Dermatologists and rheumatologists have claimed their specialties are under threat of bankruptcy and patient care at risk as the payment by results tariffs do not cover costs. Is a move into community care services really a better option, asks Daloni Carlisle

Earlier this year the professional and patient lobby on dermatology got together and warned of a threat to their specialty.

Given that this was the height of the NHS financial crisis, it was tempting to dismiss their letter to The Times as special pleading, except for one important fact: they appear to be right. The law of unintended consequences from payment by results is making itself felt.

At least one hospital trust - Newham University Hospital trust in London - has declared its department financially unviable; others have come close.

The Times letter was signed by 350 dermatologists (that is pretty much all of them, by the way), the Skin Care Campaign, the British Journal of Dermatology and the Royal College of Physicians joint specialty committee.

NHS deficits and the government's health reforms were damaging the care of people with skin diseases by removing choice, it said. GPs were being forced to treat patients themselves or divert them to services not run by specialists. As a result, specialist teams were being dismantled.

The result would be a poorer service for patients who need specialists and a potential increase in undiagnosed skin cancer.

In a survey by the British Association of Dermatologists last summer, just over half the 100 consultants surveyed said their primary care trust was setting up a clinical assessment and treatment service for dermatology. These were expected to divert up to 50 per cent of patients; meanwhile PCTs were commissioning fewer referrals from the hospital departments, in some cases slashing the number in half.

A third felt this would lead to financial instability and redundancy was under discussion in a quarter of trusts. As BAD clinical vice president David Shuttleworth put it: 'Those departments which are unable to demonstrate financial viability in trusts trying to claw back a deficit are particularly at risk.

'Under PbR a relatively small reduction in referrals may be sufficient to attract the attention of an embattled finance director, who may feel that 'outsourcing' dermatology into the community will reduce losses on the balance sheet.'

Signs of bankruptcy

BAD president-elect Colin Holden argues that PbR is at the bottom of it. 'We are an outpatient specialty and the tariffs are incredibly crude,' he says. 'We get a tariff of£115 for a new patient and£53 for a follow-up.'

But the tariff is based on an average; divert the simple referrals to a clinical assessment and treatment service or GP with a special interest and it no longer covers the more expensive cases left to the hospital department.

Or, as Dr Holden puts it: 'That means bankruptcy. You cannot be paid for Minis and build Rolls Royces.'

Commissioners are also putting pressure on hospital departments to reduce the ratio of new patients to follow-up patients, suggesting some of this 'routine work' can be done by special-interest GPs. And again it means a loss of activity and income.

Nor is it just dermatology that is threatened in this way. Rheumatology faces the same pressures, says the British Society for Rheumatology.

Take, for example, BSR president Andrew Bamji. He says he is currently under pressure to reduce his new follow-up ratio from 1:3 to 1:1, a move that is not clinically appropriate, would place him outside professional guidelines and see him discharge nearly half his caseload overnight.

'We told them not to be so be so bloody silly,' he says. 'GPs are not able to deal with flare-ups. You will have a situation where patients are re-referred and end up being more expensive.'

The Department of Health seems unwilling to acknowledge there is a problem. 'It is absolutely right for commissioners to be redesigning patterns of care to match patient interests and it would be concerning if PbR was not facilitating these sort of changes,' says a spokesman.

'Nevertheless, we recognise that redesigning care needs intelligent commissioning over several years rather than an instant solution with no thought for the consequences.'

What about the solutions? Improve the tariff? Dr Holden does not see this on the horizon any time soon. 'The premise is that it will get more complex but that will be for 2008-09 and by that time departments will be closed or lost to acute hospitals.' In fact, the delay of healthcare resource group 4 has put this back to 2009-10 at the earliest.

Community support

How about moving departments into the community? 'There's an assumption that we do not deal with acutely ill patients,' says Dr Holden. This is incorrect, he says.

He cites phototherapy, plastic surgery and treating patients on cytotoxic drugs. 'We see six to 10 ward referrals a week,' he adds. 'We see patients dying from total body involvement in diseases. These all need hospital involvement.'

A hospital-based dermatologist in a district general hospital serving a population of 500,000 will expect to see six to 10 patients with total body eczema a year; a GP will see one a decade.

