Financial challenges facing the NHS

1
Financial challenges facing the NHS

• J Roebuck
• Director of Finance

2
Introduction

• Trust is required to begin planning to address
  the economic downturn, arising from the credit
  crunch.
• Expectations are that the full impact will not be
  felt until 2011-12
• Monitor requires foundation trusts to assess the
  financial impact and demonstrate the approach
  being taken to maintain the delivery of services
  to patients with reduced resources

3
Response to Monitor

• Required by 30th September, signed off by Trust
  Board and discussed with Council of Governors
• Includes
• Assumptions as to tariffs and commissioning
  intentions
• Staffing levels and the mix between fixed and
  variable staffing costs
• Service performance, outcomes and quality
  objectives
• Investments in services
• Cash flows and liquidity
• Promotion and marketing
• Competition and co-operation issues
• Strategic objectives, including services,
  acquisitions, mergers or disposals
• Local health economy challenges and
• Board skills.

4
National situation

• The NHS in England is faced with the prospect of
  finding savings of around 1520bn over the
  period 20112014
• a comprehensive approach to improving efficiency
  is needed, encompassing actions at the system,
  organisation, team and practitioner levels
• the Department of Health and NHS organisations
  need to adopt an intelligent approach to finding
  these savings
• As a minimum, demographic pressures up to 2017
  are likely to cost the NHS around 1.11.4
  billion extra each year at 2010/11 prices, and
  would require average real annual funding
  increases of around 1.1 per cent in order to
  maintain quality.

5
South Tees context

• Integrated business plan highlighted key
  developments including radiotherapy expansion and
  centralisation of High Dependency Units
• Further development of specialist services
  including cancer, cardio vascular, trauma
  childrens services

6
Quality, innovation, prevention and productivity
(QUIP)

• Local response to economic downturn and
  implications for Public sector / NHS finances
• Aims to maintain the focus on quality
  initiatives leading to longer term, sustainable
  improvements
• Based on work undertaken by Institute of
  Innovation and Improvement, amongst others

7
QUIP

• Requires health economy solutions to meet the
  challenges faced, including
• Reduce variations in clinical practice by
  engaging doctors and other front line staff in
  performance improvement
• Benchmarking and service improvement methods
• Improving clinical pathways across acute and
  community
• Maximising the use of estate for service delivery
  across Teesside
• Service re-configuration
• Shared back office services
• Procurement initiatives
• Facilitated by use of service line reporting and
  patient level costing

8
QUIP approach locally

• SHA / PCTs focussing on achievement of technical
  and allocative efficiency
• Technical efficiency minimising cost of inputs
  to achieve outcomes / achieving more benefit per
  by streamlining procedures e.g. discharge
  planning
• Allocative efficiency achieving more benefit
  per by redistributing resources e.g. shift
  from acute to community

9
Financial impact

• Health economies likely to have to save in the
  order of 5-6 from 2011-12
• PCT allocations expected to be frozen at 2010-11
  levels
• pay awards / price increases / NICE guidance /
  demographic change
• all to be met from existing allocations
• Action required now to mitigate impact going
  into 2010-11 planning round
• South of Tees PCTs total allocation 511m
• STHFT share 196m (38)

10
Current initiatives

• Improving patient safety
• Better Care Better Value projects
• Discharge planning
• Day of surgery admission
• Bed reconfiguration
• Medicines management
• Theatre efficiency
• Procurement of clinical supplies and services