Government’s financial control noose tightens round Calderdale and Huddersfield hospitals’ neck

The government needs to fund our hospitals AND all other NHS and social care services adequately. For a start, that means scrapping the punitive Sustainability and Transformation Plans that are designed to cut more than £22bn worth of NHS and social care services by 2020/1.

In 2015, Calderdale campaigners criticised the Calderdale and Huddersfield hospital Trust’s Chief Exec, Owen Williams, for signing an NHS Confederation letter accepting the government’s proposed £22bn “efficiency” cuts, in exchange for the Prime Minister’s backing for rapid hospital cuts and closures, and funding for “new models of care”.

That chicken has well and truly come home to roost.

Latest figures for Calderdale and Huddersfield hospitals trust show that in February 2018, (month 11 of the financial year 2017 -18), it had a year to date deficit – or under-funding – of £35.27m.

Impossible financial control total

Under the Sustainability and Transformation Plan (aka Slash Trash and Privatise) funding regime, the government had given the hospital a control total (ie permitted spending amount) that allowed it to run a deficit of £15.9m.

The hospital Trust appealed this control total in January 2017 and since then the Board has continued to protest at the impossibility of cutting costs to meet the control total.

For the hospitals to meet the control total for 2017/18, the hospital would have to make £20m “efficiency savings” – ie cuts. This comes after 5 years of making huge so-called efficiency savings, year on year. The trust estimated that £17m was the max cuts it could make in £2017-18.

Electronic Patient Record chaos

Our hospitals’ finances have also been messed up as a result of setting up the new Electronic Patient Record system.  This messed up the appointments system for months and, according to the 5 April CHFT Board meeting papers,

“continues to have a significant impact on both productivity and the capture of activity data”

Altogether, the new Electronic Patient Record mess is a big element of a £9.5m shortfall in clinical income so far this financial year.

Following implementation of the Electronic Patient Record, which caused a degree of chaos and reduced the hospital’s operational capacity while the problems were solved, the Board papers say there has been a slower than expected recovery of clinical activity levels and therefore income. This means activity levels are below planned levels this financial year.

Government has withheld Sustainainability and Transformation Funding

On top of that, the government has so far withheld £6.22m Sustainability and Transformation Funding, to punish the Trust for not meeting A&E targets in the first and second quarters of the 2017-18 financial year,  and for failing to meet the control total since month 7.

Hospitals have been paid less than planned for the care it has given patients

As if that was not enough, the Trust Board papers say the hospitals have been paid

“less than planned for the actual activity the hospital has delivered within the HRG4+ test grouper.”

HRG4+ stands for Health Resource Group4+. What this means it is explained here.

Basically a Health Resource Group is a group of clinically related health services that each take similar resources to deliver. It is used as the basis for setting the payment or tariff that the Clinical Commissioning Groups will pay the hospitals Trust when it treats patients using these services. Because of this, it is called a “currency”.

HRG4+ is the new “currency” that the government introduced to pay for services to be provided in the 2 year operational STPs that NHS organisations had to produce for 2017-19.

Who knows what the HRG4+ Test Grouper is? Is it this?  CK999 has asked CHFT, and why they have been paid less than planned. We will update when CHFT tell us.

Plus there have been extra costs from having to open additional beds and extra winter costs.

All this means that as of Month 11 (February 2018) the Trust is £16.6m overspent or underfunded, depending on which way you look at it. By the end of the financial year, the Trust is forecasting a deficit (or underfunding) of £31.34m, which is £15.4m off target. This is made up of an £8m overshoot of the control total and loss of £7.4m Sustainability and Transformation Funding.

We need a rational NHS funding system

The whole current method of funding our hospitals is nuts.

First they are told they have to cut costs massively, year on year, which is simply not possible.

Second they are given an unrealistic financial control total, based on the false assumption that this is possible.

Third they are supposedly incentivised to meet the unrealistic control total (the stick) by the carrot of sustainability and transformation funding.

The carrot is then snatched away to punish the hospitals for not meeting the control total, and other targets eg for AE performance.

Then apparently the Commissioners pay the hospitals less than the agreed National Tariff prices for the health care they provide to patients.

This is all completely crazy.

Adding insult to injury, Monitor/NHS Improvement then impose private management consultancy companies on hospital Trusts, at considerable cost to the Trusts, when the evidence is that they make things worse.

We need the NHS Reinstatement Bill to be passed into law

We need a rational system for allocating resources to our hospitals, like that proposed in the NHS Reinstatement Bill.

The Bill has a first reading in the House of Commons on July 11th as a Private Member’s Bill that the Labour MP for Wolverhamption, Eleanor Smith, is presenting as a10 minute rule Bill.

It is high time the official opposition to the government mustered at least 100 MPs to turn up and stop the Tories filibustering it out of existence, which is what they’ve done at all previous presentations of the Bill.

Please tell your MP to be there, and why it matters for the future of our hospitals.

One comment

  1. Time for all Labour MPs and Councillors to sign up to the NHS Reinstatement Bill and push it through into official policy. Otherwise the NHS is as good as dead.


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