A MULTI-MILLION pound cash row is brewing between hospital bosses in York and health finance chiefs after demand for vital treatments soared.

The cost of providing secondary care within York Hospitals NHS Foundation Trust is expected to be £3.3 million more than originally expected at the end of the current financial year.

But with NHS North Yorkshire and York – the region’s primary care trust (PCT) – battling to reduce a potential £8 million deficit, papers going before its board today reveal it is challenging how these costs have arisen.

Although the PCT hopes “informal negotiations” will thrash out an agreement, it admits independent arbitration methods may be needed if the talks break down.

The uncertainty arose after the bill for secondary care – including specialist treatments such as cardiology and urology – soared above the levels York Hospital was contracted and paid to provide at the start of 2009/10.

Patrick Crowley, chief executive of York Hospitals NHS Foundation Trust, said: “The trust has always worked within the rules set out nationally for charging for work delivered, which generates the income we receive.

“I feel very strongly it is in nobody’s interests for one organisation within the NHS to benefit at the expense of another, and insist we and partner organisations work in that way.”

He said there was an issue of affordability and said he would lead and support any work to address this.

But he said: “Work done should be paid for and I reject any notion the hospital is seeking payment for services it has not genuinely provided in good faith which have resulted from a legitimate referral for consultation, diagnosis or treatment.”

The report being discussed at today’s board meeting says the £8 million deficit forecast is “a clear breach of the PCT’s main financial duty” and is based on “significant success” in the care contract challenges.

An NHS North Yorkshire and York spokesman said: “We are currently having informal negotiations with our hospital trusts about how to settle outstanding contract payments.

“We are confident these negotiations will come to a successful conclusion.

“It is important to note formal arbitration is a last resort in these matters.

“However, we must inform our board, our partners and the public that this is something we could progress to, as a last resort, in the unlikely event of us not reaching agreement.”


Trust’s budget

NHS North Yorkshire and York’s financial head said he still expects the organisation’s predicted £8 million deficit to drop.

Demands for secondary care, prescriptions and care placements have placed added pressure on the the trust’s resources and left it facing the prospect of ending 2009/10 in the red – just a year after it cleared a huge historical debt.

But Nicholas Steele, its director of finance, said: “We expect this deficit to reduce before the end of the year and every possible action is being taken to reduce expenditure in the remaining months while maintaining patient safety and quality of services.

“It is important to retain perspective on this predicted deficit which represents less than one per cent of our total budget. The main reason for our deficit continues to be demand for hospital services.”