly skilled European man who was employed locally.

Shanghai between the world wars was extreme capitalism, the city existed to make money. There were no passport controls, so anyone could move there, and it was well known for gamblers and gangsters. There was also a large population of "white" Russians who emigrated there after the Russian revolution and there was a large Jewish population of stateless refugees who emigrated from Europe in the 30s after the rise of Nazism. However, if you had no employment, you did not eat and life was cheap. For example, during the Winter of 1938 one hundred thousand "exposed corpses" were removed from the streets of the International Settlement (up to 400 a day), these were the bodies of the homeless who had died in the extreme cold and some were the casualties of the 1937 war between the Chinese and Japanese.

The capitalism continued even during the war. In 1941 the Japanese occupied the International Settlement (they had occupied the much larger Chinese city surrounding the settlement since 1937). In 1943, fifteen months later, civilians from the countries at war with the Axis Powers were interned in prison of war camps. There were about 6,000 "British" (a term that included Australians, New Zealanders and South Africans as well as people from the United Kingdom). These were not people "sheltering" from the War, indeed, Shanghai had suffered terrorism (bombs and shootings between rival gangs and attacks from Nationalists and Communists) throughout the thirties. When the Second World War started many of the British (particularly the younger men) tried to join the British military, but were refused. Churchill, realising the importance of Chinese trade on the British exchequer, told the British firms in the city not to allow their employees to leave. This may seem to us, in a modern world where people change jobs frequently, to be an ineffectual decree , but before WWII this was an important statement. My grandfather's contract says specifically that the employee - my grandfather - could not break the contract. He could only leave the job if he was dismissed, retired or was "invalided out of service". No employer would employ someone who had broken their contract of employment with another employer. Indeed, when he was interned, my grandfather obtain a letter from his employer to state that he was no longer working for the company because of internment and not because he had broken the contract.

In the internment camp the Japanese provided little food and what food that turned up had a poor provenance. The internees had intermittent deliveries of Red Cross parcels. These were not provided by the Red Cross, the organisation was simply used to deliver the parcels and to ensure that they only contained permitted items. The parcels came from friends of the internees. The internees were given several weeks notice before they were interned and so they deposited some money with a friend who was not going to be interned (in my grandfather's case, it was a Rumanian employee at the company where he worked, someone who was described as "stateless"). The friend would then put together the parcel and when the Japanese authorities allowed it, the parcels were delivered to the camp by the Red Cross.

The internees were also allowed to buy food when it was available. The British government provided funds which were administered by the Swiss Consul. These funds were euphemistically called "comfort allowances", but were used to pay for basic necessities like food and clothing. My grandfather kept a notebook and it appears that the "comfort" payment he received was $18,000 per month. Inflation was rampant in the camp, so on the 23 November 1944 six eggs cost $192, eight months later, on the 23 July 1945, the same number of eggs cost $3000. It is important top note that these "comfort" payments were loans. The civilian internees clearly had no employment, but were expected to pay for their time in the internment camp, and when they were finally liberated after two and a half years, each one was handed a bill from the British government. My grandfather returned back to work after liberation, and after a couple of months of negotiation, his employer agreed to pay his bill for his "comfort" payments while he was interned.

My father was born in Shanghai in 1932. When the war started my grandfather tried to persuade my grandmother to move with my father to Australia, but she refused to go because my grandfather could not leave his job. So my family, my grandparents and my father, were interned by the Japanese authorities. In early 1945, after two years in the camp, my father fell seriously ill. He had a tumour on his elbow. He was treated as much as was possible in the camp hospital, and also made trips to Shanghai to have x-rays in one of the hospitals there.

My grandfather's notebook lists him getting sicker. On the 12th of April it says that my father's arm was in a sling and on the 18th he had aspirin. On the 2nd my father had an x-ray and his arm was put in plaster (this must have been in a Shanghai hospital), and he was admitted to hospital on the 3rd (possibly the camp hospital). On the 28th of May the entry reads that my father is "sick". On June 27th and July the 4th he had more x-rays, and was admitted to hospital (possibly the camp hospital?) on the 6th of July. On August 8th he was admitted to hospital in Shanghai and on the 9th and 10th he was x-rayed again. On the 19th my grandfather notes that he "spoke to Dr Byson" and then on the 20th he writes a letter to my father in St Lukes Hospital Shanghai (I have the letter). My father appears to have returned to the camp by the end of the month, and then within a couple of weeks he was sent on a hospital ship back to England.

