Time to stop wasting money on "frigging ridiculous" health authorities, says Clegg

by Stephen Tall on August 28, 2009

The Guardian big-ups Nick Clegg’s plans to cut waste in the public services, specifically by trying to rein-in hospital trusts using their monopoly position to drive up costs. The paper bills it as “one of the most radical ideas of any of the main political parties to save money”:

Under the Lib Dem plan, hospital trusts would be forced to charge the same rate for operations as the cheapest and most efficient hospitals in the country.

Clegg said: “It is a very specific but rather radical idea, of saying that all hospital tariffs under the ‘payment by results’ system should match the most efficient tariffs in the hospital system. We think that would save about £2bn a year.”

Clegg admitted this would be controversial because many hospitals would say they could not compete with those that reduced costs by performing many more procedures. He said the policy would be flexible and standards would not suffer. “There has to be suppleness in it,” Clegg said. “We are not going to be stupid about it.”

But it was important that the most “cost-effective tariff”, which guaranteed clinical standards, should be the benchmark. “The hospital trusts are in a very, very powerful negotiating position because they are basically, not withstanding a few little treatment centres here and there, operating as a monopoly. The primary care trusts [which commission treatment] have got very little leverage.”

Savings from the new system would be reallocated to other areas of the NHS. Clegg said: “I hear day in, day out, people say, ‘This is frigging ridiculous, we are wasting ridiculous amounts of money on a strategic health authority that shouldn’t exist.'”