FTs expect CCGs to reverse activity growth next year
Foundation trusts expect clinical commissioning groups to oversee an unprecedented reduction in activity in 2013-14, Monitor has revealed.
The regulator’s latest annual plan review for the sector collates the finance, performance and activity forecasts of England’s 144 FTs over this and the next two years. It shows trusts predicting a five per cent fall in activity next year.
The estimate is based on predictions trusts submit to Monitor for non-elective inpatient, elective inpatient and day cases as a proxy for activity.
The review’s predictions were for activity to rise four per cent in 2012-13 before falling by five per cent the year after and rising one per cent in 2014-15.
Monitor’s summary of its report says these predictions are “questionable”.
The report by the regulator’s interim director of restructuring Mark Turner said: “Our review of plans suggests that trusts believe CCGs will have a large one-off impact in reducing acute activity in 2013-14.
“This contrasts with patterns of growth in acute activity seen in recent years (4.5 per cent a year) and suggests foundation trusts believe CCGs will be more effective in delivering demand management initiatives and moving activity out of the hospital setting.
“Our experience of reviewing trusts’ plans tells us that when they are faced with demand substantially above planned levels they have been unable to deliver the additional work profitably.”
The predictions submitted by trusts show earnings before interest, taxes, depreciation and amortisation (EBITDA) falling from 6.1 per cent last year to 5.9 per cent this year. They then rise by to 6.5 and 6.8 per cent in subsequent years – a level Monitor also considers “unlikely”.
Mr Turner’s report says the predicted improvements are based on reducing the pay bill and that “the detail of the planned cost improvement programmes” do not support the trusts’ estimates.
The document showed trusts predicting 2012-13 would be a more challenging year for finance directors, with 43 trusts predicting a worsened financial risk rating than in 2011-12.