Hospitals and hospital trusts, and particularly acute hospitals, remained under great and increasing pressures. Each month English trusts saw over a million new patients in acute specialties, and a further million attended A and E departments. Squeezed by rising demand and decreasing bed numbers for financial reasons or because of staff shortages, the morale of doctors and nurses fell.
The NHS inherited hospitals from local authorities and not-for-profit charities in 1948. Over a period of years hospitals were closed, rebuilt and merged with the aim of providing a single district general hospital in each area, supporting local general practitioners and being supported by university and specialist hospitals. In general such hospitals are 500-800 beds in size, operate to 90% capacity or more, and save in city centres have little competition. There have been steady trends to increased throughput, and with sub-specialization the number of consultants has steadily grown. The organisational framework within which the hospitals operate has repeatedly changed. Currently they are managed by NHS Hospital Trusts within a fairly inflexible budget, but the system of allocating resources to them and their supervision is in the process of changing
| Hospital episode statistics - England - 1998/2002 Source Department of Health web site | |||
| Year | Ordinary admissions (1000s) | Day cases (1000s) | Increase |
| 1995/6 | 8,371 | 2,845 | |
| 1998/9 | 8,563 | 3,420 | |
| 1999/2000 | 8,587 | 3,579 | 1.01% |
| 2000/1 | 8,645 | 3,619 | 1% |
| 2001/2 | 8,764 | 3,592 | minimal |
|
38-40% of ordinary admissions have an operation; 87-89% of day cases |
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Inadequate numbers of beds, shortages of nursing and support staff, the increased time spent on training junior doctors, nurses and theatre staff, a reduction in the working week as a result of European legislation, and the time spent on management, audit and clinical governance, reduced the productivity of clinicians. Pressure to meet Department of Health waiting list targets, to reduce people waited in A & E for admission, and to speed discharge home or to a nursing home, led to tension in hospitals and unsatisfactory experiences for patients. The NHS Plan (2000) added more targets - one Chief Executive said there were over 300 to be met - and the finance available meant that no one issue could be tackled entirely satisfactorily. The NHS was working so near its limits that the pressure of events locally might rapidly overwhelm hospitals (as at the time of petrol tax protests in September 2000), particularly if shortage of money restricted the support offered by social services.
In 1998 the Government established a National Beds Inquiry chaired by the Chief Economic Adviser of the Department of Health, Clive Smee. Reporting early in 2000 it showed that the number of staffed hospital beds in England had peaked in 1960 at a quarter of a million, and then fallen steadily to 147,000. Elective admissions had remained static, but emergency ones had risen steadily, reaching 60% of the total. Those over 65 years of age were major and increasing users of the service. York University's evidence to the study concluded that about 20% of the days older people spent in hospital would probably have been deemed inappropriate if other, intermediate, facilities had been available.
The inquiry outlined three options
an increase in the number of acute beds
a major increase in health services in the community
or the provision of ‘intermediate care’ services, to prevent avoidable admissions and make discharge home easier.
There was no immediate commitment to fund any of the options. Intermediate care became the new aim, but one that faced a number of problems. First, the natural centres for such care, the GP hospitals and the later Community Hospitals, had often been closed by management in search of money to keep acute hospitals running. Second, there was little evidence that such facilities could deliver effective outcomes in a cost-effective manner; the 'hospital at home' schemes had not done so. Third, nobody had explained how, if intermediate facilities were to be funded from money taken from the existing acute hospitals, those hospitals would keep within budget, increase their throughput and improve the quality of their own services.
In the past when it was necessary to act to keep within budget - the key objective of most managers - the standard response was the closure of beds. By 2000, however, it was recognised that capacity was a key restraint if waiting times and waiting lists were to be brought under control. The Secretary of State, Alan Milburn, accepted that more beds were needed. Bed closure ceased to be an option, new PFI projects no longer had to reduce bed numbers, and Trusts faced with a shortage of money were unable to solve their problems by cutting beds. This acceptance was not mirrored in bed statistics showing that in 1999-2000, the number of English acute beds fell from 107,700 to 107,200, although beds for day cases rose by 300. The beds available for mental illness, learning disabilities, the elderly and for maternity also fell. Staffing shortages in almost all staff groups emerged as a major restriction in the hospital service. Authorities were now asked to produce plans for increasing their capacity.
Costs were rising as new drugs and methods of treatment were introduced. When measured quantitatively in terms of throughput "efficiency" now began to show some signs of leveling off.
