14 January 2005
The Department of Health has denied that ministers are postponing a key element of the NHS payment by results system because it could have put trusts' financial problems under the general election spotlight.
Amid predictions that NHS England would have debts of £500m by the end of this financial year, hospitals and primary care trusts had become increasingly worried that the new system – which pays a standard tariff for sets of similar treatments – could force them into the red.
Hospitals currently charging more than the tariff would lose income. And, although trusts charging less would receive windfall gains, the PCTs that purchase care from them would have less money. The DoH believes this could cost £1bn a year.
The new system is being introduced in phases up to 2008/09, but from April around 70% of a typical hospital trust's income was due to come under PBR.
However, health minister John Hutton said this week that emergency admissions in non-foundation trusts would be excluded from the new regime until April 2006. The original timetable for full implementation of PBR across the English NHS by 2008/09 is to be maintained.
One trust finance director told PF: 'This gives us a welcome breather. In effect, foundations will be piloting the system and I think this will mean further reform of PBR before the rest of us have to implement it.'
PBR will now cover elective admissions, or around 30% of non-foundations' income, from April. Foundation trusts will continue to operate the scheme and will include emergency admissions in 2005/06.
The DoH spokesman said the scaling back in PBR was to give NHS finance directors more time to implement a large, unpredictable element of the new system. 'Elective admissions are more predictable than those that come through A&E, he said. 'We are doing this as we have to make sure we get this system right.
'But there is no let-up in the reform process and the pace of roll-out is still a lot quicker than countries in Europe and elsewhere operating a similar system. By telling them now, this should help finance directors to plan ahead.'
PFjan2005
