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OBSERVATIONS Body Politic Nigel Hawkes Shaky foundations: compromising the NHS The recent compromise over top-up payments may turn out to be yet another hobble on the ability of NHS foundation trusts to take financial initiative Say what you like about the NHS, but it’s certainly a rich source of ethical disputes. Some are reminiscent of religious scholars arguing over how many angels can dance on the point of a needle, but others really cut deep to people’s core values about how society should be organised. In the absence of religion, the NHS provides a belief system to which adherents cling with a truly admirable tenacity. The recent argument over top-up payments was a good example, solved (for the time being) by a masterly fudge by Mike Richards, the national cancer director, that simultaneously allows top-up payments while stoutly denying that they are allowed (BMJ 2008;337:a2418). It is the NHS equivalent of the Concordat of Worms in 1122, in which Henry V, the holy Roman emperor, agreed to appoint bishops only “by lance” but not “by ring and staff,” thereby bringing an end to the battle between sacred and secular authority. By such dexterous word juggling are compromises reached. Unfortunately all compromises eventually come apart if the underlying disagreement is unresolved. So it is today with NHS foundation trusts, whose creation was meant to throw open the door to freedom and initiative. Thanks to a compromise reached in House of Commons, trusts that have achieved foundation status are now, paradoxically, less free in important respects than those that have not. Labour MPs of the non-Blairite persuasion were reluctant to allow foundation trusts to be created at all and were persuaded to vote for the 2003 health bill only by the key concession that the new trusts would not be allowed to increase their income from private patients beyond the proportion earned in 2002-3. This “income cap” was meant to ensure that foundation trusts stayed where they were, under the heel of the Department of Health, and could not use their freedoms to create viable business models by increasing their private 508 income. So the act provided freedom while denying it. For a while all was well, as the regulator of foundation trusts, Monitor, interpreted the legislation permissively. It ruled that foundation trusts could set up joint ventures or make investments and that income from them would fall outside the income cap. But the guardians of the flame—in this case the public sector union Unison—were not asleep but merely resting. Unison challenged Monitor’s ruling, and despite buying time through a public consultation the regulator was forced to give ground, granting that its rules had been too permissive. Despite this concession, Unison still intends to pursue a judicial review to impose the cap, and legal opinion is that the union has a strong case. The paradox is that trusts that aren’t foundation trusts are not bound by the cap, and some have increased their private income significantly since 2002-3. These include mental health trusts that have set up “back to work” programmes in partnership with external contractors. Foundation trusts cannot do this, because their private income cap is essentially zero—“something of an absurdity,” as Stephen Firn, chief executive of Oxleas NHS Foundation Trust, described it in evidence to the House of Commons select committee on health. And what about Professor Richards’s compromise on top-ups? This involves private patients being allowed to pay for drugs that haven’t been recommended by the National Institute for Health and Clinical Excellence (NICE) so long as they are administered in another part of the hospital—“by lance” but not “by ring and staff,” so to speak. If this income counts against the cap, as it presumably does, foundation trusts that are already close to a breach will not be able to implement the top-up policy at all. The NHS Confederation, which represents most NHS organisations, says this applies to many trusts. Yet another anomaly is the position “ Thanks to a compromise reached on the floor of the House of Commons, trusts that have achieved foundation status are now, paradoxically, less free in important respects than those that have not ” of specialist hospitals such as the Great Ormond Street Hospital for Children. Its worldwide reputation means that it carries out a lot of private treatment, often on children sent from abroad and paid for by their own governments because they lack similar services at home. If Great Ormond Street had applied for foundation trust status, it would have had to turn away some of these patients. The hospital sought a solution through a charity specifically set up to handle such income but cannot proceed because this, too, is in breach of the rules over the income cap. The base year for the calculation is 2002-3, since when Great Ormond Street has significantly increased its private income (or, putting it another way, saved the lives of a lot more foreign babies), which it could not have done as a foundation status. Its application for this status is, unsurprisingly, on hold. In any case, it seems likely that the Charity Commission would have ruled such a charity uncharitable, as it did in the case of Odstock Private Care Ltd, a company limited by guarantee set up by Salisbury NHS Foundation Trust and funded by means of a loan. Odstock would have delivered private care using surplus NHS facilities. The commission ruled that such a body could not be a charity because it would charge fees; this is an odd ruling, as there are plenty of existing charities that do charge fees, such as private schools. The private income cap raises issues that to NHS purists matter a lot but that to others are simply pettifogging. Is it impossible for a public body to have a private arm without being corrupted? Enough Labour MPs thought so to ensure that the reform was hobbled from the start. Molly Meacher, the life peer who chairs East London NHS Foundation Trust, has tabled an amendment in Parliament that would give foundation trusts the freedom they seek. Will it prosper? It seems unlikely. Nigel Hawkes is a freelance journalist [email protected] Cite this as: BMJ 2009;338:b789 BMJ | 28 FEBRUARY 2009 | Volume 338