NHS England has ordered urgent action to tackle problems which are expected to be the trigger for a wider shake-up of health and social care in York and Scarborough where hospitals are also deep in debt.
Senior managers are warning of “bold decisions” over the future provision of hospital services which would leave some patients travelling further for care.
NHS England has put the CCG, which pays for the majority of NHS services, in its formal turnaround regime as it deals with a predicted £4m “risk-adjusted deficit” due to higher-than-expected hospital admissions, extra costs of GP drug prescribing, and a surprise £700,000 bill for out-of-area placements of mental health patients blamed on an accounting error by a separate NHS body.
It comes as York Teaching Hospital NHS Trust, which runs hospitals in York, Scarborough and Bridlington, is describing its financial position as “critical”.
Last night York Central MP Rachael Maskell warned the crisis was a culmination of many problems ranging from hospital staff shortages to cuts in social care.
She said: “It feels like the system is imploding – it’s spiralling out of control.”
CCG bosses have already come under heavy fire over the emergency closure of York’s Bootham Park Hospital amid their decision to transfer the running of mental health services in the area to a different NHS trust. The shutdown in October led to the transfer of vulnerable patients to other units and left the city without inpatient NHS psychiatric care.
In an effort to shore up its position, it has curbed investment in the Government’s flagship Better Care Fund designed to prevent people needing hospital treatment amid concerns the initiative is failing to halt emergency admissions.
The York NHS trust is predicting a deficit of £9.7m in 2015-16. It became the first in the country to be a living wage employer but its situation is so serious it is warning 1,100 low-paid staff it is unlikely to afford the £900,000 cost of their next rise in April.
The financial problems are an echo of previous cash crises facing the NHS in North Yorkshire. A landmark report in 2011 made 44 recommendations for major change but there has been little action since.
Patrick Crowley, chief executive of York Teaching Hospital NHS Foundation Trust, said its financial situation was “not surprising” given the position of the NHS overall. He blamed the difficulties on extra spending on agency staff, cancelled operations following a virus outbreak and high levels of demand for urgent care.
“We are working hard to halt any deterioration in our finances, and to end the year in line with our plans,” he said.
He said in the circumstances it would be “extremely challenging” to meet the living wage increase. It would continue to pay staff the existing living wage which was higher than the minimum wage, the Government’s planned living wage and existing NHS pay rates.
The CCG did not respond to a request to comment last night. In a report for a meeting of its governing body on Thursday, chief clinical officer Mark Hayes will confirm that it is now in turnaround “due to the ongoing deterioration of the financial position”.