News / News analysis: Emergency cover

The publication of the sense check last month launched a payment by results season that will culminate in next month’s road test and final confirmation of next year’s PBR early in 2013/14. And perhaps in a taste of things to come, providers are jockeying for position early in the process.

In late October, the Foundation Trust Network (FTN) opened its annual conference with a benchmarking study that showed seven out of 10 foundations were losing money on A&E attendances as well as being penalised by the marginal 30% rate for those subsequently admitted to hospital.

Using data from 10 trusts between April 2011 and January 2012, the FTN said the income received by most for treating patients in A&E did not cover the costs of operating the service. Average cost per attendance varied between £69 and £129, while trusts received an average of £79-£123 (adjusted for market forces factor) for every patient seen in A&E. Diving further into the detail, three trusts made a ‘profit’ from each attendance (of £18, £27 and £28), while seven made losses ranging from £3 per attendance to £34. The report said the margin per attendance was not significantly correlated with the average income level of the trust or the overall volume of attendances.

The Department of Health has moved to amend A&E tariffs for 2013/14, which could better match income to costs for different interventions. In the sense check, it announced plans to introduce greater granularity with prices for all 11 healthcare resource groups in A&E, rather than the current five, from next April.

The FTN said more accurate coding was essential. A high-level comparison of A&E activity by acuity, treatment area and tariff payment category suggested coding in some trusts did not always reflect the true extent of the work carried out. But it said that tariffs are based only on diagnosis and treatment completed in A&E. For example, the system does not reimburse trusts fully for additional resources spent on patients with mental health needs – principally staff time.

The report also called for a review of the 30% marginal tariff for emergency admissions above the 2008/09 threshold. There was little incentive for primary care to share responsibility for emergency admissions. Hospitals were earning less despite taking steps to minimise admissions – by improving early specialist assessment and ambulatory emergency care.

A&E was open 24 hours a day when other parts of the system were not, said the report. This contributed in particular to the disproportionate admissions of elderly patients. While patients over 75 accounted for 12% of all A&E attendances, nearly 50% of these attendances ended in admission to hospital.

FTN chief executive Chris Hopson said: ‘There is only so much hospital-based services can do to change patterns of care. What is needed is a whole system approach with a real commitment to keeping patients out of A&E. In the meantime trusts should not be financially penalised by fines for rising numbers of patients coming into hospital via A&E.’

One finance director contacted by Healthcare Finance said the report mirrored his trust’s experience of rising A&E attendance and the greater acuity of many patients’ condition. A&E was being increasingly used as ‘another doorway’ into the NHS by primary care.

Recent surveys have found that up to 40% of patients coming into his trust’s A&E department had done so because they could not get a GP appointment quickly enough or their GP had advised them to go to A&E. While hospitals were moving to true seven-day working, GP hours remained largely unchanged.

The finance director said the aims behind the introduction of the marginal rate for emergency admissions were good – to prevent unnecessary admissions – and there was still a role for marginal rates. But it was time for a review. ‘The 2008/09 threshold is out of date in some areas, while there is no incentive in primary care to stop people coming into hospital,’ he said.

 ‘Costs are fixed to a point, but as your numbers increase you get steps up in costs and a 30% rate will not cover it any more. Also we are rightly trying to move towards seven-day working, but this brings in extra cost over and above the 30% rate.’

Trusts, particularly foundations, have produced healthy surpluses and he said there was a degree of cross-subsidy for loss-making services. But providers want to see the threshold revised, he said. ‘We are starting to see lots of financial problems, some of which are tariff driven. If you did a poll of tariff changes acute trusts would like to see, the marginal rate would be right at the top.’