- Created: Thursday, 17 April 2014 21:13
- Written by Hannah Caller & Robert Clough
The NHS faces a real possibility of collapse before the 2015 general election. Two factors will have led to this situation: real cuts in NHS funding and the fragmentation of services that has been the consequence of the 2012 Health and Social Care Act. A programme of impossible savings is pushing many foundation hospital trusts towards bankruptcy. Clinical commissioning groups, responsible for buying health care services for their local population, are signing contracts left right and centre with private companies. At least £6bn worth of work is out to tender in the NHS in England. Financial pressure to make savings of £30bn by 2021 will mean that trusts that don’t make money can expect to be closed, aided by the new powers that the Health Secretary has now enshrined in law with Clause 119 of the 2014 Care Act. A market in health care inevitably leads to priorities that are not in the interest of people’s health care.
The financial situation of NHS trusts has deteriorated over the last three years as funding has failed to keep pace with NHS inflation. It is further threatened by NHS England’s proposal to move £2bn from hospital budgets to out-of-hospital care, and a possible extra £1bn in employer pension contributions. In July 2013 in England, 38 of 61 non-foundation hospital trusts had financial deficits with five in special measures, while five of 99 foundation hospital trusts were under investigation and 20 were in special measures. This means two-thirds of acute NHS trusts and a quarter of foundation trusts are struggling. Latest planning guidance from Monitor, the NHS financial regulator, shows a financial shortfall of 6.6% in 2015/16.
Specialist services such as chemotherapy and cystic fibrosis treatment, which are commissioned nationally by NHS England, are overspent this financial year so far by £366m, 3.8% over budget. Provisional estimates show that the cost pressure on these services will rise at 10% per year until 2021. One in three acute NHS trusts in deficit are hospitals built under the PFI scheme, making financial solvency nearly impossible as repayments increase year on year while income is falling.
David Nicholson, outgoing chief executive of NHS England, warns that billions of extra pounds are needed to allow the NHS to survive. He suggests centres providing some specialist services be cut from 300 to 15-30, and a reduction to no more than 40-70 major emergency centres across the country. He says this doesn’t mean other hospitals lose their A&E, they will just no longer deal with the most serious cases. Chase Farm hospital in north London had its A&E department closed in December 2013 after the defeat of a long struggle to save it along with the maternity unit. It is left with a 9am-9pm urgent care service while services have been centralised at Barnet and North Middlesex hospitals. In January, a three-year-old child, who was taken to Chase Farm by his mother unaware of this closure, died in the process of being transferred by ambulance to the North Middlesex Hospital. More tragedies of this kind are inevitable where closures mean fewer access points to critical care.
Care Quality Commission, batting for private providers
The Care Quality Commission (CQC) is the quality regulator of hospitals, all of which have to achieve foundation trust status by this year under the Health and Social Care Act. Between January and March 2014, the CQC inspected 19 hospital trusts in England. Each inspection team has up to 35 people which look at eight areas of the hospitals and ask five questions: is the quality of care safe, effective, caring, responsive and well-led? Just as schools have Ofsted inspection and end up with a rating, so will hospitals, which will come out either outstanding, good, requires improvement or inadequate. Failing to get a good report brings severe penalties, so to ensure the best rating, hospitals are turned upside down before and during an inspection, with teams of managers and clinicians whipped into a frenzy of presentations, meetings, memos and focus groups.
However, the CQC will no longer be concerned just with service quality – at least not if its chair David Prior, a former chief executive of the Conservative Party, has his way. On 1 February he wrote in the Sunday Telegraph that ‘We need more competition to drive up standards of care; more entrants into the market from private-sector companies, the voluntary sector and other care providers’, and announced that European or US hospital chains could be given the chance to take over NHS hospital trusts in England which run into financial difficulties. He also described waiting targets as out of date. On 23 March, the Sunday Times reported that more than 3,700 patients waited more than 104 days for treatment in 2013 in breach of waiting targets, and that almost a third of trusts (30%) are breaching a government target of 85% of patients receiving treatment within 62 days of an urgent GP referral.
Foundation status is granted to hospitals by Monitor, the economic regulator. Monitor’s present interim chair is another Tory politician, Baroness Hanham. Foundation trusts can generate income through joint ventures with large corporations, selling land and buildings and using staff and services for private medicine. If the hospital doesn’t get enough revenue, it can be closed down irrespective of the needs of the local population. But if it has a private finance initiative (PFI) scheme, then special measures will be implemented to protect it. Hence Lewisham hospital in south London had its A&E services threatened with closure to fund the South London Hospital Trust where there were three hospitals and six PFI schemes, consuming over 16% of the Trust’s income. Following a campaign to save Lewisham hospital, the High Court ruled in 2013 that Health Secretary Hunt had acted unlawfully in proposing to cut Lewisham services. In response, Hunt inserted Clause 119 into the Care Bill which has now become law. This gives special administrators appointed by the health secretary power to enforce any local changes to, or reconfigurations of, NHS services. Special administrators have no duty to plan health services on the basis of need in the area: their duty is to ensure that trusts can pay their debts and remain financially viable organisations.
Mental health services slashed
Monitor and NHS England have just recommended cutting funding for mental health services by 20% more than funding cuts for acute hospital-based services. Mental health is already underfunded, getting 13% of the NHS budget but accounting for 28% of health service need. These cuts are life-threatening and breach the Health and Social Care Act to treat mental and physical health care equally. For the young and the elderly it is also bleak, as child and adolescent mental health services are being underfunded and of Britain’s ten million people over 65, one in five are likely to need mental health services. One in ten children in London – 110,000 – are thought to have a clinically significant mental health problem. Older people are additionally affected with an underfunded service, rising demand and the cuts affecting health services in general. As with every other aspect of austerity, it is the working class who will suffer the consequences as NHS services disintegrate.
Hannah Caller & Robert Clough
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