Budget brings small increase in health expenditure, but rising demand means significant challenges lie ahead

Summary

• 2.5% increase in revenue budget welcomed but ‘significant challenges’ remain from rising demand, complexity of health care and inflationary pressures
• Efficiency initiatives have made better use of existing resources, e.g.: elective admissions (capacity up 15%), pathology (6,000 more tests), physiotherapy (capacity up 69%), radiology (18,000 additional procedures)
• Department has saved £1m on overtime, £1m on drugs, £1.5m on management efficiency, £350,000 on head office staffing, and £200,000 on energy
• Plans progressing for first on-Island pacemaker implantation in April this year
• Ultimate aim of providing ARMD (Age Related Macular Degeneration) service on-Island from within existing resources
• Realignment of age related entitlement to exemption from certain charges to reflect revisions to state pension age
• Examination of arrangements concerning exemption from prescription, and other charges together with level of charges
• Department reviewing certain of its services in the light of the Scope of Government report. Sustainability of the NHS model is a key debate. Focus on preventative medicine and health education

The Department of Health’s revenue budget for 2013/14 shows an increase in the order of 2.5% from that of the previous financial year.

The Department welcomes this continued support for its activities, particularly in these times of great financial constraint, but the Department will still be faced with significant challenges to operate within its budget, not least because of ever continuing demand for its services; the continuing complexity in the development of health care and inflationary pressures.

To address such challenges, and further focus on efficiency and effective working, a series of work streams were initiated by the Department under the overall banner of ‘Meeting the Challenges Strategy’ which, coupled with initiatives to encourage workforce engagement, have resulted in cost savings and efficiencies some of which have been driven by the Department’s lean management project ‘Fit for the Future’.

This work will continue and, collaboratively with audit colleagues from both on and off Island, strands of work to examine the way we work in a number of areas, involving both primary and secondary care, including contractual relationships, will be undertaken. For example, between April 2010 and September 2012, total referrals to Noble’s hospital increased by 5%, but by implementing various efficiency measures, over the same period, capacity for elective admissions was increased by 15%.

Between 2010 and 2011 alone pathology activity for just clinical chemistry tests alone increased by over 6,000 a year. Radiology work has risen from a total of 55,332 procedures for 2007 to 68,618 in 2012 – an increase of over 18,000 new procedures without increased headcount being provided.

Introducing self-referral for physiotherapy - which has eliminated the waiting list - has increased capacity by 69% compared to the former appointment system. In the past three years, among other initiatives, the Department has saved £1 million through revised controls on un-contracted hours and overtime through better use of bank staff; a further £1 million through greater use of generic drugs and other prescribing initiatives; £1.5 million through a variety of lean management and efficiency developments; £350,000 by the reduction in HQ and finance staffing; further contained costs with regard to certain drugs, the MEDS out of hours service and other efficiency methods including over £200,000 worth of cost savings due to energy initiatives and £450,000 due to nursing skill mix reviews.

The Department remains acutely conscious of not only maintaining an effective state-funded National Health Service in the Isle of Man, but also of achieving the objectives of its Strategy for the Future of Health Services and doing so in a way that is consistent with the priority accorded to wellbeing in the government's ‘Agenda for Change’ strategic policy programme.

The Department welcomes and applauds the recognition in that document that the ‘....wellbeing of our community is fundamental to our quality-of-life’ and will play its part in sustaining such well-being. It will do so with particular regard to pressing issues such as waiting lists and with full awareness of the government's key commitment to protect the vulnerable.

The Department is pleased with recent developments concerning the on-Island pacemaker service. Following the appointment of a physiologist from within current establishment to lead and develop this service, the plans previously drawn up have been formalised and further detail added to enable implementation of the service to begin.

The Department is currently developing in detail the policies and procedures to enable the safe treatment of our patients. It is essential that all of the Department’s staff are fully aware of the procedures and equipment to be used. The training programme is underway in conjunction with the expert team at Liverpool Heart and Chest Hospital, with the ultimate aim of commencing the Island’s first pacemaker implantation in April.

The Department expresses its sincere thanks to Noble’s Hospital Gifts Trustees who have funded the set up costs and training costs for this service. The Department has also clearly understood the representations that have been made to it lately concerning Age Related Macular Degeneration or ARMD.

Detailed discussions have taken place with colleagues from the expert team at Aintree Hospital, with the ultimate aim of providing the ARMD service on Island. There are several stages in the diagnosis and treatment of ARMD and careful consideration is being given to which stages of the patient pathway can be safely and effectively delivered in the Isle of Man, ensuring that the decisions made must have a sound business plan sustainable for the future.

Whilst the Department is fully aware of the urgency from a patient perspective to bring, at least in part, this service to the Island, it is essential that these complex matters are fully established in advance of making any determination. Additionally, of course, these decisions cannot be separated from the issue of resources.

Consequently the Department hopes that patients and their families will recognise the need for further patience whilst professional advice is sought from the Royal College of Ophthalmologists with regard to the options that the Department feels are sustainable. As soon as the Department can confirm the final plan for this service it will do so, ensuring this is delivered within the current resources available.

The debate concerning the sustainability of the NHS model for healthcare, not simply on the Island but more broadly, is a key debate and one that the Department is highlighting. As such it's only appropriate that the Department examines how its costs are incurred; whether the ways in which particular services are delivered and provided remains appropriate and whether there is scope for alternative delivery methods.

The Department is therefore very happy to consider services in the light of the adoption by Tynwald of the government's response to the ‘Scope of Government’ report. Of course, in parallel to such scrutiny of services, their appropriateness and their delivery, there must be a widespread recognition that the nature of health care on the Island may change.

Financial and resource imperatives, together with the need for ever improving efficiency, are likely to drive such changes. In the forthcoming year the Department will, in common with others, realign age related entitlement to exemption from certain charges to reflect those revisions to state pension age. Further, virtually 90% of prescriptions issued each year are to persons who, in some way, are exempt from prescription charges.

The Department will be examining the present arrangements concerning exemption from prescription, and other charges, to establish whether this remains a viable situation. The Department will also be considering the level of charges themselves and the current arrangements that apply in terms of services such as dentistry and ophthalmology. Pressures are intensified by increasing demand.

Many people will have seen recent press coverage, both on Island and off, concerning the range of costly health implications derived from the increasing numbers of overweight and obese people. This throws into focus the significance of both preventative medicine and health education.

Many other factors apply also such as, for example, the increasing numbers of prostate cancer cases, also the subject of recent significant coverage in the UK national media. In an environment where resources are finite and demand is ceaselessly increasing, difficult choices and potentially challenging decisions will have to be made.

Beyond 2013/14 there will likely be revisions to, and evolution of, health care delivery - though this would simply reflect a long history of change - as the Department strives to balance the maintenance of an effective and efficient health service with the inevitable reality of financial and resource limitations.

Minister for Health, David Anderson MHK said:

'It is clear from today's budget that there is no wavering in the determination of the Isle of Man Government to continue its policy of treating health care as a key priority. I welcome this and it is clear that the people of the Isle of Man support that approach. It is equally clear that now, more than ever, financial and resource constraints place significant pressure on our services and, almost certainly, the way that some of them may be delivered. Both I and my political colleagues, together with the whole of the Department’s workforce will rise to this challenge but do not underestimate the nature of our task and responsibilities.'