Profit and loss in the NHS

The Healthcare Commission, the government's health watchdog is launching a safety drive. Officials are concerned about the "alarming" figures on the harm patients suffer in hospital and elsewhere. Various studies estimate that there is a one in 300 chance of a hospital patient dying as a result of medical error. One in 10 is estimated to suffer harm, of whom a third suffer serious harm, and an estimated 600 errors are made a day in primary care with more than one in 10 prescriptions containing errors. Anna Walker, chief executive of the Commission, says "it is time we had a really sustained drive, through the regulators, on safety issues." It would also be putting pressure on the boards of health organisations to ensure that they "monitor, analyse, and learn lessons from safety episodes" in their hospitals, and then act on them. These are admirable sentiments but there is little hope of seeing any improvement in the near future. After decades of market-oriented initiatives to undermine the not-for-profit, tax-funded, socialised medicine provided by the NHS, the service is in disarray. Up to 20,000 staff have lost their jobs in the last year and most trusts are in deficit. But there is worse to come. At the same time as hospitals are being asked to improve safety, they are also being told to identify the services and treatments on which they could turn a profit. In the last resort, that could lead to some ceasing to provide services that do not make money. The move marks a further injection of market disciplines into the National Health Service and is being promoted by Monitor, which was set up by New Labour in 2004 to regulate foundation trust hospitals. By the end of next year it will expect all NHS hospitals applying for foundation trust status to scrutinise their balance sheets in this way. William Moyes, Monitor's chairman, said the aim was to "understand profitability, efficiency and quality - and to strike the right balance between the three", he said, with hospitals merely "behaving like any other business" and understanding their profit and loss centres. Moyes is well-placed to drive the profitability agenda in the NHS. He was Director-General of the British Retail Consortium from 2000 to 2003; a member of the economic secretariat in Margaret Thatcher’s Cabinet Office in the early 1980s; joined the British Linen Bank (a wholly-owned subsidiary of the Bank of Scotland) in 1994 and established their Private Finance Initiative advisory and equity investment team, which focussed on large deals mainly in health. With Blair’s bankers in control the health of the NHS is under attack like never before.

Gerry Gold, economics editor