A £1.5m hole in the finances of NHS Western Isles has opened up - in part - due to more expensive drugs and dealing with service cost clawback from other health authorities, it was revealed at a recent meeting of the health body.
The financial gap will mean that savings will need to be considered in order to balance the books for the future.
This week health board members heard that this overspend has built up due to a number of factors, including a clawback on Service Level Agreements (SLA) from mainland boards.
In the past health authorities such as NHS Greater Glasgow did not seek to fully recover costs from NHS Western Isles.
However, a changing financial climate, means that NHS Greater Glasgow cannot now afford such subsidies.
The increase in SLA, excluding inflation, adds up to £637,000.
More analysis of referrals - to ensure their absolute necessity - is being suggested to help cope with these costs.
The Board has also seen increasing costs relating to off island placements, specifically to private clinics.
The overspend in this area is expected to be £628,000 and this may even increase before the end of the year.
The Board will now aim to review placements regularly to ensure all patients are in the most appropriate treatment clinics.
DRUG COST HAS DOUBLED
Drugs and their costs - which have doubled in the last two years - have also led to a £400,000 overspend.
Newer treatments for Haematology and Oncology, cost more in comparison to previous treatments, particularly in regards to cancer treatments.
Studies show specific targeted treatments improve outcomes and survival rates for patients and reduce the wide range of adverse effects of traditional cancer treatments.
And with the region’s increasing elderly population (expected to be a 44% rise by 2027) this will impact the board’s ability to reduce these costs.
Currently there is an overspend on Laboratories of £185,000, with this expected to rise to around £296,0000.
Some of this overspend relates to instability in staffing leading to a reliance on agency staff.
But the board are hopeful that the recruitment of a new laboratory manager will help to decrease costs.
The utilities budget for facilities has also overspent due to a delay in achieving energy saving measures, which once implemented are expected to make savings and there is an overspend on GP prescribing.
There were also concerns about the costs of agency staff to cover workload and maternity leave, but it was expected that the overspend in this area would decrease next year.
In a statement to the Gazette about the overspend, a spokesperson for NHS Western Isles, detailed: “NHS Western Isles is currently facing on-going financial challenges as a result of particular areas of patient need.
“The Board recognises that the Western Isles are in a very unique position with regards to demographic trends at both ends of the age range, and the challenges
that arise in terms of demand for care and services, and our ability to meet that demand.
“NHSWI is currently exploring efficiencies to be made in 2019/2020 and as part of its next three-year financial plan.”
BEST OUTCOME FOR POPULATION
The spokesperson continued: “There are no indications that NHSWI will be specifically looking to reduce employment positions in relation to efficiency savings, all areas of our service are continually expected to explore ways of delivering care differently and where possible more efficiently.
“NHSWI recognises that there are good financial controls in place, with access to good accurate data which allows planning and monitoring of spending
projections and service delivery costs.
“The Board will be working with partners locally and the Scottish Government to ensure efficient delivery and the best possible outcome for the patients and
population of the Western Isles.”