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Hospitals focus on profit

14th March 2007

NHS hospitals have been asked to identify areas of care where they are making a profit.

Pound Coins

The move, promoted by foundation trust regulator Monitor, could eventually see cash-strapped hospitals only offering treatments where they can make money.

By 2009, all NHS organisations applying for foundation trust status will be required to identify their profit-making services.

Monitor say the move is the next logical step for the health service which now paid a set price for most of the treatments hospitals' provide.

By working out how much they spend on each treatment against what they are paid under the NHS tariff, hospitals can expand profit-making areas and raise cash to reinvest elsewhere.

Conversely where hospitals are making a loss, or spending more money on treatments than they are being paid, managers can identify and tackle the reasons, which may include staffing levels or inefficient use of facilities. It could also help identify where tariffs have been incorrectly set.

Currently primary care trusts can designate core services that a foundation trust must provide, but if this changes trusts could consider withdrawing loss-making services. Monitor said it would need to be confident that the PCT had alternative suppliers before giving its approval.

A number of organisations are now piloting Monitor’s proft and loss scheme.


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