Innovate, Renew, Thrive

Since the founding of the NHS in 1948, District General Hospitals (DGHs) have been its bedrock. They account for 60% of the National Health System (NHS) hospital budget, and their efforts in delivering local healthcare to communities across the nation are a crucial component of the NHS’s success.

But trends, such as NHS reconfiguration exercises and reductions in clinical variability, have started to emerge that may have fundamental implications for DGHs and their role within the health system. We believe all DGHs need to rethink their role, their potential, and how they address the varying needs of patients and commissioners. In this special report, we look at what we consider the most significant trends and suggest how DGHs can respond to them, protecting revenue while staying true to their mission.

Health System Evolution

Recent history illustrates some of the challenges faced by District General Hospitals (DGHs). The chart below shows that even as the overall hospital budget was rising, DGHs in fact received an ever decreasing share of the pot. Given their crucial role as local deliverers of care, it is imperative for these institutions to find solutions that result in a sustainable, vibrant DGH sector.

NHS Trust Change in Share of Total Income 2005-09

1How are changes in UK health system affecting NHS acute trusts?

In the past few years, a process of substantial change has begun as the health system responds to shifts in patient and commissioner needs. It's clear hospital institutions are working to very different strategies. Some are achieving break-away growth in services they deliver. However, a core group of DGHs is stable in degree of specialisation, but not growing. The next decade seems likely to be even more challenging. As funding remains at best flat in real terms, break-away institutions are likely to gain resources and funding not from a growing pot, but a shrinking one.
2What are the challenges faced by DGH staff?

DGH staff are burdened with a range of initiatives. They need to deliver savings as part of the QIPP initiative, ensure delivery of high-quality care, and achieve low infection rates. They must also deliver in-year financial surpluses, source effectively, and identify and fund investments to keep pace with technological innovation. Other challenges include the need to attract and retain the best clinical and management talent, meet national targets, and negotiate terms with demanding commissioners, all while preparing for the new NHS landscape.
3What opportunities exist in the NHS environment for DGHs?

In the future, successful DGHs could continue to occupy an ever more important function within the healthcare system. New areas of growing local need will require the development of innovative services. Advances in clinical technology mean that much of what used to be performed in highly specialised institutions can now be performed locally. New local, community-based models of care, if successfully deployed, have the potential to deliver higher quality and improved efficiency.
4What can DGHs do now to ensure future success?

While there is no simple solution and delivering new services will require a mind-set shift, we believe DGHs will have to make certain strategic transitions or face extreme financial pressures. Key strategies include investing in services where the DGH is best positioned to meet existing needs, adopting innovative, often community-based, care models, and ensuring the DGH is a fully integrated member of the regional care network. Successfully driving these shifts and renewing the role of DGHs will help ensure the future of one of the bedrocks of the NHS.