Every small hospital set to run 2015/16 spending deficit, EY report finds

21 Dec 15

All small hospitals in England are set to run a deficit in 2015/16, the first time that every provider with turnovers of under £200m a year will be in the red, an analysis by EY has found.

The examination by the business services firm found that all of the 20 small acute hospitals were projected to be in deficit, compared to over three quarters (79%) of the provider sector overall.

Smaller hospitals are projected to account for 11% of the sector deficit by the end of the year, despite representing only 8% of total revenues.

EY Healthcare director Gill Cooksley said small hospitals could bear the brunt of the financial challenges in the NHS.

“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,” she said.

“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.”

The review warned that regulators may need to step in if a trust is either financially unsustainable in its current form or is at serious risk of failing to provide high-quality, sustainable services to patients.

The examination comes after the NHS provider sector as a whole recorded a deficit of £1.6bn in the first six months of the financial year.

Changes to services may be ‘inevitable’ given the scale of deficits in smaller hospitals, Cooksley added.

“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 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.”

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