Press Release - Innovation in the National Health Service - the
acquisition of the Heart Hospital
19 December 2002
The acquisition of the Heart Hospital represented an
entrepreneurial and novel approach to improving patient services,
Sir John Bourn, head of the National Audit Office, reported to
Parliament today. The NHS acted quickly to take advantage of an
unusual opportunity and acquired the hospital and its equipment at
a good price. Activities at the Heart Hospital are already bringing
benefits to patients, though there are some risks to manage going
forward to ensure that the full benefits of the acquisition are
realised.
The new hospital will enable the University College London
Hospitals (UCLH) NHS Trust to meet a priority need: higher levels
of cardiac treatment. Coronary heart disease is responsible for
around 110,000 deaths each year and at the time of the acquisition
there was a shortage of cardiac treatment capacity in North Central
London, where UCLH is situated. When the acquisition took place in
September 2001, some patients were waiting 12 months for a
revascularisation (a procedure to improve the blood supply to the
heart). The new hospital gives UCLH capacity of some 2800
revascularisations per year by 2003-04 (around twice the previous
capacity), which will help it meet its own treatment targets and
help other Trusts meet theirs. One year on from the acquisition,
maximum waiting times for revascularisation at UCLH had fallen to 6
months, against a target of 12 months.
The Trust decided that it needed to complete the deal quickly
and that it did not have time to follow the standard NHS capital
investment process. It therefore developed its own fast-track
process. It did this successfully and produced a robust case for
the acquisition. UCLH paid £27.5 million for the property and
equipment of the hospital, some £8.5 million less than the
independent valuation of the hospital and equipment and an
estimated £17.5 million cheaper than the cost of a new build.
The transition to a public sector hospital was smoothly managed
and, one year on, more patients are being treated than in the old
cardiac unit at the Middlesex Hospital. To achieve the full
benefits of the acquisition, the NAO warns that the Trust and the
Department of Health need to manage carefully:
- Recruitment of specialist doctors and nurses, which are in
short supply. To meet its targets the Trust needs to recruit 21 per
cent more staff in line with plans that are being achieved to date.
It is monitoring recruitment activity and the acquisition does not
appear to be harming other Trusts. The Trust will need to continue
to monitor this.
- The prioritisation of patients. The Department paid for the
hospital which the Trust now owns. The purchase has allowed the
Trust to transform its ability to meet its cardiac targets. The
Trust retains discretion over the precise flow of patients, who are
treated on the basis of clinical priority. The Trust Board and the
Department of Health will need to make sure that the treatment of
patients from different geographic areas is balanced.
- Operating losses. Because it took over an ailing business,
losses of some £9 million will be incurred until the hospital
achieves full capacity in the 2003-04 financial year. The
Directorate of Health and Social Care (London), which meets these
losses, will need to monitor progress carefully and seek to
incentivise the Trust where possible to ensure no further
losses.
Sir John Bourn said today:
"This is a good example of a public sector body acting
quickly and taking risks that were well thought through and which
paid off in providing real patient benefits. This report contains
important recommendations for the Department of Health which will
help it replicate this success and encourage innovation more
widely."
Notes for Editors
- UCLH Trust is based in the Euston area of central London and
recently achieved a 3-star quality rating. It has an annual budget
of around £300 million and is therefore one of the largest Trusts
in the country. At the time of the acquisition, the Trust managed
six NHS hospitals including the multi-disciplinary University
College and Middlesex hospitals and four specialist hospitals
covering dentistry, neurology, tropical diseases and obstetrics.
Before the acquisition, the Trust’s cardiac services were based in
the Middlesex hospital, in an environment dating back from the
1930s.
- Press notices and reports are available from the date of
publication on the NAO website at www.nao.org.uk. Hard copies can
be obtained from The Stationery Office on 0845 702 3474.
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office employing some 750 staff. He and
the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 79/02
All enquiries to NAO Press Office:
Tel: + 44 (0) 20 7798 7400