Health boards in huge £150m deficit
WALES’ seven health boards have collectively overspent by £150m – a staggering 200% increase on the previous financial year, new figures have revealed.
And the budget deficit is only set to get worse, with health boards potentially facing a £175m “black hole” by the end of 2017-18.
The Welsh Government said the deficits were “unacceptable” and reiterated that it will not offer health boards any additional money.
Dr David Bailey, chairman of the BMA’s Welsh Council described the 12-month increase as “deeply concerning” but not surprising.
He said: “Wales is facing unprecedented recruitment challenges in various health professions and while work is being undertaken to address this – most notably the Welsh Government’s Train Work Live scheme – patients still need to be treated, meaning agency spend inevitably increases.
“Deficits of this kind are unsustainable and ultimately patients bear the brunt of the cost. Empowering clinicians to take decisions and manage
their own waiting lists, improving care closer to home by investing in primary care and promoting Wales as an attractive place to practice medicine will help to bring the deficit down.”
In 2015-16, health boards combined recorded a £50.3m budget deficit, with Hywel Dda and Betsi Cadwaladr University Health Boards the only two to overspend.
A year on, the health boards have to treble their deficit to £147.8m in 2016-17.
Hywel Dda (£49.6m), Abertawe Bro Morgannwg (£39.3m), Betsi Cadwaladr (£29.8m) and Cardiff and Vale UHB (£29.2m) each recorded significant overspends.
And latest predictions show some health boards are set to increase their overspend once again by the end of this financial year.
Besti Cadwaladr University Health Board, which is currently in “special measures” – he highest level of government control – had planned to overspend by £26m in 2017-18.
But a report for the board said the overspending could reach £50m “without significant intervention”.
Shadow Health Secretary Angela Burns said: “The Welsh Government’s financial mismanagement of the Welsh NHS is having a profound impact upon the patient experience right across Wales. In March, the First Minister threatened health boards with special measures if they overspent their allocations.
“What next the for Betsi Cadwaladr, which is already under their control?
“This money will have to be accounted for somewhere, and if it merely disappears from next year’s budget then the consequences for frontline services could be very damaging indeed.”
In response to the projected deficit, finance director for operational finance at Betsi Cadwaladr UHB, Huw Thomas, said: “We are taking significant action in relation to known areas of pressure, both to deliver short-term savings and better value services in the longer term.
“We are doing all we can to both deliver high quality services and meet our financial targets.”
Hywel Dda UHB, which is under the second most serious form of control known as “targeted intervention”, is forecast to have a £59m budget deficit in 2017-18. It means that £32m of savings are still needed to take account of cost pressures.
Its director of finance, Stephen Forster, said: “Effectively this represents a standstill position in expenditure compared to our 2016-17 plan as during the year we had received non-recurring income that was no longer available in 2017-18.”
It is the same story for both Cardiff and Vale UHB and ABMU health boards which are predicted to overspend by £30.9m and £36m respectively – although ABMU is currently predicting a smaller deficit than in 2016-17.
Alex Howells, interim chief executive officer of ABMU, told the Assembly’s health committee last week: “One of the key drivers affecting our position at the moment is our workforce costs and the cost of our current workforce model.”
Cwm Taf, Powys Teaching and Aneurin Bevan University Health Boards are expected to break even.
Finance Secretary Mark Drakeford announced earlier this month that the Welsh NHS will receive an extra £230m in 2018-19 – an increase of around 1% in real terms – and £220m in 2019-20.
But think tank and independent charity the Health Foundation said Wales will still need to find significant savings to keep pace with pressures.
It claims the Welsh NHS will have to find efficiencies of 1.8% if the UK Government does not foot the bill for the 1% cap on public sector pay.
Adam Roberts, head of economics, said: “Over the coming years the NHS in Wales, as in the rest of the UK, will be facing increasing demand and rising costs from new medicines and technology.
“The focus must be on improving efficiency and securing a sustainable workforce.”
The Welsh Government says health boards need to “take action” to improve their financial position.
A spokesman said: “Our position on this is unchanged. These forecast deficits are unacceptable and the four health boards will not receive additional funding.”
GRIM experiences could await patients if Wales’ health boards face a £175m “black hole” by the end of 2017-18.
There is deep concern at the 2016-17 overspend of nearly £150m, up from £50.3m in 2015-16.
The Welsh Government is adamant the “deficits are unacceptable” and the four affected health boards will not get extra cash.
The BMA also considers such deficits “unsustainable” and warns that “ultimately patients bear the brunt of the cost”.
People across Wales need a health service that has access to the world’s most effective treatments and technology and is staffed at every level with the very best men and women for the job. This is unlikely to happen if the organisation is riven with fear that it will fail to balance the books.
Betsi Cadwaladr University Health Board is already in “special measures” and Hywel Dda UHB is the focus of a “targeted intervention”.
Patients and their families will worry that the NHS in Wales is creaking. They have seen recent reports of key health targets being missed in Wales and will ask if the dream of a health service free at the point of need is under threat.
The overspends by Hywel Dda (£49.6m), Abertawe Bro Morgannwg (£39.3m), Betsi Cadwaladr (£29.8m) and Cardiff and Vale UHB (£29.2m) are indicative of the financial pressure faced by the health boards.
Finance Secretary Mark Drakeford has announced that the NHS in Wales will receive an extra £230m in 2018-19 and £220m in 2019-20. This will be welcomed by managers who sit up into the night trying to identify savings but the pressure will remain to deliver seismic improvements in efficiency and delivery.
There is never going to be a moment when the NHS can start with a blank slate. Doctors, nurses, specialists and other staff daily have to deal with life and death situations – but Wales can still embrace reforms for the good of citizens in every community.
This is not just about changing how health services are run. It means bringing change to how we live.
It is estimated that in 2015 the NHS spent £35m treating preventable diseases that were caused by inactivity.
If we could tackle the epic cost of bad diets, smoking and alcohol abuse then the NHS would be spared the task of dealing with the consequences of destructive behaviour.
It will take action across the whole of society to ensure the NHS can meet the demands of the decades ahead. The increase in life expectancy should be celebrated but it essential the resources are in place – in both social services and the NHS – to ensure that people receive nothing less than the very finest care in their later years.
Likewise, a healthy society must have excellent mental health provision and Wales cannot afford to fall behind in this area. We have the challenge of applying the values and energy that drove the creation of the NHS so it thrives in the years ahead.