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Monitor has yesterday published its review of NHS foundation trusts for the first quarter of 2011/12 revealing a variety of emerging challenges.

Finances

On finances, the results for the first three months indicate that overall the foundation trust sector is performing slightly ahead of plan. This is encouraging in the context of the financial pressure on the NHS. However, there is an increase in the number of trusts facing financial risk and subject to regulatory scrutiny. Additionally the complexity of some of the issues means that they are likely to take longer to resolve.

Commenting on the results, Monitor’s Chief Operating Officer Stephen Hay said:

"It’s encouraging that the sector is in overall surplus and ahead of plan for the first quarter - although surpluses are lower than last year due to the economic environment. But there are a number of foundation trusts that are beginning to struggle and we are looking closely at these and taking regulatory action in several cases to make sure that the issues are addressed."

Cancer targets and the Greater Manchester and Cheshire Cancer Network

Delivery of cancer targets was a key challenge in 2010/11 and continues to be for some trusts at quarter one 2011/12, with 32 foundation trusts failing to meet one or more cancer targets.

In particular, Monitor has looked closely at the issues affecting the performance of trusts in the Greater Manchester and Cheshire Cancer Network, where the Christie NHS Foundation Trust has persistently failed to meet the 62 day cancer waiting time target.

Commenting, Stephen Hay said:

"We are sending a strong message to all the foundation trusts in this cancer network that the situation is unacceptable. Patients are not being treated as quickly as they should be. It’s the responsibility of all the trusts in the network to make sure that this changes, by improving referral times. We have written to all seven foundation trusts and made it clear that we  will use our regulatory powers if they don’t find a way of delivering a solution."

Outstanding CQC compliance actions

There is also a higher number of foundation trusts with outstanding compliance actions with the Care Quality Commission (CQC) than was anticipated in their annual plans. This is due to an increase since quarter four 2010/11 in the number of trusts where the CQC has moderate concerns. We have reflected this in our risk ratings, resulting in a higher number of trusts assigned an amber-red risk rating to indicate that there could be some concerns about the overall governance of these trusts. We will take action if we establish that is the case.

Stephen Hay commented:

"We automatically reflect CQC concerns in our own risk ratings and expect foundation trusts to take action quickly to address the issues. We are calling in more foundation trusts to find out how serious the concerns are and what they are doing to address them. Where there is evidence that CQC issues are not being resolved quickly, we will consider more formal regulatory action.”

Performance targets

Monitor also assesses the effectiveness of a foundation trust’s leadership, or governance, by looking at whether they are meeting national targets and standards. At the end of the first quarter Monitor is concerned at the increase in trusts failing to comply with service performance targets – in particular the target to reduce rates of C.difficile.

At quarter one, 31 foundation trusts reported a higher number of breaches than their planned trajectory for the first three months although the overall number of cases of C.difficile has reduced by 24% since quarter one 2010/11.

Stephen Hay said:

"We are encouraged by the 24% decrease in overall number of C.difficile cases compared to this time last year, but will be keeping a close eye on trusts at risk of breaching their annual target and will take action if we identify a continued pattern of target failure which indicates weak leadership.

"Our message to the sector on this is that the speed of improvement is not good enough. Foundation trusts are behind where they need to be to hit the end of year target, so we will be pushing them hard to make sure that they meet it. Those trusts that have declared this as a risk can take action now and make sure that performance improves over the remaining nine months."

Key findings from the results in the first quarter included:

• Foundation trusts have an average Financial Risk Rating (FRR) of 3.3 (where 1 is the highest risk and 5 is lowest), which is slightly ahead of plan (3.2) but has decreased from quarter four (3.5) in 2010/11;
• 16 foundation trusts are reporting an FRR of 1 or 2, an increase from 10 trusts at quarter four 2010/11
• Aggregate EBITDA margin of 5.7% is ahead of plan (5.5%) but reflects a significant reduction from 2010/11;
• Foundation trusts have delivered £254 million in Cost Improvement Plans; this is 11% behind plan compared with slippage of 17% in the first quarter of 2010/11.
• 58 foundation trusts are rated amber-red (42 trusts) or red (16 trusts) for governance. This compares with 12 red and 24 amber red at Q4 2010/11.
• 31 foundation trusts have declared a risk to their full year C.difficile target, although the overall number of cases of C.difficile has declined by an average of 24% since quarter one the previous year;
• Monitor has warned foundation trusts in the Greater Manchester and Cheshire Cancer Network that they are required to make a collective effort to improve performance against waiting time targets for cancer; and
• The number of trusts with outstanding CQC compliance concerns or actions is currently 37, an increase from 25 at the time of publishing quarter four 2010/11 results.

Notes

1. For media enquiries contact Veena Hudson, Head of Media and Stakeholder Relations Veena.Hudson@monitor-nhsft.gov.uk or 0207 340 2446
2. Monitor authorises and regulates NHS foundation trusts ensuring they are well-managed and financially viable in order to deliver high quality healthcare for patients.
3. Monitor was established in January 2004. It is independent of government and accountable to Parliament. Monitor’s functions and powers are set out in the National Health Service Act 2006.
4. The full report can be found here: http://www.monitor-nhsft.gov.uk/home/our-publications/browse-category/re...
5. The report provides some extra context on the C.difficle and CQC concerns that are identified as significant factors driving the increase in governance risk:

   - CQC actions: We want all foundation trusts which are not meeting essential standards to address the issues identified by CQC quickly and effectively in order to reduce the risk of poor care.  It is important for patients that we have effective regulation that uncovers issues and ensures they are resolved. Ultimately we want strong leadership at all foundation trusts able to spot these issues and act on them at an early stage, which is why we place an emphasis on the importance of good governance.
   Monitor works closely with the CQC to ensure joined up regulation. We reflect the CQC’s major and moderate concerns within our risk ratings and keep a close watch on foundation trust’s progress in tackling these issues. We expect all foundation trusts with outstanding compliance actions to take prompt action to address these.

   - C.difficile: Each foundation trust has an annual target they must not go above for rates of C.difficile. This is broken down into quarterly performance goals so that a trust can see if they are on track to meet the annual target and take action if they are not. The quarterly goal is not binding but we require foundation trusts to tell us if they are above this as it indicates a possible risk that they will miss their full year target.

6. The risk ratings for all foundation trusts will be updated on 29 September 2011 and can be found here: http://www.monitor-nhsft.gov.uk/home/about-nhs-foundation-trusts/nhs-fou...
7. Monitor is now on Twitter - follow us @MonitorUpdate