We need a safer way to cut NHS costs

Some of the latest controversial plans to cut NHS spending include financial penalties for hospitals with high readmission rates. In theory, encouraging hospitals to lower their readmission rates seems like a great idea (one that was suggested by McKinsey in February 2009 when they were instructed by the Department of Health to provide advice on how commissioners might achieve greater productivity in the NHS). But how does it work in practice? Up until now, if a patient has required readmission to hospital, the hospital has been provided with funding to cover this. In 2009 hospitals received £1.49m for treating 820,395 patients who were readmitted within 28 days of undergoing surgery. Now the health secretary, Andrew Lansley , wants to make hospitals responsible for patients during their treatment and for the 30 days after they have been discharged. Under the new policy, if a patient is readmitted in those 30 days, the hospital would receive no additional money. Not so alarming for hospitals like the one where I work, Chelsea and Westminster, which has the lowest number of readmissions. But trusts such as Leicester NHS trust (which has the biggest number of readmissions) could face losses of £28.7m. One difference between Chelsea and Leicester is how they rate on the Index of Multiple Deprivation , with Chelsea much less deprived. I am not claiming that socioeconomic status of a hospital is the only important factor when thinking about hospital readmission rates: there are a range of factors that need to be considered, as outlined by the Hospital Episode Statistics online (HES). But socioeconomic status is hugely important . Research has shown that lower socioeconomic status is independently associated with higher hospital readmission rates. The potential influence of deprivation on readmission rates needs to be acknowledged, which isn't clearly happening at the moment. On the contrary, under the new policy, hospitals with the highest readmission rates look set to lose the most amount of money. If we are going to financially penalise hospitals for higher readmission rates, it is critical to adjust readmission indicators for patient socioeconomic status. Otherwise, we run the risk of depriving the already most deprived. Perhaps an alternative approach to cost-saving could come from trying to reduce the soaring number of short-stay admissions . In England, almost 600,000 more patients were admitted for one day or less in 2008-9 than were five years earlier. I'm not assuming that admissions for less than 24 hours are unnecessary or financially inefficient: some reasons for the increase are likely to be linked to our ageing population and increased ability to detect and treat illness. But the point is that some hospitals have doubled their emergency admissions and others have cut them by a third. The ones that have cut admissions may have raised their clinical threshold or established better links with the community. Whatever the reasons, I think the answer to safe cost-cutting comes from learning from NHS trusts who are doing well, rather than penalising our struggling hospitals.