Annual Report and Accounts 2012/13 - Royal Devon & Exeter Hospital

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2. Our Trust Royal Devon and Exeter NHS Foundation Trust
Annual Report and Accounts 2012/13
Our Business
2012/13 has been a challenging year for the Trust,
both operationally and financially.
The external NHS environment has
undergone significant change with
the dissolution of Strategic Health
Authorities and Primary Care Trusts
and the creation of a National
Commissioning Board and Clinical
Commissioning Groups amongst
other structural changes. The Board
of Directors has considered the impact
of these changes and the potential
impact on the local health and social
care sector as part of the work it
has been undertaking in relation to
developing the Trust's strategy. Over
the next five years it is likely that the
Trust will expand the population base
it currently serves on an acute basis
from approximately 420,000 to circa
800,000 and, in addition, will also
seek to develop integrated services
across the local community. The Trust
will continue its focus on safety and
aims to be in the top three of Trusts
across the NHS South region for its
safety performance. Furthermore
the importance of research and
development to support and further
our objectives will be strengthened,
including the completion of a new
£23m research, innovation and
learning and development facility in
conjunction with the University of
Exeter during 2013/14.
During 2012/13 the Trust treated more
patients than ever before, in particular
we experienced a rise in the number
of frail elderly patients admitted on an
emergency basis (an increase of 6% in
the number of medical patients over
85 years of age). Given the hospital's
population demographic profile, which
has a percentage of elderly residents
20 years ahead of the rest of England,
this trend is set to continue into the
future. Ensuring we are best placed to
deliver services for this group of our
patients will be a key focus over the
next couple of years. Currently the
national tariff for emergency patients
is paid at 30% for the number of
patients above the baseline year of
2008/09, so not only will we seek
to ensure that patients are treated
in the most appropriate location in
the community or hospital but we
aim to make these services become
financially sustainable (currently it costs
approximately £5m more per annum
to deliver this service than we receive
in income.)
In addition the Trust undertook a
recovery plan to address a backlog in
the number of patients waiting for
treatment for more than 18 weeks.
This backlog was created during
2011/12 due to a high number of
emergency patients occupying the
Trust's available beds and displacing
elective patients.
The Trust is on track with its plans
to recover its position against this
target during 2013/14 and has been
able to accommodate the additional
activity and extra emergency patients
due to the construction of two new
modular wards. These were opened
in December 2012 providing 48
additional beds (including a short stay
rehab facility.)
The Trust performed well against
other operational targets including
improvements to its A&E four-hour
target and finished the year meeting
its planned governance rating with
the regulator Monitor of amber red.
However pressures are emerging
around cancer targets and this
may have an impact on the Trust's
operational performance in 2013/14.
Plans are currently being developed to
ensure we can maintain a good service
for our cancer patients.
Due to the pressures outlined above,
the Trust did not meet its planned
surplus during 2012/13, achieving a
surplus (before extraordinary items)
of £1.3m against a plan of £3.5m.
Whilst this surplus is lower than
planned, it was sufficient, together
with other financial performance,
for the Trust to maintain its planned
Financial Risk Rating (FRR) of 3 against
Monitor's compliance framework.
This benchmarks comparatively with
other Foundation Trusts (FTs), as at
the end of Quarter 3, 49% of FTs
were rated at a FRR of 3. This is the
first time in recent years that the Trust
has failed to meet the financial plan
by more than £500k and, due to a
strong cash position, this does not
present any immediate concerns for
the organisation. However there is
a need to ensure that the Trust can
remain financially sustainable in a
difficult operating environment. For the
next three-five years it is anticipated
that the Trust will need to generate
approximately £17m (representing