NHS trust bosses irked by £600m penalties as it deepens cash crunch

NHS trust bosses across England are infuriated over the £600m ($862.65m) a year penalties levied on hospitals for performance failures. The trust chiefs argue that the delays in attending patients are due to lack of staff and facilities at the cash-starved hospitals and the penalties are further deepening their deficits.

NHS England and Clinical Commissioning Groups (CCGs), the GP-led local NHS bodies that pay hospitals to treat patients, imposed these fines. A fine of £120 is imposed for each failure in treating an accident and emergency case within four hours and a £300 fine for each failure to treat a patient on the non-urgent referral-to-treatment waiting list within 18 weeks.

NHS England, however, is planning to put an end to levying fines for failure of duty and instead incentivise hospitals on good performance.

NHS Providers, which represents hospital trusts, said penalising hospitals makes no sense when the sector is in the red, poised to post an annual estimated loss of £2.8bn in the annual financial reports, due to be released in a week. The fine includes £233m for missed performance targets and £169m for readmission of too many patients within 30 days, according to NHS Providers.

"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," Chris Hopson, chief executive of NHS Providers, was quoted as saying by The Guardian.

In 2015, Barts Health, the NHS's largest trust, was slapped a fine of £52.7m for missing targets at all its four hospitals in London. The fine became the major factor for the £79.6m deficit it carried in its balance sheet for 2014-2015. By the end of February 2016, Barts had been fined £23.8m, which the local CCGs reduced by £10m in an attempt to support the hospital finances. North Bristol NHS trust has paid about £8m in fine this year while King's College hospital trust in London paid over £2m.

However, NHS England said no more fines would be imposed in 2017 to enable the trusts to recover from financial losses. A spokesman for NHS England reportedly said the NHS has for "over a decade" incentivised hospitals for quicker and better services and the practice has yielded successful results. The spokesman added: "However, for next year we've already decided to suspend penalties and instead allocate an extra £1.8b to incentivise hospital performance improvement."