IN MARCH, the Healthcare Commission reported that emergency care at Mid Staffordshire Hospital was ‘appalling’. It’s in-depth investigation discovered excess patient deaths of 400 to 1200 patients between 2005 and 2008.
The reason why was that the trust board cut 150 staff in order to save £10m, so that it could register with Monitor as a Foundation Trust (FT).
Monitor was set up as an ‘independent’ regulator of FTs, under the ‘Health and Social Care Act’ November 2003.
The government has ordained that every trust must become a foundation trust by December 2008. This applies to all trusts including acute hospitals, mental health and ambulance trusts.
Foundation trusts are half-way houses to a private hospitals. Unlike an NHS trust, a FT is run as an ‘independent’ business without shareholders.
• It has control of its land and building assets, which are no longer owned by the NHS nationally. It can sell these assets with Monitor’s permission.
• Its main duties are financial; to break even and accumulate surpluses which it can retain and reinvest.
• It can borrow from the market.
• It can raise revenue by commercial deals, such as contracting out services or entering into joint ventures with the private sector.
• It is regulated by Monitor, not by the Secretary of State for Health.
• Monitor has to agree which services an acute trust will and will not provide. Monitor can take into consideration the fact that the private sector in an area is offering certain services and allow the ‘public sector’ FT not to provide them, i.e. it plays a role in the reconfiguration of services.
• Although the government claims that FTs are democratically run by thousands of members, some of whom can become governors, it is the appointed board of directors who take decisions that the governors cannot veto. The board meetings can be in secret and usually are.
In order to become a FT, the trust must eliminate its ‘historic deficit’.
Most trusts have limited capital assets in land and buildings and their main expense is labour costs. In order to cut the ‘deficit’, they can sell assets, or sell franchises to private companies, such as their car parking or shop space, or they can generate funds by offering new services like doing extra waiting list initiatives.
The main way for an ordinary hospital to save money is to: close beds, cut staff, reduce patients’ length of stay, and reduce spending on equipment, drugs and prostheses. All of these directly compromise quality of care and this is what happened at Stafford.
Service lines and tariffs
To run as business, FTs must make a surplus on ‘services lines’ and eliminate those on which it cannot.
FTs have to compete with other trusts and private hospitals under the DH’s ‘patient choice’ scheme and the new cooperation and competition rules.
Care becomes selected on the basis of financial risk and not the healthcare needs of the population in that geographical area.
In England payment for surgery is by tariff. (Tariffs are planned for mental health and community care.) If a hospital can make a surplus on doing inguinal hernia repairs, or knee replacements, then it will keep doing it. If it cannot, then the procedure must stop.
An army of service line managers and coders is necessary to make the business cases and account for every piece of equipment, staff costs, bed stays, drugs etc for each line and to send out bills.
A service line could become unprofitable if the Department of Health (DH) drops the tariff, which it is doing year by year by 3%. The Darzi next stage review cuts the tariff uplift for those trusts not scoring well on their quality accounts, so those trusts will receive even less funding.
Budget.
Alastair Darling’s budget cuts £6bn from public spending in the next two years. NHS funds will be culled by £2bn next year through ‘efficiency savings’. Trusts must increase ‘productivity’ and implement ‘lean’ working practices. Thousands of jobs will be lost or outsourced. Patients must be denied hospital care and be treated in the community.
Trusts not FTs yet.
To date, 114 trusts have become FTs, with 95 still unauthorised despite the government’s deadline of December 2008 (Health Service Journal, 23.04.09). The new deadline is Dec 2010.
Around 20 trusts are not expected to achieve FT status by that time. Twenty with no date are in London and include Barts and the London, and West Middlesex University Hospital. The chief executives of these have recently resigned and Barts/London has £1.2bn PFI to pay for. The rest are; Great Ormond St, Newham, North West London, Barking Havering and Redbridge, Barnet and Chase Farm, Bromley, Epsom and St Helier, QE Woolwich, QMH Sidcup, West Middlesex and Whipps Cross.
One concludes that the main reason why they are not applying is that they cannot reduce their ‘deficits’.
Whittington Hospital has withdrawn it’s FT application. A local councillor said that essential funds are being diverted to the new £12.8m Hornsey Central polyclinic, spelling disaster for the Whittington.
(Tottenham Journal, 07.05.09)
What happens to trusts which do not become FTs?
The DH puts forward several options; merger, being taken over by another FT, split, NHS franchise, private franchise, board removal or closure. Bill Moyes. Chairman of Monitor said ‘They might have to be broken up into components that are viable and components that are not viable.’
Frank Dobson MP is quoted as saying ‘All the options set out are absolutely lunatic and no one in their right mind would want Great Ormond Street to be anything other than continue as it is as Britain’s leading children’s Hospital.’ (HSJ 19.03.09)
The Health Bill empowers the government to close a trust which is financially or clinically ‘failing’ within 30 days and to hand it over to the private sector.
The stage is set for mass hospital closures.
Lord Carter of Coles, the chairman of the Co-operation and Competition panel said ‘Once you have created a market, the law of unintended consequences kicks in and big issues arise.’ He commented that free-standing NHS foundation trusts might evolve into eight or ten big hospital chains over the next five to ten years.
Conclusion
This government is racing ahead with silently privatising the NHS, through turning hospitals into foundation trust businesses. It hopes to let the market rip with the going out of business, merger and closure of many of them.
Meanwhile, billions of public money are being poured into unnecessary ISTCs, polyclinics and Urgent Care Centres, PFIs and LIFTs, when all that was ever needed was proper funding of our NHS GP surgeries, District General and specialist hospitals and community care.
It is urgently necessary for NHS staff, patients, the public and trade unions to form an alliance and defend our publicly provided comprehensive service, insist on proper funding for frontline services and end the massive waste and decimation of care that privatisation brings.
No to polyclinics, ISTCs and Foundation Trusts!
The Visteon workers showed the way with their occupation!
March to save Chase Farm as an acute DGH on June 6th!