Ten years of discussion about the pattern of hospital services was leading to the conclusion that acute services needed to be reconfigured, although it was unclear how best to do so. Reconfiguration was seen as to raise efficiency, reduce costs, and to handle staffing problems, new technology and public expectations, and provide more timely care for patients. Since the NHS began guidance on hospital services has been issued from time to time (e.g. Enoch Powell's Hospital Plan and the Bonham-Carter Report). The Department of Health established a Reconfiguration Project in 2002 and wished future patterns to reflect at least in some measure public feelings. In the US the Federal Government recognised in 1997 that some small rural hospitals required recognition and encouragement as "Critical Access Hospitals" . They had to be in public or nonprofit ownership, offer 24-hour emergency care services, provide no more than 15 beds for acute inpatient care, ensure that inpatient lengths of stay average no more than 96 hours, meet a distance requirement from any other hospital, have an established relationship with a larger hospital and pass a state survey. Such recognition of the need for local acute units was lacking in Britain with its denser population. There was little evidence about the best way ahead; bigger hospitals might be better, but were not necessarily so. Quality and quantity seemed to go together for some surgical operations, but not all. There was little evidence on the outcomes of medical care, and bigger hospitals sometimes in fact meant higher costs.
In February 2003 the Department of Health published a guidance document, Keeping the NHS Local. It set out the many issues to be solved, not least the European Working Time Directives. However Diagnostic and Treatment centres could provide major assistance, and it was suggested that new equipment and information technology opened new possibilities for smaller hospitals and that local populations should have at least some say when options were being considered.
diagnostic and treatment centres (DTCs), such as the pioneering one at the Central Middlesex Hospital opened in 1999. DTCs would be planned to provide care to 250,000 patients a year by 2005. Insulated from emergency work these were able to concentrate on elective surgery to shorten waiting times. Some would be run by NHS providers, others by private sector providers.
the separation of elective from emergency work, and the possible separation of medical from surgical emergencies. Half the cases going through a DGH were elective in nature, and the majority of these were potential DTC patients (for example ophthalmology and orthopaedic patients. Many elective cases could be offered fast track surgery, as a day case or 24 hour stay admission. Of the other half, most were medical emergencies, and the rest often highly complex and difficult surgical patients.
Relating hospital developments more closely to a wider pattern of primary care and community services, and services for the elderly.
niche hospitals, focussed factories that limit their work to a single area of operation and as a result can achieve greater effectiveness and efficiency - while leaving the main hospital short of resources that may cross-subsidize essential facilities such as emergency care.
the possibility that a hospital system might perform better if, instead of a large central hospital with local hospitals to which patients were discharged, patients with emergencies (especially medical ones) went to local hospitals first. At the least the high cost of ambulance services would be reduced, relatives would have greater access, and discharge after recovery to the community might be easier.
Diagnostic and treatment centres (DTCs)
Diagnostic and treatment centres (DTCs) aimed to make a significant contribution to the rapid and large scale increase in diagnosis and treatment by spearheading innovation in the delivery of services and introducing diversity of provision. The DTC offered a flexible response to the needs of areas, particularly the middle-sized populations, segments of large cities or market town centres with a population of 100-500,000. They might concentrate on cataracts and wider ophthalmology procedures – where there is a particular interest in innovative solutions, such as mobile units; orthopaedics; and day case work (including units that will work very closely with primary care services). 2001 plans were announced to build 26 fast track surgery centres in England at new and existing hospitals financed by PFI or by public funds through the Modernisation Agency. Some DTCs would be entirely NHS, some entirely independent sector (stand alone) and others joint ventures, which may be either NHS or independent sector led. By 2002 there were 10 DTC schemes open, nine NHS schemes and a joint venture with the independent sector at Redhill . A further 19 NHS schemes were to be opened by 2005. The Royal College of Physicians and the NHS Confederation established a working party to rethink the delivery of acute emergency services in hospitals.
To reduce the time patients waited, pilot trials were established for the booking by GPs of outpatient appointments and day surgery. Such trials were, however, unlikely to help where the key problem was inadequate capacity. Some attempts to improve care and to reduce it costs, for example "re-engineering” of the process of care, when evaluated did not transform performance (as at the pioneering Leicester Royal Infirmary) as far and as fast as had been hoped
The rising burden of emergency admissions when considered alongside clinical sub-specialization remained a problem. The Royal College of Physicians examined its training system; should all physicians be fully qualified in general medicine first, and only then go on to train for one of the 25 recognised subspecialties? Emergency admissions usually fell to the lot of only a few of the groups within the 'medical' umbrella, for example geriatricians, gastro-enterologists, cardiologists, respiratory physicians and diabetologists. Running an effective emergency admission system was hard and stressful.
Sometimes organisational change rather than hospital reorganisation was considered. Hospital rationalisation and trust mergers might be proposed as an answer to financial stringency. When, rarely, the predictions were examined retrospectively the results could also be embarrassing. The decision to downgrade Edgware General Hospital and centralise services in Barnett was reviewed. While patient services had improved, out of projected savings of £13.7 million, just £100,000 appeared to have been achieved.
