NHS BOARD MEETING 19 NOVEMBER Subject: Purpose: Recommendation:

Transcription

1 NHS Board Meeting 19 November 2008 paper 14 NHS BOARD MEETING 19 NOVEMBER 2008 Subject: Purpose: Recommendation: NHS Ayrshire and Arran Financial Management Report for 6 months ended 30 September To notify members of the financial position of NHS Ayrshire and Arran. To consider the financial position. 1. Background 1.1 Each NHS Organisation is required to prepare monthly financial monitoring returns to the Scottish Government Health Department. The attached financial management report reflects the local reporting requirements in line with the refocused organisation, with Appendix 1 showing the overall position while Appendix 1a shows the expenditure on locally delivered services and Appendix 1b shows Executive Director Budgets. 2. Locally Delivered Services 2.1 The total variance from budget in locally delivered services in the first half of the year is an underspend of 1.51 million with the breakdown of this by Director shown in Appendix 1a. 2.2 Integrated and Emergency Services The overspend of 529k represents almost 1% of the planned expenditure. There are a variety of causes for this overspend: - Within A&E medical locums are being used to cover vacancies at a cost greater than budget; locums are also being used to ensure that a safe service is provided on both sites. - The costs within orthopaedics are considerably overspent with nursing staff exceeding budget by 174k. The current nursing establishment for orthopaedic staffing is not sufficient to provide a safe level of service. An action plain is in place to reduce costs over time. Theatre supplies are overspent by almost 200k despite additional funding being identified in 2007/08; there is an increase in activity partly caused by the appointment of an additional consultant; the general lack of supplies inflation has caused additional pressure as there is a significant supplies budget within this area. Theatre supplies will be

2 reviewed in total by both Health Care Directors. - There are on-going overspends in Care of the Elderly wards where sickness is a major contribution to the nursing overspend. The policy on managing sickness absence is being used to try to address this overspend. 2.3 Integrated Care and Partnership Services The favourable position of 334k relates primarily to vacancies within Women and Children s Services which are masking overspends in Community and Planned Care. In Community, nursing salaries are overspent partly because of cover for staff currently absent for a number of reasons including disciplinary procedures. There are also community supplies overspends in incontinence products and travel; both of these areas have not received uplifts for a few years now and there would appear to be a rising demand for the incontinence products; there will be a review of incontinence advisers to ensure that all of the increased demand can be justified. The overspend in Planned Care arises in general surgery nursing; again, high sickness levels are contributing to this and there is considerable ongoing work to address this. There has been recruitment to the vacancies in Women and Children s Services with staff commencing early in 2009 and therefore the underspend will then no longer be available to mask further overspends in the other areas. 2.4 Mental Health Services The underspend of 726k essentially is the slippage on Drug and Alcohol funding managed via ADAT. Considerable time and effort has been expended with our partners in order to spend the allocation. However, a carry forward into 2009/2010 will be required. Within the other budgets there are various compensating variances the most significant of which are the nursing overspend in in-patient areas arising from high level of sickness and relatively high levels of observation and also in medical staffing where vacancies are being covered by the use of locum staff which are much more costly. Action is being taken to address sickness absence and the reliance on locums. Despite the significant increase to the prescribing budget for substitute prescribing there is currently an overspend of 68k in this area; this will be investigated as soon as possible 2.5 Public Health Most of the Public Health underspend arises from Ring Fenced allocations particularly for Smoking Cessation ( 190,000), Sexual Health ( 132,000) together with new programmes for Children s Weight Initiative ( 73,000) and Eye Care Review ( 100,000). As a result of the timing of receipt of these allocations development plans are required prior to implementation, this causes a delay and results in a carry forward. Taking the above six

