Debt ridden trust has no cash to pay creditors
BMJ 2005; 330 doi: https://doi.org/10.1136/bmj.330.7505.1410-a (Published 16 June 2005) Cite this as: BMJ 2005;330:1410
All rapid responses
Rapid responses are electronic comments to the editor. They enable our users to debate issues raised in articles published on bmj.com. A rapid response is first posted online. If you need the URL (web address) of an individual response, simply click on the response headline and copy the URL from the browser window. A proportion of responses will, after editing, be published online and in the print journal as letters, which are indexed in PubMed. Rapid responses are not indexed in PubMed and they are not journal articles. The BMJ reserves the right to remove responses which are being wilfully misrepresented as published articles or when it is brought to our attention that a response spreads misinformation.
From March 2022, the word limit for rapid responses will be 600 words not including references and author details. We will no longer post responses that exceed this limit.
The word limit for letters selected from posted responses remains 300 words.
Here, hidden away in a so far unremarked news story, is the problem
for national health services worldwide. This Trust has no money to pay its
creditors, but:
... the report also paints a picture of a trust that, instead of
achieving financial balance, focused on the quality of its clinical care
and achieving all clinical targets. The trust's unit costs for a wide
range of NHS treatments, such as the cost of operations, are 90% of the
national average. The trust's chief executive said that for too long its
funding had been below the cost of actually providing services.
Providing treatments is a complex matter, and it is unlikely that any
sort of costing will be appropriate in all places, even if worked out with
the best data and with the best of intentions. When you are running a
sweet factory, then the more you sell, the more money you have. When you
are providing health care, the more patients you have, the more you have
to treat, whether you have the money or not. No health system will ever
get this right, and governments - if they have any humanity - will always
have to bail out bankrupt hospitals.
Independent treatment centres deal with simpler calculations for
their simpler procedures. This will make it even more difficult for NHS
Trusts to balance their finances.
I am not a health economist. Maybe I am being simplistic, but surely
there is a way of running the finances of our hospitals so that they can
pay for their stationery without fear of having to turn patients away.
Competing interests:
None declared
Competing interests: No competing interests
Re: Health is not a business
You don't have to be a health economist to know that if your
expenditure exceeds your income, you're in trouble! Bail-outs don't solve
the problem, merely defer it to a later date when it will cost even more.
As doctors we would get annoyed if lay-people pontificated about our
area of expertise, but we seem happy to do just that when it comes to
economics. And, that's even when what we're saying is contrary to how we
behave in regards to our own money!
The biggest revenue cost pressure on the NHS is salaries and wages.
I don't often hear of doctors suggesting a cut in their salaries as a way
of treating more patients, despite the fact that we're the highest paid
doctors in Europe. I know, I've worked in France. If you don't believe
me, research it!
I suggest reading "Economics in one lesson" by Henry Hazlitt
(available from www.iea.org.uk) for a simple, easy-to-understand
explanation of the way the world works.
Regards,
Paul Shannon FRCA MBA
Competing interests:
None declared
Competing interests: No competing interests