Growing number of NHS trusts in the red

The Nuffield Trust health thinktank found that the number of hospitals in the red had grown over the past four years with 32 out of 250 trusts failing to balance the books last year including Mid Yorkshire Hospitals.

Researchers identified nine trusts that had been in debt for three years or more.

Among the hospital trusts in surplus, researchers found the majority were in the black by less than £5m.

The report points to a “north-south divide” in productivity among NHS trusts with Yorkshire and Humber emerging with the worst record.

By questioning the ability of the NHS to work more efficiently, the report raises questions over how it can save money over the longer term.

Nuffield Trust chief economist Anita Charlesworth warned that opportunities to save money in the NHS would be lost unless more attention was paid to where money is spent.

“The report highlights the unevenness with which national challenges are felt at a local level,” she said.

“It is clear that a minority of acute and foundation trusts are in consistent deficit, and they may be running out of options to resolve these problems.

“Policy-makers must ensure that appropriate support and management is in place to guarantee high-quality local services for patients.”

The report suggests there is no link between a hospital’s productivity and levels of poverty in the area it serves.

And in a finding that challenges some of the Government’s key reforms to the health service, the Nuffield Trust also found no connection between competition and productivity. Trusts with a monopoly were the most efficient.

The research suggests those trusts with more doctors, nurses and other medically-qualified stuff are the ones that are the most productive.

Larger trusts were found to be the least efficient.

While the Government has said it wants to more care for patients in the community, the report found that hospital spending had risen by more than five per cent on average over the past five years while GP funding had seen a decline in real terms .

Dr Mark Porter, chairman of council at the British Medical Association, said: “The Nuffield Trust report provides further evidence of the significant financial pressures that NHS organisations are facing.

“Our concern is that the quality of care – which is what matters above all else – is not sacrificed in the drive for greater efficiency.

“Successive governments have pursued policies supposedly aimed at improving productivity by exposing the NHS to competition with the private sector.

“Yet this report finds that trusts in areas where there is less competition are associated with higher productivity.”

Shadow Health Secretary Andy Burnham said the report showed that the Government’s NHS reforms had diverted attention from the front-line to back office operatios, derailing efforts to make the organisation more efficient.

“This report shows that in the first full year of David Cameron’s Government, NHS productivity fell after inheriting an improving picture.”

He added: “One of the clearest lessons emerging from this report is that market-based health systems cost more, not less. The Government has repeatedly claimed the opposite.

“This is yet further confirmation that the new competition regulations they are trying to force through will make the NHS more inefficient as well as more fragmented.”