Failure regime for the NHS

The Department of Health (DoH) has issued a consultation paper on 'a regime for unsustainable NHS providers'. This is a further piece in completing the framework for an NHS market. Just as the NHS market model has been created, so now is the creation of market failure and a quasi-insolvency regime for that failure.

From 2009/10 there will be a new performance regime for NHS trusts and Foundation Trusts, in which trusts could be designated as "underperforming", "seriously underperforming", or "challenged" – the latter being the equivalent of a school being placed under "special measures".

In such a scenario, an NHS trust would be reviewed after a year in "challenged" status and then a decision taken on whether to: remove (improve) that status; keep the trust on probation; or deem the trust unsustainable and wind it down.

If the final decision is taken, then within 120 days all the services could be transferred to other organisations. Campaigners are rightly concerned that this could be used to speed up the transfer of NHS provision to the private sector.

The impact assessment that accompanies the consultation estimates that 2.1 per cent of NHS and Foundation Trusts will fail every year – which equates to about six per year. By cutting the time that trusts are in deficit, the Government estimates it will save £200m per year – but isn't likely to be offset by this new bureaucratic regime?

In the case of Foundation Trusts, failure would mean the removal of foundation status and the reversion to being an NHS trust – and then the same system would apply. Of course, despite being "independent", their debts – which could include PFI deals – would naturally transfer to the taxpayer.

Campaigners have also raised concerns about democratic oversight. Once a trust is designated "challenged", it seems that local opposition would no longer be able to block reconfiguration plans. Even the NHS Confederation has stated that there is a risk the regime could be used to "subvert the democratic process" by imposing reconfiguration.

What is clear is that trusts are being evaluated not primarily on their clinical standards, but on their financial standing. "Challenged" status in the DoH consultation document is referred to solely as "financially challenged" by the Health Services Journal – and while emphasising continuity of service provision for patients, the cost savings estimates reveal the DoH's prime motivation.

The consultation document can be downloaded from the DoH website, and the deadline for responses is 3rd December 2008. Organisations representing patients or staff in the NHS need to look forensically at these proposals could have a massive impact on local service provision and accountability.