NHS Board Meeting 8 December 2010 Paper 17 NHS BOARD MEETING Wednesday 8 December 2010 Subject Purpose Recommendation Financial management report for the seven months to 31 October 2010 To notify members of the financial position To consider the financial position 1. Background 1.1 Revenue allocations received up to 31 October 2010 amounted to 585.552 million. The Board has now received all access target money and carry-forward from last year. Anticipated allocations amount to 101.774 million with the largest anticipated allocations being:- 000 Primary Medical services 45,455 Family Health Services non discretionary 46,546 Alcohol misuse 2,491 1.2 Seven months into the financial year and (in line with other boards), NHS Ayrshire and Arran are still awaiting an allocation for Primary Medical Services. 2. Current situation 2.1 Overall, when considering appendices 1 and 2, NHS Ayrshire and Arran are underspent by 1.696 million for the seven months to 31 October 2010. 2.2 Hospital, Community and Family Health Services (appendix 1) are overspent by 1,576,000 while support services are underspent by 3,272,000. The position is explained in more detail in the following paragraphs. 2.3 Integrated Care and Emergency Services (ICES) are overspent by 974,000 for the seven months to 31 October 2010. This is largely arising from an over commitment on nursing salaries ( 931,000 overspent at 7 months with 66 whole time equivalent over establishment). Within this overall total, the main areas are Care of the Elderly ( 432,000 overspent) and Medical Specialties ( 227,000 overspent). 1
2.4 Integrated Care and Partnership Services (ICPS) are 610,000 overspent for the seven month period. Although nursing salaries show a cumulative overspend this is now decreasing, however continuing overspends in nursing supplies at approximately 638,000 for the seven months are the most significant factor overall. The main areas contributing to this are theatres and incontinence products. The higher than budgeted theatre supplies relate to the greater use of minimally invasive procedures that are more expensive. 2.5 Mental Health Services are underspent by 624,000 at the seven month stage. The most significant variance is in service level agreements (SLAs) with other boards/authorities arising because of lower activity levels with these organisations. Resource transfer budgets are also underspent as it is now recognised that following a delay in discharging patients from continuing care beds, resource transfer payments to local authorities will not go ahead in this financial year. 2.6 The Medical Director budget is overspent by 616,000 within Primary Care and Prescribing. A letter from SGHD indicates the amount to be allocated for Primary Medical Services which is lower than that anticipated in the Board Financial Strategy. The primary care team have now carried out a review of all areas within primary care to mitigate the reduction in expected income. 2.7 There are two main issues within Prescribing. The first five months invoices from Glasgow have been received with regard to tertiary drugs and are on average 120,000 per month when last year the average was 71,000 per month. A full review of the back up to the invoices is ongoing. The other issue within Prescribing is the ongoing negotiations with the pharmacy contractors over a number of significant issues relating to Primary Care Prescribing. 2.8 Support Services are underspent by 3.272 million after seven months with the majority of this within Corporate Projects. Corporate Projects hold balances transferred in from manager s budgets (eg carry forward to 2011/12) and balances received from Scottish Government Health Directorates (SGHD), pending allocation to directors/managers for inclusion in detailed budgets. 