Journal should show balance, not bias, when reporting on PFI
BMJ 2001; 323 doi: https://doi.org/10.1136/bmj.323.7315.753 (Published 29 September 2001) Cite this as: BMJ 2001;323:753All rapid responses
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Worcestershire Local Medical Committee wishes to refute Professor
McCloskey's assertions in his letter published on 29 September. We have
had major anxieties about the strategic review of healthcare in
Worcestershire and the Worcester PFI project. We have been unable to
obtain the clarification we seek from the Health Authority and have
welcomed expert independent assessment of the issues.
Last summer this committee asked for an independent review, a request,
which was rejected by the Department of Health and Worcestershire Health
Authority. An adjournment debate was held in Parliament on 25th July 2000
that raised serious concern and asked important questions that were never
satisfactorily answered. Interestingly a review has now taken place as
part of the National Bed Enquiry whose findings confirmed our fears that
there would be too few beds in Worcestershire in the short, medium and
long term. The report produced by Professor McCloskey, himself, states
that there will be a deficiency of 90 beds when the new Worcester PFI
hospital opens. It should be noted that even this figure is disputed and
could be as high as 200 according to some senior managers in the acute
trust.
In this era of supposed open government it should be of great concern
that major decisions on health care provision are made in such a way that
even local GP's are not fully informed resulting in them being mislead.
We need more independent review and analysis from Journals such as the
BMJ. Professor Pollock and her colleagues should be commended for raising
important issues and bringing the debate into the public arena. There are
serious concerns regarding PFI which need to be debated. Worcestershire
LMC does not wish to see other areas of the county left in a similar state
to ours. The wider NHS must learn from its experiences
Simon Parkinson
Competing interests: No competing interests
Sir,
Pollock and Taylor both continue to misrepresent the facts about
Worcestershire's hospital by failing to compare like with like, although
the true comparison has been made available to them.
For the avoidance of doubt in your readers' minds the audit of the
changes in the business cases for the hospital is as follows:
The Outline Business Case (OBC) gave a cost for the building of South
Worcester's new hospital as £42.9m. This was at 1996 prices. The Full
Business Case (FBC) gives costs at 2002 prices. Therefore the FBC includes
6 years of inflation. Using standard (conservative) building industry
inflation this accounts for £9.4m of the difference.
Following the agreed changes to Kidderminster Hospital the new
hospital was expanded with 20% more beds and 33% more A&E capacity.
This was agreed at a fixed price of 20% of building cost and accounts for
a further £17.1m of the difference.
The FBC includes costs for design fees and contingency costs that are
not part of the OBC. This accounts for a further £12.9m.
Finally the FBC includes the cost of project management and financing
that are not in the OBC. These amount to £29.9m. These costs are
explicitly stated for PFI schemes but are invisible - but real - in
traditional NHS schemes.
These sums are reduced by £4.5m of land sales and the net FBC total
is £108m. The difference between Pollock's £108m and Taylor's £116m is the
£8m equipment cost which as Pollock correctly points out are not part of
the main PFI arrangement but which have been explicitly set out by the
Trust for the sake of transparency.
Pollock goes on to repeat her assertion that Worcestershire will have
"41% fewer beds than the national average" without justifying this apart
from a reference to the National Beds Inquiry (NBI). The NBI gave a range
of beds per 1000 population of 1.44 to 3.96 with an average of 2.67. The
Worcestershire figure will be 2.25. This is despite Worcestershire, as a
healthy county with good primary care, having hospital admission rates
that are 11% (emergency) and 29% (elective) lower than the national
average.
We did not base our assumptions on a single bed audit as Pollock
suggests (although an audit was done and supports our conclusions) but on
the evidence of the NBI. Pollock's Report was incomplete and inaccurate
because it did not consider all the relevant material but only looked at
the PFI scheme. It did not consider, for example, the contribution of the
county's 4 (now 5) Community Hospitals or the Alexandra Hospital in
Redditch. Nor did it consider the impact of the cumulative investment by
the Health Authority in Community Services of £13.3m from 1998 to 2000.