3 month variances into account a projected outturn underspend/carry forward of 650,000 is indicated against these earmarked allocations. 3. Other NHS Scotland Service Level Agreements 3.1 The most significant component of the 643,000 underspend in this line is the exclusions from Service Level Agreements for High Cost Low Volume procedures such as bone marrow and renal transplants and specific high cost drugs. Detailed projections of the year end position indicate an underspend of 1 million. The cost of these high cost/low volume treatments is difficult to forecast due to their unpredictability. 4. Executive Directors 4.1 Appendix 1b shows the budgets for the support services element of Executive Directors portfolios and for the first six months shows a 337,000 underspend. The main component of this is the 174,000 underspend within Policy, Planning and Performance salaries budgets mainly due to vacant posts. However, plans are in place to recruit to these vacancies and also, to support the new staff, a training programme is being developed. 4.2 The supplies budget for the Medical Director shows the impact of income received. This income of 487,000 was received from the Chief Scientist Office for the full year and spend on projects is minimal. The money carried forward from 2007/8 for research and Development, MMC, Consultant Expansion and Healthcare Acquired Infection projects (amounting to around 750,000) has had very little spend in the first half of the year and the budget has been phased to reflect expected spend pattern. It is expected that around 1.2 million of this supplies budget under the control of the Medical Director (mainly related to Research and Development) will not be spent this year and will be carried into 2009/10. This reflects the continued success of NHS Ayrshire & Arran s Research and Development Programme. 4.3 The Executive Nurse Director supplies budget also has income received from external agencies and around 300,000 of this budget is expected to be carried forward for earmarked purposes in 2009/ The supplies overspend by Organisational and Human resources Development Directorate relates to removal costs and excess travel costs which are due for four years following a move of base (eg. for paediatric nurses). These costs are corporate costs which are held by the Director of O&HRD, but are the consequences of actions within other directorates. 5. Deferred Budgets 5.1 A number of deferred budgets are held within the reserves and contingencies line totalling 14.58m. The budgets are only released to the directorates when the activity begins. It is expected that these budgets will require 5m carry forward into 2009/2010.

4 6. Revenue Outturn 6.1 The financial strategy submitted along with the Local Delivery Plan identified an expected carry forward to 2009/10 of 10 million and this remains the projection. The year to date underspend of 3.4 million is marginally below what might be expected at the half year point but as can be seen from the reserves line the majority of the budgets are not phased in to the year to date underspend. If the Waiting Times budget was phased equally this would have added 1.8 million on to the year to date underspend bringing it to the arithmetical figure expected for the half year. 7. Capital Outturn 7.1 The NHS Board meeting held on 23 April 2008 approved the capital programme for 2008/09. The total capital programme amounted to m (inclusive of planned drawdown of m brokerage from prior years). During the year SGHD has agreed to brokerage 7.9 million of this allocation into 2009/10 and to defer receipt of 4 million of Primary Care Premises Modernisation funding. 7.2 Capital expenditure totalling 6.539m has been incurred in the six months against the amended allocation of m for the year. A review of progress and slippage has been carried out with Project Managers. 8. Risks 8.1 If a liability is required to be shown in our statutory annual accounts for equal pay, we would be looking to SGHD for non-recurring funding to cover this since no provision has been made locally. 8.2 Prescribing may overspend due to national negotiations at a UK level and also due to reductions in allocations made in-year by SGHD. 8.3 Extra staffing costs due to Modernising Medical Careers were highlighted to the October Board meeting by the Medical Director. 9. Primary Care 9.1 Primary Care covers four contracting streams (General Medical Services, Pharmacy, Dental and Ophthalmic) delivered by independent contractors. GMS and Pharmacy are generally cash limited, in that they are included within our unified budget, whereas Dental and Ophthalmic are generally non-cash limited, the Scottish Government Health Department meet the costs incurred within these areas. The main issues within each of these areas are as follows:- 9.2 General Medical Services We don t have the allocation notified for 2008/9 due to ongoing national negotiations. The anticipated allocation amounts to around 45 million.

