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The cost of extra support

When University Hospitals of North Midlands Trust went into financial special measures in March 2017, the provider said it very much welcomed the extra support it would receive from NHS Improvement.

Almost two years down the line, the trust now claims it has racked up £19m in costs due to the regulator’s national financial regime.

In an email seen by HSJ the trust has broken down what it sees as the true costs of the financial regime, outlining the impact rules around trust control totals have had.

At the beginning of 2017-18, the trust was predicting £120m a year end deficit and, HSJ understands, was asked to meet a small surplus control total by the national regulator, which the provider did not agree to.

As a result of not agreeing its control total, the trust said it has lost out on £28m in provider sustainability funds and been left open to £10m in fines from its commissioners.

On top of this, the trust said it has put £3m aside to pay for “external support for the financial recovery programme”.

In 2017-18, the trust did get £100m in cash loan from the Department of Health and Social Care. However, as this was a loan, it did not count as income or contribute to the trust’s financial performance.

NHSI is yet to comment but it should be noted that UHNM has managed to make some gains in its financial position. The provider was able to reduce its £120m predicted deficit to £71m at the end of 2017-18. This year, it was planning for a £44m deficit but has warned this could deteriorate to £69m unless mitigated.

Trouble in the valley

Wye Valley Trust has long faced struggles typical of a small isolated rural hospital but there have been signs of improvement in recent years.

In 2016, the trust was taken out of special measures and the Care Quality Commission raised its rating from “inadequate” to “requires improvement” (a rating confirmed in October this year).

But, in 2018, it has still been among the worst performing in England on both emergency department and elective appointment targets. Finances, too, have worsened, and the trust is now expecting to report one of the biggest deficits relative to income.

These pressures are now straining the trust’s relationship with Herefordshire Clinical Commissioning Group, which holds a block contract for the majority of its activity.

The trust has argued that, given the rise in activity in excess of the assumption made in that contract, the CCG needs to contribute more to ease the load.

After the CCG’s initial offer of extra funding was rejected, the trust said it was reverting to activity based payment by results terms, and sending the CCG the full bill – which the CCG says it will not pay.

In a counter move, the CCG is also now challenging a broader slew of payments to the trust and has said it will commission another provider to clear Wye Valley’s elective backlog.

The dispute has been escalated to national regulators (NHS England and NHS Improvement) and has yet to be resolved.

The grounds of the dispute are technical, but drivers are simple. At the heart is a health system under immense pressure, scrambling for the resources needed to provide timely and safe patient care.

As a side note – it doesn’t speak well of any efforts in the Herefordshire health economy to move away from contractual and transactional relationships to a brave new world where purchasers and providers are as one.