Daily Insight: Experiment makes an exit

An innovative funding scheme for elective care — which deviated significantly from national “payment by results” arrangements — has dropped after just one year.

West Yorkshire Integrated Care System last year agreed with NHS England to trial a payment system for planned care, which focused on reducing long waiters.

The system was significantly different from the national elective recovery fund, which is based on targets for activity volumes.

But the ICS has now said it will return to the national funding scheme after deciding it provides “greater certainty and offers more substantial financial benefits” for the system.

West Yorkshire’s system saw trusts being given block payments before facing penalties for missing targets on long waiters.

NHS Confederation had talked up the benefits of the scheme, and HSJ understands that many in West Yorkshire ICS had wanted it to continue.

But it is thought the ICS dropped the alternative scheme partly because it was more difficult to earn additional incentive funding throughout the year.

New hospital is coming… at a cost

The chief executive of a trust opening a hospital that has been in the pipeline for a decade is “very confident” it will open this year, despite “finances never being tighter”.

Sandwell and West Birmingham Hospitals Trust CEO Richard Beeken is set to open Midland Metropolitan University Hospital in Smethwick in October, delayed due to the collapse of Carillion in 2018, but he warned of a running cost gap of £40m. 

Speaking to HSJ, he discussed his concerns over MMUH’s revenue gap, cutting beds to fit into the new hospital, and the future of leadership in the Black Country.

Mr Beeken said “in the good old days”, when a new hospital was opened, there was “almost a national acceptance” of a period of transition or revenue support before a project’s benefits case provided a return on investment. 

“But in these difficult financial times, it has been difficult to get any agreement at all from either national, regional or local teams about funding,” the CEO told HSJ. 

“The revenue gap, when you take capital charges out of the equation [funded by NHS England], is circa £40m per annum, which can be tackled over time… but [currently], there is no money.”