2.9 Appendix 3 gives an inter year comparison of activity which shows that overall inpatients at 40,980 are 0.7% higher than last year and day cases at 20,294 are 1.6% lower than last year. Overall activity level is almost exactly the same as last year. 2.10 Appendix 4 shows prior and current years staff in post compared to establishment. The graph shows the trend in whole time equivalent staff employed by NHS Ayrshire and Arran. The trend for the last years has been increasing; however, for 2010/11 we are projecting a reduction of about 112 whole time equivalent in line with efficiency savings measures and since August 2010 this required trend is emerging. 2.11 In addition to permanent and temporary employed staff, the graph includes bank nursing (equating to around 250 whole time equivalent staff), locum doctors and overtime or additional part time hours. Measures to manage expenditure on these areas will therefore be reflected in the outcomes shown in the graph. 2
3. Proposal 3.1 The Board is asked to note the financial position of NHS Ayrshire and Arran now. Directors will need to manage the areas of overspend; otherwise NHS Ayrshire & Arran will have difficulty meeting the financial targets agreed in our local delivery plan (LDP). 3.2 There will be significant cost pressures in 2011/12 related to new drugs, the increase in VAT from 17.5% to 20% and the 1% increase in national insurance rates. 4. Consultation on development of this report 4.1 A number of NHS Ayrshire and Arran directors have been consulted with regard to comments within this report. 5. Resource implications 5.1 The delivery of the efficiency savings targets is crucial if NHS Ayrshire & Arran are to achieve the financial outturn agreed in the approved Local Delivery Plan. 5.2 The projected outturn for the year assumes a change to the length of asset lives producing a windfall this financial year. This is dependent upon national work being accepted by Audit Scotland. 6. Risk assessment and mitigation 6.1 NHS Ayrshire and Arran have been informed that our costs for the national clinical negligence risk share may overspend by 800,000 and this figure may well be understated as it is based on a national outturn of 44 million, which is now anticipated to be 55 million. The in-year cost pressure within orthopaedic waiting times of 1,000,000 has been funded through NHS Ayrshire and Arran support services giving up budget. Scottish Government Health Directorates are presently reviewing their budgets in order to try to offset the Clinical Negligence and Other Risks Indemnity Scheme (CNORIS) increase nationally. 6.2 As mentioned in paragraph 2.3, Integrated Care and Emergency Services is 66 whole time equivalent over establishment in nursing salaries. Reviews of the outcomes of the nursing workforce model are expected to demonstrate a need for a redistribution of budgets within the Board. 6.3 Bank nursing costs are a significant contributor to the Integrated Care and Emergency Services overspend and it appears that the monthly cost of this is decreasing with further reductions expected following the changes introduced in October 2010 to provide greater control over requesting/approving the use of bank nurses. 3
