Published on Sunday, 1st October 2017


The way QA hospital is paid for is changing. Money has traditionally flowed around the NHS on the basis of activity: a national formula sets the price for a broken arm (for example) and for everyone a hospital treats, it receives a set amount of money. As the formula is based solely on the procedure undertaken, it incentivises hospitals to get people home as there is no additional funding for keeping people in for longer than necessary.


The flipside is that it encourages hospitals to do more activities, which may not always be the right thing to do. Over time, the effect is to suck money into hospitals and out of general practice and community services. It also generates a lot of accounting activity.


Across the country, NHS partners are switching to the so-called ‘Aligned Incentive Contracts’, which essentially means giving hospitals a fixed budget, regardless of the amount of work that they do. Portsmouth moved to this new model in the spring.


While none of the decisions behind this were taken by the local authority, I do think it makes sense. As the population ages, the only way the NHS will be able to cope with demand is to do more in community settings, such as district nurses and GP practices (and social care) and to make every effort to keep people who can be kept out of hospital at home. Aside from money, hospitals are dangerous places, particularly for older people, who are at risk of infection and who suffer incredibly rapid muscle loss if left in bed. Moreover, no-one wants to spend more time in hospital than is strictly necessary.


You can read some more about this here.


Tags: NHS