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“What the Government and I specifically promised was that there should be no closures or reorganisations unless they had support from the GP commissioners, unless there was proper public and patient engagement and unless there was an evidence base. Let me be absolutely clear: unlike under the last Government when these closures and changes were imposed in a top-down way, if they do not meet those criteria, they will not happen.”

So said David Cameron during Prime Minister’s Questions on the 9th January in direct response to a question about the downgrading of Lewisham Hospital. Now a month later, with Lewisham Hospital facing a downgrading of its Accident and Emergency Department, the loss of its consultant-led maternity ward and a host of other services these words sound very hollow.

A key promise of the Health and Social Care Act was that clinicians would be put in charge of the running of the health service. Clinical Commissioning Groups have been set up to take over the role of the Primary Care Trusts. £80 billion pounds of the NHS budget has been given over to these groups to procure a wide range of services for the NHS and they were specifically mentioned by the Prime Minister as one of the groups that must ok the decision to close services at Lewisham.

So presumably they must be on board? Hardly. In an article with Pulse Magazine Dr Helen Tattersfield, head of the local CCG, said.

 “I am not at all pleased and I am very disappointed. It is what everyone inevitably thought he would do. We had hoped for better. We gave very sound arguments about why the process was flawed and why the decision was dangerous. They were reasoned arguments but none of them have been listened to.”

There are two key points that this case highlights. Firstly, the government has a dogmatic faith in their NHS reforms and pushed them through against massive opposition.  Then when faced with the first real test of their ability to make the correct clinical decisions ignored their own reform guidelines completely. The GP members of the CCG are said to be considering their positions on the CCG Board after the shambolic and unaccountable processes that have gone on over the administration of South London Hospital Trust.

It is worth noting at this point, that Lewisham Hospital is not one of the Hospitals that make up the South London Hospital Trust. Lewisham Hospital was not saddled with large unsustainable Private Finance Initiative debt, and was not placed in administration. With an estimated 60 other trusts in some form of financial difficulty the repercussions of these changes will run and run.

So how did Lewisham Hospital find itself caught up in the South London Hospital Trust administration fiasco?

Funding for NHS Hospitals is provided on a tariff system standardised across the NHS, if you perform a hip operation you get paid X, provide diabetes secondary care for a patient, you get Y. In the past, if trusts have been unable to meet their financial obligations they have been bailed out by central government.  In the past this has happened often. By 2005/06 190 Trusts had been in deficit, with £450 million spent in one year from central government coffers to cover these deficits. A £1.5 billion pound bailout fund was set up by the government last year to cover the Private Finance Initiative debt of just 7 NHS hospital trusts.

These large deficits are objectionable in any healthcare system. In the marketised system under which the NHS runs they are unacceptable. In a system in which any qualified provider can bid to provide healthcare using large amounts of cash to prop up some providers skews the market and makes it impossible for new private bidders to enter the market and compete effectively. The tariffs themselves are not called into question. There is no debate about if they are fair or if there are mitigating circumstances. The ideology states that the market is the best method and therefore the market must be enforced.

The Labour government set up a failure regime termed the unsustainable provider regime in 2009 to combat this problem, yet never enacted it.  That was left to this government in 2012 for the South London Hospital Trust. Yet Lewisham is not in the South London Hospital Trust. The Trust Special Administrator appointed by the government to oversee the unsustainable provider regime is given no guidance on closing nearby services. The statutory guidance is quite clear that closing nearby services is not one of the potential outcomes.

Potential Outcomes  

61. It is the duty of the Trust Special Administrator to make final recommendations to the Secretary of State. Possible outcomes include:

                    i. a rescue and the NHS Trust leaves administration to continue on its path to Foundation Trust status;

                   ii. acquisition by, or merger with another NHS Trust or Foundation Trust;

                 iii. dissolution and the transfer of services and staff to another NHS Trust or Foundation Trust.

The reason once again is the market. The hospitals of the South London Hospital Trust have to be made more competitive. As well as the liquidation of the Trust and the merger of its hospitals with other nearby trusts, the government is writing off the PFI debt in exchange for efficiency savings. In effect the managers of the hospitals will be asked to do more with less. For this to happen, they will have to increase the numbers of patients that they treat. This is hard with a well performing hospital down the road, so in their wisdom they remove well performing key services from Lewisham to increase the profitability of the South London Trust hospitals. It makes no clinical, financial or rational sense.

The decision at Lewisham will send shockwaves through the NHS. The number of trusts estimated to be in serious financial difficulty varies widely and is complicated by the different structures that they run under: Foundation Trusts, Hospitals Trusts and Private Providers. The Health and Social Care Act 2012 created new failure regimes for each structure, yet they are untested and there are serious concerns. They are a legal minefield. The Lewisham case will almost certainly go to Judicial Review, which I am sure will become the norm in these cases.

There are currently 8 Foundation Trusts that are seen as highest risk by Monitor, the number of Hospital Trusts is more difficult to calculate, but the number is thought to be in the region of 40. There are rumours that the first privately run NHS Hospital, the Circle-run Hinchingbrooke, is also struggling financially. The impact could be much wider, especially if well performing hospitals nearby are also affected in the resulting changes of the unsustainable provider regimes.

The impact on the new Clinical Commissioning Groups (CCGs) could be catastrophic. Faced with difficult decisions up and down the country on where to make savings, there is £20 billion pounds that needs to be cut from the NHS budget by the end of this parliament. The only outcome is that some services will not be given the required cash to stay solvent. They will close. Yet It appears the Clinical Commissioners will have little or no say in the decision about what gets closed and where. This will completely undermine the local decision making process. With the GPs in the Lewisham CCG already in open revolt, how long before we see clinicians up and down the country feeling unable to input into the decisions for which they have been put in place?