Improved data on hospital inpatient outcome were included the publication of hospital mortality "league tables". Such figures had been published in the USA for over a decade, and appeared in England in 1999. The underlying data was analyzed by Professor Brian Jarman, who attempted to overcome some criticisms by standardisation for age, sex, socio-demographic background, key diagnoses and the number of emergency admissions. Hospital standardized mortality ratios (HSMRs) were calculated for each English Trust, and the trusts presented sharply different outcomes for patients once all these factors had been taken into account. The factor that correlated best with performance was the number of doctors on the staff. Taken overall, the death rates in major English hospitals seemed to be dropping about 2.5% per year. In the wake of the Bristol Report the publication of such data would be part of the responsibility of the Commission for Health Improvement.
Labour’s manifesto had included a promise to reduce the waiting lists inherited from the Conservatives by 100,000. There was no arguing with No 10 that this was unwise (the author tried) for successive governments had grappled in vain with the problem. As the first winter of its administration approached (1997) there were fears that the emergencies common in the winter months might overwhelm the hospitals. Emergencies were given the highest priority and waiting lists increased rather than falling. Labour allocated money for waiting list reduction and appointed a ‘czar’ to oversee it, and in some measure reversed the upwards trend. Faced by shortages of senior clinical staff, some trusts paid huge sums to tempt doctors to work out-of-hours to reduce lists.
In the winter season of 1998/1999, Labour took credit for a fall in numbers waiting; the Conservatives said that the easy cases were being done first. Yet problems with emergency admissions remained, ambulances queuing to get to the door of A & E, and patients queuing on trolleys to get into beds. Even a mild flu epidemic threw the service into chaos, waiting lists rose again, a Portsmouth hospital appealing to people to help to nurse their relatives.
The winter of 1999/2000 was worse, with increased numbers of cases of influenza and few intensive care beds. Elective services even for emergencies, were often delayed. There were deaths as patients, for example after heart surgery, were transferred between hospitals and the provision of more intensive care beds became a service priority. 2000/2001, a mild and wet winter, provided fewer crises but no sense that matters were improving. In 2001/2002 and 2002/3 there were few problems.
The medical profession and NHS management regularly criticized the waiting list initiative, for it could lead to simple but less urgent cases taking priority over the more difficult or life-threatening ones. In June 2001, after the election, Alan Milburn backed away from the 1997 election pledge, saying that it was time to 'move on' to a concentration on waiting times. Comparatively few hospitals were responsible for the majority of patients waiting six months or more for admission, and in general these hospitals were not lacking in capacity or in areas of deprivation.
The NHS Plan expected that by 2003-4 two-thirds of outpatient appointments and elective admissions would be pre-booked, and no longer subject to waiting lists. A number of pilot sites was established, and substantial progress was made particularly with day-case bookings. Whether the average waiting time would fall with the introduction of booked admissions was less certain. The Audit Commission reported that waiting lists for investigations were, in themselves, substantial - some 500,000 people. Complex procedures had the longest times, an average of eight weeks for ultra sound and twenty weeks for MRI scanning.
Many of the proposals in the NHS Plan were designed to improve hospital care. There were to be more doctors and more nurses. The lack of hospital cleanliness, long apparent to any visitor, also featured on the political agenda. Under the NHS Plan nurses would once more be given a role in the supervision of housekeeping arrangements. Hospital food, long a subject of criticism, was singled out for improvement. A report by the Nuffield Trust (1999) had shown that much food was wasted because it was served at rigid times, was unattractive, and patients who needed help with feeding often did not receive it. The Plan proposed a minimum standard of continental breakfast, light lunch, an improved 2 course evening meal, and drinks and snacks mid-morning and mid-afternoon. A team of professional chefs was recruited to make ward food more palatable, looking and tasting better who produced a book of "Chef's Recipes" sent to all hospital caterers. The cost of the recipes being higher, hospitals delayed their introduction. Some patients preferred their traditional cottage pie to celebrity cuisine and the initiative seemed to wither on the vine.
In each decade the problems of delivering higher throughput, of acceptable quality, within tightly restricted financial allocations, have led to varying "solutions" each of which was later replaced by a new version. Rather than competition, Labour favoured tight central control, targets, clinical guidelines (NICE), inspection (CHI) and hit squads. Patient Environment Action Teams inspected hospitals for failings, for example lack of cleanliness. Great improvement was reported, but then it was discovered that hospitals were given advance warning that the teams were to arrive. Three decades earlier the Hospital (later Health) Advisory Service had visited the crisis ridden long stay hospitals. Now a National Patients Access Team was established with top sliced money and staff seconded from the NHS, to visit, advise, and work with hospitals that were "failing" by not delivering on targets such as those for waiting list reduction.
