Despite great advances in medicine, Man’s ultimate inability to cheat Nature means that hospitals will always be in business. That does not mean the business of hospitals will always be straightforward. It is little surprise that Whitehall is nervous about the cost of the Government’s ambitious hospital building programme. The sums involved are enormous. More than £5 billion is already committed. Schemes in the pipeline are worth a further £12 billion. It is a prudent time to ask whether the money is being spent wisely.
Evolving health policy is heightening concerns about the future financing of hospitals, which can no longer bank on a fixed-sum cheque from the Department of Health each month. Since January 1 some patients have been able to choose their hospital. From April payment will follow patients. A hospital’s income will depend increasingly on performance. The issue of uncertain income is exacerbated for hospitals that have been built or refurbished under the Private Finance Initiative (PFI) and that have large fixed debts to service.
Parliament is awaiting a health White Paper, which will raise separate questions about the future viability of large, traditional hospitals. It will accelerate the trend of patients being able to receive more routine treatment in GPs’ surgeries rather than having to make a hospital visit. The changing practices have prompted two questions. Do we actually need more big hospitals? And is the PFI a problem instead of a solution? The notion that “monolithic” hospitals are no longer needed has yet to be proven. The more patients who can receive treatment nearer to home the better. But the need for acute care in a range of guises will not disappear. Besides, a radical rethink of the Government’s current hospital building programme would be deeply unpopular. All the evidence suggests there is nothing like a hospital under threat to mobilise local communities.
It is understandable that ministers want to check the figures involved in the £1.3 billion rebuilding of St Bartholomew’s and the Royal London hospitals in East London. All sides need to be confident that the trust will be capable of repaying the above-average cost over the next 42 years. But Barts has a good case for substantial refurbishment. It services one of the poorest populations in the country, and the booming Thames gateway means that its catchment area is growing. In the light of the White Paper, though, other trusts should be prepared to amend their PFI plans to ensure they are in tune with 21st-century healthcare.
Concerns about the PFI itself are led by the health system’s vested interests, whose prejudices include an enmity towards private capital. It is true that PFI has had its casualties, such as the Queen Elizabeth Hospital in Woolwich. But such cases are to do with the business plans concerned rather than the merits of the PFI itself. Does anyone believe the Government could have undertaken the biggest hospital building programme in the history of the NHS with public money? Nearly 40 hospitals have benefited, with another 60 next in line. It is precisely this kind of creative investment, with private sponsors responding to local needs, that is required across Britain’s public services. But the NHS must do its part. Despite record levels of investment, productivity in the health service has fallen. Only when it improves will the sums start to add up.