Public Sector – Threat to NHS finance changes.

A quest to ensure incentives are in place to encourage doctors to avoid medical negligence may delay changes to the NHS financial regime.

The proposed changes – moving provisions for negligence claims from the accounts of health authorities to the Litigation Authority, the NHS’s in-house insurer – will only go ahead when an alternative system can provide an adequate incentive to reduce the incidence of negligence.

The financial changes come at a time when public interest in medical negligence has never been greater. After several scandals the government announced at the weekend that it is to introduce an early warning system to spot problems among doctors.

Making provisions, under the ASB’s accounting standard FRS 12 was a burden for health trusts before managers moved them to the accounts of health authorities. But the measure still has severe financial implications that the NHS would like to deal with.

Colin Reeves, finance director at the NHS Executive, said a team of specialist accountants was now at work ‘considering’ the issue but emphasised that reforms to the financial regime would only come when alternative incentives were ready.

‘The provisions give clinicians an incentive to ensure that in the future they reduce the incidence of negligence.

‘But only when we have established another system will we move provisions to the Litigation Authority,’ he said.

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