Targets for issues such as inpatient and outpatient waiting times, cleanliness, financial results, and management of breast cancer were pulled together in 2001 in a star system. Those with three stars (about 35 acute hospital trusts) would have greater freedom to manage their own affairs. Those with no stars were at risk of the attentions of central task forces, to 'work with them'. A dozen hospitals were told to improve their performance - or the chairman and chief executive would be replaced. Nobody would defend hospitals that were filthy or in which patients waited for ever, but the league tables were odd. Some prestigious hospitals were found to be unsatisfactory, though many of those failing had major problems to face, rebuilding, hospital mergers or the implementation of major new information systems. Some were understaffed in spite of all efforts at recruitment. Others had applied all known "good practice" to trolley waits without the problem going away. Were these hospitals necessarily failing?
The stars seemed unrelated to patient outcome and whether or not clinician results correlated with the stars awarded was uncertain. Achievement of targets sometimes depended on a target figure the trust had itself supplied. All zero star hospitals were in the southeast where people were, on the whole, healthier, but it is more difficult to recruit quality staff on national pay scales, than is the case in the north. There were oddities. The John Radcliffe in Oxford had for years been praised as highly effective, treating more patients with fewer beds than anywhere else in the country, and now it was chastised for its waiting times. Kings College Hospital had - ten years previously - been execrated for its care and much money and managerial time had been spent on improving matters. It now became a three star hospital.
The trusts worst affected (no stars) were Ashford and St Peter's Hospitals, Dartford and Gravesham, Portsmouth Hospitals and Barnet and Chase Farm. In November 2001 the running of Dartford and Gravesham was taken over for 6 months by Sue Jennings, chief executive of Basildon and Thurrock General Hospitals trust and former head of the National Patient Access Team. The move, involving an entire top team, who continued their normal work, was the first example of "franchising" trailed by Alan Milburn for failing trusts earlier in 2001. In February 2002 an acting chief executive was drafted into three other no-star trusts while new NHS managers with 'a proven track-record' were selected for a three year franchise.
The method used to calculate the star ratings published in July 2002 was new, and involved three factors. First was achievement of political (albeit useful) goals, such as financial performance and waiting lists. Then there was the inspection by CHI. Finally 29 performance indicators involved clinical, patient and staff issues. Finally 29 performance indicators involved clinical, patient and staff issues. Evidence emerged that in a significant number of hospitals data was manipulated to achieve targets. Clinical performance did not figure among the factors and while the system used was published on Internet the conversion of such dissimilar information into a single index was open to question. Substantially more hospitals achieved three star rating (46 against 35) although the method of calculation had changed. Nevertheless according to the Secretary of State this was evidence that the NHS was getting better. Further changes were promised for the coming year. Star rating was important for only the better performers would be considered for the additional freedom to be given to "NHS foundation trusts".
The method used to calculate the star ratings published in July 2002 was new, and involved three factors. First was achievement of political (albeit useful) goals, such as financial performance and waiting lists. Then there was the results of inspection by CHI. Finally 29 performance indicators involved clinical, patient and staff issues. Clinical performance did not figure among the factors and while the system used was published on Internet the conversion of such dissimilar information into a single index was open to question. Substantially more hospitals achieved three star rating (46 against 35) although the method of calculation had changed, evidence according to the Secretary of State that the NHS was getting better. Further changes were promised for the coming year. Star rating was important for only the better performers would be considered for the additional freedom to be given to "NHS foundation trusts".
For the poorer performers there were penalties. Eight trusts received a zero star rating for their performance in 2001-02. Of these United Bristol Healthcare NHS Trust and Royal United Hospital Bath NHS Trust would be franchised, as would Good Hope, Birmingham. NHS franchising aimed to find the best available managers to take over the functions of the chief executive and, where necessary, other senior management positions. Franchising was a last resort for Trusts where less direct forms of assistance had failed or were considered unlikely to succeed. A list of organisations was prepared that might provide managerial expertise, some NHS, some private and some overseas (Sweden, Canada, Germany)
A ruling by the European Court of Justice in 2001 that medical care in hospital was subject to European law on the free movement of services, and that prior authorization was an obstacle to free movement of patients, raised important issues. The Court ruled that patients had the right to seek treatment aboard if they faced undue delay led to the possibility of health authorities placing patients in pain who had already waited months for knee and hip joints with European hospitals, where rapid and effective treatment was available. The Sunday Times ran a campaign to publicise this decision. The Department of Health initially tried to discourage the possibility but patients threatened to take this issue to the European Court, the BMA said that as we were in Europe we might as well take advantage of the surplus capacity there, German hospitals said they had spare capacity to treat Britain's entire waiting list, and the government conceded. Alan Milburn agreed to modify legislation to allow overseas treatment if the patient wanted it, after clinical assessment showed that this would meet the need, and if the primary care trust could meet the cost from its budget, provisos that might limit the demand. A doorway had been opened and the Department of Health coordinated pilot areas in Portsmouth, Hampshire, Kent, West Sussex and East Surrey, wishing to buy packages of operations from continental hospitals. In January 2002 the first group of nine patients left for Lille and accommodation a world away from crowded NHS wards. Others followed shortly after for treatment in France and Germany - hip or knee surgery, or cataract operations. Evaluation by the Health Economics Consortium at York described the experience of the first 190 patients as "very positive"; clinicians and managers would have preferred the money to have been spent in England. In spite of this once the trial was over few further patients were sent; the priority both for the Department and for health authorities was the expansion of capacity at home.
