Small hospitals could be paid more under forward view plans

The document reveals NHS England and Monitor will investigate whether the tariff system for trusts needed to be changed to “reflect the costs of delivering safe and efficient services for smaller providers relative to larger ones”.

It cites the latest quarterly data from the foundation trust regulator Monitor, showing that larger foundation trusts had an operating profit of 5 per cent, compared to -0.4 per cent for smaller providers.

The forward view said that contrary to calls from some quarters that smaller hospitals be merged or closed, “England already has one of the more centralised hospital models amongst advanced health systems”.

• Full coverage and analysis of the five year forward view

Looking at payment systems was one of the three actions to be taken “to help sustain” local hospital services, but only where that “is the best solution clinically, is affordable, and has the support of local commissioners”.

The document added: “Some services and buildings will inevitably and rightly need to be reprovided in other locations.”

It also promised more work on “new models of medical staffing”, referencing the Royal College of Physicians’ work on employing a larger base of less specialised, “hospitalist” doctors.

Announcing the plans - produced by the six principal NHS governance and regulatory bodies - NHS England medical director Sir Bruce Keogh said medics needed to be prepared to work out of “different parts of real estate”.  

“I don’t think we envisage the closing down of hospitals - the population is growing, people are getting older. What we are clear about is we need to repurpose these hospitals,” he said.

The forward view promises three new organisational models for smaller trusts, based on the recommendations of the forthcoming review by Salford Royal chief executive Sir David Dalton.

These are:

• a chain model, which would see shared management for a series of back office functions or across the whole institution;
• a franchise model, which allows specialist providers to operate their own, branded services at smaller providers – something that is already underway in some areas, for example specialist hospital trusts The Christie Foundation Trust and Moorfields Eye Hospital Foundation Trust already run clinics at other trusts; and
• an integrated provider, including primary and community care services alongside those provided in the hospital.

Monitor published a report in June on trusts with a turnover of less than £300m. It found no evidence that smaller trusts performed worse clinically, but concluded they would be increasingly disadvantaged as care moved out of hospitals, specialist care was concentrated in fewer sectors, and staffing bills rose.