Substantial restructuring is inevitable for foundation trusts: Healthcare managers gathering for the Foundation Trust Network annual conference next week have some tough decisions ahead of them
Healthcare managers will be gathering for the Foundation Trust Network conference next week at a time of growing confusion as to how the health reforms are going to operate.
The health secretary, Jeremy Hunt, appears unwilling to read from the script that Andrew Lansley left him. There are strong indications in his first few weeks that he does not recognise the wall that is being erected between the politicians and the NHS under the new regime, and is repeatedly pushing into territory which Sir David Nicholson and the NHS Commissioning Board regard as theirs.
And, just as the new minister starts behaving like an official with operational control, Nicholson has been behaving like a politician. His recent comments to a conference of GPs were extraordinary. He said: "Big, high-profile, politically driven objectives and changes like this almost always end in misery and failure." He is right, of course, but it is all but unprecedented for someone of permanent secretary rank, in effect, to ridicule government policy in this way.
Is this how the new separation of powers in the NHS is going to work – ministers trying to interfere on the one hand and the commissioning board feeling it has the autonomy to attack government policy on the other? If the commissioning board is going to have a row with the government, money is the likely battleground. All parts of the provider system are feeling the pressure.
It is tempting to divide foundation trusts into two camps: those who are struggling and those who are thriving. It is certainly true that small district general hospitals and those with PFI deals tend to be the ones finding it hardest to adapt to the new financial climate, but even the big foundation trusts are finding it tough. All of them are plagued by uncertainty — about income, about the impact of commissioning changes, about reconfiguration.
The Nicholson challenge to achieve £20bn of efficiency savings is not going to be met. The King's Fund's quarterly monitoring report published in September said finance directors from a range of organisations were on track to achieve their planned cost improvements for this year, but many already see little chance of the overall target being hit.
Monitor's review of foundation trust plans for 2012-13 predicts savings will exceed 4% for each of the next two years, but that is not going to do the job. In this first 18 months of the challenge, trusts have been stripping out the easily identifiable inefficiencies and benefiting from the pay freeze. But the freeze cannot go on much longer and further savings will be much harder to deliver.
If there was to be any chance of saving £20bn the early progress would have needed to be much more dramatic. This will increase pressure for reconfiguration of services and sorting out uneconomic trusts.
There seems to be some appetite among foundation trusts for taking over struggling trusts, but the risks must weigh heavily on any hospital board. The slump in the performance of Heart of England foundation trust after it took over ailing Good Hope serves as a powerful warning of the likely consequences of trying to resuscitate a failing hospital.
Many foundation trusts are finding it tough enough to manage waiting lists and A&E access times without taking on someone else's problems. There are also nerves about local opposition. Foundation trusts considering a takeover struggle to align local opinion-formers – MPs, councillors and the media. That is a lot of pain for little obvious benefit to the foundation trust.
In the short term at least, foundation trusts are likely to suffer from the growing pains of clinical commissioning groups. Monitor expects groups will struggle to manage demand for their first year, and foundation trusts that try to meet demand substantially above the level they had planned for often see their profitability weakened. This shows the folly of launching a wholesale reorganisation in the middle of a financial crisis.
The difficulties faced by foundation trusts are extensive and deep. Too many are finding it too difficult to adapt to the new health economy. Substantial restructuring is inevitable. Guardian Professional.
Healthcare managers will be gathering for the Foundation Trust Network conference next week at a time of growing confusion as to how the health reforms are going to operate.
The health secretary, Jeremy Hunt, appears unwilling to read from the script that Andrew Lansley left him. There are strong indications in his first few weeks that he does not recognise the wall that is being erected between the politicians and the NHS under the new regime, and is repeatedly pushing into territory which Sir David Nicholson and the NHS Commissioning Board regard as theirs.
And, just as the new minister starts behaving like an official with operational control, Nicholson has been behaving like a politician. His recent comments to a conference of GPs were extraordinary. He said: "Big, high-profile, politically driven objectives and changes like this almost always end in misery and failure." He is right, of course, but it is all but unprecedented for someone of permanent secretary rank, in effect, to ridicule government policy in this way.
Is this how the new separation of powers in the NHS is going to work – ministers trying to interfere on the one hand and the commissioning board feeling it has the autonomy to attack government policy on the other? If the commissioning board is going to have a row with the government, money is the likely battleground. All parts of the provider system are feeling the pressure.
It is tempting to divide foundation trusts into two camps: those who are struggling and those who are thriving. It is certainly true that small district general hospitals and those with PFI deals tend to be the ones finding it hardest to adapt to the new financial climate, but even the big foundation trusts are finding it tough. All of them are plagued by uncertainty — about income, about the impact of commissioning changes, about reconfiguration.
The Nicholson challenge to achieve £20bn of efficiency savings is not going to be met. The King's Fund's quarterly monitoring report published in September said finance directors from a range of organisations were on track to achieve their planned cost improvements for this year, but many already see little chance of the overall target being hit.
Monitor's review of foundation trust plans for 2012-13 predicts savings will exceed 4% for each of the next two years, but that is not going to do the job. In this first 18 months of the challenge, trusts have been stripping out the easily identifiable inefficiencies and benefiting from the pay freeze. But the freeze cannot go on much longer and further savings will be much harder to deliver.
If there was to be any chance of saving £20bn the early progress would have needed to be much more dramatic. This will increase pressure for reconfiguration of services and sorting out uneconomic trusts.
There seems to be some appetite among foundation trusts for taking over struggling trusts, but the risks must weigh heavily on any hospital board. The slump in the performance of Heart of England foundation trust after it took over ailing Good Hope serves as a powerful warning of the likely consequences of trying to resuscitate a failing hospital.
Many foundation trusts are finding it tough enough to manage waiting lists and A&E access times without taking on someone else's problems. There are also nerves about local opposition. Foundation trusts considering a takeover struggle to align local opinion-formers – MPs, councillors and the media. That is a lot of pain for little obvious benefit to the foundation trust.
In the short term at least, foundation trusts are likely to suffer from the growing pains of clinical commissioning groups. Monitor expects groups will struggle to manage demand for their first year, and foundation trusts that try to meet demand substantially above the level they had planned for often see their profitability weakened. This shows the folly of launching a wholesale reorganisation in the middle of a financial crisis.
The difficulties faced by foundation trusts are extensive and deep. Too many are finding it too difficult to adapt to the new health economy. Substantial restructuring is inevitable. Guardian Professional.
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