Taylor and Pollock both refer to the recent analysis of the impact of
the NBI that we, along with every health economy in England, are engaged
in. Contrary to Pollock's assertion our report has been in the local press
in the public domain even though it is not yet complete. Taylor is wrong
to say that the Acute Trust has acknowledged that our plan was wrong -
they have not done so. We have, with the local Trust and local GPs,
reviewed our plans in the light of the new planning assumptions brought in
by the NHS Plan in July last year. These assumptions go far beyond what we
planned in 1996 - 1998 by requiring extra activity to reduce waiting lists
and include less stringent performance targets for hospital efficiency. If
we run the NBI with the same planning parameters that were prevalent in
the NHS in 1997 the NBI supports our original conclusions. If we use the
new parameters the NBI shows a potential need for 50 - 90 beds in 2004
beyond our current plans mainly due to lower bed occupancy. We are
currently working with all the agencies in the county on plans to meet
this.
Taylor is also wrong to say our clinical review did not include acute
general medicine or surgery. It did. It was a strategic review of acute
hospital services in Worcestershire of which a part was a series of 9
clinical specialty working parties. The first proposals from the review
sought to minimise the move of services from Kidderminster by leaving
general medicine in place. Local hospital clinicians felt this was not
feasible and we amended our later proposals to the more radical option.
Therefore the inclusion now of short stay elective surgery beds in support
of the Ambulatory Care Centre we are developing in Kidderminster is not an
indication that we were wrong. Both Prof. Darzi who recommended the beds
and the Minister in accepting Prof. Darzi's recommendations have
explicitly said so.
Pollock and Taylor both persist in using Worcestershire's new
hospital, and its financing, to obfuscate the real issue - the safety of
clinical services in small hospitals (of which Kidderminster was an
extreme example). Kidderminster's future as an acute general hospital
would still be compromised even if there were no new hospital in
Worcester. Four years of strife have not changed that essential reality -
they have only delayed acceptance of the new, but equally important, role
of Kidderminster hospital in the future.
Yours etc
Brian McCloskey
Competing interests as before.
Competing interests: No competing interests
Dear Sir
Professor Brian McCloskey has several misconceptions about hospital
services for which he bears the responsibility in Worcestershire. (1)
Firstly when Frank Dobson MP, Secretary of State for Health visited
Worcester to cut the first turf for the new PFI hospital in March 1999,
the Department of Health press release trumpeted the cost of the new
hospital as £116m. An increase in cost of 137% cannot be explained as he
suggests by the addition of 84 beds, an increase of 21%, to provide acute
hospital services for parts of the county from whence McCloskey’s own plan
removed all 192 acute beds. The Worcestershire Acute Hospitals NHS Trust
has at last acknowledged that McCloskey’s plan was wrong in under-
estimating the number of acute beds needed.
Secondly the clinical review to which he refers was a review of nine
subspecialties and did not consider services for acute general medicine or
surgery. Only after the general election in May 1997 did it become
apparent that the costs had escalated so high that one of the county’s
three acute DGHs had to close all acute inpatient services and the A&E
department to enable the PFI hospital to go ahead. In this also McCloskey
has been proved wrong. Some elective inpatient surgery has been ordered to
return to Kidderminster. Incidentally the independent review to which he
refers (2) recommended: because of the “depth of public anxiety about the
Health Authority’s plans”, that an initial two year pilot project of the
changes be established and “formally reviewed by a reputable external
source before any irrevocable decisions are made on the future of services
currently provided at Kidderminster General Hospital.” The Health
Authority chose to ignore this recommendation.
His third misconception is that after four years of strife in the
county he has not learnt normal, intelligent people abhor the use of
‘spin’. If you are a local person and have severe chest or abdominal pain
or an accident you will find the hospital is closed as your ambulance
drives past on its 18-mile journey to Worcester. As he has been told many
times people will travel willingly for complicated treatment but local
services for conditions that occur commonly as emergencies must be
available (3) for an urban concentration of 100,000 people with an
extended rural area.
Yours faithfully
Richard T Taylor
Competing interests: Independent MP for Wyre Forest and Chair of
Kidderminster Hospital Campaign.
