Why does training some doctors cost three times as much as others?

A report published today into the funding of medical education in Britain suggests that taxpayers are getting poor value. Lucy Hodges reports

Oxford, for example, has two and a half times more staff than Liverpool and three other medical schools. University College Hospital, London, spends nearly three times as much on each student as St George's Medical School, London, and two and a half times more than Nottingham.

Moreover, the new medical schools at places such as the University of East Anglia and Brighton that were created by Tony Blair in the early years of the new millennium receive considerably less per student than the established schools.

"Clearly, it is possible to provide medical education for much less than is available to the best-provided institutions," says the report's author, Tom Sastry.

It costs around a quarter of a million pounds to educate a medical student in England. This high cost may explain why the United Kingdom recruits so many doctors from overseas.

But it is difficult to get answers to questions about why Oxford is so much better resourced than other universities, or why University College Hospital spends three times as much as St George's on its students because the information doesn't exist. The funding of medical training is a secret garden. Money for the education of the country's doctors is disappearing into a big black hole.

"The funding of medical and nurse training is probably the most opaque aspect of higher education finance," says Bahram Bekhradnia, Hepi's director. "The report reveals that some universities receive more than twice as much as others per medical student, and nearly four times as much per nursing student. But no one knows why, and no one seems to be concerned to obtain value for the nation's investment." This is not the way for the country to obtain best value.

Medical professors contacted for their reaction agreed with the report's diagnosis but were reluctant to be quoted by name because the issue was such a hot political potato.

"This is a huge can of worms," said one. "I am horrified by what I see. Most medical schools are in dire trouble. Parts of them are mismanaged. And they are treated like cash cows by their universities."

Another unnamed professor explained that "an enormous amount of money" meant for medical training - particularly the Sift (Service Increment for Teaching) money that goes to NHS medical and dental teaching bodies to compensate for the cost of training - was being diverted towards other health service priorities.

In other words, the money is being used to reduce the overspending of health trusts. "They're all at it. The target-led things [such as reducing waiting lists] are being subsidised by money that was intended for medical students," said this professor. "The amount of money I have to teach my students is a lot smaller than it should be. The universities have to balance their books, the health trusts have to balance their books and they use teaching money as easy pickings. There is a lot of obfuscation in the sector. It's about time someone sorted this out."

But there is concern that the report could be interpreted as suggesting that some medical schools are overfunded.

"It is surprising that a group like this should think that medical education is overfunded," says Professor Jane Dacre, vice president of the Royal College of Physicians and vice dean of the University College and Royal Free medical school, London. "The amount of money that reaches each individual student does not reflect what is going in at the top end."

The Council of the Heads of Medical Schools was concerned about the message being put out by the report and whether it could backfire. "In allocating funding, we believe the Government has indeed recognised the importance to both the health and wealth of the nation of strong, interwoven links between medical schools and their university hospital partners," it said.

"The nation reaps great benefit from the synergies thus created and it would be counterproductive to waste public money trying to disentagnle the two related missions."

The funding of nurse training is quite different. Until now, local NHS organisations have commissioned the training of nurses from higher education institutions through competitive bidding. Because this bidding process has been shrouded in secrecy, no one knew what the NHS was paying. It resulted in big differences in funding per student and a lack of investment in nurse training by the universities.

So, the NHS has decided to move towards benchmark pricing and rolling contracts to give universities the confidence to invest.

The problem, according to the Hepi report, is that this is likely to result in some strongly placed providers of nurse training suffering a fall in income because they will previously have been able to charge higher rates. As a result, they may withdraw from nursing education. (This has already happened with the University of Sheffield.)

The problem with that is that it might create volatility in the market when we are likely to need to train more nurses in the UK. In 2004, more than one quarter of registered nurses (27 per cent) were aged 50 and over, and 10 per cent were under 30. That contrasts with 10 years earlier when the number of registered nurses under 30 was higher than the number aged 50 and over.

The report questions whether the training of nurses and allied health professionals should be carried out at local rather than national level. "It is hard to see how patients or taxpayers benefit if no one is responsible for ensuring the best use of national training capacity and of the pool of prospective students," says the report.

Theoretically, an advantage of commissioning locally is that health trusts are thus obliged to provide in-service support for training. However, the record here is patchy. "There is a chronic shortage of trainers and poor quality appears to contribute to poor retention rates."

As with medical training, the training of nurses also has to compete for funds with service delivery. This leads to a boom and bust pattern of training that is wasteful and disruptive, says the report.

It recommends that a national accounting exercise is required to establish where public money goes in medical and dental education, who receives it and how the quality and quantity of outputs relates to inputs. And it calls for a single body to manage public investment in the training of health professions.

"In England there is a strong case for a government body to oversee the total government investment in the training of health professionals," argues the report. Any such body would need to be independent of the NHS.

It is open to question whether any new organisation should come under the Department of Health. Before that could happen, the department would need to undertake significant reforms. In the absence of such reforms, there would be a strong case for transferring scrutiny of funding to the Higher Education Funding Councils.

The idea of a single body to manage the training of health professionals is controversial. Professor Janet Finch, vice chancellor of Keele University and chair of University UK's health committee, said it was "an interesting idea" that had been discussed before. She added: "If there is a political will to consider it again, the university sector would want to be actively involved."

'The Education and Training of Medical and Health Professionals in Higher Education Institutions', by Tom Sastry, Higher Education Policy Institute, 99 Banbury Road, Oxford OX2 6JX (www.hepi.ac.uk)

Email: l.hodges@independent.co.uk

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