At the 2002 NHS Confederation Conference Alan Milburn spoke of bringing in spare capacity from health overseas systems, for example clinicians into an existing NHS facility, or a company that brought staff and invested in new facilities. In a subsequent circular dealing with "Clinical Teams and International Establishment" it was proposed to increase surgical and diagnostic capacity by the use of clinical teams, where overseas staff would supplement clinical capacity in existing organisations, and by the use of independent health service providers to set up and run health care units. It was hoped that this might make inroads into waiting times in elective surgical specialties, such as orthopaedics and ophthalmology, while following NHS principles - treatment free at the point of delivery and available according to clinical need, not ability to pay. Discussions were opened with hospitals in Lille, Pittsburgh and Athens. Consultants in the English hospitals were not always in favour of overseas teams of an unknown quality operating in their hospitals at a substantial cost, possibly leaving clinical problems to be sorted our subsequently. Nevertheless in October 2002 demonstration sites were identified to work with German, Swedish and US based health care providers and a small number of overseas teams began work.
London had been the first area in the country, 25 years before, to make radical efforts to reduce the number of "surplus" beds and the reduction in numbers had proceeded to the point where not merely elective surgery but emergency admissions were jeopardized. For years attempts had been made to improve primary health care to the level elsewhere in the country to ease the strain on London's hospitals. So there had been high hopes for the London Initiative Zone, established in 1993 after critical reports on the state of primary care in the capital. Projects aimed to improve GPs' premises, recruit a new cadre of GPs, introduce innovative approaches to old problems and develop cost-effective care outside hospital. A review of achievements five years later showed that many projects had improved premises but in some areas the standards of many surgeries remained unacceptably low. London still had fewer young GPs, more single-handed practices and larger lists. There were more practice nurses, but although primary care in the capital was improving, it was doing so no more rapidly than elsewhere in the country. Services still lagged behind. The initiative was terminated.
In 1997 Frank Dobson commissioned Sir Lesley Turnberg and a panel to undertake a strategic review of health services in the capital. The report stated that no longer could London be considered over bedded compared with the rest of England. The problems of inner city primary care were publicized once more, and it was proposed that London's hospital service should be organised within five sectors relating to the five sector plan adopted by the University. The panel considered a number of capital developments, approving the development proposed for the University College London hospitals, and modifying the proposals for St Bartholomew's Hospital and The Royal London.
Ground was broken on a £422 million private finance initiative to unite the University College London Hospitals on a single site and in 2001 UCLH signed a deal to purchase the old National Heart Hospital, now converted into a state-of-the-art private heart unit. This unit rapidly reduced the hospital's waiting lists for cardiac surgery. The redevelopment of the Royal London Hospital also made progress.
Organizationally London had been divided into four health regions at the start of the NHS. In June 1998, the Secretary of State, Frank Dobson, announced that from 1 April 1999 London would be a single NHS region. This would give greater cohesion and coterminosity with government departments and local agencies, including local authorities. The arguments against such a pattern, vetoed by Bevan in 1946, and rejected once more in the early seventies, were now weaker. A London region had been proposed in the Tomlinson Report (1992). Change had therefore been expected and would have ripple effects on the surrounding areas. A new boundary at the western side of Bedfordshire would separate an Eastern region from a large ‘L’ shaped South-eastern region. Covering 7 million people, the London region had 100,000 employees and a budget of £7 billion. Following the recommendations of Turnberg, five radial strategic health authorities were established within the London region in 2002.
The election of Ken Livingston as London's Mayor in May 2000 aroused fears that the NHS in the capital would be caught in the cross-fire between the Labour Party and the mayor. A mayor with massive public support would hardly avoid involvement in a service so important to his community. Local government also had a responsibility to work in partnership with the NHS. This, however, did not seem to become a problem.
