18. Payment by results or poor results?
Matter for discussion submitted by the RCN Sutton and Merton Branch
That this meeting of RCN Congress debates the inequalities of payment by results for patient care in the NHS
Report on this debate
Proposing this matter for discussion, Mike Smith, Sutton and Merton branch, said that payment by results (PBR) should be a consistent method of funding for hospitals. But in practice it is more a system of "payment by procedure" that "doesn’t reward delivery of good service or penalise poor quality treatment."
He asked how nursing input, emotional support, compassion, and quality of care can be measured using a system in which hospitals get paid a set amount, irrespective of the quality care they provide.
Denise Chaffer said it was important for nurses to code correctly when using the PBR system. She called on Council to lobby government for the system to be based on "realistic" costs – for a tariff that reflects the quality of care and patient outcome, rather than one that inhibits innovative practice.
Lynn Miller pointed out that target numbers are not indicative of nurses’ hard work.
Fiona Carroll called for a system that focuses on the standard of care and patient experience. Adding that nurses need to be involved in the development of any cost system, so that it’s informed by what really goes on in practice, because it’s "too important to be left to managers and accountants alone."
Mike Smith responded saying that nurses need to come to terms and get involved with the PBR system, but that it needs to look at the quality of patient care.
Background
Payment by Results (PbR), launched in NHS England in 2002, claims to provide a transparent, rules-based system for paying trusts that rewards efficiency, supports patient choice and diversity, and encourages activity. It replaced a funding system which was reliant on historic budgets and the negotiating skills of individual managers.
Currently operational in NHS England, PbR is being developed to a much smaller degree in Northern Ireland (based on care pathways for certain healthcare resource groups, or HRGs). To date, neither the Scottish Parliament nor the Welsh Assembly has shown any interest in developing an activity-based payment system such as PbR.
Since it rewards activity (rather than ‘results’), one perspective of PbR is that it provides transparency over activity levels, enabling providers to focus on the various elements of the care pathway by understanding variations in practice and control costs. Another perspective is that PbR is a market mechanism designed to promote competition, and thus stimulates increased activity in order to gain income. In a policy environment where care is being shifted from hospitals to community settings, it seems PbR may work against the grain.
The fixed-price and non negotiable ‘tariff’ system for procedures contained within PbR has created immense pressure for providers whose costs were above the national average, while generating income for those whose costs were below tariff reference values. In each case, the loss or gain was not related to actual quality of care. Some argue that this has created a perverse incentive to crudely cut costs to prevent a deficit, and at best has financially rewarded providers without asking for any care quality improvement in return.
The RCN has published several briefings on PbR, and has co-written a publication with the Healthcare Finance Managers Association on issues raised by the implementation of PbR. The RCN also holds one of the few nursing seats on the Department of Health (DH) external advisory group on PbR. The absence of any real clinical engagement on the development of PbR has been raised with the DH, and as a result there has been an increase in emphasis on multidisciplinary engagement and consultation over the continuing roll out of PbR.
PbR has undergone several major revisions, and recently has been the subject of national consultation. Nursing as a discreet activity remains largely invisible within PbR, and the next version of HRG does not address this to any degree.
References and further reading
Audit Commission (2005) Early lessons from payment by results, London: Audit Commission. Available from: www.audit-commission.gov.uk
Department of Health (2002) Payment by results (website page). Available from: www.dh.gov.uk/paymentbyresults (Accessed 4 February 2008) (Internet).
Royal College of Nursing (2007) Nurses’ business: coding and costing health care, London: RCN. Available from: www.rcn.org.uk/publications