NHS faces a £2bn deficit if cost recovery legislation is not updated

A leading personal injury lawyer has suggested that the NHS could increase its annual income via update oto the current cost recovery legislation.

A report by executive public body of the Department of Health, Monitor, has shown that the NHS trusts are currently in the ‘worst financial crisis in a generation’. An overall deficit of £930 million has been recorded in the first three months of the financial year. A prediction of a £2 billion deficit is predicted for the 2015/2016 financial year.

Trevor Sterling, a partner at Moore Blatch, has written to the Health Secretary, Jeremy Hunt, explaining the scale of the problem and calling for a change.

He said, ‘There is an urgent need for review of this legislation, which could go a considerable way to help alleviate the financial burden that many trusts are reporting,’

As part of the personal injury process, the NHS have claimed back over £200m in 2013/2014, and individual Major Trauma Centre’s recovered around £3m.

The NHS is currently allowed to claim back a fixed tariff repayment of £796 per day for patients in hospital, with a cap of £47,569 per patient.

Speaking about these figures, Sterling said, ‘While these figures appear to be reasonable there is in fact a huge disparity in costs, which means that NHS trusts are never being fully reimbursed for the service they provide.’

A Health Impact Assessment carried out in 2007 estimated that the average cost of a hospitalised patient is £16,000. However, under the current legislation, the NHS would only be able to recover a considerably less £5,572 per week.

In cases where treatment takes much longer, or in major trauma cases, the NHS are not able to recover any costs above the threshold. There is an estimated 20,000 major trauma cases each year in England which costs the NHS around £0.5 billion.

‘The whole scheme needs to be reviewed, or at the very least consideration should be given to the recoverability of in-patient and out-patient costs (not one or the other) with the cap being increased or removed, The current situation is wholly inadequate especially at a time when trusts are struggling to ensure they balance the books.’ said Sterling.

Sterling has suggested that an update to the costs recovery legislation will allow the NHS to meet the demands of increasing patient numbers, £2bn unfunded staff costs and funding cuts. He used the example of the rehabilitation code, which was recently updated to keep it relevant and effective in the changing climate.

‘No one can disagree that these are challenging times for the health service – any reform that can bring about additional financial resources to the NHS must be considered seriously and urgently,’ concluded Sterling.

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