THE Royal Derby Hospital has lost out on about £2 million because of a national ruling which has penalised it for treating too many patients.
Hospital boss Sue James had hoped to finish the financial year with extra cash, which she could spend on buying new equipment and updating the four-year-old Royal Derby building.
But she has fallen foul of a national rule designed to keep hospital admissions to a minimum.
It means hospitals sometimes receive back only 30% of what they actually spend treating a patient. This happens when hospitals admit more patients than they did the previous year.
In April and May, the Royal Derby saw a 4% increase in the number of patients arriving at its accident and emergency department. This pushed it over the number allowed under the spending "tariff".
And this was one reason why the hospital believes it will not finish the financial year, next March, below budget as it intended.
Chief executive Mrs James said: "We had hoped it would be the first time in about four or five years we would finish the year with a surplus.
"And we wanted to use that money for new medical equipment for the Royal Derby Hospital.
"The hospital has been open four years now, it is not as new as it was, and the equipment is getting to the stage where we want to think about replacing it.
"But, it's like saving up for a new sofa for the house, if you can't afford it, you won't get it. You pull the belt in and stick with the old one."
When hospitals treat patients, they send the bill to their local clinical commissioning group – a GP-led body which looks after local health services and pays the hospital to treat patients.
If the hospital treats more patients than the previous year, it will only be paid 30% of the costs by the commissioning group. The group will keep the remainder and is supposed to invest it in measures to reduce any "inappropriate hospital admissions".
But the controversial policy of paying hospitals 30% is currently being reviewed by Monitor – the regulator for health services in England – and public body NHS England.
And Mrs James said the hospital hoped to negotiate with the clinical commissioning group on how the 70% is reinvested – in the hope the money can be used to "help the A&E department".
Derby's hospitals trust was one of 48 in financial deficit in the first three months of this financial year, up to July, compared to 36 last year.
It was also one of 31 trusts which failed to see 95% of its A&E patients within four hours, against 13 last year.
Mrs James said other reasons for the deficit expected in March included the bad winter weather which extended into April – causing extra illnesses and injuries – along with the heatwave shortly afterwards.
She said the weather extremes had seen an increase in the amount being spent on patients because of the extent or complexities of their sickness or injury.
Mrs James said the average cost of a patient this year was £1,800, compared to £1,200 12 months ago.
She said this meant the hospital trust continued to have regular meetings with Monitor, to explain to the regulator how it plans to get back on track.
But Mrs James said: "We are not going to run out of money or anything like that – the £2 million is a tiny amount when you consider our budget of about £450 million.
"But the trust faces great challenges because people want to come here and the Government sets us targets which are important."
She said the hospital would always "put first" the quality of its service.
