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St Bartholomew's Hospital in West Smithfield |
Where has all the NHS cash gone?
Outside management consultants and private finance are soaking up the money, writes Dr Paul Miller
Why is the NHS in such a financial mess? Certain sectons of the media suggest that it’s all because its staff are being paid more.
However, the evidence is that it is entirely wrong to blame the problems facing the NHS on pay rises for doctors and other staff. Under their new contracts, GPs are rewarded for providing high quality services for patients and consultants’ pay is explicitly linked to the amount of work they do.
The same cannot be said of all of the private companies who have profited from NHS contracts.
Much of the money which has been invested in the service has been wasted on poor value block-bookings with independent providers, who have not completed all the work they were contracted to, often under preferential terms not available to the NHS.
The problem is not that there has been no reform of the NHS. It is that there has been too much, that it has been incoherent, and that it has been characterised by an unhealthy obsession with private provision.
So where has the NHS money gone? Let me give you a few answers. One trust with big debts, Surrey and Sussex, paid more than £52,000 for less than two months’ work from an interim chief executive from a management consultancy in February and March 2005.
The finances remained dire so the Strategic Health Authority brought in more management consultants, McKinsey, for half a million pounds.
At the start of the year the health secretary sent “turnaround teams” from management consultancies into 18 trusts in financial difficulties.
But these trusts already pay handsomely for their managers. The annual report for 2004-05 shows one trust paid its executive directors £1.2 million in 2004-05.
What extra can these trusts be getting from duplication of management costs by employing outside management consultants without significant NHS backgrounds, apart from huge bills?
Let’s also look at the huge waste of NHS money in Private Finance Initiative schemes (PFI).
The Paddington basin PFI ran up £14.9 million in costs before being abandoned. The National Audit Office condemned the project as having a fatal flaw because the Department of Health had no single body to oversee it.
A two month ministerial delay to the PFI at Bart’s, is said to have cost £35 million.
We understand that PFI was used to get large amounts of capital investment quickly. But we also understand you cannot bring NHS spending up to the EU average for just a couple of years and expect to have corrected decades of underspending amounting to hundreds of billions of pounds.
The good levels of NHS funding must continue permanently, to bear fruit.
I also want to dismiss an untruth that has been continued on occasions by some this last year.
It is simply not true that the private treatment centres called Independent Sector Treatment Centres (ISTCs) are eight times as efficient as the NHS. The ISTCs themselves do not claim that their surgeons are better or faster than the NHS.
They do organise their facilities better around the surgeon than the NHS, and the NHS would do well to learn from this simple fact. Are ISTCs more innovative than the NHS? No they are not.
The Chief Executive of one of the ISTC companies very honestly told the Health Select committee, when asked about innovation: “None of this is unique to us. All those things are happening no doubt in parts of the NHS.”
So it’s time to invest in the NHS, and re-think this obsession with the private sector.
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