Quarterly performance of the NHS provider sector: quarter 3 2016/17

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NHS providers are experiencing one of the most challenging winters on record due to a huge increase in the demand for urgent and emergency care.

Operational performance

Our analysis shows that 5.34 million patients attended providers’ A&E units between October and December 2016, which is 200,000 more than at the same period last year. Providers also saw a 3.5% increase in the number of patients requiring major further in-hospital treatment. 

This intense demand for emergency treatment coupled with a significant reduction in bed availability has led to providers collectively underperforming against several key national healthcare standards, and having to postpone some planned care. However, these pressures have been compounded by providers losing 390,392 ‘bed days’ between October and December 2016 - a 28% increase on the same period last year - because of issues with discharging medically fit patients due to constraints on community or social care.

NHS providers are treating more patients than ever before, which is a tribute to the hard work and commitment of their staff. 

But times are extremely challenging, and things are unlikely to get any easier in the short term. However, we’re fully committed to helping providers improve their services for patients now and tomorrow.

Jim Mackey, Chief Executive of NHS Improvement

Financial performance

The sustained focus on providing emergency treatment and a reduction in planned care also led to a loss of income for providers. That income either remains in the NHS or has been paid to the independent sector to cover elective treatment. Despite this the sector’s financial position is £1.3 billion better than at the same point last year; as it ended the quarter £886 million in deficit. In addition, 135 providers ended the quarter in deficit which is 44 fewer compared to the same period last year.

Measures to curb excessive agency staff spending are continuing to have a positive impact. Two-thirds of providers reported reduced agency costs with the sector delivering a £505 million improvement in its spending over the last nine months.  Furthermore, providers’ agency and locum spending in December 2016 was just £228 million – the lowest monthly spend since measures were introduced in October 2015 and 24% lower than December last year.

We’re very thankful that most providers have worked hard to improve their finances and deliver quality health and care to their populations over the last nine months. However, the job is not done yet and we need each and every organisation to play its part. We will be working very closely with those providers off plan to bring them as close as possible back to plan this year, potentially through the extension of Financial Special Measures.

Jim Mackey, Chief Executive of NHS Improvement

Next steps

To help the sector stabilise and improve its financial position, we will:

  • expand the intensive support offered to providers through our Financial Special Measures (FSM) programme, including meeting with 12 financially challenged providers to determine whether FSM support is required to improve their finances
  • ensure that the boards of the small number of providers responsible for £280 million of the sector’s unplanned forecast spending take swift action to avoid further financial deterioration

Our work with those providers previously in special measures because of financial concerns has helped to identify £100 million of savings. Today, Croydon Health Services NHS Trust and Norfolk and Norwich University Hospitals NHS Foundation Trust have been taken out of Financial Special Measures as a result of their hard work and improvement. 

Similarly, our Financial Improvement Programme has helped the NHS identify around another £100 million worth of savings. We will expand the programme over the coming months to help the NHS improve its finances even further.

Although demand pressures are unlikely to ease completely, we’ll continue to work with providers to identify and implement improvement opportunities which benefit care quality, service accessibility and financial sustainability.  

With all the action being taken, the overall sector forecast deficit should be between £750 million and £850 million by the end of the financial year. The NHS provider sector covers 238 separate trusts whose forecast revenue in the aggregate for 2016/17 is £79.6 billion  and who will have seen over 24 million patients.

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