Published: 19/02/2004, Volume II4, No. 5893 Page 19
Foundation trusts will test the robustness of the payment-by-results model and, by doing so, help to refine it.However, it is already becoming apparent that much work needs to be done with primary care trusts and strategic health authorities if unnecessary conflict or confusion are to be avoided.
Foundation trusts will be put through a rigorous financial test before they receive their licence from the independent regulator and have been engaged in detailed modelling for months. This work has not been matched with an equal amount of preparation by PCTs and SHAs, which seem somewhat passive observers of payment by results.
If SHAs can legitimately claim to oversee and direct 'system reform', they need to act quickly if they do not wish to play catch-up after the event.While payment by results and foundation trusts are part of a wider system reform, they represent the sharp and hard end of the choice agenda and careful whole-system guidance will be needed if patients are to benefit. It will soon be time for the Department of Health to witness what it has created.
Many foundation trusts with low reference costs and a solid, and expanding, acute secondary care base for elective and emergency work will prosper through payment by results and this will invert normal methods of risk apportionment and financial compensation. For example, district general hospitals witnessing circa 7 per cent growth in emergency admissions have been told for some time that over-performance payment is at marginal costs and is largely the result of finished consultant episode 'creep' or inappropriate admission methods.
I have yet to meet an acute trust which actively solicits emergency work, but the tension and dynamics of the negotiation will charge irrevocably from 1 April when foundation trusts will be paid for this work at full cost and PCTs will be forced to address the issue of referrals and new forms of domiciliary and community care. There will be financial pressure on some PCTs, and I sense there is a growing panic among commissioners that foundation trusts represent the end of commissioning as we know it.
Foundation trusts should not be blamed for being the first incarnation of fiscal reform in the NHS. However, it is incumbent on them to remain firmly within the NHS so that these tensions can be discussed in a non-adversarial fashion. Equally, those that want to maintain the status quo should be given short shrift.
Faced with the independent and NHS treatment centres, foundation trusts and payment by results combined, SHAs and PCTs would be wise to accept the realities of system reform. It is very likely that foundation trusts will need to take on greater responsibility for organising whole-system care as the funding streams will allow payment by spells, but spells themselves need to be put into a much wider healthcare context.
At the extreme, no single organisation can prosper at the total expense of another, but there will be a shift in the planning and delivery of care that will call for a welcome re-definition of PCTs, foundations trusts and the financial system we have been accustomed to for the past decade or so.
Mark Britnell is chief executive, University Hospital Birmingham trust
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