The Right Result? Payment by Results 2003-07 February 14, 2008
Posted by western4uk in Acute Services, Commissioning, Grey Literature, Health Economics, Hospitals, NHS, Practice Based Commissioning, Primary Care.Tags: Acute Services, Department of Health, Financial Management, Grey Literature, Health Economics, NHS, Primary Care
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The Right Result? Payment by Results 2003-07 details how Payment by Results (PbR), has been embedded across the NHS and has helped hospitals to be more business-like. It should start to deliver the significant increases in productivity and efficiency across the NHS that the policy was designed to achieve.The PbR policy was introduced by the government four years ago and is a system of paying hospitals nationally set prices for the number of patients and types of conditions they treat. It is designed to encourage hospitals to treat more patients, more efficiently without compromising quality of care.
This Audit Commission report finds that under PbR most hospitals have improved their financial management and now have a better understanding of how much it costs them to treat patients. The impact on the NHS in terms of efficiency and activity has been smaller than expected, however, and PbR seems to have contributed to positive trends rather than driven them.
The report sets out a number of priorities for future development of the policy that need to be addressed if PbR is to deliver further improvements:
For Primary Care Trusts
- Further develop commercial, legal and contracting skills, identifying gaps in line with the developing World Class Commissioning competencies, to improve their ability to operate in the PbR environment.
- Ensure that 2008/09 contracts contain appropriate incentives and penalties to support appropriate, high quality care, for example, readmissions targets, and that information requirements are clearly specified and enforceable. Progress against these targets should be reported regularly.
- Adopt a robust yet proportionate approach to monitoring and challenging provider activity and costs under contract, prioritising investment in practice level information systems so that practices can engage in the planning and monitoring of hospital activity.
- Actively monitor provider actions in response to the Audit Commission’s PbR data assurance audits, and use the findings from these audits to supplement existing information on potential data quality issues.
For Acute NHS Trusts
- Ensure that robust information and reporting systems are in place that meet all internal and external requirements within the minimum reporting deadline of 30 days following the end of the month, and that local information systems are in place to complement SUS as necessary.
- Embed and promote service-line management and reporting, paying particular attention to the use of surpluses and how this will be managed within the organisation.
- Understand the costing data they require to manage the business, and invest in improving internal costing systems, considering the business case for introducing patient level costing systems where appropriate.
- Prioritise the implementation of the OPCS-4.4 classification system for procedures, to improve coding internally and to support the introduction of HRG4.
- Engage in discussions with commissioners about changing patient pathways, demand management and use of local flexibilities, such as unbundling the tariff into its component parts.
For the Department of Health
- Identify and explicitly prioritise the changes that will be most effective in achieving policy objectives, and ensure that the development programme for addressing these priorities is realistic, properly resourced and communicated to stakeholders.
- Ensure that timely guidance, support and direction continues to be provided to both commissioners and providers in a balanced way, including more effective mechanisms for receiving and providing feedback, particularly in relation to contract and information issues.
- Review and address the perceived limitations of SUS in supporting PbR, ensuring there is a clear vision for NHS data and organisations’ responsibilities that is shared by NHS Connecting for Health and the Information Centre for Health and Social Care, and that the expectations of the NHS are consistent with this vision. Additional steps should be taken to ensure that guidance from these bodies is consistent.
- Invest in information systems to capture and report on community services and support the development of an appropriate payment mechanism.
- Monitor usage of the new standard contract and reinforce the move toward a consistent approach to contracting across the NHS, providing guidance as appropriate to ensure that balanced, fair contracts, that support nationally agreed principles, are negotiated.
- Use the tariff as a policy lever to drive desired behaviours, rather than purely as a reflection of average costs, signalling likely changes to the NHS well in advance.
- Explore the use of separate payment streams in addition to the tariff, for example to reward quality or to fund capital costs, where this is necessary to provide the right incentives to NHS bodies.
- Carefully monitor the implementation of HRG4 to ensure that the additional complexity of the payment classification is warranted and is not undermining policy objectives.
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