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SPECIAL REPORT: Boston Pilgrim Hospital cost spirals as budget more than doubles to £111 million

Pilgrim Hospital, Boston. ENGEMN00120130504093848

Pilgrim Hospital, Boston. ENGEMN00120130504093848

 

The cost of running Boston Pilgrim Hospital has spiralled, with its operating budget more than doubling to £111 million since 2000.

The scale of the rise is revealed after a Freedom of Information request submitted by The Standard to the United Lincolnshire Hospitals NHS Trust (ULHT), which runs the Pilgrim.

The figures show that in 2000/01, the operating budget stood at just under £49 million. Since then, the figure has increased in 11 out of 13 years to top £111 million in 2013/14.

Last year saw a particularly sharp rise, with the operating budget rising by more than £16 million.

ULHT attributed the trend to increased demand for services especially since NHS reforms brought in by the coalition government.

A spokesman said: “The local Clinical Commissioning Groups (CCGs) commission services from healthcare providers like ULHT which is set at a national tariff. ULHT then determines the operating budget for each of its hospital sites based on the activity and services we have to deliver.

“The operating budget will increase each year as the CCGs commission us to provide more services due to a rise in activity at our hospital over the years, for example an increase in A&E admissions.”

The spokesman was unable to provide an example of any extra services provided.

Stats show that while A&E admissions have gone up, the scale of the budget has gone up by a much bigger percentage.

From 2004 to 2013 the number of people admitted to A&E rose by 24.9 per cent but between 2004/05 and 2013/14 the operating budget increased by 61.3 per cent.

The total number of people seen at the Pilgrim, including inpatients and outpatients, rose from 230,891 in 2004 to 288,243 in 2013.

A ULHT spokesman said as well as more admissions, people were staying in the hospital for longer.

The former chairman of the body in charge of Pilgrim Hospital says it still remains under-funded, despite the soaring cost of the operating budget revealed by The Standard today.

And the trust, which was placed in special measures by minister Jeremy Hunt last year, forecast a £26 million deficit for 2013/14 across all its sites, with a warning that this could rise to £105 million by 2018 without cuts.

David Bowles, who stood down as chairman in 2009, said hospitals in Lincolnshire lost out due to an impression held nationally it was cheaper to run them than elsewhere in the country.

He said: “For some years hospitals have been paid on a sort of schedule of rates, so much for an A&E case, particular test, type of operation and so on. The rates paid vary from hospital to hospital. They assume in London that as this is a low wage area, health care will cost less. It does not.

“They also do not take into account that Lincolnshire hospitals are all relatively small and so cannot get economies of scale so it will actually be more expensive here.”

A spokesman for ULHT denied this was the case, saying hospital funding was set by a fixed national tariff.

Neither the Department of Health or NHS England was able to clarify the matter.

Mr Bowles also gave an alternative explanation to the increase in operating budgets.

He pointed to two factors outside of an increased demand for services.Firstly, a change in the way in which the sum is calculated.

He said that the rise for 2013/14 in particular looked ‘strange’ and felt that the hospital could be needing to include extra figures in its accounts.

The second factor, he argued, is inflation and in particular, staffing costs. He said: “Pay inflation will be significant due to the large sums pumped in to address low pay by the last government.”

He also cast doubt on the view that patients are staying longer at the hospital, pointing to the rise in inpatients.

He said: “I do not recall there being much of an increase in beds, so they may be seeing more inpatients in roughly the same number of beds with the length of stay going down - which it has done nationally.”

A spokesman for ULHT said it was ‘not aware’ of a change in accounting practice. They accepted that pay inflation will bring about a rise in operating costs with the national tariff also increasing to reflect this change.

The rising operational budget comes against a backdrop of a trust struggling with its finances.

In order to plug a predicted £105 million funding black hole it wants to centralise services on fewer sites although the detail of this are not yet known.

Pilgrim Hospital’s operating budget per financial year:

* 2000/01 - £48,997,000

* 2001/02 - £49,896,000

* 2002/03 - £54,389,000

* 2003/04 - £61,224,000

* 2004/05 - £69,303,000

* 2005/06 - £66,410,000

* 2006/07 - £74,299,000

* 2007/08 - £83,843,000

* 2008/09 - £86,730,000

* 2009/10 - £89,871,000

* 2010/11 - £98,321,000

* 2011/12 - £97,298,000

* 2012/13 - £95,790,000

* 2013/14 - £111,820,000

A&E admissions per year:

* 2004 - 39,257

* 2005 - 39,870

* 2006 - 42,451

* 2007 - 41,192

* 2008 - 41,390

* 2009 - 42,896

* 2010 - 45,422

* 2011 - 48,025

* 2012 - 48,853

* 2013 - 49,030

Inpatients per year:

* 2001 - 41,367

* 2002 - 41,140

* 2003 - 41,305

* 2004 - 43,747

* 2005 - 45,384

* 2006 - 45,939

* 2007 - 49,342

* 2008 - 51,704

* 2009 - 54,860

* 2010 - 56,894

* 2011 - 56,320

* 2012 - 55,874

* 2013 - 53,832

Outpatients per year:

* 2001 - 111,765

* 2002 - 132,421

* 2003 - 135,311

* 2004 - 147,887

* 2005 - 150,891

* 2006 - 148,106

* 2007 - 151,285

* 2008 - 159,994

* 2009 - 169,590

* 2010 - 173,974

* 2011 - 176,899

* 2012 - 179,349

* 2013 - 185,381

 

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