6.4 As mentioned in paragraph 2.4, overspends within ICPS for theatre supplies are thought to relate to the greater use of minimally invasive surgery and management are reviewing the range and extent of this to ensure its cost effective use. The incontinence supplies problem relates to an unexpected increase in delivery costs and an increasing demand from nursing homes. In addition, supplies costs are being examined by a group set up to adopt the use of top ranked products, ie those representing best value for money. ICPS are also undertaking a piece of work through Lean to address these supply pressures. 7. Impact assessment and consequential changes proposed to mitigate adverse impacts identified 7.1 None required. 8. Conclusion 8.1 At month 7, the projected outturn for NHS Ayrshire and Arran remains at 5 million as per the outturns shown against each of the directors. The main areas of risk involve the national work on asset lives, the CNORIS outturn and the degree of funding that comes from SGHD. Derek Lindsay, Executive Director of Finance 18 November 2010 [Derek Yuille, Assistant Director of Corporate and Shared Services] 4
INCOME AND EXPENDITURE SUMMARY FOR HEALTH SERVICES IN AYRSHIRE AND ARRAN FOR THE 7 MONTHS TO 31 OCTOBER 2010 HOSPITAL, COMMUNITY AND FAMILY HEALTH SERVICES SALARIES SUPPLIES TOTALS PROJECTED Year to Date Year to Date Annual Year to Date OUTTURN Budget Expenditure Variance Budget Expenditure Variance Budget Budget Expenditure Variance 000s 000s 000s 000s 000s 000s 000s 000s 000s 000s 000s HEALTH CARE DIRECTOR - INTEGRATED CARE AND EMERGENCY SERVICES Emergency/ Urgent Care 6,955 7,406 (451) 2,393 2,240 153 16,043 9,348 9,646 (298) Assessment/ Intermediate Treatment 21,812 21,507 305 6,890 7,264 (374) 48,430 28,702 28,771 (69) Medical Specialties 16,119 16,293 (174) 3,445 3,466 (21) 33,728 19,564 19,759 (195) Care of Elderly 9,823 10,308 (485) 1,321 1,405 (84) 19,073 11,144 11,713 (569) External Service Level Agreements 10,211 10,240 (29) 17,710 10,211 10,240 (29) Income INTEGRATED CARE AND EMERGENCY SERVICES (9) 54,700 55,514 (9) (814) (7,660) 16,600 (7,855) 16,760 195 (160) (13,250) 121,734 (7,669) 71,300 (7,855) 72,274 186 (974) (2,200) HEALTH CARE DIRECTOR - INTEGRATED CARE AND PARTNERSHIP SERVICES Community Hospitals and Nursing 12,111 12,347 (236) 4,012 4,186 (174) 26,950 16,123 16,533 (410) Ambulatory Care 8,060 8,003 57 2,548 2,538 10 18,327 10,608 10,541 67 Planned Care 23,698 23,627 71 4,134 4,653 (519) 46,392 27,832 28,280 (448) Children's, Women's and Sexual Health Services 16,399 16,327 72 1,862 1,888 (26) 31,519 18,261 18,215 46 Allied Health Professionals 11,204 10,968 236 260 244 16 19,796 11,464 11,212 252 External Service Level Agreements (including Ayrshire Hospice) 18,083 18,200 (117) 31,830 18,083 18,200 (117) INTEGRATED CARE AND PARTNERSHIP SERVICES 71,472 71,272 200 30,899 31,709 (810) 174,814 102,371 102,981 (610) (1,200) DIRECTOR OF MENTAL HEALTH SERVICES Mental Health and Learning Disabilities 27,692 27,580 112 6,105 5,947 158 59,045 33,797 33,527 270 Resource Transfer and Joint Planning 0 12,980 12,913 67 25,862 12,980 12,913 67 External Service Level Agreements 0 1,175 893 282 2,017 1,175 893 282 Income (413) (418) 5 (823) (413) (418) 5 MENTAL HEALTH SERVICES 27,692 27,580 112 19,847 19,335 512 86,101 47,539 46,915 624 1,400 MEDICAL DIRECTOR Pharmacy Director 3,615 3,462 153 4,309 4,967 (658) 13,805 7,924 8,429 (505) GP Prescribing 42,716 42,694 22 74,246 42,716 42,694 22 Primary Care Development 1,314 1,311 3 788 808 (20) 3,374 2,102 2,119 (17) Primary Medical Services 26,937 27,175 (238) 49,807 26,937 27,175 (238) Family Health Services 29,354 29,362 (8) 51,226 29,354 29,362 (8) Community Dental Service 1,203 1,176 27 147 114 33 2,378 1,350 1,290 60 Unplanned Activity/Other Healthcare Providers 1,157 1,095 62 2,073 1,157 1,095 62 FHS Income (3,691) (3,699) 8 (6,377) (3,691) (3,699) 8 MEDICAL DIRECTOR 6,132 5,949 183 101,717 102,516 (799) 190,532 107,849 108,465 (616) (300) Appendix 1 HOSPITAL, COMMUNITY AND FAMILY HEALTH SERVICES 159,996 160,315 (319) 169,063 170,320 (1,257) 573,181 329,059 330,635 (1,576) (2,300) 5
