Agenda item

RNHRD, also known as ‘The Min’, a reference to its original name ‘The Mineral Water Hospital’ is experiencing significant and longstanding financial challenges and is required to implement a strategic solution that will resolve the underlying reason for these difficulties. Following a presentation made to the panel on this issue in March 2012 and subsequently in February 2013 an update report is now being provided at the Panel’s request. 

Members are asked to note the information presented within the report.

The Chairman invited Kirsty Matthews (Chief Executive - Royal National Hospital for Rheumatic Disease - RNHRD) to introduce the report.

The Panel made the following points:

The Panel asked if there is any other organisation, apart from the RUH, that the RNHRD could get involved with in terms of the acquisition. 

Kirsty Matthews replied that as the RNHRD is a Foundation Trust (FT) it can only be acquired by the FT.  The Board of the RNHRD have found it very challenging now that the RUH application for the FT status had been delayed but it is for the RNHRD, as the FT, to operate under the legal framework and under the relevant Act provision/s.

The Panel commented that the NHS might lose £7-8million before the RNHRD is acquitted and felt that money could be spent better.

The Chairman asked if the directive from Monitor effectively gave a lifeline to the RNHRD.  When the Panel learnt that the RUH will not get the Foundation Trust status the immediate thought was what will happen with the RNHRD now.  The RNHRD is now in a period of suspension and losing £10k per day on average.  The Chairman acknowledged that the RNHRD is delivering an exemplary service and it is well loved and well respected in the area, delivering exactly what patients and users want.

The Chairman said that back in March 2012 an announcement was made that the closure of the RNHRD was imminent and it would merge with the RUH.  That was meant to happen by the end of the last financial year but due to recent events it didn’t happen.

The Chairman added that the Panel was very critical on the way the RNHRD Board handled the closure of the Neuro-rehab services, and certainly the response from the Secretary of State suggests that any NHS organisation are obliged to engage at an early stage with the Health Overview and Scrutiny Committee.  The Chairman acknowledged that the RNHRD is engaging now over the problems of the financial imposition and some of the commissioners may be able to help the RNHRD.  The Chairman asked Kirsty Matthews if there is any organisation that the Council can lobby in order to gain extra financial support.

The Chairman said that he learnt recently that Weston Super Mare hospital is looking for outside bids of support.  There are thirteen contenders, so it is not an impossible aspiration. 

Kirsty Matthews responded that the RNHRD Board are fortunate to work closely with Monitor over the period of the significant breach in status for 4.5 years.  Monitor has been quite supportive and the relationship is quite good.  The reason why the RNHRD continue to work towards the acquisition by the RUH is that, as an organisation, the RNHRD believes that it is in the best interest of the patients.  The other reason is the close clinical relationship between the two organisations.  Kirsty Matthews also mentioned the research and development partnership with the RUH and suggested that the Panel might want to ask one of the Clinicians, or Medical Director, to attend a future meeting to explain how closely the RNHRD works with the RUH.

Kirsty Matthews added that the RNHRD have had to wait for a long time for the process to be secured and she agreed with the frustrations around the legal framework that the RNHRD needs to work within.  The RNHRD is now working with Monitor to secure central funding for the year 2013/14 to get to the point where the RNHRD services can be acquired by the RUH.

The Chairman asked why the hospital is losing £10k per day currently.

Kirsty Matthews replied that there are number of factors contributing to it.  Partly it is that the income base is reducing and it is difficult for the hospital to reduce their fixed cost base in terms of the building cost, level of support to run the hospital, etc.  It is a number of factors – partly to do with reducing tariffs (less income now though the same level of service provided) and partly to do with cost pressures, imbalance between the income and cost.

Kirsty Matthews added that it would not be the case of ‘passing the buck’ to the RUH.  The RUH would need to go through their own due diligence and risk assessment process in terms of choosing to acquire services that the RNHRD provides.  There is a benefit that comes through the acquisition that allows reduction of the cost base, such as not having the RNHRD Board (overhead cost base).

The Panel commented that one of the issues could be a failure to adapt to a changing culture.  There was no evidence that the RNHRD was selling their services and asked if the hospital engaged in the heavy marketing policy.

Kirsty Matthews replied that one of the main challenges for the RNHRD is that most of the NHS provider organisations have their patients coming in through the A&E.  There are no patients in the RNHRD that just turn up; they are there as a result of the RNHRD excellent marketing.  The RNHRD have seen an increase every year in the number of referrals into rheumatology services.  What hit the RNHRD the hardest was that despite the fact that the hospital attracted significant increases in their rheumatology patients, they were paid 12% less in one year.  So, the income for those patients was cut by 12%.  Kirsty Matthews also said that there was an increase in complex pain patients.  The hospital also launched two new services that absolutely sit within the description of the RNHRD but the hospital has to work with a 12% reduction in tariff.

The Chairman said that there must be a way to fund the hospital which provides an exemplary service to their patients and asked if there is anyone that the Council can lobby on the RNHRD’s behalf to help financially.

Kirsty Matthews thanked the Chairman for suggestion and replied that it would be more appropriate if she writes formally and ask that question.

The Chairman suggested that Kirsty Matthews should write a letter to the Chairman of this Panel, Councillor Paul Crossley (Leader of the Council) and Jo Farrar (Chief Executive of the Council) asking if there is anyone that the Council can lobby on the RNHRD’s behalf to help the hospital financially.

The Panel agreed with this suggestion.

It was RESOLVED to:

1)  Note the report;

2)  Ask Kirsty Matthews to write a formal letter to the Chairman of this Panel, Councillor Paul Crossley (Leader of the Council) and Jo Farrar (Chief Executive of the Council) asking if there is anyone that the Council can lobby on the RNHRD’s behalf to help the hospital financially; and

3)  Receive a further update at November 2013 meeting.