Financial Performance Report Month 8 Report to the Public Trust Board Financial Performance Report Month 8 Chris Tidman – Director of Resources / Deputy Chief Executive

Summary Points The Trusts run rate has deteriorated to a £0.4m deficit in month. This is now £0.8m away from plan. The key reason has been the impact of Norovirus on the Trust’s income and cost base. Pages 3 & 4 Income has been affected by outbreaks of Norovirus. Whilst this has resulted in an average activity month, November is usually one of the highest months and had the second highest plan of the year. Pages 6 to 8 Expenditure has remained stable for November, although the additional costs of Norovirus have offset what would have been a reduction. This has also hindered the realisation of Length of Stay savings. Pages 9 to 10 Internal QIPP savings for the month were £1.2m, £0.1m above plan. The year to date achievement is £6.3m against a plan of £6.5m. The Trust is forecasting to achieve £12m QIPP by the year end which equates to 4% of turnover. Page 5 A £12m Revenue Support Loan has been agreed by the DH and is available on the 17th Dec. This will allow the Trust to significantly reduce the outstanding creditors Pages 11 - 13

Trustwide Position The overall position at month 8 is a deficit of £2.2m, £0.4m worse than Month 7. This compares to a planned £1.4m deficit. This adverse movement is due mainly to the Norovirus outbreak. £0.5m on reduced Healthcare Income £0.3m on increased one off costs to manage the outbreak and the lost opportunities on QIPP As a result the Trust is now forecasting a break-even position at year end.

Run Rate & FRP Run Rate Forecast Worsened in Month 8 £0.4m in month £0.9m behind plan Forecast Forecast outturn has been revised to break-even. This assumes: No contractual penalties are applied Reasonable settlement with commissioners over the costs of meeting stepped 12% increase Emergency Demand – Discussions continuing £12m QIPP delivery Additional £2m Financial savings package agreed at November Board including cessation of WLI , use of nurse agency staffing and closure of TAU

Internal QIPP Improved QIPP Performance Month 8 savings £1.2m Key scheme performance Newton schemes CQUIN from over performance Procurement Forecast performance based on assessment at individual scheme level. Current forecast achievement £11.6m Additional measures will ensure £12m achievement reached

Income - Summary YTD patient care income is £210.2m representing £7.4m over performance against the internal plan Income for November lower than expected as a result of the Norovirus outbreak plus plateauing of emergency admissions increase. November is usually a productive month The Trust lost 1,320 bed days in November as a result of bed closures attributed to Norovirus

Income - Inpatient Daycase activity is higher than plan in month 8. Elective activity is under plan as a result of cancellations to surgery and bed/ward closures due to the Norovirus outbreak. Emergency admissions remain 12% higher than 2012/13 plan and also above last financial year levels. However, Emergency demand in November now appears to be following the prior year trends. It is forecast that the admission avoidance schemes should begin to have a positive impact on admissions in the last quarter.

Outpatient & A&E New and Follow up Outpatient attendances are broadly in line with plan in month 8, while Outpatient procedures are slightly underperforming. The introduction of EZ notes at Kidderminster has resulted in some reduction in outpatient booking at Kidderminster to enable staff access the notes. The small under performance in Month is consistent with previous months. This would suggest that commissioner plans to offer alternatives to A&E for less complex patients are having an impact. This masks the fact that blue light ambulance attendances have increased as a % of total attendances

Pay Substantive medical costs have been relatively stable since Aug 12 Agency usage remains high Double running of Anaesthetics Jnrs Improving flow of medical patients Cover for sickness and absence COO & CMO to review agency staffing plans Temporary nursing has increased due to Norovirus & winter pressures capacity ( Highfield) Substantive staffing now equal to total staffing at start of 11/12

Waiting List Initiatives WLI WLI have fallen for last 3 months and are only below 11/12 levels for the same period due to the 20% pay rate change Operational plans in place to cease reliance on WLI from January, noting that this may temporarily affect 18 week performance whilst new arrangements bed in.

Balance Sheet

Cash & Debtors Cash Debtors £12m Revenue Support Loan agreed Available on 17th Dec 2012 A number of outstanding creditors to be paid Debtors Total debt position includes the £3.5m balance of transitional support and £2.5m Emergency demand invoice Aged Debt Profile Improving

Capital Capital Capital schemes are back-loaded and will increase through the remainder of the year Financial recovery plan includes delaying non essential capital spend on all three sites

Summary Financial Position has moved adversely to £2.2m deficit due to impact of Norovirus Forecast outturn now revised to breakeven at year end. This position is based on the following main assumptions. QIPP schemes continue to deliver as planned Reasonable settlement with commissioners re funding for the stepped increase in emergency demand Any contractual penalties levied for A & E / C-Diff are reinvested Winter Pressures capacity (Highfield Ward) is funded Additional £2m financial savings package is delivered through revised operational planning, noting the potential risks to performance targets Weekly Financial recovery meetings will continue until the financial position improves