5 More information on areas of spend is shown in Appendix GP Prescribing GP Prescribing has a budget of 68 million net of income (10% of NHS Ayrshire and Arran s spend). Spend information is produced centrally for all Health Boards and runs two months behind. This is an issue, especially, at the year-end with regard to the accuracy of our forecasting NHS Ayrshire & Arran were 38,000 overspent on a budget of 25m. However, within the month of July, GP Prescribing within NHS Ayrshire and Arran overspent by approximately 200, This year prescribing has been influenced by two major factors, Category M pricing and PPRS. Category M pricing relates to the cost of Part 7 drugs within the drug tariff and these are mainly generic drugs. At the start of the year, the Scottish Government Health Department estimated that because of price reductions in Category M prices the Boards were liable to save 54 million and this money was deducted from each Board s allocation (NHS Ayrshire and Arran 4.3 million). These prices are reviewed quarterly so the Boards have had a deduction removed from their allocations prior to the actual saving materialising. October s Category M prices have seen further reductions and discussions are ongoing with SGHD to decide what should be done about this. 9.5 The Government have also agreed a further Pharmaceutical Pricing Regulatory Scheme (PPRS) that will cover all branded medicines. This came into force on 1 October 2008 and should deliver a price freeze on all branded medicines from 1 October 2008 to 31 December Pharmaceutical Services The main issue within Pharmaceutical Services was the introduction in August 2008 of three new services to be delivered by Pharmacists. These were the introduction of smoking cessation and two sexual health services (Chlamydia advice, testing and treatment and emergency hormonal contraception (EHC)). These services were already being carried out in NHS Ayrshire and Arran, albeit in a slightly different way than was proposed by the Government s circular. The Government have budgeted 4.5 million for these services and it will be interesting to see if this will cover the costs. On known figures, NHS Ayrshire and Arran will spend more on EHC than provisional SGHD figures would indicate. 9.7 Dental and Opthalmic Services Although these services are non-cash limited, the cost of the services has been increasing over the last few years (partly because of the introduction of free eye tests) and it may be the intention of the Scottish Government Health Department to move them from non-cash limited to the unified budget. We need to ensure that the allocation we receive to cover these costs reflects the rising trend in the cost of these services. Derek Lindsay Director of Finance 24 October 2008

6 (Alan Farrow)

7 Appendix 1 INCOME AND EXPENDITURE SUMMARY FOR HEALTH SERVICES IN AYRSHIRE AND ARRAN FOR THE 6 MONTHS TO 30 SEPTEMBER 2008 Health Care Delivery Costs: Year to Date Year End Actual Plan Variance Forecast Revised Variance Plan Locally DeliverEd Services (details attached) 285, ,391 1, , ,134 1,344 Other NHS Scotland Service Level Agreements 21,866 22, ,880 45,900 1,020 Unplanned Activity/ Out of Area Treatment 1,132 1, ,874 3, Other Health Care Providers 1,096 1, ,220 2,220 0 Health Care Delivery Costs Total 309, ,590 2, , ,653 2,889 Non Clinical Service Costs Executive Directors (details attached) 10,172 10, ,467 24,567 2,100 Other Non Clinical Service Costs 4,646 4,313 (333) 3,779 3,764 (15) Reserves and Contingencies ,506 14,580 5,074 FHS Income (3,151) (3,158) (7) (5,995) (5,995) 0 HCH Income (10,809) (10,662) 147 (18,504) (18,552) (48) 0 Total Net Revenue Expenditure 310, ,243 3, , ,017 10,000 Revenue Resource Limit 571, ,140 0 Anticipated Allocations 44,928 44,928 0 FHS Non Discretionary Allocations 28,949 28, , ,017 0 Saving/(Excess) Against Resource Limit for year 10,000 0