INCOME AND EXPENDITURE SUMMARY FOR HEALTH SERVICES IN AYRSHIRE AND ARRAN FOR THE 7 MONTHS TO 31 OCTOBER 2010 SUPPORT SERVICES SALARIES SUPPLIES TOTALS PROJECTED Year to Date Year to Date Annual Year to Date OUTTURN Budget Expenditure Variance Budget Expenditure Variance Budget Budget Expenditure Variance 000s 000s 000s 000s 000s 000s 000s 000s 000s 000s 000s Director of Information and Clinical Support Services: Capital Charges and PFI Costs 13,150 13,164 (14) 26,055 13,150 13,164 (14) Director of I&CSS 92 102 (10) 47 40 7 237 139 142 (3) Estates & Capital Planning Services 3,140 3,021 119 5,513 5,564 (51) 15,520 8,653 8,585 68 Clinical Support Services 12,511 12,398 113 3,379 3,377 2 26,918 15,890 15,775 115 ehealth and Infrastructure Services 1,721 1,766 (45) 2,020 2,063 (43) 6,865 3,741 3,829 (88) Information Services 3,822 3,718 104 175 166 9 7,160 3,997 3,884 113 Information and Clinical Support Services 21,286 21,005 281 24,284 24,374 (90) 82,755 45,570 45,379 191 2,000 Director of Public Health: Health and Civil Protection 854 849 5 32 21 10 1,565 886 870 16 Health Improvement 945 899 46 73 85 (13) 1,701 1,018 984 34 Ring Fenced Funding 1,119 1,036 83 306 285 21 3,158 1,426 1,321 105 Public Health 2,919 2,784 134 411 391 19 6,424 3,329 3,174 155 205 Chief Executive's Office 311 316 (5) 110 54 56 716 421 370 51 65 Policy, Planning and Performance 678 650 28 54 55 (1) 1,302 732 705 27 52 Finance 2,050 2,106 (56) 301 228 73 4,038 2,351 2,334 17 40 ORG and HR Development 2,358 2,340 18 339 283 56 4,771 2,697 2,623 74 40 Medical Director 2,105 2,059 46 152 152 5,275 2,257 2,211 46 300 Nursing Director 2,270 2,333 (63) 41 40 1 4,435 2,311 2,373 (62) (30) Corporate Projects 3,498 725 2,773 4,429 3,498 725 2,773 4,603 TOTALS 33,977 33,593 383 29,190 26,302 2,887 114,145 63,166 59,894 3,272 7,275 Appendix 2 6
Appendix 3 Month 7 - Interyear Comparison - 2010/2011 - Cumulative OCTOBER 2009/10 2010/2011 Increase/(Decrease) Emergency/Urgent Care Inpatient 2,126 1,993 (133) (6.3%) Assessment/Intermediate Treatment Inpatient 16,668 16,756 88 0.5% Assessment/Intermediate Treatment Day Case 4,816 5,297 481 10.0% Assessment/Intermediate Treatment Inpatient and Day Case 21,484 22,053 569 2.6% Medical Specialties Inpatient 2,333 2,456 123 5.3% Medical Specialties Day Case 1,362 1,309 (53) (3.9%) Medical Specialties Inpatient and Day Case 3,695 3,765 70 1.9% Care of the Elderly Inpatient 2,668 2,935 Improving Balance of Care/LTCM Inpatient 960 1,146 Improving Balance of Care/LTCM Day Case 108 211 Improving Balance of Care/LTCM Inpatient and Day Case 1,068 1,357 Ambulatory Care Inpatient 1,833 1,722 Ambulatory Care Day Case 4,499 4,086 Ambulatory Care Inpatient and Day Case 6,332 5,808 267 10.0% 186 19.4% 103 95.4% 289 27.1% (111) (6.1%) (413) (9.2%) (524) (8.3%) Planned Care Inpatient 7,293 7,123 (170) (2.3%) Planned Care Day Case 7,180 7,352 172 2.4% Planned Care Inpatient and Day Case 14,473 14,475 2 0.0% Children's, Women's & Sexual Health Services Inpatient 6,800 6,849 49 0.7% Children's, Women's & Sexual Health Services Day Case 2,654 2,039 (615) (23.2%) Children's, Women's & Sexual Health Services Inpatient and Day Case 9,454 8,888 (566) (6.0%) Total Inpatient 40,681 40,980 299 0.7% Total Day Case 20,619 20,294 (325) (1.6%) 7
March February July Appendix 4 9150 8 9100 9050 9000 8950 8900 8850 8800 8750 NHS AYRSHIRE & ARRAN STAFF August September October November December January Establishment 2008/9 2009/10 2010/11 June May April WTE