Dr Bamji, on the other hand, would jump at the chance. One specialist service has already made just this move - the musculoskeletal service in Stoke on Trent at the Heywood Hospital recently transferred from the acute sector to being run by the PCT, neatly circumnavigating PbR issues.

'Is there a barbed wire fence round the hospital?' he asks. 'We are already part of the community. Why do we have to have these artificial barriers?'

Newham University Hospital trust director of emergency elective care Penelope Haile is struggling to save the dermatology and rheumatology services.

'We have got to the point where we have a specification for the primary and secondary element of both services for the local population,' she says. 'We have worked on it with clinicians and patient representatives.'

In short, the PCT will put this spec to practice-based commissioners, asking for bids that will support a local service provided out of the hospital.

'It is very helpful in that it makes explicit what the PCT is providing at each stage,' she says. 'It sets out what they expect the GPs with a special interest to look like as well as primary and secondary care.'

But what is also becoming clear is how PbR is unable to deal with such complexity. Ms Haile adds: 'Patients are quite happy to see a nurse or GP in the community but they want to know they have access to specialist back-up. Currently we are counting attendances. We are not counting the time a consultant spends on the phone to a GP.

'What we need is a tariff set around pathways of care and the team that supports patients in the long term.'

NHS Confederation policy director and PbR supporter Nigel Edwards agrees. The idea is in the latest PbR discussion document, although only as an idea. 'I am concerned that the PbR team's approach is to unbundle, unbundle and unbundle and put a price on everything,' he says. 'They seem to recognise the problem but not do anything about it.'

Another option is for acute trusts to bid for the clinical assessment, treatment and support services (CATS). West Hertfordshire PCT expects to sign a contract very soon that would see the West Hertfordshire Hospitals trust provide the dermatology CATS. All referrals will be triaged by consultants but then streamed variously to specialist nurses, special-interest GPs or the hospital as appropriate.

West Hertfordshire PCT assistant director of commissioning Suzanne Novack says it is a case of adapt or die. 'We all have to move with the times,' she says.

Consultant dermatologist at the hospital Julia Schofield is hopeful - although far from certain - that it will save the department. 'It's all been awful and difficult,' she says of the last year during which her department has come back from almost certain closure as a proposed contracted-out CATS threatened to reduce its workload by 60 per cent.

'We will still see our income drop, but if the CATS is successful we hope we will attract work from outside the area under choose and book.'

It also answers some of the questions that consultants elsewhere have raised about the safety of CATS. 'It will sit here as part of our department and therefore will be part of our trust governance, training and appraisal.

She remains, angry, however, that her department was ever under threat. 'We are a modern department. Our consultants are already out in the community. We have redesigned our services and done everything the government wanted us to do. There is nothing else we can do.'

She is particularly angry over the idea that consultants should not be allowed to triage patients in CATS because they have a vested interest in referring them to hospital. 'It's something you hear a lot,' she says. 'But it's the same for GPs and even more so because they line their own pockets by referring to primary care.'

The right design

West Hertfordshire Hospitals trust director of business development Nick Evans is entirely in sympathy with the concerns of BAD, BSR and professional bodies representing a whole range of outpatient specialties.

'The loss of departments is a concern for BAD and a concern for us,' he says. 'I am not okay saying we abandon these specialties. It does not seem a sensible way forward.'

If hospital departments do become unviable, he envisages a network model. 'We have strong dermatology services here so we may be the hub for that with other areas buying from us. In other specialties we may be the spoke.'

He is not convinced that the service changes will deliver the savings. 'PCTs will find that the savings are transitory. They will still have to send some patients to a trust. The trust will still have overheads and the tariff will be recalculated.'

It's what Mr Edwards calls 'stranded capacity'. As he puts it: 'Outpatient suites still have to be paid for. There is a danger that savings will evaporate.' Local freedom to vary tariffs will eventually see trusts vary them upwards, he warns.

He also cites evidence that although GPs with a special interest appear cheaper, largely because they do not carry the overheads built into the tariff, they end up more expensive.

A BMJ study in 2005 put the relative costs of a patient attending a special-interest GP in dermatology at£208 while the hospital appointment came in at£118.

Mr Edwards urges a careful approach: 'This is an area where services have to be very carefully designed, where 'good enough' will not deliver.'