8 Appendix 1a INCOME AND EXPENDITURE SUMMARY FOR HEALTH SERVICES IN AYRSHIRE AND ARRAN FOR THE 6 MONTHS TO 30 SEPTEMBER 2008 LOCALLY DELIVERED SERVICES SALARIES SUPPLIES TOTALS Annual Year to Date Annual Year to Date Annual Year to Date Budget Budget Expenditure Variance Budget Budget Expenditure Variance Budget Budget Expenditure Variance 000s 000s 000s 000s 000s 000s 000s 000s 000s 000s 000s 000s HEALTH CARE DIRECTOR - INTEGRATED CARE AND EMERGENCY SERVICES Emergency/ Urgent Care 10,666 5,395 5,463 (68) 3,740 1,861 1,907 (46) 14,406 7,256 7,370 (114) Assessment/ Intermediate Treatment 41,573 20,732 20,868 (136) 12,578 6,612 6,817 (205) 54,151 27,344 27,685 (341) Medical Specialties 16,828 8,633 8, ,315 3,766 3, ,143 12,399 12, Care of Elderly 18,391 9,162 9,307 (145) 2, (74) 20,455 10,083 10,302 (219) INTEGRATED CARE AND EMERGENCY SERVICES 87,458 43,922 44,234 (312) 25,697 13,160 13,377 (217) 113,155 57,082 57,611 (529) HEALTH CARE DIRECTOR - INTEGRATED CARE AND PARTNERSHIP SERVICES Community Hospitals and Nursing 21,181 10,551 10, ,938 1,237 1,477 (240) 24,119 11,788 11,950 (162) Ambulatory Care 10,257 5,099 5, ,623 1,292 1, ,880 6,391 6, Planned Care 37,125 18,573 18,720 (147) 8,004 3,974 4,008 (34) 45,129 22,547 22,728 (181) Children's, Women's and Sexual Health Services 26,326 13,221 12, ,951 1,454 1, ,277 14,675 14, Allied Health Professionals 17,008 8,520 8, , ,167 9,077 8, INTEGRATED CARE AND PARTNERSHIP SERVICES 111,897 55,964 55, ,675 8,514 8,624 (110) 129,572 64,478 64, DIRECTOR OF MENTAL HEALTH SERVICES Mental Health and Learning Disabilities 41,226 20,462 20,743 (281) 12,284 5,568 4,561 1,007 53,510 26,030 25, Resource Transfer and Joint Planning 24,397 12,199 12,289 (90) 24,397 12,199 12,289 (90) MENTAL HEALTH SERVICES 41,226 20,462 20,743 (281) 36,681 17,767 16, ,907 38,229 37, MEDICAL DIRECTOR Pharmacy Director 5,670 2,772 2, ,164 2,857 2,947 (90) 12,834 5,629 5,643 (14) GP Prescribing 68,217 33,972 33, ,217 33,972 33,972 0 Primary Medical Services 47,225 21,351 21,357 (6) 47,225 21,351 21,357 (6) Family Health Services 283 (283) 32,749 21,431 21, ,749 21,431 21,431 0 Community Dental Service 2,264 1,090 1, ,511 1,195 1, MEDICAL DIRECTOR 7,934 3,862 4,024 (162) 155,602 79,716 79, ,536 83,578 83, DIRECTOR OF INFORMATION AND CLINICAL SUPPORT SERVICES Capital Charges and PFI Costs 33,025 15,514 15, ,025 15,514 15, Estates & Capital Planning Services 5,228 2,621 2, ,678 2,999 3,038 (39) 10,906 5,620 5, Clinical Support Services 20,459 10,254 10, ,535 2,770 2,996 (226) 25,994 13,024 13,162 (138) ehealth and Infrastructure Services 2,637 1,343 1, ,988 1,040 1,055 (15) 4,625 2,383 2, Information Services 5,918 2,959 2, ,250 3,125 2, Service Development Energy 6,172 2,372 2,410 (38) 6,172 2,372 2,410 (38) INFORMATION AND CLINICAL SUPPORT SERVICES 34,282 17,183 16, ,730 24,861 24,980 (119) 87,012 42,044 41, DIRECTOR OF PUBLIC HEALTH Health Improvement 1, , Ring Fenced Funding , ,212 1, PUBLIC HEALTH 2,227 1,120 1, , ,952 1,980 1, LOCALLY DELIVERED SERVICES TOTAL 285, , , , , ,627 1, , , ,879 1,512

9 Appendix 1b EXECUTIVE DIRECTORS INCOME AND EXPENDITURE SUMMARY FOR HEALTH SERVICES IN AYRSHIRE AND ARRAN FOR THE 6 MONTHS TO 30 SEPTEMBER 2008 SALARIES SUPPLIES TOTALS Annual Year to Date Annual Year to Date Annual Year to Date Budget Budget Expenditure Variance Budget Budget Expenditure Variance Budget Budget Expenditure 000s 000s 000s 000s 000s 000s 000s 000s 000s 000s 000s Variance 000s Public Health - Health and Civil Protection (17) , Chief Executive's Office Policy, Planning and Performance 1, , Finance 3,454 1,727 1, ,157 2,247 2,141 ORG and HR Development 5,030 2,465 2, (174) 5,466 2,636 2,717 Medical Director 4,637 2,306 2, ,386 (208) (270) 62 7,023 2,098 2,032 Nursing Director 3,708 1,921 1,923 (2) 845 (96) (116) 20 4,553 1,825 1, (81) TOTALS 19,821 9,926 9, , ,567 10,508 10,

