Fears Over Hospitals Payment System
Posted on: Wednesday, 6 July 2005, 09:01 CDT
A NEW "payment-by-results" system threatens to plunge the North- East's foundation hospitals into the red, a report warned yesterday.
Inspectors highlighted how a funding shake-up had helped create projected deficits of more than 3m at four of the first 20 foundation trusts.
One of the four - Bradford Hospital - was forced to make drastic cutbacks, including hundreds of job losses and ward closures, to balance its books after running up an 11.3m black hole.
Now the study, by the Healthcare Commission, has warned that payment-byresults poses major risks for all hospital trusts that win semi-independence from Whitehall control.
It also concluded there was no evidence to suggest foundation trusts were improving the quality of care provided to patients faster than standard hospitals.
The only North-East hospital among the first 20 foundation trusts examined in the study is City Hospitals Sunderland, which achieved the status in July last year.
But, since then, Gateshead, South Tyneside and Harrogate and District trusts have all received approval for foundation status, which means they can borrow to invest in improvements.
Under payment-by-results, funding is directly linked to the number of patients treated, with hospitals receiving a set sum for each treatment.
It is already being tried out across foundation trusts, although it will not be introduced fully until next year.
Crucially, foundation trusts - because of their semi-independent status - cannot be bailed out by the Department of Health if they run into financial difficulties.
But Health Patricia Hewitt insisted the report was "encouraging", noting it dismissed fears that foundation trusts would cherry-pick staff and easy-treat patients.
It had concluded hospitals were better able to respond to local needs and could use their greater financial freedom to speed up new services and facilities for patients.
Source: Northern Echo
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