In my grandfather's notebook there are also notes of the hospital costs. The cost for my father's hospital care for the month of May 1945 was $11,300 (in comparison, the following week gave the cost of one egg at $410), for June it was $14,500 (80% of the monthly "comfort" allowance) and in August it was $200,000. The last payment would presumably cover the cost of the two x-rays and the time my father stayed in St Lukes Hospital. Most poignant was the entry on the 28th August 1945. My father was in great pain and someone in the camp had made a brace to support his arm. This cost two and a quarter million Shanghai dollars. (Unfortunately, I cannot find a comparison figure for eggs, but the hospital bill for August of $200,000 was noted in the following week.) I assume that there must have been a separate loan for this, but there is no paperwork to indicate this.

Reading through this I cannot help but wonder how these medical costs can be managed on a small, fixed budget that has to cover basic needs like food and clothing. My grandfather managed it, but it must have been a strain. I know that my grandfather suffered mental ill health a year later, but this was when my father and grandmother were in England and their letters say that they are unsure that the doctors in England could save his arm (in the event, they did, although my father's arm was disabled for 40 years until eventually it was amputated when he was 51).

This is something that we do not experience now, since we are so used to getting high quality care, free at the point of delivery. Soon, however, when personal Health Budgets are introduced, we will be in the same situation my grandfather was in: a fixed monthly budget, and regardless of the vagaries of ill health, we will have to stick to our budgets or find some other funding source. Personal Health Budgets are a return to the 1940s and it is a Conservative government that will deliver it.

Friday, 17 August 2012


Imagine for a moment that you are in charge of rolling out a scheme where all the patients with long term conditions (LTCs) in the locality are given a budget to pay for their healthcare. How would you calculate how much to give each patient?

Few patients with an LTC will have a single condition, so you will need to calculate how much the treatment for each condition will cost. But even if two patients have the same, single condition, it is unlikely that their treatment will cost the same because one may be more severely affected than the other, or there may be some other factor involved, like age. Once you have a rough idea how you would calculate a budget, hold on to that idea and read on.

Calculating a personal budget is not simple. But it is happening right now for social care.

A week ago I talked to a social worker friend who was the manager who introduced personal social care budgets in her area. Initially she was enthusiastic about them because they offered a way to personalise care: the service users would have more choice about how the care was delivered and would be more involved in the decision-making. This was during the last government when there was money to pay for options like personalisation. Now my friend is scathing. Personal budgets are no longer a vehicle to personalise care. The reason is that for all of their benefits, personal budgets are not resilient to cuts, indeed, they may even make cuts easier to apply, and this results in service users getting worse care.

I asked my friend how the budgets were calculated. She said that each service user is assessed and their needs are collated. They used a points-based system where different needs accrued different numbers of points, and the more severe the need, the more points were allocated. For each service user, the points are summed and then converted to money to create the service user's direct payment.

I asked how this worked. She said "first we take the budget agreed this year by the local authority and top slice by 20%..." I stopped her there: "what's the 20% for?". he went on, "...that's for cuts. Then we divide the remaining budget by the total number of points for all service users and that gives us how much money each point is worth".

There are a couple of points to raise here. The first is that the process is equitable: each service user gets a share of the budget and their share is proportional to their needs. However, note the word proportional: the service user does not get the money they need, just a proportion. This leads us to the most important point. If personal budgets are to allow service users to personalise their care, they would be calculated on the cost of the service users' needs. A points system would not be necessary, since the social workers would simply aggregate the costs of the services the service user needed and that should be their budget. The fact that a points system is used is an acceptance that service user needs cannot be fully funded. Direct payments are dependent upon the budget allocated by politicians, with a lesser dependence on the service users' actual needs. Politicians determine personal budgets, not social workers.

