Patients given 'needless' appointments because NHS funding pays hospitals to create work, trust chief warns

Exclusive: Concerns raised as NHS announces reforms to ‘payment by results’ system which fall short of incentivising the health service to work together

Doctors in overstretched hospitals feel forced into giving patients needless appointments so that they don’t lose funding, an NHS trust boss has said.

The health service’s financial system means that hospitals are given more money for generating work for themselves – and penalised for helping patients avoid coming in for treatment.

With hospitals facing record demand and a 50 per cent rise in patients having to wait six months or more, Alex Whitfield, chief executive of Hampshire Hospitals NHS Foundation Trust, said these payment rules were hampering efforts to modernise the health service.

Despite these concerns and the potential disruption for patients missing work or school for appointments, NHS plans published this week show the so-called “payments by results” (PbR) system will be around until at least 2020.

Speaking at the NHS Providers annual conference in Manchester, Ms Whitfield said: “I had this bizarre conversation with one of our paediatricians, who said to me, ‘I’ve got children coming back to see me who I don’t think need to, but if they don’t we won’t get the income will we?’

“We’ve been telling them for ages that there’s one pound and we need to spend it for patients as best we can, and getting people to come and have needless attendances in an acute hospital is really not the best use of our very limited money.

“I hadn’t realised that people in the depths of our organisation still haven’t got that message.”

These habits have been ingrained at all levels of the NHS by years of funding squeezes and emphasis on financial performance in trusts.

Another example, which sparked a “major internal argument”, saw parts of the trust’s board object to funding a private ambulance service for people discharged after patient transport ends for the evening.

“We’re actually paying for something that reduces our income,” Ms Whitfield said. “We could have admitted them and got something, but it’s completely the wrong thing for the patient, the system, the professionals.”

In subsequent comments to The Independent, Ms Whitfield clarified that she did not think the payment tariff system was driving clinically inappropriate behaviour, but that in “marginal cases” it could be the deciding factor and this shouldn’t be the case.

Hours after she spoke NHS England published plans for a major overhaul of the NHS Tariff which will shake up the way trusts are paid in 2019-20.

Among the proposals is a standardised rate for outpatient appointments, which would mean trusts are paid the same if a patient is seen by an NHS consultant, a nurse, or over the phone or via Skype.

However the same changes will bolster payment by results in A&E departments, removing a cap on attendance payments to ensure hospitals are not penalised in the face of rapidly increasing demand which they can do little to control.

Ms Whitfield told The Independent that telephone appointments could address some of the pressures they face, but funding needed to be part of wider reforms that joined up hospitals with other parts of the NHS.

Announcing the changes on Tuesday NHS England chief executive Simon Stevens said the £20bn increase to the NHS budget pledged by Theresa May was the perfect time to “pivot to a different financial regime”.

Funding alternatives

Simon Stevens’ plans to reform NHS funding will require unpicking damaging NHS reforms introduced by Tory health secretary Andrew Lansley in 2012.

Mr Stevens singled out competitive contracting rules, which were intended to drive down prices but have made it harder for organisations to work together and have resulted in private groups like Virgin Care suing NHS bodies who breach them.

Removing these deadlocks is a key part of NHS England’s plans for developing “accountable care organisations” – super-organisations combining all the health and social care providers in a region.

This could allow trusts to be paid for any investment that improves health (and keeps patients away from hospital).

But campaigners, including the late Stephen Hawking, have resisted their implementation over privatisation fears.

“[The changes] will be part of a five-year transition to a fairer, more transparent, and simpler reimbursement mechanism across the sector.”

But “going cold turkey in a 12-month period is not actually possible”, he added.

Dr Robert Harwood, chair of the British Medical Association’s consultants committee, told The Independent doctors want reforms to incentivise closer working between parts of the NHS.

“Ultimately we don’t believe that the PbR system is the way to pay acute providers in England,” he said.

“Patients should be assessed and treated based on clinical need, [under PbR] providers can be given the wrong funding and incentives are, unfortunately, inherent in this kind of system which can fragment services and care.”