NHS paying bills late in struggle to balance books, say suppliers

The National Health Service is delaying paying bills and cutting orders for supplies as it tries to balance its books, according to the trade associations whose members supply the service with everything from scanners to diagnostic tests. Ray Hodgkinson, director-general of the British Healthcare Trades Association, said that while the picture was highly variable "some of our members are having real trouble getting money out of NHS trusts".

Most had standing orders that said bills should be paid within 30 days, Mr Hodgkinson said. "But some are not paying for 60 or 90 days and even longer. They are in breach of their standing orders and for a lot of our members who are small businesses this is creating problems with cash flow. There is no doubt there is slow payment on a significant scale."

With Patricia Hewitt, the health secretary, having said she would take "personal responsibility" for restoring the NHS to financial balance this year, Mr Hodgkinson said: "NHS chief executives are telling us that they must balance their books at all costs."

Doris-Ann Williams, director-general of the British In-Vitro Diagnostics Association, whose members provide diagnostics supplies and tests, said: "We are starting to see invoices not being paid and orders not being closed until the start of the new financial year [in April].

"All sorts of measures are being taken to try not to spend money in this financial year."

Having seen orders dry up and bills not paid this time last year as the NHS headed for a £500m-plus financial deficit, she added that this was "starting to seem like an annual event".

She said: "We did a survey of our members in September and things had got much better than at this time last year. But the reports we are getting now is that the problem is recurring."

John Wilkinson, director-general of the Association of British Healthcare Industries, whose members supply everything from latex gloves to high-technology life support machines, said they had seen the impact most in bigger items of capital spending.

"We traditionally get late payment around this time of year and we have had some reports of that recently but not an overwhelming crescendo. But capital spending on equipment seems to have dropped quite dramatically - it is really quite badly down."

That was worrying when the NHS had a target to reduce the maximum wait from GP to surgery to 18 weeks and that goal would not be achieved by simply doing more faster but by reshaping the way services were delivered, Mr Wilkinson said. "Quite a lot of those changes will involve capital spending on equipment."

One supplier who declined to be named said: "The instructions seem to be 'spend absolutely nothing' and we in common with our competitors have seen a marked drop in order levels. We're expecting a flood of orders next month since payment will then fall in the next financial year."

From:
http://www.ft.com/cms/s/e30c4d3c-bb07-11db-bbf3-0000779e2340.html

The cash crunch is also having a direct effect on patients. On March 07, 2006 Health Direct posted: NHS overspending increases waiting times for patients when early signs that a big overspend in the National Health Service in England is starting to affect patient care came with the waiting list figures for January. Although the total list rose by only 7,600 in the month, up 1 per cent, the number of patients waiting between three and five months for treatment has jumped by 36,600 - 25 per cent. In other words, while the number of patients waiting has only risen slightly, the wait has increased.

That appears to have resulted from hospitals putting off treatment until the new financial year, which starts in April, while still keeping to the government's guarantee of a maximum six-month wait.

At the same time, some primary care trusts are telling hospitals that they must treat no more patients next financial year than this year, and in some cases fewer, to claw back an overspend that has been forecast to hit £790m by the end of this month.

Andrew Lansley, the Conservative health spokesman, said "[some] doctors are being told they cannot treat patients who are waiting in pain and discomfort until they reach the six months deadline. For a government that said it was going to put all this extra capacity into the NHS, and when the capacity becomes available then tells staff they cannot use it, it is the height of absurdity".

Last year, on January 23, 2006 the same thing happened when NHS Hospitals shut wards as cash crisis bites. The spiralling cash crisis in the NHS has already forced two thirds of hospitals to close wards and will soon start directly affecting patient care, health chiefs warn. A survey of 117 chief executives of NHS trusts reveals the depth of concern among healthcare professionals about the destabilising impact of wide-ranging govt reforms.

Three quarters of them say that growing financial pressures brought on by primary and acute care restructuring will affect patient treatment.