Wiltshire Clinical Commissioning Group's financial troubles: starting a debate on NHS funding
"We cannot carry on doing the level of activity we have in the past two years" - that was Wiltshire Clinical Commissioning Group's Finance Director Simon Truelove's message to this week's meeting of its governing board (October 20.)
Marlborough News Online reported the day before that the CCG will miss its target surplus for this financial year by £4.8 million and has to implement a 'Financial Recovery Plan'. A letter had been sent to all the CCG's GP members outlining the recovery process and the dangers.
As a percentage of its £540 million funding for 2015-2016 that £4.8 million gap does not seem very large.
When I met with Simon Truelove after the meeting he emphasised the CCG was not forecasting a deficit, but a reduced end of year surplus of £700,000 instead of the required £5.5 million which is one per cent of their budget.
So why does this financial situation merit the adjective 'dire' - used by the CCG's Chairman, Dr Peter Jenkins, at the board meeting? And why has NHS England come down so hard on the CCG?
The surplus is not a 'profit' that then goes back to Jeremy Hunt's piggy bank. Importantly, the money comes back to the CCG on top of next year's funding from the Department of Health. So lack of the full 'surplus' is - in part - raising the unpleasant vision of a £23 million cash gap for the CCG in 2016-2017.
The surplus is also vital for the CCG as it is used as a mandatory control measure so NHS England can ensure the CCG is being properly run. And if the Financial Recovery Plan is not accepted, NHS England could intervene and the CCG would lose its autonomy - and plans it has been working on since it began work in 2012 might fall.
What, I asked Simon Truelove, has caused the CCG's current financial problems? One cost that has gone beyond the CCG's forecast is the number of 'elective operations' - like new knees and hips - being done by the three acute hospitals (GWH, Salisbury and RUH) and by the independent hospitals - operations that the CCG must pay for: "We may have to fix the amount we spend at our acute hospitals."
In taking this kind of action the CCG is in a good position: "We are more credible because we are a clinician-based organisation. Our clinical leaders have absolutely taken on board our financial situation. They do not want the NHS privatised or changed - they absolutely support its work with the most vulnerable."
"But there are difficult decisions to make. Our clinicians are in a good place to challenge clinicians doing unnecessary procedures - for instance at the independent hospitals."
Another cost increase has been in prescribing. Part of the recovery plan will focus on 'prescribing waste' - largely repeat prescriptions that end up unused in bathroom cupboards.
There is also the cost pressure of funding nursing care - the part of self-funders' residential care home bills that is considered to be health care rather than accommodation costs and can be claimed back from the NHS.
Then there is the government's Better Care Fund (BCF) policy. This was aimed to force a greater integration between health services (CCGs) and social care (local authorities) and to keep the frail and elderly out of hospital until absolutely necessary.
Simon Truelove explains that for Wiltshire it involves the transfer this year of £27.1 million - £15 million of it new money - from the CCG to Wiltshire Council: "In essence top sliced from the CCG for the Better Care Fund. This has left us with less room for manoeuvre."
To fund this transfer of funds the CCG was allowed to reduce its 'headroom' - or annual contingency fund - from two per cent to one per cent. The BCF partly consolidates the CCG's aim of treating people in the community and their homes - with less reliance on hospital admittance.
The BCF has broadened this work out and is having good results: delayed transfers of care ('blocked beds') are at their lowest for two years and below the BCF's target - there are fewer hospital admissions from nursing and residential homes - emergency admissions of over 65s are down four per cent by the end of July - and so on.
Simon Truelove sees these 'green shoots' as being very positive. But they are not yet translating into money saved: "We have still seen a gradual increase in hospital activity and people who are going to hospital are just having more complex illnesses and need to stay there longer."
Taking a wider view of NHS funding for the county, Simon Truelove explained that it has been low for many years. This is because Wiltshire is considered to be a generally healthy and wealthy county with one of the highest life expectancy rates in the country.
It has not got the health problems of towns in the north of England, of London or even of Swindon. It has no inheritance of industry-based health problems caused by, for instance, pollution, or the rapid population increase experienced by Swindon. So its share of the NHS budget has been kept about 2.3 per cent or, at current levels, £12 million below what it might expect to receive - even though the over 65 population is higher compared to the national average.
In return for the extra £8 billion promised in the Conservatives election manifesto (which was inflated to £10 billion in Jeremy Hunt's party conference speech) the NHS is being asked to make savings over the next five years of £22 billion.
Simon Truelove gives just a little sigh - it is difficult enough to make the annual round of in-year savings called QIPP (for Quality, Innovation, Productivity and Prevention and pronounced 'Quip'.) In fact the CCG's 2015-2016 QIPP targets are not all being met yet.
The problem is that since the NHS was created in 1948, science has meant it has to pay for an unforeseen and increasing number of expensive interventions before birth, at birth and in old age: "How much longer can the NHS continue to expand - that's the big debate - to be honest."
However, Simon Truelove realises that no politician is going to stand up and say people have to pay for this treatment or that, or the NHS must stop saving - for example - very premature babies. He does say: "Procedures with minimal clinical benefits may have to be curtailed."
There must, he says, be a debate, and it will have to be had at a local level: "How do you change the population's expectation of what the NHS can do for you? If we only have a fixed amount of money, something has to give. From where I'm sitting we're ramming a square peg into a round hole."
During the board meeting some anxiety was voiced that the Financial Recovery Plan might interrupt the good work the CCG has initiated and which was beginning to show clear signs of improvement.
The CCG's Accountable Officer, Deborah Fielding: "We are delivering the new service changes - those are not making the savings, but they are making a difference to care on the ground - and that's really important."
Chris Graves, who chairs Healthwatch Wiltshire which has been monitoring patients' response to the policy of treating people at home or closer to home and preventing unnecessary hospital stays: "Patients say you're doing the right thing".
And Dr Richard Sandford-Hill, who is the GP Chair of the CCG's west Wiltshire locality, was adamant: "We've got to try and hold our nerve. We must continue delivering exactly what we said we would. If we weren't doing what I think is the right thing, what kind of situation would we be in now?"