10 Appendix 2 Allocation Letter Ref. Current Plan Ayrshire and Arran Health Board Allocation letters ME 0 Formula Allocation 546,657,866 HCH1-1 Cochlear Implant Service (24,777) HCH1-2 Audiology Service Modernisation 56,733 HCH1-3 Implementation of HPV Programme 115,566 HCH1-4 Alcohol Brief Interventions and Treatment 1,775,085 HCH Scottish Enhanced Services 947,000 HCH1-6 Pre-implantation Genetics Diagnosis (18,143) HCH1-7 Blood Borne Virus Prevention 419,400 HCH1-8 Keep Well Wave II 1,000,000 HCH1-9 Sexual Health 351,118 HCH1-10 Smoking Cessation Including Keep Well 542,000 HCH1-11 Nutrition Co-ordinator posts 40,000 HCH1-12 Equal pay Unit costs recharged to Boards for (22,472) HCH1-13 Child Healthy Weight Intervention Programmes (HEAT H3) 145,123 HCH1-14 Three Towns Healthy Living Centre and Radio City HLC transition fund 150,000 HCH1-15 Scottish Primary care Collaborative Project Managers for 2008/09 15,000 HCH1-16 Cardiac Funding 106,000 HCH1-17 General Waiting Times Funding 777,000 HCH1-18 Diagnostic Funding 1,106,000 HCH1-19 Pre-Registration Training - Community Pharmacy (100,896) HCH1-20 Continuity of work on dental priority groups 73,500 HCH1-21 Patients Rights & Waiting Times - First Tranche ( 50m) 2,552,000 HCH1-22 Patients Rights & Waiting Times - First Tranche ( 50m) + First Share of 10 1,315,000 HCH2-23 Health Clearance for New Health Workers 27,428 HCH2-24 Tranche 1 of funding to support use of CHI number 40,967 HCH2-25 For implementation of Carer Information Strategies 77,000 HCH2-26 Infrastructure for Health Boards - capital charges ,400 HCH2-27 Support for Board implementation of ehealth Programme ,800 HCH2-28 Ring Fenced for GDS IM&T Facilitator Support 64,798 HCH2-29 AHP Support & Dev Scheme - 2nd Year Outputs 3,384 HCH2-30 HNC Year 1 Funding 86,671 HCH2-31 Implementation of Senior Charge Nurse Review 25,000 HCH2-32 Hepatitis C Action Plan Phase II 251,472 HCH2-33 R&D Funding Allocation ,158 HCH2-34 HNC Year 2 & 3 Funding 140,007 HCH2-35 Review of Community Eyecare Services in Scotland - Pump Priming Funding 132,000 HCH2-36 HIB Vaccine for young children catch-up programme 23,444 HCH2-37 Additional resources for mental health partnership spend 378,000 HCH3-38 Dental Action Plan Support costs and Childsmile Projects 365,000 HCH % marginal costs for Golden Jubilee National Hospital (619,000) HCH3-40 Dental Action Plan Oral Health support costs 370,000 HCH3-41 AHP Support & Dev Scheme - Year 2 Outputs 1,692 HCH3-42 School Dental Service 65,000 HCH3-43 Funding for treatment and rehabilitation services to tackle problem drug use 1,198,000 HCH3-44 Implementation of smoking Action Plan 115,000 HCH4-50 First Qtr allocation for work under Long Term Conditions Collaborative 37,684 HCH4-51 Radio City Healthy Living Centre 50,000 HCH4-52 First Qtr allocation of Mental Health Collaborative Funding 37,685 HCH4-53 ADAT Support Funding 183,527 HCH4-54 Agreed Carry Forward ,961,000 HCH4-55 PACS Deplotment: ERDM ref: F ,314 HCH4-56 Changes to pregnancy and newborn screening programmes 473,663 HCH4-57 Allied Health Professions Support and Development Scheme - Year 2 Outputs 3,384 HCH4-58 Implementation of Review of Mental Health Nursing 21,787 HCH4-59 Keeping Childbirth Natural and Dynamic 7,000 HCH4-60 Funding to support rehabilitation co-ordinator posts 55,000 HCH4-61 Respiratory MCN 50,000 HCH4-62 Dental Priority Group - Oral Health Improvement for Older People 45,000 HCH4-63 Tranche 2 against June outturn 3,108,000 HCH4-64 Food, Fluid and Nutrition funding 20,000 HCH Prescription Charges - reduction in Income Received 1,207,000 HCH TRP Adjustment (2,315,000) HCH Cat M (4,371,000) HCH New Interim Pharmacy Package 272,000 HCH5-73 Scottish Dental Access Initiative - Messrs C & F 40,000 HCH5-74 Nurse Completion of Non-Medical Prescribing Course 17,000 HCH5-75 Sickness absense funding following bidding process 23,451 HCH5-76 Scottish Dental Access Initiative - Mrs A N 80,000 HCH5-77 Revised allocation to boards to support the implementation of Smoking Prevention 400 HCH5-78 To support boards in achieving the 62 day cancer target 38,745 HCH5-79 Implementation of Senior Charge Nurse Review - shortfall 1,000 HCH5-80 Provision of Wigs 97,000 HCH5-84 Counterweight payment for Buddy Dietician 2008/ ,000 HCH5-85 Alcohol Misuse Communications Funding for distribution to ADATS 6,112 HCH5-86 Transfer of 1 SHO Post - HME(J)13/2002-Trauma & Orthopaedics (Ayr) (39,021) HCH5-87 Nutrition of women of childbearing Age, pregnant women and children under 5 230,099 HCH5-88 First quarter allocation from the 18 Weeks RTT programme 133,381 HCH5-89 Palliative Care Model 1,187 HCH5-90 Community Pharmacy Practitioner Champions 21, ,140,362

