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Feature Emergency Care

How England’s emergency departments are being penalised

BMJ 2014; 348 doi: (Published 17 February 2014) Cite this as: BMJ 2014;348:g1604
  1. Jasmine Macnabb, assistant producer1,
  2. Lyndsay Rowan, researcher1,
  3. Carl Heneghan, director2,
  4. Igho Onakpoya, researcher2
  1. 1Dispatches, Channel 4, London, UK
  2. 2Centre of Evidence Based Medicine, Oxford, UK
  1. Correspondence to: carl.heneghan{at}

To try to stem the rise of emergency hospital admissions the government introduced a penalty system to incentivise health providers and commissioners to manage demand. But how much money is being withheld from hospitals? A team from Dispatches set out to investigate

Emergency departments in England are under pressure. This winter, to help head off a crisis, the government made an extra £400m (€490; $670m) available to help hospitals cope with winter pressures. At the same time, substantial sums of money are being withheld from hospital budgets under government policies, with targets, penalties, and incentives designed to help drive down numbers of emergency admissions and readmissions and to improve the flow of patients through hospital. The money withheld stays in the NHS.

There are no published data detailing how much money has been withheld from hospital budgets under these policies. Nor is there publicly available information on the level of fines imposed on hospital trusts since they were introduced for delays in clinical ambulance handovers in April 2013.

So Channel 4 television’s Dispatches programme sent freedom of information requests to 156 acute hospital trusts and 212 clinical commissioning groups asking for information on funds withheld. Dispatches, in conjunction with the Centre for Evidence Based Medicine at Oxford University, then processed and analysed the data they provided.

Increasing demand

In the past 15 years there has been a 47% increase in emergency admissions, and as a result an extra four million people a year use emergency services than in 2004. In 2012-13 a quarter (26%) of patients attending emergency departments were admitted, at a cost of £12.5bn to the NHS; most of those admitted stayed for two days or less.1

Many of these admissions are avoidable, but there is little consensus on how best to reduce the numbers. In 2010 the “marginal rate rule” was introduced in the NHS with the aim of stemming the tide of emergency admissions. The rule sets out a baseline admission rate for each hospital trust at which admissions would be remunerated fully: if admissions were above this baseline, the hospital would receive only 30% of the fee for the admission on the nationally set NHS tariff. The aim of this policy is to give health systems an incentive to better manage the demand. The 70% savings are to be reinvested by NHS commissioners into specific joint activities that aim to reduce the demand on emergency services.

But reports indicate that there are problems with the rule and how it has been implemented. The health minister Lord Howe admitted that the rule “hasn’t worked very well” in assisting commissioners and providers.2 In 2013 the Foundation Trust Network surveyed its members. Ninety six per cent of those surveyed said that the marginal rate was not achieving its aim, and half said that they had not been consulted on how the savings should be reinvested.3 Estimates indicated that hospitals may be losing as much as £500m a year as a result of the rule.

NHS England’s rationale is that financial penalties or incentives encourage hospitals and those who look after patients in the community to work together more closely. The government maintains that the ambulance handover target has reduced delays by a third and that the marginal tariff has slowed the growth in admissions.

To find out more, Dispatches sent freedom of information requests to 156 acute hospital trusts and 212 clinical commissioning groups in England asking for information on funds withheld because of the marginal tariff, the readmissions policy, and fines for breaching handover times and ambulance waiting times (box).

Response to freedom of information requests

Requests under freedom of information legislation were sent to 156 hospital trusts in England, covering 212 clinical commissioning groups (CCGs). Of these, 12 were either specialist hospitals or had no emergency departments. As of 12 February 2014 we had obtained replies from 149 (95%) of 156 trusts, 132 of which provided cost information.

Data on funds withheld for 2010-11, 2011-12, and 2012-13 come only from trusts, as CCGs do not hold this information. However, the estimated figures for funds withheld after April 2013 come mainly from CCGs (these figures vary substantially as they do not make up a full financial reporting year).

