Small hospitals are expected to forecast a combined deficit of £273.3m in 2016 - almost double the 2014/15 figure of £141.7m and as a result, will be running an average deficit per hospital forecast to reach £13.7m,
This means that all small hospitals will be in deficit compared to 2014/15 when 12 small hospitals (60%) were in deficit and eight (40%) ran a surplus.
EY’s analysis looked at 20 small acute hospital trusts across England that had a turnover of less than £200m using publicly available information from the relevant Trust’s websites.
Gill Cooksley, Director at EY Healthcare, said: “As hospital Trusts up and down the country struggle to balance the books, small hospitals, in particular, are bearing the brunt of unsustainable finances and the challenges of delivering clinically sustainable services.
“With the NHS forecasting a deficit of £2.6bn in 2016, small hospitals will be responsible for a disproportionate share as small hospitals account for 8% of the total revenues of English hospitals yet 12% of the deficit.”
“There is a risk that in the rush to find big savings from larger NHS trusts, smaller hospital trusts are ignored despite the fact that achieving financial and clinical sustainability within smaller hospitals is often much harder.
“These hospitals have a vital role to play in their communities and need to act quickly to ensure that they can continue to deliver vital services in a safe and sustainable way.”
Hospital Failure
The report goes on to suggest that with deficits increasing year on year and finances continuing to perform badly, there is a risk that regulators may step in.
NHS Improvement has the power to appoint Trust Special Administrators (TSAs) to take control of an NHS Foundation Trust’s affairs if the trust is either financially unsustainable in its current form or is at serious risk of failing to provide high-quality, sustainable services to patients.
This has only been invoked once, in the case of Mid-Staffordshire NHS Trust in 2013.
Ms Cooksley added: “The trust special administrator process will remain a rarity, and should be seen as a last resort. For hospital management, failure will mean a loss of responsibility and decision making powers and reputational damage.
“For patients, a failing hospital brings uncertainty and worry when they are at their most vulnerable. Patients need confidence, not only over when they’ll be treated, but also that the treatment they receive is of high quality and in an appropriate setting.
“As the National Audit Office has pointed out, with the lack of an overall plan for the long-term sustainability in the NHS overall, the onus should be on these small trusts to be pro-active in assessing and securing their long term future. Every service a hospital provides needs to be looked at and judged independently as to whether it can be delivered in a safe and sustainable way.
“However, it may be decided that it is not be feasible to continue to offer certain services at a small hospital and partnering with nearby larger hospitals may be inevitable if patient safety is to be maintained.”
“If this is the case, then it’ll be important to bring Clinical Commissioning Groups, neighbouring hospitals and other local care providers together sooner rather than later to ensure that these services can be accommodated in a timely, efficient and safe manner.”