Even the best-managed trusts may struggle to avoid financial failure in the current climate, a healthcare thinktank has claimed.
A more nuanced approach to dealing with the financial failure of trusts in needed, the King's Fund report concludes.
Financial failure in the NHS: What causes it and how best to manage it states that the increasing number of hospitals reporting deficits has put a spotlight on what happens when NHS providers are in financial difficulty.
Even the best-managed trusts may struggle to avoid financial failure in the current climate, a healthcare thinktank has claimed.
A more nuanced approach to dealing with the financial failure of trusts in needed, the King's Fund report concludes.
Financial failure in the NHS: What causes it and how best to manage it states that the increasing number of hospitals reporting deficits has put a spotlight on what happens when NHS providers are in financial difficulty.
The Health and Social Care Act brought in Trust Special Administrators to take over the management of failed organisations, but the process has proved controversial
Older approaches to managing financial failure such as replacing the management, mergers or franchising have had limited success and were not designed to deal with current levels of financial distress in the NHS the report claims.
The report calls for a more nuanced approach to financial failure based on:
– Distinguishing between providers struggling due to the exceptionally difficult financial environment and those with more fundamental problems.
– Taking a more sophisticated approach to finance that distinguishes between emergency support and investment to enable transformation of services.
– Allowing a realistic timetable for the recovery.
– Understanding problems in the wider local health economy rather than just focusing on the individual organisation.
– Establishing strategic leadership to manage change across local health economies following the demise of strategic health authorities.
– Designing an approach that responds to legitimate public and political concern about difficult service changes.
Richard Murray, director of policy at The King’s Fund said: "Providers are operating in an extremely difficult financial environment. Developing an approach to financial failure that responds to this environment is a significant challenge.
"A nuanced approach is required based on an understanding of the whole local health economy and balancing a range of other factors. None of this makes for a speedy or straightforward process but there are no quick fixes."