If this is not bad enough, the meagre budget being allocated by local politicians is expected to be reduced by 20% every year. This is a reduction forced upon local authorities by central government in its deficit reduction plan. Personal social care budgets are being cut to reduce the deficit. Clearly the budgets do not cover the costs of the care the service user needs, so I asked the obvious question of where the rest of the money comes from. I got the obvious answer: the service users either pay the difference themselves, or ration their care. The sorts of optional care that were used to "sell" personal budgets to the public (like horse riding lessons for disabled kids) are no longer affordable. Personal budgets have been cut too much to fund them. Indeed, my friend told me that the cuts are biting so deep that personal budgets do not even cover basic needs. It is getting to the point where people are seriously calculating the maximum amount of time it is reasonable to allow someone to remain in a soiled incontinence pad.

The points-based system means that what little money is available is shared equitably, but it also makes it easer for the cuts to be made since removing an entire service would create a political storm.

Now imagine you are a manager allocating personal health budgets. You are in the same situation that social care is in at the moment: the budget, not the patients' needs, determines the direct payment you can make. Does this change how, at the top of the page, you thought that personal budgets would be allocated? I am completely against personal health budgets: they allow the government to make cuts to our healthcare, and as cuts get deeper ()as they will) personal health budgets will legitimise top-up payments by patients. No one voted for this at the last election.

Saturday, 4 August 2012


How do you rank one hospital trust against another?

It is not easy. For a start there are lots of general criteria you can use, like clinical quality, financial probity and patient experience. It is difficult to combine, say, a financial ranking with a clinical ranking: which is more important, and how do you weight them? Even within such a criteria, there are lots of sub-criteria. For example, in clinical quality you could include things like standardised mortality (HSMR), waiting times and hospital acquired infections (HAIs), but how do you combine them?

Dr Foster attempted to create a ranking in 2009. To do this they used 16 indicators, some of which were numeric values (like the HSMR) and others were logical (a question to which there is a yes or no answer). The numeric values had different scales, so some were percentages, others were whole numbers (for example, the number of HAIs). In some cases large numbers were "good", in other cases large numbers were "bad". All of this meant that Dr Foster had to manipulate these indicators before they could be combined. They scaled the numeric values so that all "good" values were -ve and the more negative the better, and all "bad" values were +ve and the larger were worse. (Their methodology says that high is "bad".) They also had to scale the values so that the highest for one indicator was as high as another indicator (for example a high HSMR may be 120, a high HAI rate maybe 10, so these two values would have to be scaled). Since outliers (exceptionally high or low values) will alter this scaling they had to be excluded and outlier trusts given the new maximum (or minimum) value. Dr Foster also had to find a way to turn a good "yes" and a bad "no" (and vice versa) into a number. There was a lot of manipulations of these indicators.

Even after converting all the indicators into numbers of approximately the same scale, it was still difficult to combine them because you have to determine how important one indicator is compared to another. For example, how important is the mortality rate compared to the HAI rate? So Dr Foster had to use some kind of weighting. The way they did this was through fuzzy logic using Bayesian ranking (look it up). With 16 different indicators, some of which can have a wide range of values, you would expect the final ranking to be unique, but the Dr Foster technique managed to give some hospital trusts the same value (and the same rank). In later years Dr Foster omitted to give the total "safety score" or the rank position, and instead chose to band trusts. This is a much better technique, but it prevents people from identifying the "best" trust, and so, although it is a fairer way to grade trusts, it is not a good way to get Press attention (who love rankings).

It is very difficult to combine different values to get a ranking. However Eoin Clarke has attempted to do this in a hamfisted way: he has produced his rank of the 143 Foundation Trusts according to their risk of "bankruptcy and dissolution". It is nonsense and I left a comment to explain why his methodology is nonsense although he's chosen not to publish the comment, so instead I will explain it here. Monitor uses a a finance rating of 1 to 5 and a red-amber-green (RAG) for governance. It uses two different scoring schemes precisely because it is difficult to compare finance and governance, yet Clarke does exactly that. He converts both the finance numeric, and governance RAG ratings, into scores between 0 to 10 and then adds them together. This means that he gives finance and governance equal weighting: does that make any sense? For example, breaching the 4 hour A&E target, or making more private income than the private patient income cap, are both regarded by Monitor as "breaches of authorisation" and will result in a lower governance rating. But are these breaches as bad as ending the year with a £50k deficit? Or ending the year with a £5m deficit? Apples and oranges. Clarke does not take into account the way that Monitor has created their ratings. For example, a trust could make a surplus and meet its cost improvement plan (CIP), but if it has a historical debt (regardless of how quickly it is paying off this debt) it cannot get a 5 finance rating.

