Does size matter?

Sorry about the heading but this subject ‘does matter’ and needed a bit of spicing up! It is about whether small rural hospitals are fairly funded and the implication on the quality of care and even death rates.

We need to start with some very dull but important documents the government published recently produced by a working party.  The documents are called ‘Payments by Results and the Market Forces Factor’.  You can just see them flying off the bookshelves and being downloaded to Kindles, left, right and centre.

Important documents because they could have an impact on the safety or quality of your care.  And they are deeply flawed.

Why?  Because by implication these documents say, to use a private sector analogy, a small rural corner shop should charge less than Tesco’s.  I kid you not.  And if the small rural hospital is paid less, it has less income to spend on staff.  Recent reports suggest that there may be links between higher death rates in hospitals and low staffing levels.

In this market-driven NHS, bequeathed to us by both major political parties, you cannot let the market decide how much each hospital can charge for its services.  Heavens no.  This is done by this national working party with the assistance of academics.

They have come up with a ‘Market Forces Factor’ (MFF) .  The higher the factor the more you can charge for each operation or procedure. Simple.

There are 245 Trusts in England.  In the league table of MFF’s where do you think we are?

241 of the 245 Trusts are allowed to charge more than Lincolnshire’s own hospitals.  You should feel for Cornwall and Devon as their 4 Trusts get treated even worse than us.  But look at the following:

  • Peterborough, Stamford and Northampton get 4.6% more
  • Cambridgeshire gets 6.2% more
  • Hinchingbrooke, which in effect has gone bankrupt, gets 6.5% more

Don’t even mention some of those around London, where it is 25% plus more.

But what’s a few percentage points worth you might think?  Using the above surrounding areas as comparators, for ULHT it could be, say, an extra £20m pa or more for exactly the same workload.  That a lot of extra nurses, a lot of extra care and  attention you are NOT getting if you are in one of our hospitals.  No wonder the CQC has been so critical of staffing levels at hospitals, such as Boston Pilgrim; one of 17 hospitals highlighted in reports earlier this year as having dangerously low staffing levels.

Look at the chart below.  It shows how much more hospitals can charge per procedure than the lowest charging hospital, poor old Cornwall.  ULHT are to the extreme right, one of the lowest charging Trusts in the country; others can charge almost 30% more.

pbr mff

So how do we get to this bizarre situation?

When the working party decides how much individual hospital trusts can charge they take into account:

  • land values.  It is of course well known that the value of land has a direct correlation with the cost of your hip replacement!  Land values in Lincolnshire are amongst the lowest in the country.
  • local wage levels.  Wage levels in Lincolnshire are amongst the lowest in the country.  They simply ignore that staff are on national terms and conditions, using some pretty flawed research to justify their stance; one interpretation of which is that they wish to discourage hospitals from using national pay scales for non medical staff.
  • London medical staff costs.  They adjust for this but ignore that, for example, rural hospitals have difficulty retaining staff and also tend to have high costs due to the use of expensive locums.

And importantly they do not look at the size and geographic location of hospitals and whether you can get economies of scale.  This works against all of the hospitals in Lincolnshire and particularly Boston Pilgrim and Grantham Hospital where it is obvious that, due to the small size of the hospitals, unit costs will be higher. This is not taken into account and the Hospitals are not allowed to charge for it, potentially driving down staffing levels with worrying implications.  Size does matter and it works against small rural hospitals.

Perhaps the working party and their academics should come to our hospitals?  Or perhaps they do not want to.

Perhaps, rather than fund our hospitals properly, they want this flawed market to make our hospitals fail, to have the excuse to close what they may regard as small inconvenient little places or hand them over to the private sector.

If they agreed that our hospitals should be paid more, as the cake is fixed, others will need to get paid less.  They wouldn’t want to upset the powerful teaching hospitals and London, would they?

I suggest you write your local MP drawing his attention to this blog.  Ask him to do something about it.  You might also write to our local authority health scrutiny committee.

I fear however that all they will get back from London is technical gobbledygook, divorced from reality and the real market.  In the real market the little corner shop charges more. Size does matter and driving down what relatively small rural hospitals get paid can lead to lower staffing levels and risks to patients – you and me.

But this been going on for years, nobody’s done anything about it before, so why should they now? After all it’s only Lincolnshire.

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About djbowles

Putting Lincolnshire first, challenging out party politicians
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