Acute general hospital services in Wales should in future be planned to match 'patient flows' rather than health authority and trust boundaries, according to the report of the acute services development group.

The group, chaired by Welsh chief medical officer Dr Ruth Hall, has concluded that the 'natural affiliations between clinical services and existing patient flows' should be recognised and developed to create new 'health economies'. These would include 'critically important links' with acute services in England.

Instead of sweeping rationalisation of hospitals, which appeared inevitable when the group began its work against a background of financial crisis last May, the report opts for the gentler option of a 'differentiated' hospital service. Each health economy would develop its own model, with some hospitals given a more specialised role, and others providing local services.

The report also calls for increased expenditure on buildings and equipment; the development of intermediate care; greater use of communications and information technology; and a new partnership between the NHS, local government and the independent sector.

Richard Thomas, director of the NHS Confederation in Wales, welcomed the recommendations: 'The report is right to say that there should be local solutions in each of the health communities in Wales. ' But he warned: 'The report doesn't use dirty words like rationalisation.

'But we have said very clearly that the way health services are configured is not affordable within the cost envelope, even taking into account recent increases. '

The report has been issued for consultation until the end of November. It will contribute to the NHS Wales strategy which is due out before the end of the year.

Access and Excellence: acute health services in Wales.