Hospital trusts face significant cash penalties this year as their emergency activity continues to rise, HSJ analysis reveals.

The analysis shows emergency admissions have risen by more than 8 per cent between April 2008 and April 2010. The rise comes as new rules mean trusts will be paid only 30 per cent of the tariff rate for emergency activity above their 2008 levels.

To penalise us for emergencies we are not determining doesn’t seem very fair

HSJ compared emergency activity in April 2010 with April in the two previous years at 19 randomly chosen trusts. At 16 trusts it was higher in 2010 than both previous years. The average increase since 2008 was 8.8 per cent.

HSJ’s analysis is confirmed by the healthcare information provider CHKS, which looked at April and May 2010 activity rates at 24 unnamed trusts, finding an average 8.5 per cent increase compared with the same two months in 2008.

If the present rate of activity continued through the year the rules could cost trusts £505m nationally during 2010-11 - the total value of the lost income and approximately the payment of an average district general hospital. The average cost per trust would be £3.4m.

The tariff rules are meant to incentivise hospitals to combat inappropriate emergency admissions.

Wrightington, Wigan and Leigh Foundation Trust chief executive Andrew Foster said: “Trusts have already got huge financial pressure through changes to the tariff and disinvestments [by commissioners]. Having extra activity for which you are not being paid puts even more pressure on.”

Royal Wolverhampton Hospitals Trust chief executive David Loughton said its commissioners were working to prevent emergency demand but it was still rising.

He said: “To penalise us for emergencies we are not determining doesn’t seem very fair. When people are ill you can’t turn them away because someone has said, ‘Here are the rules’. I know full well the PCT will agree with that.”

North West London Hospitals Trust chief executive Fiona Wise said if admissions keep rising the trust would be forced to rethink plans to cut costs by closing beds.

Despite the impact of the payment cap on trusts, sources said there was concern it was having little effect on activity because primary and community care services are not affected.

HSJ understands the Department of Health is asking a group of experts to review the payment system designed to encourage preventive services.

Wrightington’s Mr Foster said at present demand reduction work appeared to be on hold because of uncertainty about PCTs’ future role and authority over GPs, who are due to become the lead commissioners.

He said: “In that period of uncertainty dealing with emergency pressures has come to a stop. It is important we have health-economy-wide plans for dealing with funding reductions, and the ground is being taken away from under that.”

Several PCTs said they were working with their trusts to reduce demand. Farid Fouladinejad, strategy director at NHS Hounslow, has seen activity at West Middlesex University Hospital Trust increase then stabilise. He said the PCT wanted to build an urgent care centre outside the A&E department but was waiting for government approval.

He said: “The tariff may help commissioners provide incentives and disincentives, but we will not have systemic change unless we influence clinicians’ behaviour.”

GP Sir John Oldham, who leads the QIPP programme for long term conditions and urgent care, said: “The data demonstrates the need to grapple with this. The fact that some are doing better than others shows we need to learn from the best.”


Nuffield Trust research due to be published on Monday is expected to say that earlier discharge, financial incentives for acute trusts and low confidence in the quality of care outside hospital help explain the rise in emergency admissions since 2004.

It is also likely to identify shorter bed days as a factor in lowering the threshold for admission - meaning patients are being admitted with decreasing severities of illness, although they are also being discharged earlier.

An aging population and rising patient expectations have also contributed to the 12 per cent increase between 2004-05 and 2008-09.

But some trusts have seen reductions in their admissions.

The highest increases have been in urban areas, including those in London, the Midlands, the North East and North West. But the Nuffield report will say there is no clear link between deprivation and higher emergency admissions.


Clarity is the key to tackling excess admissions