NHS trusts — Funding

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The cost of funding NHS trusts

The NHS was confirmed as the government’s biggest spending area in the Chancellor’s 2004 UK comprehensive spending review. A major funding boost will take investment in the NHS from £69bn in 2004/05 to £92bn by 2007/08 — a year on year rise of 7.1 per cent. NHS influencers need to remember that the hospital sector consumes a large part of this. So note that at the same time the government has also published its Treasury public service agreements on health. One new target around chronic disease management reflects an attempt to create new incentives to reduce emergency hospital admissions.

Primary care accounts for around 90 per cent of all healthcare interventions and yet it will receive only about 40 per cent of the £69bn. So for 10 per cent of healthcare, NHS trusts will therefore have received over £41bn for 2004/05. Attempting to move services into the primary and community setting and preventing hospital admission not only makes good economic sense but also is likely to be appreciated more by patients.

There is a growing movement amongst PCTs to try and get hold of some of the large amounts of money consumed in the hospital sector. This will be achieved by not referring some patients to hospitals, but dealing with them in the primary care setting, and by taking some services out of the acute sector altogether (moving them into the community sector). The new GP contract will in fact further stimulate this release of resources as will the growing number of GPs with special interests. It would certainly be beneficial for NHS influencers to understand how funding flows to the NHS trusts, particularly in high-cost specialty areas like cancer.

The Wanless reports

The first Wanless report in 2002 called for a vast cash injection of new monies over the following two decades — up to a maximum of £184bn by 2022 (three times the current level). The report’s estimates of how much the new NHS will cost are based on three scenarios:

  • Solid progress — where good progress is made
  • Slow uptake — where there is little change
  • Fully engaged — where great advances are made

Note that the vision of the future NHS workforce is one in which many of the first contacts between patients and the health service will be provided by nurses or other health and social care professionals in community settings. These services might cover minor injuries, minor surgical procedures, counseling, laboratory work and care of older people. Practice nurses, nurse practitioners and nurse consultants can expect their roles to continue to expand.

See Securing our future health: taking a long-term view.

The second Wanless report in spring 2004 made a number of recommendations to government concerning improvements that needed to be made in the nation’s public health in areas like obesity and sexual health. A major white paper on public health is expected in late 2004.

The impact of Delivering the NHS Plan on hospitals

Delivering the NHS Plan: next steps on investment, next steps on reform spells out where all the promised new money will be going, including the acute sector.

The promises include 40 new hospitals and 500 more primary care one-stop centres by 2007. More nurses, more doctors and more hospital beds are promised. Details on the payment by results system appeared for the first time.

An NHS bank was introduced to deal with overspends and debt in the NHS and social services are to be fined for bed blocking, even though it is generally felt that they are currently under-resourced by government. There were also proposals for hospitals to be allowed to cross-charge local authorities for the cost of delayed discharges, but they would also face financial penalties for emergency readmissions under the scheme. Good news for some companies, as NHS influencers should be able to link in product messages in areas like asthma, chronic obstructive pulmonary disease (COPD) and mental health.

The document contains an interesting chart, comparing the 1948 NHS model with the new model required for the 21st century. The rigid professional lines are to move to ‘modernised flexible demarcations between professions’, and as regards to patients, the world will move from one where they are patronised to one where there is choice of where and when they can get treatment.