28 January 2005
The Audit Commission is holding talks with the Department of Health on the introduction of a 'policing' system for payment by results to prevent trusts from 'gaming' the new NHS finance system.
In an interview with Public Finance, Andy McKeon, the commission's managing director of health, said there were 'missing steps' in PBR, which had contributed to its instability and accusations that foundation trusts were manipulating the system to grab maximum funding.
'It has been implemented without any national monitoring or policing. All other countries that have introduced this have found significant increases in activity and opportunities for organisations to game the system. They have put in place mechanisms to prevent that.'
McKeon, former head of policy at the DoH, said there was no evidence that trusts were playing the system, where the money follows the patient instead of traditional block funding. But problems in obtaining accurate data, and controversial figures that indicated a sharp rise in short-term emergency admissions in foundation trusts, had made the introduction of PBR unstable.
Three weeks ago, the department announced that it would delay the roll-out of PBR for short-term emergency admissions in non-foundation trusts by a year after fears of financial volatility.
McKeon said the Audit Commission 'was well placed' to play a 'significant part' in any new monitoring system, which could have a two- or three-pronged approach.
The first would be a national data analysis, the lack of which the commission flagged up in its critical report last year. This would use individual performance information and examine trends over time. It would also compare this with 'character changes' in other trusts and build up a picture of any potential problem areas.
The second phase would be 'supplemented audits' to check on the quality and accuracy of trusts 'coding' on the number and costs of their procedures.
The commission is to publish a study on foundation trusts' 'early lessons' from PBR in March or April.
PFjan2005
