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Last Updated: Thursday, 25 May 2006, 18:34 GMT 19:34 UK
Top hospital fights to keep in the black
By Nick Triggle
BBC News health reporter

A whirl of government reforms has created "turbulence" in the NHS, the government admits.

The top-rated York Hospital is one trust which has found life difficult, despite being good at keeping its finances in check.

Carry On film
Hospital wards were relaxed and friendly places in Carry On films

The over-riding image of hospital wards in the Carry On films was one where patients and nurses chatted freely as they recovered from surgery or illness.

"Fifteen years ago, we even used to have patients taking round cups of tea at night," said Mike Proctor, director of nursing at York Hospital.

"Really, wards were places where people rested and recovered. Perhaps had a laugh as they did in the Carry On films.

"But that is no longer true. Nowadays you are only in hospital if you are really sick. It means nurses, and doctors, are much busier."

The change has been brought about by a series of government reforms from waiting list and A&E targets to more emphasis on providing care in the community, which has put more pressure on hospitals to get patients in and out quickly.

Waiting targets - Hospitals are having to see patients much quicker than they used to. Currently no-one waits longer than six months for an op and A&E patients are pushed through within four hours
Payment by results - Traditionally hospitals were given lump sums of money based on past activity, but now they are having to compete for patients under a system which pays them per treatment
Community push - Meanwhile local health bosses and GPs are being encouraged to see more patients in community settings and, in turn, reduce costly hospital referrals

But there are pitfalls to such a dizzying array of transformation.

Patrick Crowley, director of finance at York Hospital, said: "If you throw a pebble into a pond, it causes ripples. If you throw three pebbles in, you have chaos."

In the rush to meet waiting targets, it is easy to push people through hospitals.

But if too many patients are pushed through the system - its costs much more to provide hospital care than community care - it drives up costs.

And that is what has happened in York and the surrounding area.

York and Selby Primary Care Trust, which is in charge of paying for local services, has run up a 23.7m deficit.

The debt is primary being blamed on the numbers of hospital referrals which are 50% higher than the national average.

The response of the trust, which has had a hit-squad of financial consultants sent in by the government, is to try to reduce the number of referrals by providing more care in the community with beefed up nurse and physio teams.

PCT chief Penny Jones has tried to sell the measures as being of benefit to patients.

She said: "As part of the process of developing the PCT's financial recovery plan, we're looking at ways of delivering more affordable care that better meets the needs of patients.

"In some instances this will see a reduction in the number of admissions to hospital... enabling more patients to be treated at home, which is often better for patients and their families and is also more cost effective."


But whether the measures benefit patients or not, in the interdependent NHS, it does have a negative knock-on effect for York Hospital.

Hospitals, which have traditionally been given a block allocation of money for the year based on past activity, now have to compete as they are paid per patient treated.

It means that the expected reduction in referrals will cost the hospital 3m this year.

In response - and this is despite breaking even last year - the hospital has unveiled a package of measures, including 200 jobs cuts, bed closures, admin savings and more efficient procurement.

Mike Proctor
York hospital is having to make job cuts

York Hospital NHS Trust chief executive Jim Easton said: "It is a tricky tightrope to walk.

"On the one hand we don't want to have too much capacity as it will mean we will run up a deficit, while on the other if we don't have enough resources we will struggle to hit the targets we have to.

"We are a well run, three-star trust which has remained in financial balance so it is hard, but we just have to get on with it."

But for staff working under the threat of job cuts it has not been so easy. A cut of 200 posts would represent a 5% reduction of the 4,000-strong workforce.

The hospitals hopes to achieve the target through natural wastage, but said it could not rule out compulsory redundancies.

Consultant anaesthetist Ian Woods, the hospital's medical director, acknowledged staff morale had been affected.

But he said: "What is important is that clinicians ensure quality treatment continues.

"Hospitals are busier than ever and there is a lot of pressure there. We need to concentrate on care."

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