Health check list for hospital trusts

10 Nov 05
A new hospital assessment tool, launched by the Department of Health this week, will be the catalyst for 'radical change' and possible service cuts, Public Finance has been told.

11 November 2005

A new hospital assessment tool, launched by the Department of Health this week, will be the catalyst for 'radical change' and possible service cuts, Public Finance has been told.

The performance check list sets out the areas used by the foundation trust watchdog Monitor to assess whether a hospital trust can be granted foundation status.

Foundation trusts form the cornerstone of the government's plan for the new health care market, in which consumer choice determines which services and providers flourish.

The check list was launched as Health Secretary Patricia Hewitt announced that trusts awarded two stars in annual performance ratings would now be allowed to apply for foundation status.

The tool examines a hospital's financial viability in its local health care market by assessing factors such as the strength of competition, the existence of private sector treatment centres, patient demand, debt and its ability to perform services within the fixed NHS tariff.

Mike Gill, assessment director for Monitor, told PF that where the check list revealed that capacity in a local economy outweighed demand, Monitor would either make recommendations to the strategic health authority that it commission less services from, for example, private treatment centres, or it would advise the hospital to cut its uncompetitive services.

Gill said: 'If there's going to be increased capacity, then you need to have increased resources too. The alternative is that you increase providers but not capacity, in which case it might mean that certain organisations need to resize, in order to demonstrate viability.'

The government wants all hospitals to become foundation trusts by 2008, yet Sue Slipman, director of the Foundation Trust Network said that there were some hospitals that would not make it.

'They could have perfectly good management, but are just not operating in environments that make them viable,' she told PF. 'By that I mean there isn't a market there. There will be a range of solutions that need to be found for that group, some of which will be quite radical.'

PFnov2005

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