Worthing and Southlands Hospital debt ‘government manufactured’

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Campaigners determined to keep Grantham Hospital open on the march in Nottingham on September 23rd
Campaigners determined to keep Grantham Hospital open on the march in Nottingham on September 23rd

THE current cash crisis at Worthing and Southlands Hospitals is the result of a ‘manufactured’ funding deficit.

This is due to the government’s belief that health services in the South of England are over-funded, says campaigning group KWASH (Keep Worthing and Southlands Hospitals).

Campaigners have joined with consultants at Worthing and Southlands Hospitals to release an in-depth, ‘evidence-based’ response to South East Coast Strategic Health Authority’s ‘Creating an NHS fit for the future’ document, published in May.

Intensive care consultants Dr Richard Venn and Dr Lui Forni’s counter document ‘Fit for whose future?’ says: ‘This response has been the result of exhaustive reading and research by several consultants at WASH who are concerned by:

a) Activity projections

b) Rationale for major changes in the settings of healthcare

c) Changes proposed in settings of healthcare that have been proposed by the SHA.

It adds: ‘The current WASH financial problems are the result of a “manufactured” budget deficit created as a consequence of central government belief that the South of England is an over-resourced Health Economy.

• It is inconceivable that any hospital in the South of England could cope with the huge volume of elective and emergency medicine and surgery, which take place at WASH, if acute services at Worthing hospital are withdrawn.

• Although the public are interested in new and innovative ways of providing hospital services in community settings (including diagnostic tests, etc), many fear that the government’s proposals are a means to closure of local hospitals via the “back door”.

• The quality and scope of evidence to support shifting hospital care into the community is lacking, and it should not be assumed that this shift will reduce costs.

‘Merely relocating secondary services or specialists into primary care settings will not reduce demand on hospital resources.

• The local population can be reassured that any concerns expressed by the SHA regarding staffing levels at WASH as a consequence of the EWTD, are unfounded.

• Closure of acute services at Worthing Hospital will result in patient deaths as a result of the interhospital transfer of sick patients, and will be very expensive.

‘There are safety concerns for telephone triage in the community by nurses and paramedics, and calls for further safety evaluations have been advised.

‘1. Funding for the NHS in West Sussex – Why is WASH in debt?

‘Since 1971 NHS funding has been allocated on the basis of the relative needs of the population served. . .

‘The weighted capitation formula is used to calculate an individual PCT’s ‘fair share’ of available national resources. This fair share or target allocation is then compared to a PCT’s current actual allocation to produce the “distance from target”. This is the amount by which a PCT is assessed to be either receiving more or less than its fair share of available national resources.

‘The capitation position of PCTs in Surrey and Sussex is such that even a significant change in the formula will at best reduce the extent to which most PCTs are above their “fair share” target. It is highly unlikely that any change in the formula would result in any additional resources being received by the majority of PCTs in Surrey and Sussex. . .

‘The implementation of Payment by Results and in particular the transitional arrangements related to this, effectively amounts to a further allocation process.

‘This creates a double funding blow for Surrey and Sussex since on the one hand it receives only marginally more than the minimum level of growth due to its capitation position, whilst on the other there is a net cost to the health economy arising from the Payment by Results (PbR) transition arrangements.

‘These PbR transition arrangements can be summarised thus “the benefits to Trusts with below average reference costs moving to the national tariff and the new market forces factor, is being capped in 2006/07 and 2007/08”. i.e we will not generate income by performing well in health economics terms.

‘In 2008/09 when the cap is removed, Trusts stand to gain significantly.

‘As a consequence Surrey & Sussex will loose £40 million in EACH of the next 2 financial years.

‘This will become a £40 million gain in 2008/09 when the cap is removed. Interestingly if our Acute Trusts had been treated in the same way as Foundation Trusts then the gain for EACH individual Trust would have been £59.7 million in 2006/07 and £17.4 million in 2007/08.

Resource Accounting & Budgeting (RAB) scheme applies to all government departments. ‘It effectively means that financially challenged organisations have to both respond to their underlying recurrent deficit (ie to bring their monthly run rate back into balance) and repay the overspend from the previous year.’

‘The scale of RAB deficit which the Surrey and Sussex health economy has had to contend with, in addition to addressing the underlying recurrent deficit, is set out below:’

Summary: We are in the wrong place at the wrong time.

1. The weighted capitation formula is repeatedly challenged over the various elements of this formula and their weightings. There are currently calls for expressions of interest into NHS resource allocation research to review the need formula again! ‘Despite the undoubted integrity of the formula it is intuitively difficult to understand and explain why some parts of the country should receive nearly twice the level of funding per head of population than others.’

2. The pace of change policy means that Surrey & Sussex PCTs will receive a below national average increase in resources for 2006/07 and 2007/08.

3. The PbR transitional arrangements will mean a loss of £40 million to Surrey & Sussex PCTs for the years 2006/07 and 2007/08. If our Acute Trusts had been treated in the same way as Foundation Trusts then the gain for EACH individual Trust would have been £59.7 million in 2006/07 and £17.4 million in 2007/08.

4. The Resource Accounting & Budgeting (RAB) scheme will result in £120 million underlying ‘in-year’ deficit.

‘A “manufactured” deficit created as a consequence of central government belief that the South of England is an over-resourced Health Economy is not a justification for the proposed SHA changes in “Settings of Care”.

‘Those of us involved in delivering Health Care, recognise that we are currently under-resourced and any quality improvements in Health Care are welcomed but will also have significant cost implications. . .

Summary:

1) “Settings of care” ignores the obvious question of where the huge current in-patient work-load of WASH will be re-housed, if acute services are withdrawn from Worthing Hospital.

2) Interhospital transfer of sick patients kills patients and will be very expensive.

3) Identification of those patients, prior to hospital admission, who will require in-patient hospital care and those who may require intensive care facilities, is difficult even for hospital specialists.

4) There are safety concerns for telephone triage by nurses/paramedics for non-serious problems, and calls for further safety evaluations have been advised.’