NHS FIFE
Report to the Finance & Resources Committee on 30 July 2014
ACUTE SERVICES DIVISION FINANCIAL RECOVERY PLAN
- INTRODUCTION
1.1This report sets out current progress on the Acute Division financial recovery plan. It provides a framework to identify specific, measurable actions to deliver a balanced financial position over a two year period. A detailed action plan is attached as an Appendix to this report. These actions have been identified and agreed with the General Managers of the Clinical Directorates and the Director of Nursing for Acute Services.
- BACKGROUND
2.1Within the Acute Division, there is need to ensure management focus across four key priorities: activity; staff governance; clinical governance; and cost. Our ability to resource and deliver effective patient care represents a balance across these domains. During 2013/14 there was a conscious emphasis on the delivery of activity targets and improving the quality of care provided. The management team recognise that there is now a need to focus energies on addressing the financial pressures and delivery of financial balance.
2.2As previously reported to the Finance & Resources Committee, the level of overspend within the Acute Division is the single most significant financial pressure facing NHS Fife at present. At the end of June 2014, the Division is reporting an overspend of £2.603m for the period. This compares with an overspend of £2.377m for the same period last year, despite significant additional investment in both elective and unscheduled care capacity, as well as drugs pressures, and the general pay and supplies uplifts.
2.3Further analysis of the position for the year to date is provided in the overall NHS Fife Finance Report, considered as a separate agenda item at the Finance & Resources Committee meeting. The position is predominantly driven by staffing costs, with 80% of the overspend relating to pay expenditure, as highlighted below:
Note: The purchase of healthcare within Ambulatory Care is largely staff related as it covers Medinet costs for endoscopy and the radiology reporting service provided by Expert Eye.
- FINANCIAL RECOVERY PLAN
3.1Monthly review meetings are now in place for each of the Clinical Directorates, with both the Director of Acute Services and Director of Finance in attendance. Through these discussions and from further analysis of the budgets and expenditure position, there is increased clarity on the issues within each Clinical Directorate. This section provides some background on the cost drivers.
3.2A detailed action plan to address the issues is attached as Appendix 3.
General Issues
3.3As noted at paragraph 2.3pay expenditure accounts for 80% of the total overspend. Within that, it is clear that the two single biggest issues are the use of bank nursing and medical locums across the Division. Cost pressures within supplies and drugs budgets are largely being managed, with some additional funding available.
- Bank / agency nursing
Appendix 1 provides an analysis of the monthly bank and agency nursing costs for the full year 2013/14 (£3.5m) and the period to date in 2014/15 (£0.9m). Detailed information is readily available via the Nurse Bank team on the booking reasons. To the end of June 2014, more than 50% of the shifts utilised were to cover vacancies, whilst 23% related to sickness and other leave. Over recent months, there has also been an emerging trend in the use of agency nursing.
- Medical locums
The use of locums to cover both senior and junior medical vacancies is a concern across the Clinical Directorates. Appendix 2 provides a comparison of expenditure with the same period last year, for each specialty and Clinical Directorate. It is evident that there are considerable increases in a number of areas, including Elderly Medicine, Anaesthetics, Obstetrics & Gynaecology (mostly junior medical) and Urology.
Ambulatory Care
3.4The Ambulatory Care financial position is largely driven by Endoscopy services and Health Records. It is anticipated that the overspend within Health Records is likely to continue, but other areas within the Directorate will be able to deliver a balanced position collectively.
Planned Care
3.5The key issue within Planned Care is the ongoing pressure on capacity in order to deliver waiting times. This is impacting on both medical and nursing costs, as well as continued use of the private sector, with no available budget to support these costs. The recurring investment in the capacity plan during 2013/14 sought to address the pressures within Planned Care, however it has become increasingly apparent that the demand and capacity projections need to be refreshed.
Emergency Care
3.6Across Emergency Care, it has become increasingly evident that there are a number of budget anomalies, particularly within nursing, where there are a number of unfunded posts. In addition, the ongoing use of surge capacity during April and May, with no associated funding source, has impacted on the position to date.
3.7This additional activity is also resulting in increased overspends in a number of non pay budgets including general supplies and sundries.
Year end forecast
3.8As part of a robust financial performance management approach across NHS Fife, a detailed year end forecast will be developed through a mid year financial review. Prior to that, work will commence during August on a Directorate by Directorate basis for Acute services, to determine the likely year end forecast based on current trends and proposed actions (as set out in the action plan in Appendix 3). The action plan will continue to be developed over the coming weeks. Monitoring of performance and delivery of actions will be considered by the management team on a regular basis. The key early focus will be on controlling bank nursing costs. A risk assessment will also be developed.
3.9As an early indication, there is confidence that the Ambulatory Care Directorate will be in a position to remain within budget this financial year, perhaps with some offset from other non clinical areas within the Division.
3.10The extent to which the Planned Care Directorate can reduce the current trend will be determined by the review of theatre and other capacity as set out in the action plan. It is anticipated that some improvement can be made in the current financial year, but the Directorate is highly unlikely to achieve financial balance by 31 March 2015.
3.11The financial performance of the Emergency Care Directorate will be largely determined by the actions required to reduce bank nursing and the work to improve flow. There is little indication that this is fully achievable in the current year and as a result there will be continuing financial pressure in this area for the remainder of this year and into 2015/16.
