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Last Updated: Monday, 13 March 2006, 10:00 GMT
New finance rating for NHS trusts
Hospital scene
Trusts have been given star ratings since 2001
NHS trusts are to be rated separately on financial management as well as patient care as part of measures to tackle those managing resources poorly.

The new two-tier system will replace star ratings and will see trusts' performances graded from weak to excellent on the two areas.

NHS watchdog the Healthcare Commission said a close eye would be kept on the trusts with the biggest deficits.

The change comes as record overspends are being predicted for the NHS.

The commission's new Health Check plans were announced on Sunday just days after Sir Nigel Crisp resigned as NHS chief executive amid a growing financial crisis.

Poor financial performers will get a poor result in the new Health Check that will be published this autumn
Patricia Hewitt

Health Secretary Patricia Hewitt said she believed "robust financial management" was an essential part to providing better quality services and the improvements patients want.

She added: "This will give patients a clear picture of the quality of service - which is what matters most - while also making it essential to get the best possible value for money.

"By using every pound of public money as effectively as possible we release more resources for new drugs, better prevention and faster treatment.

"In effect, poor financial performers will get a poor result in the new Health Check that will be published this autumn."

Ms Hewitt also said trusts rated as poor performers financially would not be able to bid for foundation status, which allows them more freedom from Whitehall control and financial independence.

Chief executive of the Healthcare Commission Anna Walker said the new ratings would get to the heart of what is really happening in local NHS trusts.

'Richest picture'

She said: "We want to answer the questions that people are asking about the performance of healthcare organisations. We are committed to offering the richest picture possible.

"As a first step, this year's rating will have two parts: quality of care and use of resources.

"This frees us to offer people a clear picture on quality, while being tough on resource issues where necessary."

The NHS Confederation which represents 90% of health service organisations said it had been calling for absolute transparency about finances.

Its chief executive Dr Gill Morgan said: "It is right that from now on we are completely transparent about the financial situation, because only in this way can we find the solution to the current challenges the NHS faces.

"This will, however, be very challenging for many NHS organisations given the current climate."

'Simplistic'

She added that splitting the rating would also show that even where organisations have financial problems, they can still provide excellent clinical care for patients.

Shadow Health Secretary Andrew Lansley also agreed it was right to differentiate between management and finances and the quality of patient care.

Liberal Democrat health spokesman Steve Webb welcomed the move away from the "absurd" attempt to summarise the performance of a hospital in one measure.

But he said the new plans appeared to provide very simplistic measures of performance and gave insufficient weight to the quality of patient care.

"Financial discipline is important but what matters most to patients is not a trust's balance sheet but quality of care," he added.

Since 2001 hospitals, ambulances and primary care services in England have been given hotel-style stars, which aim to show how well they are doing.

They are graded on a range of criteria, including financial management and awarded zero, one, two or three stars.




SEE ALSO:
Q&A: NHS star ratings
26 Jul 05 |  Health


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