Financial problems in Britain’s National Health Service will worsen over the next few years and a number of hospitals could fail, a report said on Wednesday.
And far from healing the problem, the government’s planned reforms could exacerbate it.
The King’s Fund, an independent NHS think tank, said the health service urgently needed a more flexible financial structure to deal with failing hospitals and to prevent problems occurring in the first place.
More than a quarter of NHS Trusts in England were in the red in 2004/5 despite record levels of funding, said the King’s Fund report, “How should we deal with hospital failure?”
Over a fifth of hospitals were likely to experience large and persistent deficits in the next few years and it was likely that a significant number of these would fail, putting the quality of patient care at risk, it added.
“A key lesson from the private sector is that failure is the end of the road,” the report’s author Dr Keith Palmer said.
The government’s plans for a market-based system for health care, designed to allow greater patient choice, will make the situation worse, the report warned.
Allowing the independent sector to run some services would also further reduce the income for some existing NHS bodies, the study said.
The government said its plans would allow patients to choose from a list of providers meaning the best ones would get more business and poor performers would have to improve or face the consequences.
“The trouble is that market incentives will inevitably create further instability as a by-product of trying to stimulate improved efficiency and responsiveness,” Niall Dickson, the King’s Fund chief executive said.
It called for a package of rescue measures to be applied to NHS trusts with large deficits before they failed.
It also said trusts that failed to meet targets for patient care or financial performance should lose control over their destiny, with an independent administrator appointed instead.
The Department of Health said the planned reforms would ensure investment was used in the most effective way.
“The department already has a well-established regime in place to monitor and address problems in NHS Trusts,” a spokeswoman said.
Later on Wednesday the NHS Chief Executive Nigel Crisp is due to publish the annual report on the NHS performance which is set to say extra investment and reform has brought real improvements for patients.