Herts and minds: £100m hole that could defeat protesters

Bedfordshire and Hertfordshire have some of the healthiest communities in the country and a large number of small district general hospitals that duplicate each other's services.

In short, a recipe for financial disaster. Health services in the area get a relatively low payment per head but have more hospitals to support. However, attempts to reconfigure have been dogged by a lack of political support, articulate pressure groups and the understandable attachment of large towns to 'their' hospitals.

With no large cities, DGHs have tended to be based in towns and serve a limited catchment area. But some hospitals' catchment areas are likely to grow rapidly ? Luton and Dunstable trust is predicting an increase from 300,000 to 500,000 in the next 10 years and plans to become a foundation trust. But other trusts have smaller populations that are projected to grow more slowly.

Unravelling that situation has taken many years, but with the local health economy more than£100m overspent the impetus for reconfiguration may finally have become unstoppable.

Both West Hertfordshire Hospitals trust and East and North Hertfordshire trust are launching consultations on the centralisation of some of their services.

Both need to reduce their cost base, especially as financially pressurised primary care trusts are reducing the amount of care they are commissioning from them. Ending the duplication of services could help the bottom line over the next few years.

Centralised facilities

But longer term, both have ambitious plans for better centralised facilities funded through the private finance initiative. And the affordability of those projects - a key part of the outgoing strategic health authority's Investing in Your Health blueprint ' is in doubt.

West Hertfordshire trust chief executive David Law has said that the changes he has proposed are needed to secure the£300m redevelopment of Watford General Hospital. But Hemel Hempstead MP Mike Penning recently told the Commons health select committee that the new hospital needed 'a miracle'.

East and North Hertfordshire trust chief executive Nick Carver has told HSJ that the trust's income points towards a new hospital worth£400m rather than the projected£550m the new Hatfield super-hospital would cost. The trust is currently working on an outline business case and is looking at the consequences of this ? such as whether a£400m hospital can include the planned cancer centre. Even at£400m, affordability will be 'challenging', says Mr Carver.

Both trusts are in deficit ? although they have plans to reduce this figure and to move towards income and expenditure balance ? and are cutting posts. But PFI projects come with a substantial yearly payment ? about 10 per cent of the cost ? which trusts have to meet out of income.

Both trusts will also lose some income to privately run surgical centres which will be set up at Hemel Hempstead Hospital and at the Lister in Stevenage.

These will carry out much of the elective treatment formerly done by the trusts ? and will limit their ability to benefit from patient choice.

Mr Carver is confident that this loss of income will be covered by the reduction in associated costs, sub-contracts and transitional payments. He sees the centre as bringing much-needed investment in healthcare in the area and says his policy is one of 'constructive engagement'.

Mr Law admits he would have been happier just to have been asked to provide the services at tariff. 'But it is a commissioning decision and we have to respect that decision.'

Some staff and£15m of work will be transferred to the surgical centre.

Lack of consensus

So will the changes finally gather enough political support to become reality? 'Hertfordshire has not been able to get public, NHS and political consensus behind one strategy,' says one insider. Back in 2003, Investing in Your Health was generally supported. But that was in the context of rapidly rising investment in health, when everything seemed possible. Now there are questions being asked about whether the whole package can be delivered.

With many marginal constituencies in the area, decisions have been highly politicised.

Hemel Hempstead Hospital in particular has been threatened with many changes since the mid-1970s and has been frequently saved by health ministers. From 1974 to 2005 the Hemel parliamentary seat has been held by the party in power, but Labour lost it to the Tories in the last general election. Now many of the marginals in the area are held by Tories and Labour may feel it has little left to lose.

Health secretary Patricia Hewitt has indicated she thinks services in the area need to change, which may indicate a tougher line, and prime minister Tony Blair has said that NHS managers will get support when tackling restructuring.

'We are confident that if we put together a robust and well-argued case for change that demonstrates how we can return to financial balance then ministers would back the local health economy in consulting on these changes,' says an SHA spokesperson.

But one NHS insider in the area points out that the loss of several Labour MPs has meant there is less influential political support for new hospitals.