One of the trusts that Clarke lists in his worst 30 trusts is a trust I know well. This trust generates a surplus every year and has done so since 2007. It meets its CIP every year. It is in the top 15 of trusts according to the Reference Cost Index (ie it is an efficient trust). But since this trust took out a DH loan in 2005, it cannot have a 5 finance rating and the maximum it can get is a 3 (which is has, and Clarke's scoring regards this as middling). The trust has also missed its 4 hour A&E target (not regularly, but once is enough) and hence the governance rating is not Green. Using Clarke's ranking this trust is in danger of bankruptcy and dissolution, but it is the strongest trust in its local health economy, and is nowhere close to bankruptcy.

Clarke's ranking is pretty much meaningless, so ignore it.

Friday, 3 August 2012

Could this be the explanation?

Circle Health have been on a public relations offensive in the last few weeks, and this culminated in the appearance on the 1st August of their Chief Executive, Ali Parsa, on both Radio 4's Today programme, but also on BBC2's Newsnight.

On both programmes Parsa gave the same message, much of it plain wrong. He said that Hinchingbrooke will "have balanced books this year" when the first quarter's results showed that they made a £2.3m loss which was £652k more than they had planned. He then said that Germany spends the same as the UK on healthcare, and this is largely on private providers like his company, yet Parsa claimed that the German providers had greater patient satisfaction than the NHS. His claim was unsubstantiated and does not fit in with the facts: Germany spends much more (12% of a much larger GDP than our 10% of GDP) than the UK on healthcare and Germany report access to healthcare issues almost as worse as the US (and five times worse than the UK) and the Commonwealth Fund ranked Germany two places below the UK in patient satisfaction. Parsa topped-off his tirade with the Conservative accusation that GPs are private providers (which they are not for many reasons). The BBC (in the form of Justin Webb of Today and Kirsty Wark of Newsnight), left the worst claims of Parsa to go unchallenged, through ignorance rather than bias.

So why isn't Ali Parsa taking a long August vacation, why is he in the media at a time when most people are watching the Olympics? The reason may well be the following graph: the share price of Circle Holdings over the last 12 months (screen shot from Interactive Investor):

Over the last year the share price of Circle Holdings has fallen from around 200p a year ago (at the time of a large share offering and the listing of CIRC on the AIM stock market) to a value of about 80p now (it even fell as low as 44p for a few days).

This is not the graph of a company with a bright future: investors are showing their lack of confidence in the company. Mix into this the results from 2011 where Circle Holdings made a loss of £13.6m (EBITDA) and the announcement from the government that they will no longer pay Independent Sector Treatment Centres (ISTCs, like Circle's treatment centre in Nottingham, the only part of their business to make a profit) above the NHS rate (and hence this is a cut in payment of about 20%), and you have a company that should be panicking.

On the first of August Parsa was in firefighting mode. His media appearances were to reassure investors, to try and get the share price out of the slump it has been in for two months. The following graph shows the effect of Parsa's efforts:

He added 5p to the price (82.5p) before it fell back to 80p: the share price is still in a slump.

Parsa clearly has a lot more work to do to get the share price back up to its high of 200p, so expect a lot more media appearances in the next few months.

In a piece on Open Democracy Richard Whittell of Corporate Watch says:
"Earlier this week [31 May] Circle Health went to investors to raise money, partly to help pay off £14 million it had borrowed from hedge fund James Caird Asset Management, at a staggering interest rate of 25 per cent."
Could this be the reason for the sharp drop in Circle share price at the beginning of June?

Further searches came up with the following from Reuters confirming Whittell's statement:
Circle Holdings PLC Announces Cash Placing And Subscription To Raise GBP47.5 Million
Tuesday, 29 May 2012 02:04am EDT
Circle Holdings PLC announced that it intends to raise GBP46 million (net of expenses) by way of a placing of 65,714,286 Placing Shares and a subscription of 2,142,857 Subscription Shares at a price of 70 pence per New Ordinary Share with institutional investors. The Placing and the Subscription are conditional, inter alia, upon Shareholder consent. The Company has received Irrevocable Undertakings to vote in favour of the Resolutions from Shareholders representing in excess of 75% of the Existing Issued Share Capital. The Group intends to use the proceeds of the Placing and the Subscription as follows; repay in full the outstanding GBP14.1 million loan from JCAM which will mature in February 2013 and is subject to interest at the rate of 25% per annum; meet its current working capital requirements at CircleBath and Hinchingbrooke; complete the commissioning of CircleReading and its subsequent operating cash flow requirements; continue to support the Group's central operations; and provide working capital to implement the Group's strategy of bidding to take over the management of further NHS Trusts as and when they are put out to tender. Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that Admission will become effective on June 19, 2012, and that dealings in the New Ordinary Shares will commence at 8.00 a.m. on June 19, 2012.

