The financial demise of Oxford's department of neurosurgery (OxDONS) was precipitated by the financial rules of the reformed NHS. In particular it was produced by the failure of "resources to follow patients"; the requirement that "prices have to follow costs"; and the use of private income for revenue expenditure, not capital expenditure. This process will eventually affect all hospital departments, but it affected the unit in Oxford sooner as it started as "efficient"--that is, underresourced--and has depended on income from extracontractual referrals and private work. Current NHS accounting rules act as a disincentive to private income being generated in NHS hospitals, and consultants should be aware of this.
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