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HOSC Newsletter

Issue 44: February 2015

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"Challenged Health Economy" status provides welcome financial analysis

Additional support provided to East Sussex as a "Challenged Health Economy" will provide healthcare services with welcome financial analysis, HOSC has learned.

Representatives of NHS England and the NHS Trust Development Authority (TDA) spoke with HOSC at its most recent meeting about their decision in February 2014 to designate East Sussex as one of 11 "Challenged Health Economies". Local healthcare representatives were also present and expressed their support for the Challenged Health Economy programme.

Ravi Baghirathan, Senior Delivery and Development Manager at the TDA, told HOSC that one of the areas of support that the designated "Challenged Health Economies" had received was financial analysis for the local hospital trust from the consultancy firm Price Waterhouse Coopers (PWC). The hospital trust in East Sussex is East Sussex Healthcare NHS Trust (ESHT).

Mr Baghirathan explained that the primary purpose of the analysis was to produce detailed data to help both ESHT develop its five year sustainability plan and the Clinical Commissioning Groups (CCGs) develop their local commissioning plans.

HOSC asked Darren Grayson, Chief Executive of ESHT, why he thought East Sussex was designated a "Challenged Health Economy". Mr Grayson said that both commissioners and provider organisations in East Sussex - not just ESHT - have had financial issues for at least the past 20 years that were well known but could be better understood.

However, Mr Grayson argued that ESHT's financial position is no longer unusual and many more health economies are now in a 'challenged' financial position, particularly hospital trusts, than there were in February 2014. He said that the majority of hospital trusts are now in deficit and the majority do not have the necessary five-year strategic plans in place to demonstrate that they are financially sustainable.

Mr Grayson said that ESHT welcomed the financial analysis as, whilst the Trust has an extremely good understanding of its own finances and is very transparent with its financial reports, it has never had the capacity to undertake a forensic analysis of its finances.

Darren Grayson said that there had been two separate analyses of ESHT's finances by PWC. The first had looked at whether ESHT could reconfigure its services to become financially sustainable; the second was undertaken t o understand precisely why the NHS national tariff payment system does not provide adequate funding for a hospital trust with ESHT's configuration.

Amanda Philpott, Chief Officer, Eastbourne, Hailsham and Seaford CCG and Hastings and Rother CCG, and Wendy Carberry, Chief Officer, High Weald Lewes Havens CCG, both agreed that the financial analysis was welcome and would help to inform the East Sussex Better Together commissioning programme for integrated health and social care community services that is due to get underway in 2015.

Amanda Philpott added that the financial analysis has made it clear to the TDA and NHS England that it was a myth that the health economy in East Sussex could be fixed simply by reconfiguring hospital services.

HOSC was reassured by Pennie Ford, Director of Operations and Delivery at NHS England Surrey and Sussex Area Team, that none of the analysis would supersede local decisions and it was for use by the CCGs and ESHT at their own discretion.

HOSC Chair, Cllr Michael Ensor, said "we are very keen to be kept informed of the progress of the Challenged Health Economy programme, but we recognise that the financial analysis is not yet ready to be shared. The CCGs will be using the financial analysis for the East Sussex Better Together programme, so we will continue to scrutinise the Challenged Health Economy as part of our wider scrutiny of the Better Together programme, starting on 26 March 2015".


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