NHS looks for radical solutions in fight to cut £250m

The Yorkshire Post estimates more than £250m will be saved by NHS hospitals serving patients from the region in the coming year, slightly more than in the past 12 months.

But the savings will be harder to achieve because demand for care has risen, they face another real-terms cut in funding for most of their services, and because “easy-win” savings – switching to cheaper drugs or cutting back-office staff – have already been made.

The need for further savings means health chiefs across the region are looking at more radical steps to save money by reducing demand for expensive hospital care. Major reviews in coming months are expected to prove most controversial in North Yorkshire and in the Wakefield, Pontefract and Dewsbury areas.

The new round of savings needs to be delivered at a critical time as GPs prepare to take charge of £65bn of NHS expenditure from soon-to-be abolished primary care trusts (PCTs). Latest figures from the region’s 14 PCTs show all ran up a surplus in 2011-12 except in North Yorkshire which broke even only after receiving extra funding.

NHS chiefs claim they have exceeded a savings target totalling nearly £500m in Yorkshire in the past 12 months across the entire range of services including GP, community and mental healthcare, but the biggest proportion of savings was made in the hospital sector – although officials in North Yorkshire admit they face serious problems achieving their target mainly due to extra hospital expenditure, despite a focus on reductions in hospital referrals and visits to A&E.

Only the troubled Wakefield-based Mid Yorkshire hospitals trust, which runs NHS services in Wakefield, Pontefract and Dewsbury and has been beset by serious financial problems for a decade, is running a deficit, totalling £19.7m in 2011-12, despite £14m of extra funding. It blames higher-than-expected staff costs to meet waiting time targets, a £4.4m employment tribunal settlement and problems achieving its £30m savings plan. It is believed it will run another deficit in the next 12 months in the region of £15m.

Overall, Yorkshire Post analysis suggests nearly half of 16 hospital trusts serving patients from Yorkshire will fail to achieve their cost-saving targets in 2011-12. Significantly, many trusts have treated more patients than planned in an early indication key plans to cut hospital referrals are struggling to have an impact.

Among trusts which will fall short of their savings targets are the Hull and East Yorkshire trust, which is expected to achieve 70 per cent of its £21.5m target, and the Barnsley trust which is due to be £2m short of its £7.4m target. Both blame demand pressures which has meant their capacity could not be cut as expected.

The South Tees trust, providing services in Middlesbrough and Northallerton, is likely to be £4m short of its £22m target, while Sheffield Children’s Hospital is expected to achieve 80 per cent of its £5.7m target. The Scarborough and Bradford trusts will also fall marginally short.

Those trusts under pressure to save more in the coming year include South Tees, Doncaster and Bassetlaw, North Lincolnshire and Goole, Sheffield Teaching Hospitals, Barnsley, Harrogate, Hull and East Yorkshire, and Rotherham.

Bosses at the York trust, which will take over the Scarborough trust in July, predict the combined savings target of £18m in the coming year will be a “significant challenge”. The Scarborough trust will continue to receive a subsidy worth a £8m year to cover the extra costs of its services.

Neil Chapman, director of finance at hospitals in Leeds which faced heavy criticism yesterday for standards on three elderly care wards, said it had saved £32m since April.

“That’s probably the largest saving ever made in one NHS organisation in one year,” he said.

“Every penny we save is reinvested in patient care. The future is challenging – we do not expect more money to appear in these hard economic conditions so we have to improve what we do and the way we do it if we are to continue to deliver care to those who need it.”