On readmissions, 148 trusts and 160 CCGs replied. Where both replied we assumed that the hospital trust figures were more likely to be historically complete and we used these.

We obtained meaningful data on 143 trusts (92%). Of these, 131 (92%) supplied the amounts withheld from them. We also sent freedom of information requests to 148 hospital trusts and 10 ambulance trusts; 138 hospital trusts and all the ambulance trusts replied. Sometimes the hospital trusts told us to go to ambulance trusts for information on funds withheld, which we did. Sometimes the ambulance trust then told us to contact the CCG, which we were unable to do because of time constraints. Where information conflicted between hospital and ambulance trusts, we used the information from the hospital trust as the primary source.

We obtained data for ambulance waiting times from 45 trusts and split waiting times into four categories (≤15 min, 15-30 min, 30-60 min, and >60 min). In addition, we also had data on the longest waiting times.

What did we find?

From the information we obtained on 132 trusts, we found that the total amount of money withheld under the marginal tariff was £848 302 105 from 2010-11 to 2013-14. However, the amount withheld for 2013-14 was collected mid-year and therefore doesn’t represent the full year’s figure. Nottingham University Hospitals NHS Trust suffered the biggest defund of any one trust: £32m over the four years. In contrast, 13 trusts reported no withheld funds at all; 63 reported more than £5m in withheld funding and 14 more than £15m.

The 143 trusts that supplied cost information on funds withheld for readmissions had a total or £390 477 765 withheld. Again the amounts varied considerably across trusts. Twenty four had no funds withheld, yet Barking, Havering and Redbridge University Hospitals NHS Trust had £15.9m withheld and Barts Health NHS Trust had £15.8m withheld. Fifteen trusts had more than £6m withheld.

For ambulance handover times we obtained data on 503 730 patient episodes from 45 trusts. Three quarters (71%) of patients were handed over within 15 minutes, 20% were handed over between 15 and 30 minutes, 7% between 30 and 60 minutes, and 9810 patients (just under 2%) waited longer than 60 minutes. The longest waiting time was 608 minutes, and three other trusts reported waiting times longer than 400 minutes. Five trusts had some patients without recorded handover times.

This means that for every 1000 patients who arrive at hospital by ambulance, 89 will wait at least half an hour to be handed over, and 19 will wait longer than one hour. In some rare instances patients can wait nearly half a day.

What does it mean?

We received marginal rate review data on 85% of trusts, which together lost out on a total of £848m over four years. For readmissions, over the same period, trusts lost out on nearly £400m. Yet 60 trusts didn’t hold the information on where the marginal tariff funding had gone. Moreover, 46 trusts didn’t hold the information on where the money withheld as a result of the readmissions policy was spent. The substantial variation across trusts suggests that there might be a problem in terms of the interpretation of these rules and implementation. If some hospitals seem to be managing demand and readmissions levels, and not facing losses because of withheld funds, it would make sense for them to share strategies and expertise with trusts that have been hit.

The variation can also be explained by simple regression to the mean: trusts with high admission rates before the rule was implemented would potentially pay no fines because their admission rates reduced or stabilised over the subsequent four years, regressing to the average. Hospitals with low baseline admission rates will tend to regress to a higher level, back to the average, but will end up being penalised.

In addition, the health service has undergone substantial reorganisation through this period. This has led to some confusion and problems with contracting between hospitals and providers, which has added to the causes of the variation. A review by the regulator of trusts Monitor and NHS England, published in October 2013,4 heard “from many providers about potentially serious issues on the horizon with payments for urgent and emergency services generally.” In terms of these problems, the review noted “a lack of transparency about how some clinical commissioning groups are spending the 70% of the funds that they retain.”


Cite this as: BMJ 2014;348:g1604


  • Competing interests: The authors have read and understood the BMJ Group policy on declaration of interests and declare the following: CH has received expenses and payments for his media work from Channel 4 and receives payment for running educational courses at the University of Oxford and University of Oxford ISIS consulting services for external teaching and training.

  • Provenance and peer review: Not commissioned; externally peer reviewed.