NHSScotland Chief Executive's annual report 2015-16

Chapter 4 - Securing Value and Financial Sustainability

'A key priority will be shifting the balance of care from an acute to community setting by increasing the share of the budget dedicated to mental health and to primary, community, and social care.'

Financial Overview

In 2015/16, health spending in Scotland exceeded £12 billion for the first time and amounted to 40 per cent of total Scottish Government spending. In line with the Scottish Government commitment to protect the NHSScotland resource budget, the 14 Territorial NHS Boards received an above inflation baseline increase of 3.4 per cent, which was directed towards the provision of frontline healthcare services for patients and their families.

For the eighth year in a row, all NHS Boards achieved their financial targets. Once again, this demonstrates the commitment of all those involved across NHSScotland in managing resources, often within very challenging circumstances, and delivering high quality services underpinned by financial strength.

In 2016/17, health spending in Scotland is rising to a record level of almost £13 billion. NHS Boards have received a 5.5 per cent resource increase over 2015/16 budget levels, including investment of a further £250 million from NHSScotland to Health and Social Care Partnerships to protect and grow social care services and deliver our shared priorities.

The Scottish Government will continue to ensure that NHSScotland is equipped for the challenges it faces and will increase the revenue budget by £500 million more than inflation by the end of this parliament. As part of this, a key priority will be shifting the balance of care from an acute to community setting by increasing the share of the budget dedicated to mental health and to primary, community, and social care.

As the most significant reform of our health and social care services since the creation of NHSScotland, over the course of 2015/16 work progressed towards integration with the new Health and Social Care Partnerships becoming fully operational by 1 April 2016. Additional investment of £1.3 billion over five years in our Health and Social Care Partnerships will help to build up our social care capacity, helping people to maintain their independence for as long as possible, in their own homes and communities and meaning that fewer people need to go to hospital to receive care.

How the Health Budget was Spent in 2015/16

The Scottish Government allocated £10.4 billion directly to the 14 Territorial NHS Boards. The seven Special NHS Boards and Healthcare Improvement Scotland received £1.3 billion, and £0.5 billion was used to fund a variety of other support programmes, research and improving access to services.

Capital Investment

In terms of capital investment, 2015/16 saw the Queen Elizabeth University Hospital and Royal Hospital for Children open to patients. This £842 million investment, completed on time and on budget, provides patients of all ages with access to services on a single site and ensures better continuity of care.

The Scottish Government has continued its programme of investment in health infrastructure, with other major investments in the NHSScotland estate. In Dumfries, good progress is being made with the £275 million replacement of the Dumfries and Galloway Royal Infirmary, while in Edinburgh, construction is ongoing on the £230 million new Royal Hospital for Sick Children. The Woodland View Hospital in Ayr opened in the summer of 2016. Part of a £55 million project, the new hospital provides a 206-bed integrated mental health facility and community hospital.

The Scottish Government has committed over £500 million in funding to deliver new community health infrastructure through the hub programme. This funding has delivered projects such as the Eastwood and Maryhill Health and Care Centres (£25 million) and three new health centres in Lanarkshire, serving East Kilbride, Wishaw and Kilsyth (£50 million). Projects in the pipeline include a bundle of new health centres in Lothian to serve Blackburn, Firrhill and north-west Edinburgh (£35 million) and the Stirling Care Village (£35 million).

In major acute infrastructure, the Scottish Government has committed £200 million to deliver new diagnostic and treatment centres across Scotland, as well as further investment in excess of £40 million in NHS Grampian's Baird Family Hospital and ANCHOR Centre projects on the Foresterhill Campus in Aberdeen.

Chart 3: Planned and Actual Efficiency Savings 2015/16 by NHS Board

Source: NHS Boards' Financial Performance Returns

Efficiency Savings

NHS Boards were required to deliver at a corporate level efficiency savings of £293 million for NHSScotland for 2015/16. This equates to 3.0 per cent of their baseline funding. Savings requirements ranged from 0.4 per cent ( NHS Education for Scotland) to 7.1 per cent (Golden Jubilee Foundation Board). Almost all Boards achieved this level of efficiency and a number over-delivered, bringing the final total for 2015/16 to just over £290 million (see Chart 3).

NHS Boards delivered these savings while maintaining the quality of services through a range of initiatives. These included:

• Service transformation activity, such as improving elective flow;
• Drugs and prescribing, including implementing medicines reviews in Primary Care;
• Procurement - a focus on ensuring best value when purchasing goods and services;
• Workforce - reducing the use of locums and agency staff in NHSScotland;
• Estates and facilities - improving energy efficiency and reducing waste; and
• Support services - reducing spend on non-clinical staff.

Chart 4: Glasgow Royal Infirmary - Improvements to Reduce the Time Taken to get Patients to Operating Theatres for Emergency Surgery

Source: Glasgow Royal Infirmary

An example of the innovative way in which NHSScotland is improving the quality of care for patients, whilst also being more efficient is shown here.

Glasgow Royal Infirmary - Optimising Patient Flow

Glasgow Royal Infirmary has been implementing the Institute of Healthcare Optimization's ( IHO) Variability Methodology since April 2015 and as a result has achieved impressive improvements in the safety and quality of patient care. A standardised approach to classify the urgency of each individual patient has been implemented across all specialties accessing emergency theatres, with more than 95 per cent of all patients now consistently getting to theatre without delay. Post-operative length of stay has also been improved by almost one day for all patients who have reached theatre within their urgency waiting time. As the cost of an inpatient stay is usually estimated at around £350 on average, and evidence shows that reducing the length of time patients spend in hospital unnecessarily is beneficial, this is both an improvement in outcomes and a cost saving ^[131] .

Chart 4 shows the impact of specific improvements to reduce the time taken to get patients to operating theatres for emergency surgery within clinically appropriate times. Chart 5 shows the reduction in the length of stay for those patients.

Chart 5: Glasgow Royal Infirmary - Reduction in Length of Stay

Source: Glasgow Royal Infirmary

Focusing on the Future

Recognising that NHSScotland will face financial pressures in future, despite the commitment to maintain funding levels, there will continue to be a focus on innovative ways of both improving the quality of care and making our services more sustainable. A continued focus on reducing unnecessary prescribing, making patient 'flow' through our acute hospitals better, using technological advances to improve outcomes and ensuring that all of our infrastructure and support functions are as efficient as possible will be a major area of activity across health, social care and government during 2016/17 and beyond.