1. McCloskey B. Journal should show balance, not bias when reporting
on PFI. BMJ 2001;323:753. (29 September.)
2. King’s Fund. Building on Excellence. (May 1998.)
3. Smith R. How best to organise acute hospital services? BMJ 2001;323:245
-6. (4 August.)
Competing interests: No competing interests
EDITOR-The cost inflation figure which saw the cost of the PFI
hospital scheme in Worcester increase from £49m to £108m was supplied by
the Worcestershire Acute Hospitals NHS Trust and confirmed by the
Department of Health. £29.9m of the capital cost increase was due to PFI
financing costs which were not factored into the original budget.
McCloskey wrongly attributes some of the cost increase to equipment and
maintenance. However, in common with a lot of PFI schemes, equipment in
the Worcestershire hospital is subject to a separate deal and annual
maintenance is not included in the total capital cost figure.
We used Trust finance and NHS letters and reports to show in our
report how the escalation in PFI costs combined with rising deficits
prompted Region and the Health Authority to axe Kidderminster in order to
divert much needed funds into the new hospital. This is why although bed
numbers increased for the new PFI hospital they will not offset the bed
and service losses incurred by the combined closures of the old Worcester
Royal Infirmary hospital and the Kidderminster hospital. When the larger
"pan-Worcestershire Hospital" opens the area will have 41% fewer beds than
the national average. The effect of this is already taking its toll. The
local media and GPs report that there were no beds available in
Worcestershire last week, or in neighbouring Warwickshire, Herefordshire,
and South Birmingham, which also have new PFI hospitals planned. This is
at a time when Worcester still has the benefit of the Newtown site, which
is due to close with the loss of between 56 and 112 more beds.
McCloskey's claim that our article in the BMJ is incomplete and
inaccurate is unsubstantiated and appears to derive from a single
inpatient bed audit study published by Worcestershire Health Authority.
However, the Department of Health has been unable to rebut our evidence
more than two years after its publication, and our analysis is in line
with findings of the National Beds Inquiry. Moreover WHA has now published
a report which shows a shortfall in bed numbers of at least 93. It has yet
to be placed in the public domain. It is regrettable that despite all the
attempts by GPs and members of the public the health authority and Trust
continue to refuse to give a proper account of bed numbers and their
location and funding. Prof McCloskey, as one of the architects of these
changes, has yet to convince his population how the major service
reductions which result from the high cost of PFI will improve access to
and quality of care for the community as a whole.
Allyson M Pollock
Professor
Health Policy & Health Services Research Unit
Email: allyson.pollock@ucl.ac.uk
Competing interests: No competing interests
Re: Re: Worcestershire Hospitals
8 November 2001
EDITOR-I am pleased that Prof McCloskey finally accepts our figures.
We wrote in our report on the Worcestershire PFI hospital scheme:
'total capital costs more than doubled between the 1996 outline
business case (OBC) and the 1999 full business case (FBC). The funding
required for the new hospital rose by 118% in three years, from £49
million to £108 million, excluding £4.5 million derived from land sales…
The full business attributed cost increases of 53% to building costs with
an increase in the number of beds from 380 in the OBC to 452, and the
inclusion of a new cost of £29.9 million described as "other" in the FBC.
Despite its significance, this new cost item is not properly explained but
is probably due to "financing costs."' (Paragraphs 2.4-2.5, Pollock AM,
Price D, Dunnigan M. Deficits before Patients: A Report on the Worcester
Royal Infirmary PFI and Worcestershire Hospital Reconfiguration. June
2000.)
McCloskey's most recent letter confirms the accuracy of this account.
There remains a small difference in our respective reporting of the
original total capital cost figure (McCloskey says £42.9m whilst we say
£49m) but in the scale of things that is relatively minor and the figures
are probably reconcilable. McCloskey has introduced another possible
source of misunderstanding by wrongly ascribing some of the cost increases
to "6 years of inflation". However, the OBC cost figures are in 1995/96
prices while the FBC (approved by NHS Executive and HM Treasury on 19
March 1999) from which the agreed costs are derived uses 1998/99 prices
(FBC, Vol. 2, appendix I, summary financial model, p. 258). Thus there are
only three years of inflation reflected in the agreed cost figures, not
six as McCloskey states. But that error is immaterial for our present
purposes.
