NHS cash floods into staff salaries

Patients miss out as NHS cash floods in Salaries soaked up new funds, reveals damning report Denis Campbell, Jo Revill and Ned TemkoSunday March 18, 2007The Observer
Billions of pounds of taxpayers' money pumped into the National Health Service has gone on improving the salaries of GPs and consultants and paying for increased pensions rather than on improvements in patient care and frontline services.
A damning report by the highly respected health think-tank, the King's Fund, reveals that productivity in the health service has actually declined, despite the huge injection of cash.
The report reveals that only 30 pence in every pound of the Government's record NHS budget has been aimed at directly improving patient care. As well as salaries, the rest has gone on a growing bill for clinical negligence payouts and rising drug costs.

The King's Fund report, based on the most detailed and authoritative analysis yet of Labour's trebling of health spending, will make difficult reading for government ministers alarmed at criticism of the impact of their health reforms. The government has increased spending on the NHS by £57 billion since 1997.
On Tuesday Tony Blair and Gordon Brown will face further criticism when an influential group of MPs is expected to single out ministers' mishandling of national pay deals as one reason for the current financial crisis in a number of local health trusts.
The hard-hitting report from the Commons spending watchdog, the Public Accounts Committee will say that the GPs' contract alone cost £300m more than expected, and there were also above-budget deals with consultants and other NHS staff. One PAC member, Labour MP Don Touhig, said during the committee hearings that ministers and NHS leaders had simply 'caved in' as if they had 'had their own mint'.
The author of the King's Fund study, economist John Appleby, said the figures showed why hopes had been dashed that tens of billions of extra NHS spending would mean major improvements in frontline care. Patients had benefited far less than they should have, he said.
His research discloses that 34 per cent of the £19bn which the government has put directly into hospital and community health services in England since 2003 went on more pay for clinical staff. However, productivity levels among GPs, consultants and nurses have nowhere near matched the scale of the increase in the NHS's funding in England, which has gone up from £35bn in 1997 to £92bn in 2007-08.
While consultants have seen their pay scales go up by 70 per cent under Labour, their productivity had actually fallen by 20 per cent over the same period, judged by the number of in-patients admitted per consultant, said Appleby. Similarly, the number of in-patient admissions per nurse fell by 15 per cent, and GPs are not markedly more productive than before they got hefty pay rises in 2004, he added.
Appleby's analysis shows that of the £19bn:
· £6.6bn went on pay
· £2.2bn on the rising cost of drugs, and implementing recommendations by the National Institute of Clinical Excellence treatment advisors
· £1.6bn on hiring more doctors to comply with new EU employment laws on number of hours worked
· £1.1bn on new buildings and equipment
· £1bn on medical equipment and £600m on negligence lawsuits.
After all that, just £5.9bn was left for direct improvements, which include reduced waiting lists, much greater use of day surgery, larger numbers of doctors, nurses and consultants, and elderly patients spending far less time in hospital, he said.
'The NHS could have got more for its money, and could have used all that extra money more efficiently for patient benefit,' he said. 'For example, it could have ensured a productivity clause was inserted in the consultants' contracts.'
In an interview with The Observer, Patricia Hewitt, the Health Secretary, said her predecessor John Reid was right to spend so much of the NHS budget on pay rises because it was facing a potential personnel crisis due to problems with recruiting and retaining key staff.
But she admitted that 'with hindsight' ministers should have changed commissioning, the process through which primary care trusts buy a certain amount of operations and procedures from local hospitals. The NHS needs to 'build up a culture' in which the trusts - in a drive to get better value for money - could challenge a hospital if, for example, patients were staying much longer than other hospitals who were managing to discharge them faster, thus saving the NHS about £500-a-night.
Dr Jonathan Fielden, chairman of the British Medical Association's consultants' committee, dismissed Appleby's comments about consultants as 'convenient, simplistic and an easy hit' but admitted that 'around two-thirds of consultants are being forced to see fewer patients because of the financial restrictions in the NHS and the Government's policy of fewer patients being treated in hospitals.'