• UHDB expects to be fined £3m for not hitting targets enforced by NHSE
  • Policy described as “tone-deaf” by King’s Fund expert

NHS England has been criticised for its ‘tone-deaf’ attempts to maintain financial incentives on elective care, even as the service deals with extreme pressures from coronavirus.

As covid pressures fell over the summer, national finance chiefs issued new targets around elective activity, tied to financial penalties and rewards. NHSE has said it would apply fines “sensitively in the light of operational circumstances”.

Yet a report yesterday to the board of one struggling trust, University Hospitals of Derby and Burton Foundation Trust — which had around a third of its beds occupied by covid patients at the start of this week — suggested it faces £3m in fines for not reaching its targets.

The report said UHDB’s “half-year plan for October 2020 – March 2021 was a £10m deficit (including £3m assumed for penalties for not achieving [elective] activity targets.”

A separate report to the board meeting added: “Covid-19 inpatient demand continues to exceed our worst-case scenario… a downturn in elective activity is necessary to enable theatre staff to support the pressures of an expanded ICU on both sites — this compounds an already challenging position in terms of backlogs and waiting times.”

Richard Murray, chief executive of the King’s Fund and a former senior finance official at the Department of Health, said: “If the elective incentive scheme can, and should, be suspended where bed occupancy or staff absences are high then I would say that this means it is effectively defunct, given the current state of the service.

“More fundamentally, at a time when trusts will be putting every resource they have into treating covid patients and the vaccination programme, fine-tuning a system of fines for elective under-performance comes across as pretty tone-deaf.

“From every conversation we have had with the service, leaders and staff were aware of the importance of reducing the backlog and didn’t need an increasingly complex system of financial penalties and rewards. It is covid that has stopped them, not a lack of financial incentives.”

UHDB said it is still waiting for further guidance as to how, or if, its financial performance targets will still be applied as part of the scheme.

At the board meeting, chief executive Gavin Boyle said there were 475 covid positive patients at the trust. He noted that during the first peak there was a maximum of 250 positive patients at any one time, rising to 300 during the second wave.

HSJ asked NHSE whether there were any plans to scrap the scheme.

A spokesman said: “The NHS has always been clear that it would apply any payment scheme for elective care sensitively in the light of operational circumstances, while ensuring that resources flow to support those organisations which are able to maintain and increase elective activity.

“That’s why the NHS advised local health systems in December it would be introducing a 10 percentage point tolerance or buffer in applying the scheme for September and October, and confirmed that going forward the scheme would be suspended where levels of covid bed occupancy or staff absence rates suggest that is necessary.”