'Fines add to toxic incentives'

The government's decision to fine councils for delayed hospital discharges will result in unintended consequences that will worsen services for patients, Labour think-tank Demos has warned.

The report, System Failure, says the complexity of the NHS means the carrot-and-stick approach creates unpredictable and unintended consequences. It flags up star-ratings as an example of enforced targets which have actually reduced co-operation between hospitals, and created what one observer described as 'toxic incentives'.

NHS Confederation policy director Nigel Edwards, who wrote the report's foreword, said fines for local authorities were likely to produce similar behaviour.

He said: 'Care decisions will be taken to avoid the fine which means that the wrong patients are targeted and money withdrawn from services. Relationships between agencies may also be soured, which reduces the chances of partnership working.'

Report author Jake Chapman, who was professor of energy systems at the Open University until 2001, said rather than a command and control approach, the NHS should be allowed to develop its own solutions as to how to improve healthcare, with piloting used to test improvements.

He said: 'In a very complex system the outcome of change is unpredictable, so you need to try it out on a small scale.You would foster innovation. You would go to a good hospital and say, 'We would like you to come up with three ways of improving on waiting lists.

Here is£1m. Go away and do it'.'

Mr Chapman told the government to listen to those working at the sharp end of the service.

He said: 'You just need to listen to them. Good managers do it, and do it intuitively. Senior civil servants in Whitehall see themselves as above that, but they do not know anything about trolley waits in Ipswich.'

System Failure: why governments must learn to think differently , Demos. Central Books. 020-8986 5488.£8.