Appalling emergency care resulted in enormous suffering, says health watchdog in most damning report ever on an NHS hospital

Hundreds of patients suffered and died unnecessarily as a result of appalling emergency care at a flagship foundation trust, the government's health watchdog said today in the most damning report ever on an NHS hospital in England.

The Healthcare Commission said senior managers at Mid Staffordshire NHS foundation trust were so obsessed with meeting targets and winning freedom from Whitehall control that they did not correct serious failings in the care of patients admitted through the accident and emergency (A&E) department.

Some patients were hidden away in unstaffed units that were used as "dumping grounds" to avoid breaching the four-hour target for the maximum waiting time in A&E.

During the three years to March 2008, at least 400 more patients died than would have been expected at an average hospital with a similar case mix. But the commission could not say how many of these deaths were directly attributable to the poor quality of care.

It said the problems centred on the trust's hospital in Stafford where there were "low staffing levels, inadequate nursing, lack of equipment, lack of leadership, poor training and ineffective systems for identifying when things went wrong".

Sir Ian Kennedy, the commission's chairman, said: "This is a story of appalling standards of care and chaotic systems for looking after patients. Those are words I have not previously used in any report. There were inadequacies at almost every stage in the care of emergency patients. There is no doubt that patients will have suffered and some of them will have died as a result."

Alan Johnson, the health secretary, issued an immediate apology to the patients and ordered a national inquiry into whether an early warning system that is supposed to detect clinical underperformance is working effectively across the whole of the NHS.

Relatives of patients who died at the hospital will be entitled to an independent review of the case notes. Johnson said: "This will be an essential step to put relatives' minds at rest and to close this regrettable chapter in the hospital's past."

Sir Bruce Keogh, medical director of the NHS, said there had been a "gross and terrible breach of patients' trust" and a "complete failure of leadership". He said he was now working on new sets of indicators – including death rates and feedback from patients about the quality of care – to force every hospital in England to concentrate on safety and quality. The information will be published on the NHS Choices website.

The commission found:

• Patients arriving in A&E were assessed by unqualified receptionists to determine whether they needed urgent attention. One patient with an open fracture of the elbow had to wait for more than four hours, covered in blood and with no pain relief, because the receptionist failed to give the case priority

• There were too few consultants in A&E to provide on-call cover all day, every day and junior doctors were not adequately supervised

• There were not enough nurses to care for emergency patients. A review of staffing levels in 2007/08 found the trust was short 120 nurses, of which 17 were needed in A&E, 30 in the surgical division, and 77 on the medical wards

• Nurses in the emergency assessment unit were not trained to read cardiac monitors and sometimes turned them off. Patients did not always get the correct medication. Nurses on the wards were not always able to identify when patients were deteriorating after an operation, for example, by monitoring vital signs

• Call buttons were not always answered when patients were in pain or needed the toilet. Relatives claimed patients were left, sometimes for hours, in wet or soiled sheets, putting them at increased risk of infection. Patients at risk of developing pressure sores did not get appropriate care. In one ward, 55% of patients were found to have pressure sores when only 10% had sores on arrival

• Delays in operations were commonplace, especially for trauma patients at weekends. Sometimes a patient's operation might be cancelled four days in a row, and they would receive "nil by mouth" for most of the day, four days running

The commission analysed the trust's board meetings from April 2005 to 2008. It found discussions were "dominated by finance, targets and achieving foundation trust status". When the infection rate of Clostridium difficile doubled in the early months of 2006, the information was not released to the board or the public.

In 2006/07 the trust set itself a target of saving £10m, equivalent to about 8% of turnover. The report said: "To achieve this, over 150 posts were lost, including nurses. This was in a trust that already had comparatively low levels of staff."

Mid Staffordshire was awarded foundation status in February 2008 – several months after the commission began investigating standards of care.

Anna Walker, the commission's chief executive, said she did not know the trust had applied for foundation status until after Monitor, the foundation regulator, decided to award it.

The trust said its board decided on Monday to suspend Martin Yeates, who stepped down as chief executive on 3 March, pending an independent inquiry into his leadership of the trust during the period covered by the commission investigation. He will remain on full pay until the investigation is concluded. Toni Brisby resigned as chair of the trust on 3 March.

The Department of Health launched two further investigations last night. Sir George Alberti, the government's emergency care tsar, will lead an independent review of the trust's current A & E services; and Dr David Colin-Thome, the primary care tsar, will review the standards of care and treatment at the trust during the five years before the commission began its investigation, to determine how the obvious failings were allowed to continue for so long.