Essexyellows
Well-known member
- Joined
- 7 Dec 2017
- Messages
- 17,133
In amongst Matt Hancocks speech yesterday evening he wrote off £13.4 billion of historical NHS debt.
Now some will say "How?" others will say "Where is the Magic Money Forest?".
However the reality of what he did is much different. So in a very small scale here is how it happens........
An NHS Trust gets paid by activity and measures and a big pot from the Government.
In our labs at our Trust we do lots of tests, roughly 25 million a year.
Lets take Test "A". It costs us £6 to do it. We receive a mix of activity (volume) payments and a fixed price that totals £5.20.
The mathematicians among you will say "That is a loss of 80p per test"
The business people will say "Stop doing it or reduce the cost price"
Trouble is many of our costs are fixed and you can`t "stop" or folk die and nobody likes that.
Now some tests we make a surplus on but with excess demand, an increasingly poorly population etc etc, there are more negative figures than positive.
And that is why he could wipe the slate clean, re-set the spreadsheets and "start again" its just a trading balance on paper. It is also why the NHS will happily consume the entire GDP if allowed too.
Now some will say "How?" others will say "Where is the Magic Money Forest?".
However the reality of what he did is much different. So in a very small scale here is how it happens........
An NHS Trust gets paid by activity and measures and a big pot from the Government.
In our labs at our Trust we do lots of tests, roughly 25 million a year.
Lets take Test "A". It costs us £6 to do it. We receive a mix of activity (volume) payments and a fixed price that totals £5.20.
The mathematicians among you will say "That is a loss of 80p per test"
The business people will say "Stop doing it or reduce the cost price"
Trouble is many of our costs are fixed and you can`t "stop" or folk die and nobody likes that.
Now some tests we make a surplus on but with excess demand, an increasingly poorly population etc etc, there are more negative figures than positive.
And that is why he could wipe the slate clean, re-set the spreadsheets and "start again" its just a trading balance on paper. It is also why the NHS will happily consume the entire GDP if allowed too.
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