The recognition that staffing was a major constraint on development of the NHS led to an increased accent on personal management, now called "human resources". Without the appropriate staff, improvement in care and achievement of NHS Plan targets would happen. A review of the existing system of workforce planning, including the consortia that oversaw staff intakes (e.g. nursing), led to the establishment in April 2001 of 24 - later 27 - Workforce Development Confederations, (WDCs) to lead on workforce planning for all disciplines, commissioning training programmes, managing contracts with local organisations, such as universities and encouraging recruitment. These Confederations, with staff of a senior level, were generally coterminous with Strategic Health Authorities. A strategy for human resources within the NHS Plan, More staff working differently, was issued in July 2002. The NHS Plan had set targets for increased staff numbers, but quite as important was redesigning jobs, multi-disciplinary teams looking at care pathways, and deciding who might appropriately perform a procedure or deliver care, for example a nurse might undertake activities previously the province of the doctors.
An electronic staff record would, by 2005, provide a single human resources and payroll system for every NHS organisation
The quality of our hospital buildings has always been substandard. When, in the 1960s, money and building materials had begun to be less of a problem, Enoch Powell's Hospital Plan (1962) had proposed over 200 schemes. In the event a third were completed and a third partially completed. The oil crisis and shortage of money slowed progress. By 1990 the capital for new construction had been radically reduced. Comparatively little came from central funds though some money was available from land sales. Planning priorities were set by regional offices (now part of the Department of Health) and were based on service needs and in some cases reflected political factors.
Until 1991 all major capital expenditure inthe NHS was funded by central government from tax or governmentborrowing. The NHS did not have to pay interest or repay capital,so in effect new equipment and buildings came "free." The 1990NHS and Community Care Act established hospitals as independentbusiness units in the public sector and required them to pay fortheir use of capital through "capitalcharges." From 1992, under the Conservatives, the shortage of public funds for hospital development was made good by greater reliance on private finance, the Private Finance Initiative (PFI). Labour on achieving power maintained and developed this policy, later referred to as public-private partnership. Major PFI schemes were typically "DBFO" - i.e. a private sector consortium designs the facilities based on NHS specified requirements, builds them, finances the capital cost and operates their facilities. In returnthe NHS trust paid an annual fee to cover both the capital cost,including the cost of borrowing, and maintenance of the hospitaland any non-clinical services provided over the 25-35 year lifeof the contract, after which it would be handed over in good state.
The way schemes were selected relied on longstanding principles. A strategic case for change, based on health care need, had to be established, but under PFI once a preferred option had been identified an "outline business case" was prepared for central approval. Initially the business case generally included a reduction of beds. This was driven partly by the long standing view that the acute sector should be curtailed in favour of primary care and long term care, but also by the cost of PFI schemes. Private finance is generally more expensive than public borrowing, and schemes carried a substantial transaction cost. A detailed statement of what was desired and who should bear the financial risks was submitted. Affordability was a critical constraint on planning and services might be designed to fit pre-determined financial allocations (although this was nothing new, for the Nucleus Hospitals had been designed on that basis). Potential providers, and the best privately financed solution, would be identified, and the contract once approved would be finalized and awarded. Only around 2000 was it accepted that the policy of reducing beds in the acute sector had gone to far, and thereafter a reduction in capacity was no longer seen as a virtue.
For those wanting a new development, PFI, became "the only game in town". Government argued that PFI would result in better hospital designs, the private partner taking on the risk of construction cost and time over-runs, and more efficient maintenance. (Guy's Hospital Phase 3 rose in cost by over 300% and was three years late.) Critics, such as Allyson M Pollock, believed it was locking the NHS in to expensive 30-year contracts. Buying hospitals, essentially on credit, was not be cheap in the long-run, brought no new capital investment into public services and was a debt which had to be serviced by future generations. The value for money assessment, they believed, was skewed in favour of private finance. Higher costs were due to financing costs that would not be incurred under public financing, and many hospital PFI schemes showed value for money only after "risk transfer", but the large risks said to be transferred are not justified. PFI more than doubled the cost of capital as a percentage of trusts' annual operating income. (BMJ 2002;324:1205-1209).
A select committee of the House of Commons reported in 2002 that PFI was being blamed for ills not directly related to it, whereas the many benefits ascribed to it had yet to be proved; and recommended that more capital was found from central sources for major schemes so that PFI projects could be compared with conventionally procured ones.
Many PFI schemes involved facilities management, laundry, catering, cleaning and security. Some smaller ones dealt with support services including pathology, imaging and dialysis. They might involve the provision, maintenance and replacement of medical equipment at the end of its useful life. A new generation of Diagnostic and Treatment centres, and projects concerned with information technology, were also candidates for PFI. As contracts could include staffing and clinical services, as well as the provision and maintenance of buildings, the voice of the various skill groups had to be heard. UNISON opposed schemes in which private companies could set their own terms and conditions of service, which might not be up to NHS standards (low those these could be).