The basic difference between us is McCloskey's interpretation of the
£29.9m financing costs. In his first letter McCloskey attributed the extra
costs of the PFI hospital to additional benefits purchased under the PFI
scheme. He asserted that equipment and lifecycle maintenance costs were
included in the PFI scheme but not in the public scheme. This assertion
proved to be a mistake (neither cost category occurs in the PFI total
capital cost figure) and he has withdrawn it without explanation. He now
asserts that the costs are not extra at all because any scheme would incur
them. Financing costs, according to McCloskey, would be paid even if the
hospital were financed out of public capital: "These costs are explicitly
stated for PFI schemes but are invisible - but real - in traditional NHS
schemes."
However, he is wrong again. No publicly financed hospital would incur
these costs and McCloskey cannot provide a single instance of a hospital
paying them other than under a PFI scheme. The Department of Health has in
the past suggested that publicly financed hospitals ought to pay project
finance costs of this type, but that does not affect the fact that the
costs are not paid by hospitals at the moment except under PFI. The DoH
hope may be what McCloskey intends to reflect in his difficult phrase
"invisible - but real". If it is, he is mistaking policy prescription for
practice and wrongly using it in his attempt to rebut evidence that PFI
brings additional costs that lead to hospital downsizing.
So far as evidence of downsizing goes, McCloskey claims that our
figure of Worcestershire plans based on "41% fewer beds than the national
average" is unfounded. However, he should be fully aware of the evidence
on which this statement is based since it is taken from a report on which
he has already commented. Readers may find it helpful if I quote the
excerpt in full (paragraph 9.4 and note 33, page 14):
'An indication of how serious this scenario is for local residents is
illustrated by comparing planned bed numbers and caseload against the
average for England. The number of beds per 1,000 population will fall to
40% of the English 1994-95 to 1998-99 average (i.e. 0.9 vs. 2.2 acute beds
per 1,000 catchment population; FBC base model). Acute inpatient admission
rates will fall to just over half (59%) of the English average on the
basis of the planned admissions.
'Projected activity following completion of the WRI PFI contract also
envisages a possible 7.6% increase in caseload from a 1997-98 base with an
additional 71 acute beds (a total increase of 84 beds). This "increased
caseload" model would provide acute inpatient beds equal to 41% of the
1997-98 English average.'
The source of these data are Department of Health, Beds Availability
and Occupancy, England, Financial Year 1997-98, DoH publications, 1998,
Table 2, p. 165; PFI Full Business Case, Table 15, p. 27; Full Business
Case, Table 16, p. 28.
Worcestershire's failure to attain anything like the efficiency gains
in inpatient management implicit in these targets explains its present
difficulties. This failure was predicted.
McCloskey now concedes that the original planning base for the
hospital was out by up to 90 beds, although he blames government for
undermining his "planning assumptions". Worcestershire's Local Medical
Committee says that even this figure is in dispute and that unnamed trust
managers put the figure at nearer 200.
The capacity crisis is already hitting home. Two months ago a primary
care group in Evesham told local MP, Peter Luff, that on 19 September no
beds were available for medical admissions in Worcester, where 21 patients
requiring admission were backed up in casualty, and no beds "of any sort"
were available in Gloucester, Herefordshire, Redditch, Selly Oak, or
Solihull. In effect, the NHS in the West Midlands was closed to new
admissions. The Acting Chief Executive at the Worcestershire Acute Trust
wrote to GPs and the Health Authority a few days later acknowledging that
the Trust's beds "were all 100% full", adding: "I would be grateful for
any help anyone could give."
Local health care managers and professionals gambled on their ability
to pay the higher costs of PFI by transferring spending out of patient
care and closing hospital beds. The gamble has failed and the public is
paying the price.
Allyson M Pollock
Professor
Health Policy & Health Services Research Unit
Email: allyson.pollock@ucl.ac.uk
Competing interests: No competing interests