Hospitals are being fined £600m a year for missing key NHS patient treatment targets in what bosses claim is a “shortsighted” system that hits patients and pushes them deeper into debt.
NHS Providers, which represents hospital trusts, says that the fines levied by GP groups are nonsensical, given that about 90% of trusts are in deficit and the sector is due to end the financial year later this week an estimated £2.8bn in the red.
“NHS trust chief executives tell us they are intensely frustrated by these fines and see them as shortsighted, counterproductive and reflecting a sense of denial about how serious the problems facing hospital, community, mental health and ambulance services really are,” said Chris Hopson, chief executive of NHS Providers.
Penalties are being imposed on trusts across England for failing to treat patients waiting for A&E, cancer and non-urgent care quickly enough, even though almost all hospitals are struggling to meet the growing demand from patients. One trust – Bart’s in London – was fined nearly £53m last year.
A trust is fined £120 every time its failure to treat an A&E patient within four hours leads to it breaching the duty to deal with 95% of such cases within four hours. There is a £300 fine every time staff fail to treat a patient on the non-urgent referral-to-treatment waiting list within 18 weeks, and the trust then cannot attend to 92% of such cases within the required timescale.
The fines are levied by clinical commissioning groups (CCGs), the GP-led local NHS bodies that pay hospitals to treat patients, and NHS England. Trust chiefs claim the charges hinder their ability to hire staff, set up specialist teams and take other steps to tackle the underlying problems that have led to them breaching targets in the first place.
Last year Barts Health, the NHS’s largest trust, was fined £52.7m for missing targets at the four hospitals it runs in London. That made up by far the largest element of the £79.6m deficit it ran up during 2014-15, which at the time was itself the largest overspend ever incurred by an NHS trust.
Barts is likely to suffer a much smaller financial penalty this year, despite its continuing problems meeting waiting-time targets. It had been fined £23.8m by the end of February, but the local CCGs reduced that by £10m to try to help Barts overcome serious problems it is facing, including widespread understaffing.
“This is not about condoning poor performance or poor clinical care for patients. Rather it is about recognising that fines are a blunt instrument for improving patient care,” Hopson said.
North Bristol NHS trust saw about £8m of its income disappear this year through fines, and King’s College hospital trust in London over £2m.
Prof John Appleby, chief economist at the King’s Fund health thinktank, said the fines were perverse and potentially unfair on certain trusts. “The cause of some of these [waiting time] problems is lack of money [and so] to take away money from an organisation seems a bit perverse.
“If a trust has admitted more emergency patients than it should, it could be because of a lack of investment in community services. It’s then a bit ironic to fine them for not meeting this target when the lack of community services is outside their control. You can see how these financial incentives might work in theory, but they may not be working in practice and they may be simply making problems worse in some cases,” added Appleby.
Hopson said that £10m fines have led to one trust that was on course to break even to instead post a £10m deficit and another to see its deficit widen from £5m to £15m.
NHS Providers says that the £600m of penalties on hospitals is made up of £233m for missed performance targets and £169m for too many patients being readmitted within 30 days. Trusts lose out on a further £199m because CCGs only reimburse them for a proportion of the actual cost of treating A&E patients over and above the number that presented in 2008-09, even though GPs and others are in charge of treatment once someone has gone home.
CCGs used to be able to waive the fines if they thought trusts had a good reason for missing targets. But it became obligatory last April for them to levy them on any trust missing any target. Similarly, fines levied by CCGs used to be reinvested to help trusts. But in January NHS England told them they could instead hold onto the monies and use them to improve their own balance sheets.
NHS England defended the fines, but said that they would not be imposed next year as part of a big effort to get hospital finances back on track. “For over a decade, well-established NHS practice has been that hospitals are incentivised to eliminate long waits for their patients, and rightly so.
“The successful result has been an enormous fall in typical long waits for an NHS operation – from over 18 months to well under 18 weeks,” a spokesman said. However, for next year we’ve already decided to suspend penalties and instead allocate an extra £1.8bn to incentivise hospital performance improvement.”
