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04.09.17

Mackey urges ‘hard focus’ on winter plans as trusts face financial struggle

Provider performance figures from the period between April and June this year have painted a picture of tough financial targets, growing regulatory action and extremely high levels of bed occupancy, paired with continued difficulty in discharging medically fit people.

The latest NHS Improvement (NHSI) report found that the health sector is forecasting a deficit of £523m at the end of 2017-18, £27m behind plan – although the Nuffield Trust has argued that the real figure could be almost £3bn higher when accounting for one-off savings.

Almost 90% of providers have agreed “ambitious” financial control totals for this year, but just 71% are currently able to deliver on them.

Others have been subjected to the financial special measures and NHSI’s financial improvement programme, both of which are designed to help struggling providers recover their books.

United Lincolnshire Hospital NHS Trust has been placed in financial special measures as a result of the latest figures, for example. Also on the basis of this Q1 data, NHSI will be requiring board-to-board ‘challenge sessions’ with a number of trusts, which could also lead to financial special measures or other regulatory action for a handful of them.

But the regulator is also anticipating that one or more providers could be released from the financial special measures scheme when a full review is completed in September.

Quarter 1 figures also showed that while the sector has managed to stay on track when it comes to agency staff, cutting down on spending by 22% compared with the same period last year, it is struggling to meet other challenges that are set to get even worse during the coming winter.

Emergency admissions via Type 1 A&E grew by almost 4% compared to the same period last year, while A&E attendances increased by almost 3%.

While performance against the four-hour A&E target is running at just over 90%, providers are still having issues with delayed discharges. In June, 55% of delayed transfers of care were caused by the NHS and 38% by social care, marking the lowest and the highest rates respectively since records began seven years ago.

“Extremely high levels” of bed occupancy also negatively affect capacity, NHSI explained. Between April and June this year, the average sector-wide bed occupancy level ran at over 89%, with occupancy in general and acute beds routinely running in the low 90% occupancy levels – and winter hasn’t even started yet.

The regulator’s outgoing chief executive, Jim Mackey, argued that providers should be applauded for making a “very strong start to the year”, but acknowledged that there are “lots of risks ahead in terms of the sector’s finances”.

“We need to focus hard on the bed situation. Our hospitals are very busy already, and it’s still relatively early in the year,” he admitted. “Last winter we ended up opening over 4,500 beds at the busiest times, mostly in an unplanned and unproductive manner.

“Winter planning is progressing well, under Pauline Philip’s leadership, but more needs to be done urgently to address the occupancy situation, in sufficient time for a more planned approach to this coming winter, and to maintain the standards we are all aiming for.”

‘Mission impossible’

NHS Providers boss Chris Hopson agreed that the latest figures show continued progress, especially considering trusts had racked up a massive £2.45bn deficit just two years ago. He emphasised that they are putting a “huge amount of work” into controlling costs, increasing productivity and improving efficiency, proved by successes such as reducing agency staff spending.

“However, as with last year, there is a need for caution and much of the provider sector’s financial performance over the rest of the year will be determined by how the NHS performs this winter,” continued Hopson.

“Last year, trusts ended up spending significantly more than planned on extra capacity to deal with record winter demand, and they lost income from elective operations they needed to cancel. These pressures are often now present throughout the year, not just at winter time.”

Despite progress, the underlying scale of the challenge ahead “remains unsustainable”, the CEO argued, with real-terms funding increases dropping from last year’s 3.6% to just 1.3% this year. This means providers will have to absorb a 5% growth in demand and costs, cut operating budgets by almost £4bn and meet a 4.2% savings target “that no other advanced Western health system has ever consistently delivered”.

“All at the same time as improving A&E performance, delivering new commitments for cancer and mental health provision and investing for transformation and to keep the NHS estate up to date. This is mission impossible,” concluded Hopson.

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