Wednesday, 1 August 2012

Footpaths Across the Grass

Unfortunately I cannot find it, but a few years ago I read an article about a local council who were annoyed that people ignored the "Keep Off the Grass" signs in one of their parks. The council looked at what people were doing and found that the people who walked on the grass were simply cutting off a corner when walking from one part of the park to another. The existing paths were to parts of the park where people did not want to go. So the council simply created a path where people wanted to walk. This solution meant that the grass was not walked upon and there were no unsightly bare-earth paths.

This is an important lesson. If you make rules that no one wants to follow you should not be surprised when no one follows them. Equally so, you should not be surprised that it costs you so much trying to make people follow those rules (like employing extra park keepers to shout "Oi! Keep off the grass!")

This story came to mind yesterday at a meeting at my local CCG where a member of the committee I was on asked why a cancer patient was not getting treatment and who was it that would take up the patient's case to ensure that the treatment was delivered. That question was followed by a lengthy discussion from officials about how the complaints and advocacy system should work and how it should work in the future with Local Healthwatch. They gave no reason why this system didn't work for this patient, and although they didn't say it, I got the impression that they felt the patient was at fault for not using the system the way it was designed to be used.

The problem is that the system is not working for this patient because the various providers (the GP and the local acute hospital) and the local PALS service are not working how they should be. The concern is that the new structures will not work how they are supposed to work, and this is more to do with the system not being designed around how the organisations actually work and how patients use them. It would be far better to observe how these organisations communicate and to improve that, rather than changing completely how they work together.

(My opinion is that GPs should be empowered to act as advocates in such a situation and have the responsibility for ensuring that the care is delivered. GPs are patients first point of contact with the NHS.)

Put the path where people want to walk rather than telling people to walk where they don't want to go.

Hinchingbrooke double fail

The Hinchingbrooke Health Care NHS Trust Chief Executive's & Franchise Representative's Report (franchise representative represents Circle) has the following quote:

Mark Simmonds MP for Boston and Skegness visited the trust on 6 July and was able to attend a meeting about the positive changes that have been implemented in our Emergency Department this week. He had this to say: "In this hospital you can change the way the NHS works, in my view for the better, you are at the frontier of the way healthcare is going to be provided in the future. I hope patients and the local community recognise the positive changes that have been made and provide sufficient support and recommend it to their family and friends."
Hinchingbrooke is in Cambridgeshire, Boston and Skegness is in Lincolnshire, so this is not a quote from a local MP. One has to wonder why Hinchingbrooke is inviting seemingly random MPs to inspect their hospital. Do you think his invitation has to do with Simmonds' Register of Members Financial Interest:

Strategic adviser to Circle Healthcare (social enterprise), 42 Welbeck Street, London W1.
March 2011, £12,500 quarterly fee received. Hours: 10 hrs per month. (Registered 3 May 2011)
June 2011, £12,500 quarterly fee received. Hours: 10 hrs per month.
Late entry to which the rectification procedure was applied on 6 March 2012. See paragraph 108 of the Guide to the Rules.
(Registered 3 October 2011)
Simmonds was reluctant to declare that he was paid £12,000 a quarter (£50,000 a year) by Circle, and earlier this year had to apologise to parliament for deceiving them like this. Can someone explain to me why Hinchingbrooke, who are franchised to Circle, are quoting an MP who is paid by Circle? This is hardly an independent view, the public are being fed a biassed statement.

However, a rate of £1,250/3 per hour is pretty steep*, and you would expect that when you pay someone this large amount of money the recipient would come up with something more enthusiastic than "you are at the frontier of the way healthcare is going to be provided in the future". For that amount of money (£1,250/3 = £420 per hour) I would expect "get your asses down here right now, this place is brilliant!"

