Does closing hospitals save money?  Does reconfiguring services save money and improve care?  Do we need yet another paper telling us we need to shut hospitals in order to provide care closer to home?

I have seen many (lengthy) business cases written to support reconfiguration of services.  In theory all such changes have to be commissioner led so the case is almost invariably from the commissioning perspective – not whole system.  Changes which benefit commissioners often increase whole system costs, and benefits claimed for patients are often illusory. There is little or no evidence of what happens across the whole system.

Take a couple of examples.  If you commission a walk in centre you can justify this on the grounds that the “tariff” for a visit to a WIC is much less than the “tariff” for an A&E attendance – so the commissioner saves money.  But the A&E is still there and has very little opportunity to reduce its costs just because a proportion of more minor cases go elsewhere, and the costs of running the WIC have to be met – so total cost to the NHS could actually INCREASE.

And a local “A&E” was closed based on the fact that it was clinically unsustainable.  The clinical evidence was that death rates were lower at other nearby hospitals so this must be a good thing.  But the evidence that has been reported showed that in fact death rates in the catchment area actually went up – the assumption that every patient would simply pitch up at a better hospital was never sensible.  So the whole system effect was BAD not good.

We have heard that hospitals should only be shut for clinical reasons never for financial – as if the two things were unrelated.  The latest evidence into death rates (as opposed to the nonsense about excess deaths in the media) shows that there is a strong link between death rates and levels of funding.  This is astonishing – hospitals with more resources do better than others with less!!!

You see business cases saying a hospital is clinically unsustainable (as in Stafford) because it cannot afford to attract and retain the necessary staff – so is that clinical or financial?  If you had the clinical leadership to construct the networks and enough money you could make quite small hospitals viable in clinical terms but not financial.  You can’t easily separate the two things.

If you close a hospital completely and sell the site you save the estate and Facility Management costs.  If you end the life of a “trust” you save the costs of the board, some senior managers and some support services.  But the patients still have to be seen and go somewhere – they don’t disappear when the hospital is bulldozed, so you will need to increase capacity elsewhere and that is not free even with economies of scale.  So if you close a £150m pa hospital how much is saved overall?  Has anybody ever worked it out?

Well here is a question.  If you shut a third of our hospitals would you save more than you could save from ending the absurd commissioner/provider/Payment by Results market which has just cost us £3b to set up?

So should we close hospitals so we can provide care closer to home with the money saved? I have looked at many business cases which say just that.  Again it may look sensible to commissioners but it is equally bonkers.  By all means build up primary and community care and build new facilities and when that actually reduces demand for hospital admissions and attendances then begin to shut hospital capacity.  But that takes YEARS and the big savings come when you shut the hospital and sell the site – not much before.  In the meantime you have double running costs and you may have to invest in new capacity, retraining and transfers.  How does this save money other than over a long period?

So.  We need to plan over much longer periods.  We need a whole system approach and whole system analysis of costs and benefits.  We need a planning framework and the skills to go with it (not management consultancy) – and not a market.  And we need to stop pretending there are simple answers to complicated issues.

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2 Comments

  1. eric watts says:

    Very good points – can you give references for the example quoted of a rise in deaths following A&E closure?

  2. neil wood says:

    Redesigning an aeroplane while it’s flying is never a good idea ………

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