FINANCE: Birmingham Children’s Hospital Foundation Trust is predicting a year end surplus of between £8m and £9m.
Its surplus at month seven was £5.6m.
This financial position is being driven by several factors.
The trust is undertaking more activity than specified by commissioners in all areas with the exception of the emergency department.
The financial margin from delivering this activity is higher than expected. The costs of delivering the activity is at a marginal cost below that expected, which may reflect the cost controls put in place across the trust.
In addition, coding has also improved so that income is better reflecting the mix of activity undertaken.
Also, the trust is overperforming in specific areas that tend to have high margins, e.g. patients with a zero length of stay – in other words just a few hours while being observed.
Expenditure reserves set aside for increased revenue investment in psychiatric intensive care units and with the expansion of additional beds have not been used as quickly as had been anticipated.
This puts the trust in a strong financial position but this is important because delivery of efficiency savings, while improved on previous years, still is only 90 per cent of plan with particular problems in children’s and adolescent mental health services and some corporate departments.
There remains uncertainty over the tariff levels for specialist paediatric services in future years and it is important that the trust has strong financial foundations from which to address potential income reductions.
Commissioners are already looking at how to cut costs because of financial difficulties they are facing, with one PCT asking to stop all consultant to consultant referrals within the trust without referring back to a GP, and another PCT refusing to pay £500,000 owed on the discharge of a long stay patient.
It is likely that the cost savings required across the hospital will be between 6 per cent and 8 per cent next financial year.
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Birmingham Children’s Hospital Foundation Trust, finance and performance report
30 November 2010