Annex A > Chapter 11 - Referrals > Referrals to Bristol - referral procedure, the catchment area and finance > Finance
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Finance
20 The NICS service (for under-1s) was funded through the mechanism of the Supra Regional Services Advisory Group (SRSAG), following Bristol's designation as an SRC for NICS in 1984.
21 In relation to paediatric services for the over-1s, Mr Graham Nix explained that at the beginning of the period of the Terms of Reference (1984), funding was received `from government and [went] to the Regional Health Authority for the South West Region. That money was allocated out to each of the Districts of which Bristol & Weston Health Authority was one.' [16]
22 A report of a Strategic Planning Working Party in 1983 [17] recorded an excess of demand over supply for open cardiac surgery generally (i.e. adults and paediatrics) in the South West Region in 1982. Mr Nix emphasised that the report `refers to the fact that the South West Region should continue to send patients to London as well'. [18] However, he pointed out that at that time there were difficulties in identifying the numbers of patients who were referred from the region to London:
`Within the South West Region we, all the health authorities, had worked together to use the same computer systems, so it was possible to access data about patient flows, so we were in the infancy around that time as well, but at least we could access information. There was not the sophistication that exists now where we know where every patient comes from'
`They are in a completely different region so you would actually have had to have gone to those hospitals and said "Do you care for any of the patients in the South West?" and with a lot of the hospitals in this country, they would not have had any idea where their patients were coming from. It would have been a manual exercise, probably, to have gone through every set of notes to find out where those patients' residential address was.' [19]
23 The costs of treating patients from outside the Bristol & Weston District Health Authority (B&WDHA) were charged to the referring district by means of the Resource Allocation Working Party (RAWP) cross-boundary flow mechanism. [20] The report of the Strategic Planning Working Party noted that districts providing regional specialties were deemed to have the financial resources for providing these specialties within their existing allocation. [21] Mr Nix explained, however, that data on the cross-boundary flow was probably two years old, if not older. [22] This meant that expansion of a service took a long time to be reflected in the RAWP funding mechanism. [23] Mr Nix told the Inquiry that the RAWP mechanism was `basically incapable' of funding regional specialties. [24] Thus, according to Mr Nix, in order to fund regional specialties the RHA had to agree to give some special help to the DHA that happened to host the regional specialty. [25] Assistance did come from the RHA. For example, on 11 July 1983, [26] the South Western Regional Health Authority (SWRHA) agreed to a one-off three-year funding package to B&WDHA for the three years beginning with 1984/85, in order to finance a further expansion of the cardiac capability at Bristol. [27]
24 The Inquiry heard that there was, at least before 1 April 1991, a theoretical financial incentive for hospitals within the catchment area, but outside the District, to refer cases to London rather than Bristol. [28] This was because of the way that certain of the London hospitals `charged' referring districts through the RAWP formula. The Inquiry heard evidence that London hospital statistics did not regard cardiac surgery as a separate specialty. Their RAWP `recharge' was based either on the cost per case of thoracic or general surgery, which led to a lower amount than was `recharged' by Bristol for cardiac surgery, which was treated by Bristol as a separate, more costly specialty. [29] The Special Health Authorities (SHA) such as the Brompton, Hammersmith and Great Ormond Street received separate funding not included in the RAWP allocations and the services they provided were `free'. Hence it was cheaper to make referrals to London. This did not, however, mean that the actual cost of the operation in the London hospital was necessarily lower than in Bristol. Whatever the actual costs were, however, there was, in theory, a financial incentive to refer to London. [30] However, the Inquiry heard no evidence from referring clinicians that this influenced their own referral decisions.
25 In 1990/91 charging for inter-district cross-boundary flows was introduced, and contracts were introduced from 1 April 1991. [31] As a result of changes introduced following the NHS Review `Working for Patients', the resource allocation system changed on 1 April 1991. From then on, allocations were calculated for the purchasers that contracted services from providers. [32]
26 The funding of referrals from Wales is dealt with later in this chapter. [33]
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Footnotes
[17] UBHT 0266 0415; report of a Strategic Planning Working Party dated 14 February 1983
[19] T22 p.27-8 Mr Nix. A Working Party report in 1984 recorded that there were facilities for 375 open (adult and paediatric combined) cardiac operations in Bristol in 1984, which was less than two thirds the number of such operations being carried out on residents of the South West Region. See UBHT 0295 0276 and T22 p.38-40 Mr Nix
[20] T22 p.60 Mr Nix. These issues are dealt with in more detail in Chapter 6
[21] UBHT 0266 0417; report of the Strategic Planning Working Party dated 14 February 1983
[26] Before the years of the Inquiry's Terms of Reference
[27] UBHT 0295 0276. See Chapter 6 for more detailed consideration of these issues
[29] T22 p.60-1. Mr Nix was discussing a document from the Plymouth Health Authority, concerned with the needs of Devon and Cornwall residents for cardiac surgery, dated 9 September 1985; UBHT 0295 0516. Mr Nix told the Inquiry that at this time the Bristol `recharge' for an adult open cardiac operation would be the same as a paediatric open-heart operation