NHS Grampian bosses admit financial deficit will be hard to tackle
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NHS Grampian finance chiefs have admitted the health board will face a “reasonably significant deficit” this year as it aims to plug a £60 million gap.
While it did meet three of its financial targets for the last financial year, things are looking a bit tougher over the next 12 months.
A paper explaining NHS Grampian’s year end financial position went before members of the board yesterday.
Assistant director of finance Alan Sharp said the health board’s budget was helped in March thanks to funding from the Scottish Government to help with system pressures.
The cash from Holyrood, along with staff using up annual leave carried on from the previous year, helped to ease the £14.9m overspend.
NHS Grampian is also currently reporting an underspend of £0.6m.
But even though the board managed to find balance in the last financial year, Mr Sharp admitted the underlying financial challenge for NHS Grampian continues.
At a meeting of the NHS Grampian board in April, it was estimated that the health board would face a £60m black hole over the next year.
Mr Sharp explained that multiple factors were to blame.
But he noted that inflationary pressures were a “significant” contributor, particularly costs for energy, drugs and medical supplies.
Mr Sharp also told board members that a number of one-off measures used to help balance the books last year will not be available again.
He added: “Even with the full delivery of our plan and savings for the year, it is likely that we will not be able to achieve a revenue breakeven position.”
And he reckoned it was likely that NHS Grampian will overspend against its revenue budget.
The increasing cost of drugs raised some concern with board members.
Dennis Robertson asked if any work was going on with drug companies to find a way to reduce prices in a bid to help health boards across the country.
Mr Sharp told him that conversations about drug costs were ongoing at both a UK and Scotland level.
He said: “There is a national UK wide scheme which regulates the costs of some very high-cost hospital drugs.
“That’s currently being reviewed by the Westminster Government who are in negotiations with the pharmaceutical companies.
“There are also big pressures on costs around the drugs which GPs prescribe at the moment and they particularly impact on our health and social care partnerships.
“A lot of that is just down to inflationary pressures of the cost of raw materials and labour, which has gone up across the world and not helped by the conflict in Ukraine.
“There are discussions ongoing, but there’s still a lot of upward pressure on our drug costs at the moment.”
The latest figures from February 2023 show that GPs prescribed 806,883 items at a cost of nearly £10.2m.
Omeprazole which is used to treat heartburn and indigestion ops the table as the most common drug issued to patients.
It is used to treat heartburn and indigestion.
While paracetamol was the second most-prescribed medication.
In 2021, prescriptions of the the painkiller across Grampian and the Highlands and Islands cost more than £1.1 million.
NHS Grampian’s most-prescribed medications and their total costs for February are listed as follows -
Omeprazole (29,516) – £157,365.22.
Paracetamol (14,368) – £53,018.21.
Aspirin (10,912) – £17,890.28.
Salbutamol inhaler (10,474) – £19,466.22.
Amlodipine (9,652) – £12,512.29.
Atorvastatin (8,820) – £14,862.89.
Levothyrox (8,724) – £15,713.14.
Ramipril (8,348) – £17,737.62.
Amoxicillin (8,077) – £28,925.01.
Sertraline (7,271) – £11,745.08.
Chief Executive of NHS Grampian, Professor Caroline Hiscox said NHS Grampian’s financial position is an “absolutely critical” part of its decision making going forward.
She explained that the health board’s five year plan recognised that its financial position is not going to be balanced for a number of years.
“That requires us to think about the longer term and to be really clear and transparent about why and how we are making our decisions,” she explained.
NHS Grampian will work closely with integration joint boards and local councils in a bid to try and find potential savings.
