Why all NHS trusts are equal for funding, but some are more equal than others.

by | 28 Sep, 2018 | Blog, Business, NHS, NHS structures

Why all NHS trusts are equal for funding, but some are more equal than others.

Have you ever wondered why some NHS trusts consistently perform badly, receive bad CQC reports and struggle to recruit staff when compared to other? We all know that the mantra of “it’s different here” is used on a loop by senior executives, managers and staff alike, but it really is.
Firstly there are external factors which are (mostly) out of the control of local and national NHS organisations such as:


    • rurality adds additional costs in staff time and transport to get to people at home, and to get people from home to hospital and clinic appointments.

Wealth and deprivation

    • In areas where the population are wealthy they are more likely to be health literate – to understand local health services and messages about health and wellbeing, to know what is available, research their condition (and potentially be more assertive about treatment choices).
    • In areas of deprivation, there is less access to the internet, people are unlikely to be health literate 43% of the English working-age population cannot fully understand and use health information containing only text. When numerical information is included in health information, this proportion increases to 61% Ref: A mismatch between population health literacy and the complexity of health information: an observational study. Rowlands et al; Br J Gen Pract 2015 June.
    • Diet improves with income, those on lower incomes have a higher proportion of processed meat in their diet and a higher intake of fats in their diets as outlined by Sara Garduno Diaz, University of Leeds.
    • Other risk factors for poor health rise with lower incomes such as smoking. There is no coincidence that the ONS map of proportion of current smokers amongst adults by local authority looks very similar to the Indices of Deprivation.

Transport links

    • Social isolation and loneliness have strong links to mental health problems, increased risk of falls and additional long-term health problems – it is far harder to engage in community activities if you are not within easy walking distance of things such as patient support groups, and public transport is poor.
    • If there is poor public transport and/or poor roads, a patient is more likely to request patient transport – adding cost.

Age of population

    • Nearly all areas of the UK having a rapidly ageing population, but rural areas attract people coming to retire, creating disproportionate growth in elderly populations and pressures on healthcare services.

However, there are inequalities that are the direct responsibility of NHS England and NHS Improvement. The National Tariff Payment System sets the Payments by Results (PbR) Tariff for England. NHS Digital states that “Payment by Results (PbR) is a system of paying NHS healthcare providers a standard national price or tariff for each patient seen or treated.” However, the next paragraph reads “This tariff takes into account the complexity of the patient’s healthcare needs and the tariff received by the provider is adjusted to reflect the nationally determined market forces factor (MFF). This is unique to each provider and reflects the fact that it is more expensive to provide services in some parts of the country than in others.”

When you read section 12 of Annex A: The national prices and national tariff workbook, you will see that there is, for example an MFF of 1.2976 for University College London Hospital NHS Foundation Trust (UCLH), and an MFF of 1.0142 for United Lincolnshire Hospitals Trust (ULH).

What does that mean for UCL, situated a short distance from Regent’s Park, just down the road from The Portland Private Hospital, where young royals enter the world and for ULH with hospitals spread across one of the largest counties in England, with some of the most deprived citizen’s in the country? It means that for each unit of NHS activity UCL gets paid PbR tariff + 29.76% and ULH is paid PbR tariff + 0.155%.

Let’s take the example of a first Outpatient appointment with a single healthcare professional for General Surgery:

    • PbR tariff £163.00
    • UCL would be paid £211.50
    • ULH would be paid £165.31
    • Difference – £46.19

Payment by Results (PbR) is a system of paying NHS healthcare providers a standard national price or tariff for each patient seen or treated.” Really??????

Declared interest – I my family live in Lincolnshire.

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