The must read stories in health from Thursday

Driven to desperate measures

“Just how does this help?”… “I think we’re in danger of losing our way”… “How will this help? It’s just moving funds around the system.”

“So, no balancing of financial goals and quality outcomes here then?”…  “Surely this is robbing Peter to pay Paul? Where is the patient in all of this malarkey?”

HSJ readers have been left baffled and exasperated by the latest communique from Monitor, NHS England and TDA, informing them that all fines for missing performance targets must be used to improve providers’ and CCGs’ bottom lines.

The change in approach not only applies to the rest of 2015-16, but “retrospectively from 1 January”.

It means if providers and commissioners planned to reinvest the money from fines in schemes to improve performance – as previously expected of them – they are no longer allowed.

Finance experts have repeatedly warned during 2015-16 that the size of the provider sector deficit in risks blowing the DH’s budget for the year, and this letter came just days after Monitor and the TDA told providers they would be meeting with a number of challenged trusts to agree urgent measures, “including headcount reduction”, to improve their financial positions.

HSJ reported in November that a draft letter, circulated at a high level of the NHS, told CCGs to fine providers and return the money to the centre – which, as you can probably imagine, was also heavily criticised.

But with 31 March approaching and the DH’s expenditure limit on the line, we can only expect this type of activity to increase.

In a sign of the depth of the fiscal desperation, one reader commenting on hsj.co.uk felt there was no alternative but this: “Why not just increase car parking charges?”

Transactions back in fashion

It seems transactions are back on the agenda after a little while out of favour.

The news that Sherwood Forest Hospitals Trust is to give up on being an independent provider and is looking for a merger or acquisition partner is significant for the acute sector.

It shows that the centre will still consider M+A, despite scepticism about its potential to make effective change.

The flurry of mergers that saw small-ish or unloved trusts like West Middlesex University Hospital, Ealing or Heatherwood and Wexham Park lumped in with larger neighbours have not had time to do well, or otherwise.

The Sherwood Forest has been in special measures since 2013 and is rated inadequate by the Care Quality Commission.

The questions for the centre will soon become what size of dowry the suitor trusts might want for taking on the East Midlands provider.

HSJ has reported before on the eye popping sums that have been promised to the white knights in these situations.

The biggest name approached on the deal, Sheffield Teaching Hospitals Foundation Trust, appears to have ruled itself out of the process.

This has left two less well regarded organisations in the running.

Nottingham University Hospitals Trust is large and has a strong academic and research profile, but it is financially challenged though and cannot be said to have mastered its performance issues.

Derby Teaching Hospitals FT is smaller but also has significant finance problems - it is predicting a deficit of £33.7m this financial year on a turnover of £488m.

Derby was also the subject of a sustainability review by Monitor in October. Although the results have not been made public, the review taking place suggests the trust might need to expand to remain viable.