Why aren’t the UK Health Services centre stage in this election? All 4 are bust.

£100 (Liberals) or £150 (conservatives) extra per head is not enough to change the Health Services for the better. We need to be thinking differently, outside the political mainstream box, and our media are letting us all down by avoiding the main issue. There has to be some form of rationing, and it will be much fairer if it is universal for the big and fearful conditions. The health service is meant to be a mutual based safety net. It excludes dementia by common agreement between the parties, but it does not exclude cancers or emergency surgery -yet. If the brexit vote and decision is over, why aren’t the Health Services centre stage? The conservatives have taken a difficult decision on home based care – from strength of belief they will win this election whatever. More decisions like this need to be taken, and depoliticised.

Lawrence Dunhill in the HSJ reports 18th May 2017: NHS spending as proportion of GDP ‘would fall under Tories and Labour’

Roz Scott in the Brighton and Hove news reports 9th May 2017: Lib Dems say 1p income tax rise would fund £31m boost to NHS in Brighton and Hove and Mr Fallon was in action in last weekend’s Spectator: Sunday political interviews round-up: Fallon – We warned the NHS on Cyber Security

The Kings Fund publishes the Trust deficits, but there is an issue over the next quarterly figures, which are due before the election. These figures are for England, and exclude the other Health Services in the UK.

Dennis Campbell on 9th November 2016 in the Guardin: NHS trusts on course to overshoot budgets by £850m, figures suggest  – Overspend is projected to be more than three times the sum health bosses have deemed acceptable, according to the Health Service Journal

Nick Triggle for the BBC opined 18th March 2017: NHS facing ‘mission impossible next year’

Nick Triggle reports for BBC News 18th May 2017: Conservative manifesto: Why many will pay more for care

Edward Cornick in “Public Finances” on 20th Deb 2017 opined: Deficit figures tell only part of the NHS finances story

Great efforts have been made to control NHS spending, but providers may have hit the limit of the ‘make do and mend’ approach

The latest quarterly figures (Q3) for the NHS provider sector have just been published. The current deficit of £886m reflects the huge efforts that NHS trusts have made for the first three quarters of the year, as they attempt to turn around the provider sector’s finances following 2015/16’s £2.45bn deficit. However, the figures also forecast an end of year deficit closer to £873m rather than the desired target of -£580m set at the start of the financial year.

The latest quarterly figures for the NHS provider sector, covering October to December, have been published today. The latest quarterly figures (Q3) for the NHS provider sector have just been published. The current deficit of £886m reflects the huge efforts that NHS trusts have made for the first three quarters of the year, as they attempt to turn around the provider sector’s finances following 2015/16’s £2.45bn deficit. However, the figures also forecast an end of year deficit closer to £873m rather than the desired target of £580m set at the start of the financial year.

But no matter what these headline figures and forecasts are, they only tell one part of the story of how NHS providers have to manage the money in these straitened times.

We surveyed NHS trust finance directors in early February to get their assessment of the financial performance of their trusts. In total, 99 completed the survey and we will publish the full results shortly. But following the third quarter figures, it is worth examining now what finance directors told us about forecast vs plan for 2016/17. The findings provide us with useful additional context as we head towards the end of the financial year.

One of the questions put to finance directors was whether or not they are on plan for the end of this financial year. Most of them were: almost two thirds (60%) were on plan, with 13% actually over-performing. Of course this still means over a quarter (27%) were under plan. But given where the provider sector has been in recent times at this point in the year, this perhaps represents a qualified success.

But just how qualified?

To answer this we asked the finance directors how much their forecast end of year position would be dependent on one-off measures, such as non-recurrent savings, capital to revenue transfers, and balance sheet and accounting adjustments. The responses showed that NHS trusts will be leaning heavily on these to prop up their positions, with two thirds of respondents indicating they would be very (39%) or quite (27%) reliant on these types of approaches.

The extent of this reliance is revealed by the overall figure that trusts said these one-off savings amounted to. Adding together the 99 providers surveyed, this totalled some £340m. The sample size represents just over 40% of the provider sector and our initial analysis indicates across the whole sector these one-off measures could account for as much as £1bn of savings this year. This is higher than the £622m forecast for non-recurrent savings in the official Q3 figures, which includes standard non-recurrent savings, but not the full range of adjustments that trusts will have to make.

If we put that £1bn figure into a broader context, it means the total amount saved in one-off measures could easily be the equivalent of the entire official aggregate deficit figure for 2016/17. The result is an underlying challenge significantly higher than what’s apparent in the top line official figures.

In the short term, this means the results for the whole service at the final quarter of the year still have the potential to be fragile. If we return to those trusts who are off plan, they have shown some substantial deterioration in their positions. Even those who are on plan said in our survey that maintaining finances going into the final quarter of the year will be a huge ask.

There is also a worsening financial situation for clinical commissioning groups. At Q3 they had forecast an overspend of £370m. Being realistic, we also do not know yet how much of the 1% of their budgets (supposed to equal £800m) that was meant to be held in reserve to cover a larger than plan provider-side deficit will actually be in place at the end of the year.

Finally, add into the mix that there are no more significant reserves left centrally either. This means the Department of Health is again at risk of exceeding its departmental expenditure limit, something which it only narrowly avoided last year.

So even if we squeak through 2016/17, our survey shows serious risks will continue into next year. The money is due to get even tighter and will be combined with a significant persistent underlying deficit. Therefore, asking providers to be responsible for covering the shortfall between funding and demand, essentially the current policy set by the government, will become unsustainable.

NHS trusts report that, having persistently used a range of one-off, non-recurrent approaches to deliver stretching financial targets over each of the last four years, they have now reached the natural limit of these approaches. Further savings require genuine transformation which, in turn, requires investment and management bandwidth – both of which are currently in very short supply.

And this means the ‘make do and mend’ approach that has allowed the provider sector to survive – just – up to this point, will have finally been exhausted. Instead, we will have reached the stage where a clear decision, at a political level, needs to be made about what can realistically be achieved by the NHS within the funding available.

A version of this blog also appeared on the NHS Providers website

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This entry was posted in A Personal View, Rationing, Stories in the Media on by .

About Roger Burns - retired GP

I am a retired GP and medical educator. I have supported patient participation throughout my career, and my practice, St Thomas; Surgery, has had a longstanding and active Patient Participation Group (PPG). I support the idea of Community Health Councils, although I feel they should be funded at arms length from government. I have taught GP trainees for 30 years, and been a Programme Director for GP training in Pembrokeshire 20 years. I served on the Pembrokeshire LHG and LHB for a total of 10 years. I completed an MBA in 1996, and I along with most others, never had an exit interview from any job in the NHS! I completed an MBA in 1996, and was a runner up for the Adam Smith prize for economy and efficiency in government in that year. This was owing to a suggestion (St Thomas' Mutual) that practices had incentives for saving by being allowed to buy rationed out services in the following year.

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