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NEWS: Michael Day NHS faces job cuts as financial crisis deepens BMJ 2006; 332: 743 [Full text]

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Signs of crisis or signs of hope?

Stephen Black   (4 April 2006)

Reduction in Consultant posts

WA Holden   (31 May 2006)

Signs of crisis or signs of hope? 4 April 2006
Stephen Black, consultant london sw1w 9sr Send response to journal: Re: Signs of crisis or signs of hope?	There is a distressing lack of context in the current debate about the state of the NHS. Financial deficits, job cuts, and professional whingeing are all at record levels (at least according to headline writers). Some even allege that he system is close to collapse. Even the debate about how the NHS is funded has been resurrected, driven--apparently--by the idea that demand always exceeds supply in a publicly funded system. It is, however, possible to see the current problems as the birth pangs of real reform and a sign that reform is starting to work to the long term benefit of all. If this is right, then panic and putting reform on hold would be a catastrophe for the system. To see why it is vital to look behind the current headlines and see their historic context. Historically NHS trust accounts have contained little useful information on anything. They existed more to tick a statutory reporting box than to provide useful guidance on performance or the state of the hospital. It has rarely been a good thing to declare large surpluses (after all if you didn't need the money this year you would likely lose it next year) and never good to declare deficits (though the perverse incentives tend to send the money in the direction of the inefficient units with deficits who can argue they "need more funding"). So trusts expended great efforts to achieve the political goal of "balance" and none to achieve the useful goal of reporting something relevant to management decision making. PCTs and SHAs connived in this by moving money around the system to avoid as far as possible significant surpluses or deficits. In the private sector, company accounts have a role (though an imperfect one) in informing mangers, investors, and governments about the real state of the business. Regulation and audit prevent serious manipulation by unscrupulous managers (which is why Enron’s bosses are in court). Good companies hold private accounts (management accounts) that help them understand the performance of their operations so they can fix or improve them. The point of this is that the current deficits may be a welcome sign that the accounts are starting to move from being a political pretence that all resources are used equally well to an honest admission that some hospitals are better managed than others. We already know that this is true for other reasons. For example, the reference cost exercise behind tariff setting (search for “reference costs” on the DH website for the data) shows that the most efficient hospitals can be half the cost of the worst for exactly the same procedures (and this is true even when unavoidable regional cost differences are taken into account). In the private sector such enormous differences would lead to rapid action to improve the operations of the poor performers. So the fact that some trusts are now declaring big deficits and are taking actions to sort them out such as shedding staff is a welcome sign of honesty not of crisis. The fact that badly managed and expensive hospitals are cutting staff is sign that the right management actions are being taken at last. If the efficient and well-managed hospitals grow (perhaps by employing some of the staff shed) and the inefficient shrink or improve then the same NHS expenditure will deliver more healthcare. Well organised hospitals deliver both higher quality care and more efficient use of government money than their badly managed rivals. The degree of improvement of NHS productivity that could be achieved if the worst moved even halfway towards the best would be enormous. In fact it would be so big that we could stop worrying about the other big debate of the moment the idea that demand must always exceed supply in a publicly funded system. If we get the incentives right and don’t succumb to panic because of the short term pain, the prize could be a rapidly improving NHS where quality and speed of care just keep getting better. Competing interests: Management consultant in health
Reduction in Consultant posts 31 May 2006
WA Holden, Specialist Registrar Rheumatology Great Western Hospital, Swindon Send response to journal: Re: Reduction in Consultant posts	As a Specialist Registrar who has just obtained a CCT in Rheumatology and who is currently working for the final 6 month 'period of grace' before becoming unemployed, I have been becoming increasingly worried about an apparent lack of new Consultant posts for which to apply. There is a general feeling amongst colleagues that recruitment for new or replacement posts has been frozen or stopped as a direct result of a short -sighted knee-jerk reaction to the current financial crisis in the NHS. I decided to check on the number of Hospital Consultant posts advertised in BMJ careers over the past 3 and 6 months of this year compared to the same period a year ago. The number of posts advertised over the past 3 months from 28th February 2006 to May 30th 2006 was 1416. This compares to 1773 posts over the same period a year ago, a decrease of 20%. The figures for the past 6 months from November 29th 2005 to May 30th 2006 show a similar decrease of 16% (3497 vs 2942 posts) compared to the previous year. Presumably the number of National Training Numbers has not decreased to a similar extent, and we can therefore expect to see both an increasing number of highly trained but unemployed Consultant-level doctors and a rapidly increasing pressure on the service with an inevitable increase in waiting times. Competing interests: None declared