Milestones
3.12There are a number of key milestones in the delivery of these actions:
- RISKS
4.1The performance of the Acute Division is the greatest financial challenge for NHS Fife at present. Whilst the Divisional Management Team are committed to the delivery of the action plan in order to address the financial pressures, there are a number of other financial risks which remain. These include:
- Ongoing delivery of agreed recurrent efficiency schemes;
- Financial consequences of the outputs from the nursing workforce tool;
- Financial exposure of the delivery of elective and unscheduled care capacity requirements for RTT and waiting times targets.
- RECOMMENDATION
5.1The Finance and Resources Committee is asked to:
- note the actions and proposed timescales;
- note that a further update will be provided at the next meeting of the Committee.
HEATHER KNOXCAROL POTTER
Director of Acute ServicesAssistant Director of Finance
(Management Accounting)
22nd July 2014
APPENDIX 1 – ACUTE DIVISION NURSE BANK & AGENCY COSTS
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APPENDIX 2 – ACUTE DIVISION MEDICAL AGENCY COSTS
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APPENDIX 3 – ACUTE DIVISION FINANCIAL RECOVERY ACTION PLAN JULY 2014
COST DRIVERS / ACTIONS / POTENTIAL IMPACT (£’000) / LEAD / TIMESCALEGENERAL ISSUES
Bank Nursing / More robust scrutiny of bank nursing usage is required at all levels of management. Detailed reports are available and need to be critically reviewed on a monthly basis within the Division. Local review of controls in place at Directorate level for requests. / Planned £0.5m reduction in current financial year
Minimum target £1m reduction in spend achievable by end 2015/16 / Director of Nursing (Acute Services) / General Managers / Early August
Given the extent to which the use is driven by sickness absence, a detailed action plan for Acute Services is required, building on the overall NHS Fife Plan. Support from both HR and Partnership required. / General Managers (Emergency Care) / Late August
Block recruitment of nurses already underway will reduce use of bank to cover vacancies. This will be closely monitored in terms of both number of vacancies and expenditure trends / Director of Nursing (Acute Services) / Senior Charge Nurses / Immediate
Observation policy to be reviewed, to ensure robust clinical judgement mechanisms are in place. This could result in potential reduction in the use of bank staff. / Director of Nursing (Acute Services) / Early August
Implementation of the recommendations from the nursing workforce tool should reduce the requirement for bank staff. / Director of Nursing / October
In relation to non contract agency nursing, the approval process has been escalated within the last 2 weeks. There is an expectation that this will significantly reduce expenditure with an immediate effect. / Director of Acute Services / Immediate
Internal Audit review of controls and processes for bank usage / Director of Acute Services / Already underway
Introduction of a roster management project (short term appointment) to improve effective rota compliance / Director of Nursing / September
Leadership development programme for senior charge nurses, encompassing devolved budgetary responsibility and accountability / Director of Acute Services / Director of Nursing (Acute Services) / September
Medical Locums / Review gaps in trainee rotas and consider medium term opportunities for Specialty Doctors and / or Clinical Fellows (eg 12 months) as an alternative for short term locum use. / Target expenditure no higher than 2013/14 / General Managers / Clinical Directors / Already underway
Dedicated recruitment campaign for consultants (BMJ and virtual) / TBC / Director of Acute Services / Medical Director / Already underway
Drugs / Review top 10 high cost and / or volume drugs. / Target 1% reduction in total drugs spend c.£100k / Chief Pharmacist (Acute Services) / Review:
August
Impact:
October onwards
AMBULATORY CARE
Health records / Department wide review is underway which will include: benchmarking of staffing levels, budget and costs. This also needs to address the clinical leadership required, to drive culture change and behaviour to support modern ways of working eg digital dictation. / TBC but £50k minimum reduction in cost / Head of Health Records / Associate Medical Director (Acute) / Report: September
Implement: January
Discussions are required with PCES introduce cross cover within VHK A&E reception. / c.£20k / General Manager (Ambulatory Care) / August
Laboratories / Implementation of the managed service contract will see significant financial benefits as the year progresses. / Part of agreed efficiency plan (£83k) / Laboratory Services Manager / Already underway
Endoscopy / Budget allocations for regional activity are to be reviewed, to ensure SEAT Boards are appropriately recharged and supplies uplift to be allocated. / c.£50k / Assistant Director of Finance (Management Accounting) / August
PLANNED CARE
Elective demand & capacity / Demand and capacity plan is being developed on a specialty by speciality basis. This which will quantify the financial consequences for the current year as well as 2015/16 and beyond, in order to deliver referral to treatment targets (RTT) and waiting times guarantees. It will take account into account the availability / capacity of junior doctors as well as senior medical staff
This will need to incorporate options for delivery of the required capacity, taking account of the following:
- Options appraisal to utilise St AndrewsCommunityHospital theatre;
- Options appraisal to increase day case capacity at QMH to free up capacity at VHK;
- Full utilisation of the funded capacity at Stracathro.
EMERGENCY CARE
Nursing / Senior nurses to review staff listings on a ward by ward basis in order to reconcile nursing budgets and funded establishments. This may not resolve funding issues, but will enable a more robust understanding of the budgets. / Linked to reduction in bank nursing / General Manager (Emergency Care) / Senior Nurses / August
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