Payment by Results 'is damaging patient care'

20 Aug 10
The NHS Payment by Results system is creating perverse incentives that are affecting the quality of patient care, Public Finance has been told.

By Jaimie Kaffash

20 August 2010

The NHS Payment by Results system is creating perverse incentives that are affecting the quality of patient care, Public Finance has been told.

The system pays NHS trusts based on the number of procedures they carry out. But doctors are claiming that it discourages collaboration between health providers and does not accurately reflect the costs of complex treatments.

In a recent case, Dr Shirine Boardman claimed unfair dismissal against SouthWarwickshire NHS Foundation Trust. The doctor was seconded to a diabetes community clinic for southern Asians, but the trust sacked her for transferring patient information to the clinic.

The employment tribunal ruled in the trust’s favour. But it said there were ‘financial issues which meant that the trust was particularly concerned about the possibility of losing patients to the clinic in the community and that was the basis upon which [the trust] made clear that patients were not to be transferred for their clinical health care needs to the clinic’.

Boardman told PF that Payment by Results actively deterred collaboration that would be in the patient’s best interests. She said that, because the hospital was worried about losing money through the system, other clinic staff were not given access to patient information, which meant they would have to ring the hospital to find out vital information.

‘The patients could see me either in the community or in the hospital for their diabetes appointment, but the hospital stood to lose £230 for every patient. The primary care trust does not have to pay that if the patient is seen in the community.’

Boardman expressed sympathy for the trust’s predicament: ‘If the hospital doesn’t get money because the patient is seen in the community, they cannot pay my wages.’

‘It does put strain on how to work with your community. To provide a patient with holistic care, you need everyone to work with each other.’

The system also means that complex surgery is too expensive, as the tariffs given to providers do not cover the costs. With a lowering of the tariffs, so they reflect ‘best practice’ costs, this situation could become worse. 

Derek Machin, a consultant surgeon and a member of the British Medical Association's consultant committee, told PF: ‘The more complex the surgery, the less likely it is that the PBR tariff will cover the costs. And it is not peculiar to a single trust – it is across the piece.

‘Hospitals are expected to cross subsidise from more lucrative work. But if the more lucrative tariffs are being changed as they seem to be to best practice tariffs then the likelihood is there will be no lucrative tariffs and there will be nothing to cross subsidise most major operations. Major surgery is inadequately recognised in the current tariffs.’

The government’s said in its recent healthwhite paper that they are to look at reforming the PBR system.

The white paper said in future, the structure of payment systems would be the responsibility of the NHS Commissioning Board. Until then, the Department of Health ‘will start designing and implementing a more comprehensive, transparent and sustainable structure of payment for performance so that money follows the patient and reflects quality’.

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