One of the largest teaching hospitals in England is forecasting a year-end deficit of almost £50m, HSJ has been told.
Nottingham University Hospitals Trust said it will end 2015-16 with a deficit of £49.2m even if it manages to make £44m of efficiency savings in the next 12 months, finance and procurement director Rupert Egginton told HSJ.
The trust said one of the main reasons for its poor financial performance is the continuing losses it makes on emergency patients where the tariff for activity is set at below cost.
The trust is a major trauma centre and specialist provider with a catchment area population of more than 3 million. It has the fourth largest acute bed base in England.
In order to substantially reduce costs and improve its efficiency, the trust is hoping to accelerate transformation of services in the region, working with local commissioners.
In 2014-15 the trust achieved a surplus of £750,000 but this was primarily down to £11m of support from the Department of Health and £27m of non-recurrent funding from commissioners.
It has made cumulative surpluses of £54m since the trust was formed in 2006-07, and last year made £42.5m of savings against a target of £44.4m.
Alongside reductions in payment for activity, the trust has also been forced to increase its staffing following demand growth and wider patient safety demands since the 2013 Francis report.
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In its annual report, due to be discussed by the board this week, the trust will say: “Against the background of a financially distressed health economy, it is essential that the trust delivers and is able to articulate an appropriate balance between financial control, operational pressures and quality of care.”
Mr Egginton said: “Our financial challenge for 2015-16 will be our toughest yet, with a forecast year-end deficit of £49.2m. Our income is lower than last year even though we will deliver more activity this year, resulting in extra cost to the trust.
“The most significant element of the trust’s deficit results from losses in the emergency pathway.”
He added: “Our savings target is £44m this year. This is after generating savings in excess of £123m over the last three years. Savings of this magnitude can only be achieved by transforming the way in which services are delivered across the health and social care community in Nottinghamshire.”
Information supplied to HSJ and board papers