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Change service provision to guarantee quality, small district general hospitals urged

These hospitals can ‘survive and thrive’ but performance has dipped over past two years, says Monitor

Caroline White

Friday, 13 June 2014

Small district general hospitals can be financially viable, but they must change the way they provide services to local patients if they are to guarantee the quality of care, says a report* from the health sector regulator Monitor, published today.

Patients and communities often highly value local hospitals, says the regulator. But there is concern within the sector that smaller non-specialist acute providers operate at too small a scale to be financially sustainable while providing quality care.

Economists analysed an array of clinical and financial indicators to find out if any particular factors affect the performance of hospitals with fewer than 700 beds—typically in trusts with an income of less than £300 million.

The analysis found no clear evidence that smaller acute hospitals performed any worse clinically than their larger counterparts.

But evidence is emerging that smaller providers may be starting to find it more difficult to manage budgetary constraints and face greater financial challenges as their performance has worsened more than that of the sector as a whole over the past two years, says Monitor.

Another factor that also affected financial performance was the proportion of work undertaken under the NHS national tariff, and many smaller providers tend to proportionally do more of this work.

The report concludes that size is likely to become an even more important issue as hospitals struggle to recruit staff to further improve the quality of care.

It recommends that small district general hospitals should identify new models of care for patients, and redesign services to improve the integration of care and move it closer to home.

And they should come up with creative ways to address the challenges of scale, such as sharing staff with nearby trusts, using new technology, or building networks between smaller hospitals and major centres, it says.

And they should ensure that the right balance is struck in local communities between service redesign and ensuring that patients can be treated near to where they live, says Monitor.

“With changes in this direction, smaller acute providers should have an important and sustainable place in the future,” concludes the report.

“People value their local hospitals and we wanted to understand the challenges that they face as the NHS takes on a potential £30 billion funding gap over the next decade,” said David Bennett, Chief Executive at Monitor.

“We found that smaller hospitals are facing increasing challenges but with the system’s support can continue to play an important role in the nation’s health service,” he insisted. 

But he cautioned: “Bigger isn’t always better and just merging or taking a ‘one size fits all’ approach to local health services is not the answer. We need to achieve the right balance between risks to quality and risks to access, and consider other constraints such as the impact of clinical specialisation to make sure patients continue to benefit from the local hospitals that they value so much.”

Terence Stephenson, who chairs the Academy of Medical Royal Colleges, said that: “Providing the right services for patients in the right place that can be financially and clinically viable is one of the NHS’s absolutely key challenges.”

He added: “It is clear from this report that that there are no simple conclusions or answers to these questions. But the report provides the service with a useful base for taking forward thinking and practical action.”


* Facing the future: smaller acute providers. Monitor, 2014.

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