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PCTs face £100m-plus overspend on referrals

By Christian Duffin

PCTs are bracing themselves for overspends totalling more than £100m because of a huge leap in hospital activity, Pulse can reveal.

One trust in six is predicting serious financial problems caused by higher than expected spending on hospital services - a problem being blamed largely on the unexplained spike in GP referrals.

Figures collated by Pulse from 51 PCTs in England – a third of the total - uncovered projected overspends ranging up to more than £20m, in what one PCT chief executive described as an ‘unprecedented' financial situation.

In the nine PCTs predicting financial difficulties caused by the huge rise in spending on hospital services, the combined predicted overspend is more than £60m – suggesting the national figure could easily climb past £100m.

Pulse revealed last week how trusts were offering GPs millions of pounds in incentives to try to persuade them to cut referral rates.

Hampshire PCT is facing a potential overspend of £23.7m this year unless it takes serious action. Chief executive Gareth Cruddace said the ‘unprecented growth in activity' presented a ‘very serious situation' that was being replicated across the country, particularly in light of PCTs' statutory duty to break even.

The PCT has brought in economists from the York University's Centre for Health Economics to try to explain the increase in activity.

Wiltshire PCT said higher than expected numbers of GP referrals had resulted in a projected £2.7m overspend for 2008/9. A trust finance report for October said the situation was ‘high risk', adding that ‘detailed investigations into the reasons for the increase have been and continue to be undertaken by the information team working closely with GPs'.

NHS Kirklees is predicting a combined overspend of £2.5m on outpatient activity and critical care in Mid Yorkshire alone .

Brent Teaching PCT said that between April and August it had overspent by £2.5m on its acute commissioning budget. Lewisham PCT is facing a £3.65 million deficit on its acute service agreements with three large London hospitals.

Across the country the situation has resulted in huge pressure on GPs to reduce referrals, with Pulse last week revealing a string of controversial incentive schemes. In Oxford, where the PCT is facing a £23m overspend, GPs could receive up to £1.2m if they hit referral reduction targets.

The backlash against such schemes has grown this week, with prominent specialists condemning the incentives for putting patient safety at risk.

A BMA spokesman said: ‘Schemes that include targets based on reducing referral rates should be avoided as GPs should make referral decisions based on clinical factors.'

Shadow health secretary Andrew Lansley condemned the incentive schemes as ‘inefficient and unethical'. He said: ‘If patients find out that their local health bureaucracy is paying their GP not to refer them to hospital they will be rightly outraged.'

Scale of the crisis

Referrals soaring: GP referrals in the first quarter of this year were 16% higher than in the same period last year, with 350,000 more cases for the hospitals to cope with.

PCT finances threatened: Many PCTs are facing huge overspends caused by the increase in hospital activity, with Hampshire PCT reported an ‘unprecedented' situation. It is one of at least two PCTs facing overspends of more than £20m.

The impact on GPs: With more and more PCTs taking drastic action, controversy is growing over the role of GPs, with some refusing to take part in referral incentive schemes on the basis that such schemes distort clinical decision-making.

PCTs are facing financial crisis due to increase in hospital activity PCTs are facing financial crisis due to increase in hospital activity

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