CIPFA health finance conference October 67 Watch out, the ISTCs are coming

13 Oct 05
NHS trusts have been warned they must improve their services or they will be replaced by independent sector providers.

14 October 2005

NHS trusts have been warned they must improve their services or they will be replaced by independent sector providers.


At the annual CIPFA health finance conference in Bournemouth last week, Adrian Bull, chair of the CBI health care panel, told the audience not to underestimate the importance of independent sector treatment centres.


Seventeen ISTCs, which have contracts to provide non-urgent operations to NHS patients, are already open, with a further 17 to come in wave one. A second wave, to include diagnostics and elective surgery, is currently out to tender.


Bull, who is also managing director of Carillion Healthcare, said that by 2008 ISTCs would take around £1.2bn of NHS spending (less than 2% of the total) and carry out less than 10% of elective activity. But private sector provision would not stop there.


'Competition is coming to the NHS and these units [ISTCs] will seek to expand their patient throughput. But the financial implications for the NHS come from the decision to increase capacity as a whole rather than the decision to increase independent sector provision.'


The government wanted to ensure the first wave of ISTCs provided additional services so it banned them from poaching NHS staff. But wave-two centres can employ staff transferring from the health service.


'This is no longer about additionality. It's about transfer of services,' he insisted.


His words are sure to raise trade union hackles, coming a week after the Labour Party conference called for a review of private sector involvement in the NHS.


Charlotte Moar, finance director at Swindon and Marlborough NHS Trust, said £37.5m a year would be spent on independent sector care in her strategic health authority area.


Although it was difficult to predict the effect on her trust, she said, the hospital recognised that it might lose less complex treatments to other providers, and had vowed to work with the independent sector rather than against it.


'The big positive has been working with our consultants to develop greater flexibility. They understand the threat and the majority don't want to be transferred to the independent sector. It also brings out the positives in the NHS we see anyone, 24 hours a day.'


Clinical work should be 'under same scrutiny as finance'


NHS organisations should routinely publish the outcomes of patient treatments, a leading health economist told the conference.


Peter West, head of value for money at the Healthcare Commission, said that NHS clinical work was not subject to the same level of scrutiny as its use of money.


'I hope to make the Healthcare Commission serious about measuring outcomes for patients. This might seem like an extra burden but it seems to me to be worth it. We must face up to this idea as it will give us a much richer picture of our performance than we have now,' he added.


West recently joined the Healthcare Commission from York University's Centre for Health Economics.


Some trusts are already providing outcome information. In August, St George's Healthcare Trust in south London became the first to publish its death rates for all specialities.


Speaking on the deficits in the NHS, Andy McKeon, Audit Commission managing director for health, said that while these were small relative to turnover, he was still concerned about the 'size and location' of some debts.


'They are focused mainly in the south of England. If you drew a line from Bristol to the Wash you are more likely to be in debt below that line than above it,' he said.


The Audit Commission had issued 16 public interest reports in the past year. 'This is a significant increase on previous years. There are two reasons one is the scale of the problem, the other is advice we have issued to auditors to ring the alarm bell earlier and more loudly.'


Joined-up care services 'won't end council role'


December's white paper on out-of-hospital care will create more integration between health and adult social services than previously imagined but it will not draw local authority social care provision to a close, the conference heard.


Roger Mortimore, a member of the CIPFA social services panel, said: 'I think it will stop short of ending the local authority role. We may see local authorities in a commissioning role and we are likely to see changes in financial flows similar to those in the NHS.'


The end of direct care provision by primary care trusts and the 15% PCT budget cut would have the biggest impact.


Mortimore said council and NHS joint working to reduce delayed discharges had been a success but guaranteed funding for this would end this year.


'My guess is the white paper will announce the end of this guarantee, and end the system of fines for delayed discharges or more likely alter it so it applies only in the most outrageous cases.'


 

PFoct2005

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