Transcript No Slide Title

Budget Setting &
Forward Look
David Carson
Financial Controller Service Development
NHS Tayside
The NHS Financial Challenge
Black Hole Syndrome
Why?
• Demographics
• Health inflation above RPI
• New technologies account for 1/3 of annual
increase
• Victims of own success
• NHS Tayside £475m to £650m in 4 years
Demographics
Age group (years)
Scotland 1911
80-84
70-74
60-64
50-54
40-44
30-34
20-24
10-14
0-4
Males
Females
300 250 200 150 100 50
0
50 100 150 200 250 300
Population in age/sex group (thousands)
Visit of Health Foundation, 7th October, 2004
Demographics
Age group (years)
Scotland 2031
80-84
70-74
60-64
50-54
40-44
30-34
20-24
10-14
0-4
Males
Females
300 250 200 150 100 50
0
50
100 150 200 250 300
Population in age/sex group (thousands)
Visit of Health Foundation, 7th October, 2004
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Strategic Pressures
balancing act
Kerr Report
Waiting times
Mental health legislation
Patient safety initiative
Health and Safety
Modernising medical careers
DDA, decontamination
SMC/NICE/SIGN
Left field
Budget process
• Double Micawber effect - must balance in
year, MUST NOT overspend, criticised for
underspend (1% carry forward allowance)
• Continuous process of horizon scanning
• Commence building budgets about now to
present to Board Committee in March
• Iterative process
Budget process
• Inflation - pay is 72% of total costs,
Agenda for Change, GP contract,
consultant contract
• Non pay inflation
• Developments
• Ring fenced funding
• Result is inevitably a deficit leading to
a savings target
• Manage at the margins
Budget process
£000s
Funding increase
Additional costs
Pay inflation
Non pay inflation
Service pressures
B/fwd commitments
Developments
£000s
33,000
19,000
7,000
3,000
7,000
7,000
43,000
Projected deficit
(10,000)
Budget process
• Savings targets
• Efficiency savings - service redesign
• Delay developments
Lessons
• The earlier we know, the more
chance we have of absorbing cost
Lessons
- If NHS know early enough in the budget
process we are more likely to accommodate
drug cost increases
- Need robust costs for drugs and timing of
approval to predict impact
- Need details of other impacts on facilities,
side effects, laboratory costs
Win/Win
• Drugs to push care i/p to daycase
to o/p to community
• Reduce length of hospital stay
• Avoid/prevent admissions
• No/few side effects
“The drug itself
has no side
effects but the number
of health
economists
needed to prove
its value may
cause dizziness
and nausea”
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