Search the website

Options for the future of Payment by Results

June 2007

The BMA has concerns about PbR in its current form. Our concerns are significant and we believe PbR is not currently fit for purpose. If the overall aim of PbR is to provide a transparent, rules-based system for paying for NHS care we do not believe the current proposals address the concerns we have about PbR in general. Our concerns are that:

• PbR introduces the concept of profitable and unprofitable patient services whereby children, patients with mental health needs or co-morbidity have services reduced or withdrawn;
• low cost private treatment centres cherry pick low cost, uncomplicated and low risk cases and leave more high cost, complex and high risk cases to comprehensive NHS hospitals;
• NHS trusts are threatened by diverting funds to the private sector and strategic planning of health services based on need is being undermined;
• collaboration between primary and secondary care is at risk of being eroded further not least as providers are in direct competition by pursuing incentives to treat patients;
• bureaucracy and management costs are likely to increase significantly and the benefits of PbR are unlikely to compensate for the increased costs.

Overall we believe PbR should reward efficiency, promote fairness by making payments for the effectiveness of work done and should offer a way of ensuring that money flows effectively within the system. The current PbR model merely provides payment for activity and does not account for results. We do not believe that PbR can work in the current severely financially capped system as it leads to excessive demand management which is likely to have a detrimental impact on patient care.

There are three areas which we believe are not sufficiently covered by the questions in the consultation proforma. We have elaborated on these areas. Our comments on these three areas underpin our overall response to the consultation questions. These areas are: a) the split level tariff; b) recognition of the tariff’s impact on quality of care and cost effectiveness and c) audit of the tariff.

A Split-level tariff
PbR aims to support NHS modernisation by paying providers for the work they do, rewarding efficiency and quality. We recognise that PbR also carries risks which need to be managed effectively both locally and nationally. However, we are concerned about the proposals for a national tariff as set out in chapter 3.

Our key concern is that a split level tariff will result in changes which may not impact positively on patient care. We believe that the tariff should not drive change unless the change is beneficial to patients. We have concerns that a split level tariff will fragment service provision and may adversely affect patient care through unhealthy competition between providers. PbR should ensure quality patient care is not compromised by efficiency or cost savings which are forced by a split-level tariff. We seek further clarification on the purpose of the system which we believe blurs the principles on which the system was developed.

B Recognition of the tariff impact on quality of care and cost effectiveness
We are concerned that the tariff may impact detrimentally on the quality of care delivered and this will have implications for cost effectiveness. We are in favour of developing a robust tariff which fulfils patient need. However, we are concerned that the tariff will not bring stability to the health service and will put undue pressure on providers to bring down costs to levels of affordability which fulfil national government targets but do not fulfil local patient needs. Furthermore it is, currently inadequate to promote the necessary coordination and collaborative approach required for quality care in these areas. We note the NHS Confederation’s recent report ‘the challenges of leadership in the NHS‘, based on interviews with a cross-section of senior managers about what they think about the state of NHS leadership, summarised; ‘some policies, in particular payment by results, encourage trust boards to think about the survival of their own organisation rather than the wider health community’ (see reference 1). We are concerned the tariff is already having a detrimental impact on care.

We believe the tariff should not apply to all areas of the health system. Notable exceptions should be mental health and long term conditions where co-morbidity is likely to have significant implications for the effective treatment of the patient. Patient care may be compromised by the tariff not recognising the complexity of a patient’s needs.

C Audit of the tariff
We believe that effective monitoring of PbR is necessary to ensure that it operates in the interests, and to the benefit of patients. An incentive-based system needs to monitor both payments and behaviour. The data from which payments are made must be quality assured; the accuracy of the payments is also important as is the purpose for which payments are made.
The BMA supports the assurance framework principles proposed by the Audit Commission and believes the framework should include:

• an independent, targeted external clinical coding programme covering all acute trusts, including foundation trusts;
• development of benchmarking indicators to target audits and for wider use by PCTs and Trusts;
• regular national briefings and emerging issues from both the coding audits and benchmarking indicators (see reference 2).

Notwithstanding the above, whilst we oppose PbR in its current form we have provided our detailed comments on the questions asked in the consultation proforma under the respective question headings. We hope to further engage with you on the development and strategic direction of PbR following our Annual Representatives meeting in July and would be keen to meet with your representatives.
References

1. http://www.nhsconfed.org/membersarea/downloads/download.asp?ref=2465&hash=8a10122b7cd6aea2672fc5a18efdcc25
2. http://www.audit-commission.gov.uk/pbr/assuranceframework.asp?CategoryID=ENGLISH^574^SUBJECT^4700