Monday, December 11, 2006
New Nightmare For Alice
"A nightmare from Alice in Wonderland" is how one hospital finance director describes the orders from the DoH Bunker. And no amount of screaming into field telephones by the Commissar and her senior clerk can alter the grim reality of life on the frontline.
All along the line, treatments are being postponed, training scrapped, elderly male and female patients forced to bed-share, and God knows what other low-budget medieval practices reintroduced.
Because the money's run out. Finito.
In fact, as the IFS pre-budget analysis highlighted, it could be even worse than that- a huge spending splurge in the first 7 months of the current fiscal year means that by February/March spending will need to be even more crammed down than it was last year. If you're thinking of getting sick, do it before Christmas.
Today we learn that 103 hospital trusts will end this year with accumulated fiscal deficits of £1.6bn, and at least a dozen are technically bankrupt. Worst placed is the Queen Elizabeth Hospital Trust in Woolwich, whose PFI funding problems we've blogged previously (see here). It expects to have a cumulative deficit by the end of March to £65.3m, equivalent to 56.9% of its turnover. Unless it lays off most of its remaining staff and converts itself into a supercasino, there isn't a cat's chance it can recover. It's bust.
Other bankrupt trusts include Surrey and Sussex Healthcare, Hinchingbrooke in Huntingdonshire, Ipswich, North West London and West Hertfordshire.
The drama has become a crisis because of the Resource Accounting and Budgeting (RAB) regime impose by the DoH and the Treasury in 2001. The system was originally designed to regulate spending by Whitehall departments, but has had a devastating effect when it was applied to overspending hospital trusts:
"If a trust spent £105m, but had an income of only £100m, it would end the year with a deficit of £5m. The new rules sliced £5m from its income in the following year and obliged it to make a £5m surplus. That required the trust to cut its spending from £105m to £90m. Trusts faced with this triple whammy could not achieve the target without damaging patient care and so their deficits escalated."
Today we hear the new orders from the Bunker. In effect they're giving up on turning round the deficit trusts during our lifetimes. Instead, they're putting massive new pressure on solvent trusts to generate surpluses, which can then be counted against the deficits, so that the Commissar can claim the system as a whole is in balance (actually they're demanding a £250m surplus to give them a safety margin).
So now all hospitals are under the cosh- deficits or not. All hospitals must cut down on those "unnecessary surgical procedures". And patients all over the country will suffer the consequences- possibly even if they live in Labour marginals.
Victory! Victory at all costs! Because without victory there can be no survival. No suvival for that patronising oleaginous Australian wind-up merchant we all hold in such very very deep contempt.
Posted by Mike D at 7:58 am