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‘Alarming’ Q3 financial decline raises serious questions about targets

A raft of winter pressures in December, including an A&E performance standard that slipped below 90% and high levels of bed occupancy, have significantly impacted the finances of providers in the last quarter, latest figures have revealed.

The three-month period ending 31 December 2017 saw record numbers of A&E attendances, with 5.6 million people visiting emergency departments – a quarter of a million more than the same period the previous year.

NHS Improvement’s (NHSI’s) report shows that providers have coped well despite these extra pressures, halting the year-on-year decline in A&E performance seen in the same quarter the previous four years.

However, bed occupancy has affected the ability of providers to admit patients requiring planned care, and has been impacted by delays in transfer of care to other settings, including social care. Delayed discharges cost around 470,000 bed days, accounting for 4.6% of all beds across acute, community and mental health providers.

NHSI has revealed that these challenges have created financial pressures across providers, particularly in the acute sector.

At the end of the period providers reported a deficit £365m greater than the “ambitious” £916m target set for that point in the year, and also predicted an end-of-year deficit of £931m – £435m worse than planned.

The majority of this financial decline has been concentrated in a minority of providers where performance has diverged materially from plans.

During the quarter, for example, NHSI placed King’s College Hospital NHS FT into financial special measures in order to protect services after it projected a deficit of £92m. And albeit not in the Q3 date range, another major trust – Barking, Havering and Redbridge University Hospitals – was also thrown into financial special measures following “rapid deterioration,” while an East Sussex trust admitted it’s set to miss its cash targets by a whopping £21m.

Nevertheless, the provider deficit, which was £2.47bn in 2015-16, has been reduced through a series of measures, including a reduction in the use of expensive agency staff, efficiency measures, and smarter procurement – although many of these have been one-off savings.

However, despite successful steps to crack down on agency spend, high vacancy rates persist, with over 100,000 empty posts, which NHSI warned continues to have an impact on performance.

The regulator’s chief executive, Ian Dalton, praised NHS staff for delivering their best for patients despite rising demand, but did acknowledge that some providers “appear to have managed the financial pressures better than others.”

“We are working closely with those providers whose financial position has deteriorated seriously to ensure that they grip their problems while delivering the best possible care for their patients,” he added.

“It would be unrealistic to assume the demand which has been building for a number of years is going to reverse. Local health systems need to work together to plan for capacity in future years that can meet the increasing levels of demand that we will continue to see.”

‘Alarming deterioration’

Saffron Cordery, director of policy and strategy at NHS Providers, claimed that the figures demonstrate that the NHS has been “pushed to the limit” and warned that staff are at “real risk of burnout.”

Outlining the problems faced by the NHS, she added: “The figures confirm, once again, three key problems the whole NHS provider sector is facing – increases in demand for treatment continue to significantly outstrip increases in NHS funding; trust savings targets remain too ambitious; and there are serious ongoing workforce shortages.”

Similarly, Richard Murray, director of policy for the King’s Fund, called the year’s predicted deficit alarming, adding: “A deterioration of over £300m in three months. This reflects the dramatic decline in the finances of a number of individual trusts, and raises serious questions about how reasonable the financial targets were in the first place.

“While NHSI is right to point to increases in demand for services as the reason for the financial difficulties, these are not pressures that have sprung up in the last few months and show no sign of abating.”

NHS Confederation’s boss, Niall Dickson, agreed that while staff are doing a “heroic job,” the latest figures reflect the “intolerable pressure” the system faces.

“We have repeatedly pointed to severe underfunding in health and care and a year-to-date deficit in the English NHS of £1,281m is just the latest evidence of this,” he continued.

“We have lurched from budget to budget with one futile bail out after another. We think there may be signs that some figures in government and opposition are listening – we hope so, because it is now time for the political class to wake up and tackle the long-term funding of both health and social care. Nothing less is acceptable.”

Top image: Alashi

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