So not only is Hinchingbrooke duping the public, they are not getting value for money, either. Double fail.

[* oops arithmetic error corrected as per comments]

Thursday, 26 July 2012

Imaging the cutting of bureaucracy

The Conservative Draft Manifesto in 2010 said: "we will cut the cost of NHS administration by a third". This, apparently, was to be done by cutting management by 45%.

The Nuffield Trust have just released some slides showing how the NHS has changed since 2010 and what Lansley's new NHS will be like. I have extracted just the charts showing the organisations:

You can make the image bigger by clicking on it, but before you do that, have a look at the shapes out of focus. The left side has four types of organisations top to bottom; the right hand side has five (or six) types. Top to bottom are the layers of management. Lansley claimed to cut the layers of management, but he has clearly added to them. Further, if you look at the total number of organisations, the left side shows fewer separate organisations and the transition to the right shows more types of organisations: the system is getting more complicated. Bureaucracy comes from complication and Lansley's NHS is more complicated.

Sunday, 8 July 2012

Self referral

"I haven't seen you for years, your condition must be bad: I only get to see the difficult cases."

This is what the consultant eye surgeon said to me at an emergency appointment at the eye clinic early in the summer of 2005. He was right, the last time I had appointment with him was seven years before. When I moved to the area I was referred to the hospital for diabetic retinopathy by my previous doctor. Retinopathy is a condition where the blood vessels on the retina grow large and weak and are liable to burst. Previously I had had a big bleed in one eye and had started a series of laser treatment. This treatment continued under the new consultant, having many thousands of laser burns per eye (a session every 3 months, then 6 months over a period of 5 years). I was referred to the eye surgeon's clinic and initially it was him that treated me, then when my eyes stablised another doctor from his team took over the treatment. In the follow up for my last treatment by the senior consultant he told me that there was one blood vessel that they could not treat and I should expect it to burst some time. Now I was in his office with the results of when that vessel bursting.

The previous few days I had removed about a tonne of hardcore from my garden. Over several years I had dug up stones and concrete in my garden and I wanted to get rid of this pile. I ordered a skip and spent a couple of days moving the hardcore from the pile to the skip. This involved a lot of bending down and picking up heavy stones. The next morning I noticed a strange mark on my retina and remembering the previous bleed, I went to my optician. He looked at my retina and told me to go immediately to the hospital eye clinic. I was fitted onto the list of one of the doctors and, after seeing my eye, he made an appointment the following week for the senior eye surgeon. And that is when he made the comment above.

The seriousness of the bleed made me a priority. Indeed, the bleed was so large that the surgeon called in two of the other doctors in the clinic to see the extent of the bleed and compare it to the photos of the vessel that had burst. There was an impromptu case meeting. The surgeon told me that I would need an operation under general anaesthetic where the gel in my eye (the vitreous humour) would be removed and then he would stop the bleeding of the vessel and clean up my retina. My eye would then be re-filled with an oil-like substance which my body would eventually absorb (over a period of about a month) and replace with more of the vitreous humour. The size of my bleed made me a priority for surgery and the surgeon's list was changed accordingly.

The surgery was successful, and the surgeon was able to clean up some of the damage from the previous bleed, so I had eyesight that was better than it had been for a decade. There is still some permanent damage and this is like having several blind spots in my eye. After the surgery I had a follow up with the eye surgeon and although I have had several follow up appointments for my retinopathy, I didn't see him again until I needed cataract surgery, which he also carried out.

The government has decided that in the interests of "patient choice" we all must have the choice of the "consultant-led team" for our care. This is an attempt to get closer to the US system of patient referrals. Self referrals are one of the causes of the high costs of the US system. If an American colleague gets a rash they will go and see "their" dermatologist. If I get a rash I will see my GP and if my GP thinks the rash needs the opinion of someone more specialist, I will be referred to the consultant dermatologist. The NHS system ensures that you get care according to need. It is the GP who decides what that need is: can they deal with it, or does it need a specialist. This is NHS prioritising, which some people call "rationing", but it is rationing only in the sense that GPs "ration" the work of the specialists to only those who need it. I have had countless arguments with American colleagues who interpret NHS prioritising as a form of denial of care. It isn't. The NHS ideal is that we get the care prioritised according to our clinical need. Those who do not get the care, do not need it.

