Under the Payment by Results system, introduced in April 2005, hospitalsare paid a set price specific to each procedure they carry out.Previously, they received a fixed amount regardless of the work theydid. The system has resulted in hospitals with a wider range ofprocedures receiving more money and those with a smaller range - such asspecialist children's hospitals - losing out.
To offset this, the Department of Health last week announced additionalfunds for children's hospitals. "Most NHS trusts and foundation trustshave a mix of routine and complex cases, which results in losses andgains being offset," said Lord Warner, the health minister. "However,for specialist children's hospitals, which have a smaller range ofservices, this does not in all cases work in practice."
Specialist children's hospitals, however, will still lose out. GreatOrmond Street Hospital was left with a 5.9m deficit under Paymentby Results but has received just 3.4m extra from theGovernment.
"Great Ormond Street NHS Trust was faced with significant financialuncertainty and shortfall this year due to unintended consequences ofthe Payment by Results system," said a spokeswoman. "We are pleased withhow our discussions with the Department of Health have gone and areencouraged by the decisions that have been made. The conversation isongoing as there are some final details to be decided and 2006/07remains a financially challenging year for the trust."
Sheffield Children's Hospital, which has a shortfall of 2.4m,will get just 900,000. Chris Sharratt, its chief executive,however, welcomed the extra funds. "The money will enable us to maintainall our services during the year," he said. "We are pleased by thecommitment from the department to work with the four children's hospitaltrusts to further develop the tariff."
Alder Hey in Liverpool has an 11m deficit and will receive 4.9m; Birmingham Children's Hospital has a 2.6m deficit andreceives 1.3m. Discussions are under way over when the hospitalswill get the extra money.
Although the payments are only for 2006/07, the Department of Healthsaid similar arrangements could be put in place for 2007/08 "ifneeded".
Nigel Edwards, director of policy at the NHS Confederation, whichrepresents more than 90 per cent of NHS organisations, said: "We welcomethe extra support that the department is giving specialist children'shospitals."
