A DRAMATIC one in three hospitals face closure, the Nuffield Trust has warned MPs.
Many hospital trusts face severe and potentially unsustainable financial pressures, warns a Nuffield Trust submission to the House of Commons Health Select Committee.
The think tank draws together official figures to show that these pressures are concentrated in smaller hospital trusts and those without foundation status, and in the West Midlands and outer London.
These pressures have been partially masked by hospitals being given ‘non-recurrent’ support to achieve financial balance.
The Nuffield Trust statement emphasises: ‘While the NHS has met unprecedented targets for financial savings since 2010/11, these have been delivered through pay restraint, reductions in the prices paid to hospitals, and management cuts.
‘However, our research shows no evidence of a step-change in productivity which could enable the NHS to be able to do more for less at a rate which would meet savings targets.’
The Nuffield Trust submission to the Health Committee reports: ‘At the end of July 2013, almost half of non-foundation acute trusts are forecasting a deficit for 2013/14 (31 organisations; 48 per cent of the total).
‘The aggregate net position for all these trusts is forecast at a deficit of £232 million for the financial year.
‘Crucially, margins for earnings before interest, taxes, depreciation and amortisation (known as ‘EBITDA’) are falling across all types of trust except specialist foundation trusts (adjusted for non-recurrent support).
‘This is a crucial indicator of whether, in this instance, a hospital is financially viable. 43 (42 per cent) of non-foundation NHS Trusts ended 2012/13 below the five per cent Monitor would normally require to grant foundation status.
‘A further 40 foundation trusts were also below this benchmark, meaning that about a third of all trusts were in a relatively weak financial position.’
The submission states that it will be difficult to find clinically and financially sustainable futures for an increasing number of providers of hospital, community and mental health care that face a difficult financial future.
The Nuffield Trust adds: ‘Meanwhile, despite successive governments aiming to provide better care for less by treating people outside hospital, this does not appear to be happening.
‘Spending on the hospital sector continues to rise while GPs have seen cuts in real terms. Although reducing emergency admissions has been a key priority, the most recent figures show that they are increasing.’
The submission also warns policy-makers not to rely in the short term on savings delivered through community-based interventions designed to shift care out of hospitals and, in the process, reduce emergency hospital admissions.
A number of evaluations conducted by the Nuffield Trust show very limited evidence of these schemes reducing emergency hospital admissions in the short term.
Nuffield Trust Chief Economist, Anita Charlesworth said: ‘The NHS faces an unprecedented challenge in finding savings of four per cent each year. . . Although pay restraint and management cuts have created large savings, these cannot close the long-term funding gap without threatening the quality or sustainability of care services.’