Between May 1997 and March 2002 64 major PFI hospital developments were approved with a total capital value of more than £7.5 billion. Eleven were completed and operational by early 2002 including Carlisle, Dartford & Gravesham, South Buckinghamshire, Greenwich, North Durham, Calderdale, South Manchester, and Norfolk & Norwich, Hereford and schemes at Worcester and Barnet & Chase Farm. For a few schemes, e.g. Sheffield, government pledged public funds.
|
Major completed PFI schemes in England |
|
| Trust or hospital | Capital value (£m) |
| Norfolk and Norwich Health Care NHS Trust | 158 |
| Dartford and Gravesham NHS Trust | 94 |
| Greenwich Healthcare NHS Trust | 93 |
| Worcestershire Acute Hospitals NHS Trust | 87 |
| South Manchester University Hospitals NHS Trust | 66 |
| Calderdale Healthcare NHS Trust | 65 |
| Carlisle Hospitals NHS Trust | 65 |
| Source: UK health departments / BMJ 2002324; 1178 | |
There were 15 currently being built including the largest hospital project, the £422 million scheme at University College London Hospitals (UCLH) (18 storeys and 630 beds). The UCLH scheme will be completed in two phases, first in 2005 and second in 2008. Five PFI schemes were scheduled to open in 2002, eight in 2003 and one in 2004. With an annual spend of some £3 billion, the construction now under way was, in real terms, the largest programme that the NHS had seen. A further 36 medium-sized schemes were proceeding, all but four under PFI. In November 2001 a partnership with a BUPA hospital (Redwood) was announced that would lead to that hospital becoming a fast track diagnostic and treatment centre treating thousands of NHS patients annually.
PFI showed signs of proving more expensive than predicted. The National Audit Office, examining the progress of the first project to be approved - Dartford and Gravesham Hospital in 1997, found that the potential savings were less than had been calculated. PFI appeared to be less open to outside scrutiny, to lead to developments that might be smaller than clinically required and to create a substantial future revenue burden. How far PFI - and public/private partnerships - could flourish after the withdrawal of government support for Railtrack was a cause for concern. The risk would now seem greater to the private sector.
The UK spends less than almost any other Western country on private health care, although about 15% of its total health spending involved the private sector. About two billion pounds was spent in independent hospitals and clinics with medical staff fees on top, and the NHS itself spent 1.25 billion of its budget on non-NHS treatment.
Government changed its policy towards private health care radically over the period of the 1997-2001 administration. At the start Frank Dobson opposed it in principle and debarred GP fundholders from using private hospitals. However, his successor Alan Milburn signed an agreement with the private sector in 2000, one reason being to encourage the NHS to buy spare capacity to reduce waiting lists in line with manifesto promises. The number of NHS cases operated in the private sector rose as a result, in the case of the BUPA hospitals trebling to over a thousand. During the election of 2001 Labour made far greater commitments to reduce waiting lists by buying private services for hundreds of thousands of NHS patients, unwelcome to the NHS unions. Long term contracts were, nevertheless, slow to emerge. Major providers of private facilities included BMI Healthcare, BUPA and the Nuffield Hospitals. New private hospitals continued to open, for example a luxury ‘boutique’ nursing home in Harley Street, providing everything one could expect from a five-star hotel, primarily for patients recovering from cosmetic surgery. The main thing lacking in the private sector was immediate care for emergencies. Not all private sector hospitals were profitable. The University College Hospitals Trust purchased the excellently refurbished private heart hospital in Westmoreland Street, which was in financial difficulties. to increase its cardiac surgical capacity.
The number of those in the UK with private medical insurance had remained static for several years but increased again in 1998 to 3.5 million and in 2000 to 5 million, about 12.6% of the population when those with cover through their employers were included. More were insured in the south than the north, and the growth in the numbers was even larger among those paying for private treatment out of their own pocket, sometimes on fixed cost 'pay-as you go' packages provided by private hospitals. Cataract removal for £2000, knee replacement for £7,000 or a heart bypass for £10,000 might be a practical proposition for older people who had been covered by their firms before retirement, but who did not replace the cover when they retired. About 850,000 operations a year were carried out in the private sector, in some 200 hospitals, two-thirds of the beds being owned by four major groups.
Government agreed to abide by a European Court decision to allow people to be treated in other EC countries, which made it likely that the public would become increasingly aware of the discrepancy in standards. Secondly it was pledged to allow patients who had waited more than 6 months for admission for heart surgery to be treated in a private hospital at NHS expense. It hoped that such policies might ameliorate some of the continuing problems with the wait for hospital treatment (See Hospital Services/waiting lists) and the first patients under this scheme left for Lille in January 2002.