'Our level of influence is less than it might have been. All the Tory MPs are signed up to Hatfield but their level of influence is less,' the insider said. 'Change will require not just NHS will but also political will. The issue is whether we are going to be able to deliver Investing in Your Health in its entirety.'

David Law says: 'The attention that is being paid to financial issues at the moment is such that I would be hopeful of political support. That is as long as we can demonstrate that there is not a practical alternative and we have taken account of some of the issues there will be for the community and we have gone through a robust process.'

But he agrees that politics has had a strong influence on the health care system in Hertfordshire.

Poor communication

There may be wide acceptance that change is necessary in West Herts - although that is unlikely to be shared by some of the individual action groups involved. Some people are critical of the trust's approach in the past. One insider says it did not do enough to build bridges and ended up with very bad press coverage.

The potential upside of all this is that trusts will get back into balance, new hospitals will be built and community services will be improved. The downside could be that even after acute services are painfully moved out of some areas the 'carrot' of the new hospitals does not happen.

Even if they are built there will be a substantial period of 'making do'. In Watford, this will involve using modular buildings to house some of the services until 2013. And some capital investment will be needed if the trusts' interim service changes are adopted.

But Investing in Your Health relied on three cornerstones: the new hospitals; the ability to centralise services, which has both clinical and financial drivers; and the investment in community facilities, which many people would see as 'compensation' for having acute care further away. So is this investment happening?

The answer is probably yes. But it is happening against a backdrop of PCT financial problems, which must limit the speed of change. At the same time, acute trusts are being driven to make faster changes than was originally planned.

The Audit Commission recently issued a public interest report on the West Hertfordshire Quadrant - the trust and the four PCTs around it - which highlighted the organisations' total£75m deficit.

The financial pressure in the local health economy is such that PCTs in Hertfordshire have put pressure on the local mental health and learning disabilities trust to cut its cost by around 5 per cent. Although some of these savings will be made internally, there will be effects on patient services, including a higher criteria for treatment and intervention in some areas.

This has been criticised by the health scrutiny committee. On the positive side, there are examples of investment in community-based hospitals, such as redevelopment of Herts and Essex Hospital, Hertford County Hospital, and community hospitals in Cheshunt and Potters Bar.

And PCTs are planning to develop some services swiftly in response to the potential withdrawal of acute facilities. In Hemel, for example, Dacorum PCT is pushing ahead with plans for an urgent care centre which could be in place by October. It would see up to 80 per cent of the people who would normally be seen by accident and emergency and a 40-bed intermediate care centre could be linked with it, with care of the elderly consultants offering cover for both units.

Diagnostics on site could be used by both the urgent care centre and the independent treatment centre when it is built.

Practice-based commissioning

The area's GPs have formed a practice-based commissioning group, and they may wish to commission community-based clinics, which would need a suite of consulting rooms.

Which NHS body would own the site is far from clear, but there could be a cluster of services which would occupy part at least of the hospital site ? there is widespread speculation that some of the site will be sold for housing.

Dacorum deputy chief executive Louise Patten says that such services could prevent unnecessary admissions to an acute hospital and A&E attendance.

In St Albans, the PCT wants to develop community-based services on the City Hospital site but is unlikely to need all of the site.

Again, there is the potential for part of it to be sold off.

St Albans and Harpenden PCT chief executive Jacqueline Clark says it has plans to get back into financial balance, but admits that 'this is not a year of investment in new services'.

The PCT already runs some services at St Albans City Hospital and sees it as a pivotal facility, but there is a question about how quickly it can afford to develop new services there if West Hertfordshire trust withdraws. The site has no A&E, but West Herts does run a minor injuries unit there.

But are local people still being short-changed? It is easy to dismiss health campaigners calls for unsustainable services, but the original Investing in Your Health consultation talked about Hemel becoming a non-acute site but retaining all the highlighted services as well as a birthing centre and a paediatric assessment centre.

These two now seem in doubt. An SHA review of the birthing unit ? which has been closed since December because of staffing problems ? has recommended it should remain closed, primarily to save money.

Although the prospect of it reopening at some point is still a possibility this seems unlikely.

The combination of financial and clinical drivers may mean that reconfiguration of health services in the area is unstoppable, but that does not mean that they are going to be popular - or that local people will not go down fighting.