TSA Draft Report: A Summary from a Unite The Union Activist

Kings College Hospital

Secretary: Frank Wood

 

South London Hospitals: Cuts, closures and redundancy

 

Introduction

The placing of three recently merged Hospitals onto the so called Regime for Unsustainable NHS Providers (UPR) offers little new in dealing with the historic debt which has resulted from years of under funding, costly PFI schemes and organisational uncertainty. In order to now deal with the government induced crisis south London Healthcare is to be carved up with the threat of many services (if not an entire hospital) being outsourced and Lewisham Hospital (in the very centre of a deprived and populous community becoming a walk in treatment centre and a centre for routine operations.

 

Process

This draft report, the outcome of 75 days work by the administrator, represents the first stage in a 4 step process. Now, from November 2nd to December 13th, there is to be a consultation process.

 

Then the Trust Special Administrator (TSA) will draft the final report to the secretary of state including an analysis of the costs of the PFI contracts (which will be confidential due to commercial sensitivities) and the options open to the Department of Health will be covered in the confidential paper.

 

The secretary of state will then make a final decision which is final and has no right of appeal to be published by February 1st 2013.

 

The debt

SLH came into existence on April 1st 2009 as a result of the merger of

Queen Marys Sidcup QMS

Queen Elizabeth Hospital QEH

Princess Royal University Hospitals PRU formerly Bromley Hospitals

 

The 3 predecessor organisations had overspent every year since 2004/5. At the point of merger these had accumulated deficits of £149 million. By the end of this current financial year i.e. March 31st 2013 it is projected the debt will be £207 million. The total cumulative debt for the period from 2004 up to merger and then the period from merger to the end of this year will be £356 million. The annual deficit for 2011/12 was the largest in England at £65 million representing 14.8% of its income. The trust would be insolvent without the significant additional public dividend capital that it has received (£226 million in the last 4 years up to and including 2012/13).

 

The 2012/13 forecast deficit:

PRU £20.3 million

QEH £28.3 million

QMS £10.9 million

 

The combined trust employs 6300 staff and has an annual income of £440 million. At present its expenditure exceeds its income by about £1 million per week.

 

Total revenue declined by £32.1 million over the 4 years (6.9%) and finance costs, principally being the 2 PFIs at PRU and QEH have increased by £6.4 million (29.5%) over the same period. As a result, despite significant reductions year on year in operating costs the trust still has an operating deficit.

 

The trust has six PFI contracts and spends 16% of its income on these compared to the national average of 10.3%.

 

PRUH annual cost £30m

PRUH equipment £5.4m

QEH £29.1m

QEH equipment £4.6m

 

The income declined due to:

 

  • The national tariff deflation (which declines in real terms year on year to drive efficiency improvements)

 

  • Commissioners plans which sought to shift care to the community.

 

Even should the trust achieve its projected CIPs it will likely continue to be in defecit every year due to the efficiency requirement in the national tariff, i.e. its inability to match the decline in real funding.

 

The proportion of the trusts total cost base spent on staffing rose from 58.7% to be forecast as 62.2% in 2012/13. This was as a result of temporary or agency staff costs:

 

In 2011/12 agency costs where £13.3 million nearly £10 million over budget.

 

In 2012/13 agency costs are projected to be £33.8 million

 

Short term planning has led to full time posts being lost to be filled by expensive agency staff. The trust has a history of failing to achieve it’s cost improvement plans and the TSA describes that plans are often “a short term reaction to pressures and demonstrate a lack of planning”. There is an “absence of a clear and embedded turnaround strategy across the trust.” The trust is significantly less efficient in its use of staff, equipment and materials. Many buildings are underused. Some of the buildings on the QMS site are entirely empty.

 

Summary

Since 2004 the three trusts have all been considerably in deficit as a result of a triple whammy of :

  • Reduced funding from the new tariff system and the shift in funds to community care.

 

  • The high cost of the 2 PFI schemes and the cost of unfit buildings and estate.

 

  • The uncertainty and crisis management which has led to high staff costs and inefficient use of much needed healthcare resources.

 

The cumulative effect has been to divert hundreds of millions of health funds into propping up the three hospitals and into paying two financing schemes which should not have been approved.