11 ANTICIPATED ALLOCATIONS: Hollybush House 800,000 Distinction Awards 304, Day Cancer Target 24,998 Ayrshire Hospice - Superann costs 77,802 GMS Global Sum 26,675,000 GMS Board Funds 8,810,000 GMS Primary Care Investment 2,223,000 GMS Quality Payments 7,459,000 Emergency Dental Services 116,800 Primary Care IM&T Facilitator 36,000 Waiting Times Tranche 3 & 4 777,000 Paediatric Intensive Care (865,000) Positron Emission Tomography (PET) Scanning (311,000) Recombinant Factors VIII, VIIIa, and IX (1,800,000) National PACS contribution by SGHD-Required as Revenue Funding 600,000 44,928,211 TOTAL 616,068,573

12 Appendix 3 Spend against budget at Month m Budget Actual Emer. Serv Part. Serv. Ment. Hlth Med. Dir. ICSS Externals Oth. Non. Clinical P/Health

13 Appendix 4 NHS AYRSHIRE & ARRAN SEPT 2008 Year to Date Year end position Line No Primary Medical Services - Unified Budget Payments Actual 000s Budget 000s Variance 00s Forecast outturn 000s Annual Budget 000s Variance 000s 8.01 Global Sum 11,933 11,895 (38) 23,885 23,791 (94) 8.02 Deduction for Opt Outs (Out of Hours and Additional Services) (711) (715) (4) (1,441) (1,430) MPIG correction factor 1,847 1, ,694 3, Total Global Sum and MPIG 13,069 13, ,138 26, Quality aspiration 3,115 3, ,566 9, Quality achievement Total Quality 3,115 3, ,566 9, Directed Enhanced Services 1,230 1,206 (24) 3,374 2,664 (710) 8.09 National Enhanced Services (18) (47) 8.10 Local Enhanced Services (1) 1,800 1, Total Enhanced Services 2,164 2,121 (43) 5,808 5,078 (730) 8.12 PCO Administered 1,247 1, ,494 2, Premises 1,760 1, ,807 3, IM&T Balance of PMS Expenditure Total Primary Medical Services 21,606 21,601 (5) 48,274 47,637 (637) 8.17 Other OOHs expenditure reported as HCH 2,086 2,062 (24) 4,180 4,142 (38)