Experiments in the provision of private general practice also developed. Walk-in centres, and chains of GPs prepared to operate private schemes, were developed. Possibly pharmaceutical chains such as Boots might provide primary care.
The quality of health service information, particularly patient activity information, had long been a source of concern. From the earliest days of the NHS financial allocations depended upon its accuracy. The introduction of Hospital Activity Analysis in the 1960s and the work under the chairmanship of Edith Körner in the 1980s were early examples of attempts to improve matters. Yet in 2002 the Audit Commission still found grounds for concern in its report Data Remember: Improving the quality of patient-based information in the NHS. As government policies now involved target setting, the use of faulty (or fraudulent) data could have major consequences for patients, organisations and their management.
The NHS has never been short of strategic plans for information technology, the first being in 1972. In the early days of NHS computing there was great interest in its clinical application but, in general, it was easier, cheaper and seemed more important to develop financial and administrative systems. The NHS Information Authority was established to manage the development of national health information systems. Revised information strategies appeared, as timetables slipped. As it became increasingly clear that NHS costs depended crucially on clinical activity the emphasis changed and the 1998 strategy was more geared towards doctors, health professionals and clinical care. Computerised medical records and prescriptions, electronic referrals and hospital test results, and arrangements with community support would all become quicker and more reliable. The aim would be to create electronic patient records for individuals both in general practice and hospitals, using NHS Net to connect every GPs by March 2000 - a deadline missed. Then the records would be linked into an electronic health record available anywhere appropriate. In 2002 more promises were made of speedy implementation (perhaps within three years), a broad-band network was envisaged, and a move was made from multiple suppliers to preferred providers. Yet discharge summaries were still not sent to GPs electronically, NHSnet remained less efficient than standard email, and GPs could seldom exchange patient information without re-entering data.
The NHS Information Authority's three key projects currently are
Electronic Health & Patient Records
-By 2002 basic browsing and email facilities should be available, with electronic patient records by 2005.
National Electronic Library for Health, designed with the NHS employee, doctor or nurse in mind. Access to the private NHS Intranet (NHSnet) or registration is necessary to use the full facilities, but substantial sections of the library (and its links) have public access. The public and patients were asked to use NHS Direct.
Hospital computerisation was slow. In general practice, the cooperation of the BMA and the RCGP that worked together with government to introduce financial incentives to encourage GPs to computerise their practices, has led almost all to use computers in their consulting rooms for prescribing and other clinical purposes. By 1996, 96% of general practices were computerised and about 15% now run "paperless" consultations. In hospitals computing was treated as a management overhead, and doctors had no incentives to become involved. There are several reasons why it was technically easier to computerize general practices than large hospitals, and all are related to scalability. What works for a small practice does not work for a big hospital or across the primary-secondary care divide. For twenty or more years GPs had used PCs; hospitals at least initially could not go down that route. The sheer size of the hospital sector and the way in which technological advance rapidly outpaced information technology in the NHS, led to substantial difficulties. The structure of patient records that differs substantially from specialty to specialty, terminology, varying computer standards, security and rapid technological advance all make for problems. (Benson T, BMJ 2002: 325,1066-9 &1090-93) Conventional email easily outpaced developments in the NHS intranet that might be more secure, but was less easy to use.
By 2003 doctors, both in hospital and general practice, were taking to hand-held computers. using their handhelds for similar activities -most notably, for personal and professional scheduling (84% and 68%, respectively) and, at the point of care, for information access and support for clinical decision making. Handhelds were being used for access to drug information and clinical decision support, prescribing and, to a lesser extent access to medical records and laboratory results.
In 1995/6 a new NHS number was issued to all patients on GPs' lists. These numbers formed a database on which, ultimately, electronic patient medical records might be developed. However the data base was soon used for a National Strategic Tracing Service (NSTS) to provide the NHS with accurate patient administrative data. Pilot trials showed that the data base was useful in waiting list management. Based on a secure database of all people born, or who had been registered with a GP in England and Wales, by 2001 it provided on-line access to over 60 million records covering all GP registered patients. It included:
people (NHS number, names, date of birth, sex, date of death etc.);
places: (address, postcode); and
organisations: (GP practices, Trusts, Health Authorities) and the relationships between them, within the NHS.
Further over the horizon lay telemedicine, long vaunted but slow to be implemented. This might cover teleradiology, ambulatory care, audiology/speech pathology, tele-mental health services, dermatology, pathology, nuclear medicine and remote operative procedures. Much of the development was taking place in the USA, where there was an American Telemedicine Association.