 

South London’s wider healthcare

The scope of the UPR was widened to include Lewisham Hospital which, as the only other non-FT in the area was subject to DoH control. In 2009 LH was identified as being “financially challenged”. However, last year, LH did break even albeit just and recently due to the addition of Lewisham community services. The projection is that LH will return to a deficit next year.

 

As a consideration of the causes as to the difference between survival rates at the week and week end Emergency care is judged to require amongst other things:

 

Increased consultant presence across all 7 days of the week with multi-disciplinary assessment, consultant on take to be freed from other duties and 24 hour access to diagnostic imaging.

 

Similarly maternity care is judged to require obstetrician led maternity services 24/7 with obstetric consultant presence on the labour ward, midwifery staffing ratios at a minimum of 1 midwife to 30 births and one-to-one care during established labour from a midwife.

 

As a result hospitals would need to “increase the staff they have on their rotas.”

 

Summary

The overall impression is that whilst Lewisham is performing adequately it:

 

  • Cannot continue to meet future financial targets.

 

  • Cannot provide a safe and high standard emergency service or maternity service.

 

This assessment is based not upon the quality of care Lewisham already provides to a large and diverse community but upon an opinion of the TSA.

 

Recommendations

1)     QMS is developed into a Bexley Health campus owned by Oxleas NHS Foundation trust.

 

2)     Vacant and poorly used premises will be vacated and sold including Orpington Hospital, areas of QMS and so on. Surplus estate should be sold. In QMS where the land is in green belt the possibilities for development are limited so the likely value low. Some of the land at Lewisham will also become surplus to NHS requirements and be sold.

 

3)     Additional funds will cover the excess PFI costs at QEH and PRU and the accumulated debts are written off.

 

4)     Emergency care will be provided at 4 sites i.e. Lewisham will cease to have a full casualty department. This would mean the transfer of some 70 patients per day to a different location. The estimate of likely increased travel time for the ambulance service is an increase from 13 minutes to around 21 minutes but it is recognised that this may climb to nearly 27 minutes in some cases.

 

5)     Maternity care. It may be centralised i.e. closed at Lewisham.

 

6)     LH may become centre for non-complex elective inpatient procedures. It is recommended that this is on a similar model to the SW London Elective Orthopaedic Centre in Epsom ran through a partnership model across the 4 trusts and perhaps involving the independent sector in the partnership.

 

These recommendations effectively mean that the short lived SLH trust will be scattered to the 4 winds with:

QEH and Lewisham becoming a new organisation

KCH taking on PRU (or PRU being tendered out to the private sector)

 

Operational efficiency

As the TSA believes that the trust presently has a high medical staff cost relative to income by bringing this into line with other trusts the medical staff could be cut from 862 at present to 722 (or 17%). In terms of nursing numbers the TSA feels these are too high and weighted towards too many senior nurses but admits more detailed level benchmarking is required.

 

Theatres are underused and the outpatients departments have not addressed significant non-attendance rates.

 

The number of scientific, technical and therapeutic staff is judged to be excessive and pathology, speech and language therapy and pharmacy get special mention. A high level review has established that of these pathology and pharmacy had the greatest benefit in delivering savings by outsourcing. Similarly the 1300 back office staff are highlighted as ripe for both on and off shore outsourcing.

 

Summary

Effectively the savings (i.e. the reduction in south London health care costs to meet the reduced real funds available) are achieved by dismantling Lewisham and Sidcup Hospitals and by handing over PRU to Kings.

 

The former South London Hospitals will see “excess land” sold off at give away prices and staff outsourced to the private sector. The private sector will be given the opportunity to be involved in the cherry picked simple surgical procedures to be ran as part of what will be the largest elective surgery centre of its type in the UK.

 

As a result of these changes a thriving and diverse community will see its casualty services disappear and its much needed maternity services centralised.

 

The failure of SLH is pretty much the same as for the rest of the NHS. It has seen its funds cut, it has been forced to compete for these dwindling funds with community services, its new buildings schemes saddled it with unmanageable debt and the complete lack of planning introduced by the internal market meant staff costs and inefficiency went sky high.

 

Unless a national Health Service with clear central planning, public capital funding (and ending of PFI) and funding according to local  health need is in place then there are likely to be 20 more trusts like SLH facing similar performance management. For local people in those areas that means more cuts in services, privatisation of cherry picked services, privatisation and outsourcing of health workers and job losses.

 
Frank Wood UNITE
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