Diabetic retinopathy cannot be "cured", so I still have 6 monthly monitoring of my retinas. If I was given the choice of consultant I would choose the eye surgeon who had operated on my eyes. I like his manner and how he explains my condition to me. But I also know that he is considered the best eye surgeon in the region. When it comes to their health, everyone wants the best. Every surgeon's time is limited, so he limits his time to the more serious conditions. My eyes are stable, so I will be a waste of his time and expertise. That is the way that the NHS works and it means that regardless of who you are or what you earn, if you need the expertise of the top clinician in the country, you will get it.

In the US the rationing of expertise is carried out through money: only those with the most amount of money can afford the best. In the NHS the "rationing" is carried out according to clinical need. 

Lansley's plan of choice of "consultant-led team" will be a failure. The guidance says:
"Patients who want to should be able to choose a particular named consultant-led team for their first consultant-led outpatient appointment where it is clinically appropriate. The right to access services within maximum waiting times under the NHS Constitution continues and applies to patients who choose to be referred to a named consultant-led team."

The 18 week referral to treatment waiting time target means that the more popular consultants (inevitably the most skilled) cannot handle the increased numbers of patients through longer waiting times. The only tool they have is the interpretation of the terms "consultant-led team" and "clinically appropriate". This policy will fail to give the patients the consultant they demand because responsible consultants will interpret "consultant-led team" to mean that they can delegate a patient to another doctor who is part of their team. They will also interpret "clinically appropriate" as I have outlined above: the consultant will see the higher priority cases and his junior staff will see the rest.

Lansley does not expect this policy to succeed because he knows that it cannot succeed. However, even as a failure this policy will achieve what Lansley wants: it will increase patient demand for self-referral, and that will lead us to a healthcare system that will be worse for us because we will not get the care we need, and it will lead to a system that most of us cannot afford.

Wednesday, 4 July 2012

Circle Bath

This is an interesting presentation (pdf) by Circle aimed at their investors. I want to show two graphs from this presentation.

The first one shows vividly how the NHS is subsidising the debt ridden Circle Holdings. The red bars are the private patients and their figures are generally declining over the year. The black bars are the NHS patients and payment for these consistently provides much more income than the income from private patients. Without the NHS patients Circle would go bust; without Circle, the NHS would continue quite happily. Who needs who?

This second graph shows the "market share" between three hospitals in the Bath area, two private hospitals (including CircleBath) and the local NHS provider, the Royal United Hospital. The market share of the BMI hospital is broadly flat, and the small; peaks and troughs more or less correspond to the red bars on the previous graph (ie where the red bars are smaller and CircleBath have fewer private patients, there's an increase in BMI private patients). The interesting line is the decline of the market share of RUH which matches the rise of CircleBath.

How is CircleBath doing this? Well, it is not by being efficient and making a profit. Quite the opposite, they appear to be using their boutique hospital as a loss leader. The hospital had a revenue of £12.2m in 2011 (that is, the income of the hospital). Circle Holdings overall has a turnover of £75m on which it makes a loss of £14m. Circle's other hospital (in 2011) was the ISTC (Independent Sector Treatment Centre) at Nottingham which had a turnover of £51m on which it maked a profit of £2.4m. (Circle ran another clinic in Burton for the first 7 months of 2011, but this was a small unit, with an income of £1.5m). Considering Circle makes a profit at Nottingham on NHS work and it makes a loss over all, it is clear that the company makes a huge loss at CircleBath. Circle cannot make a profit from its private work, and any profits it makes from NHS work go to alleviate the losses they make from treating private patients.

The NHS "competitor" is RUH. This has an annual income of £216m, but the trust has a historic debt of £40m. The trust have been in surplus since 2007, and paying off this debt, and the current surplus is £4.2m. The trust has a loan from the Department of Health of £38m payable over 20 years, and like many of these loans it is at an eye popping rate of 5.05%. The government keeps boasting that they can borrow at historically low interest rates, so why are they lending this money at loanshark rates to NHS Trusts?

Clearly the situation in Bath is far from ideal. Circle are running a hospital at a loss poaching patients from the local NHS hospital. If CircleBath was an NHS hospital it would have been put into administration by now. Instead, it is allowed to threaten the viability of the local NHS trust by poaching patients and treating them for NHS rates that are less than they need to sustain the hospital.