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By Ian Dipple Friday 28 February 2014 Updated: 28/02 09:23
THE TRUST which runs the Alexandra Hospital is facing having to borrow more money from the Government as it risks running out of cash.
Without action by September 2014 Worcestershire Acute Hospitals NHS Trust would be overdrawn by more than £5million as a result of a combination of factors. They include increased demand through A&E the Trust is not being fully paid for because of national pricing rules, beds being tied up due to delays elsewhere in the system, cancelled operations and increased staffing costs.
The Trust lost another £500,000 in January and is set to end the year £12million in debt.
On top of that the Trust faces being fined £1million by commissioners for failing to hit the four hour A&E waiting time, ambulance handover and waiting time for elective surgery targets, as a result of the pressure it is under.
Discussions are continuing with commissioners and the Trust Development Authority about the Trust's current financial situation but it looks likely this year's £12million deficit will be added to the existing £18million of historic debt from overspends in the early 2000s. That will cause the Trust a cash problem in the future. It borrowed £12million from the Department of Health in 2012/13 to shore up its finances and ensure the Trust could pay its bills on time. But the situation has slowly deteriorated with more than £2million of debt now more than 90 days overdue.
The Department of Health has already agreed to reduce the amount the Trust needs to hold in its account at the end of the financial year, which will put more cash into the system.
Chris Tidman, the Trust's director of resources, said the long-term solution to their financial problems was the re-organisation of hospital services and plans to change the urgent care system to reduce demand through A&E, which would cut costs, but could take two to three years to resolve.
"Unless there's an extra injection of cash into the Worcestershire health economy we will see a cash problem emerge and we will have to mitigate that by taking out a temporary loan," he told the Standard.
"The real issue is have you got a lot of cash in the bank and ourselves and one or two others aren't the most liquid of Trusts and because of the legacy debt, the Trust entered this difficult period without a great deal of cash in the bank.
"There's an indication as long as you are doing the right things and getting ourselves and the health economy back into balance [then you will get the money]. There's no worry of not being able to pay suppliers or staff there's just a number of ground steps we have to go through and the argument will be what level we need."
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