Nursing and Payment by Results

Understanding the cost of care

22 July 2009
NHS England has been reimbursing providers for acute care using an activity based casemix payment system called Payment by Results (PbR) since 2003. PbR uses Healthcare Resource Groups (HRGs) as a means of classifying patients' treatment episodes for reimbursement. They are developed by clinical working groups from national data and are designed to group together episodes that are clinically coherent and consume similar amounts of resource. Within PbR, although efforts have been made to engage clinicians in the gathering of data, nursing costs are still treated purely as a workforce cost which is aggregated to the unit or department level and allocated on the basis of the amount of time the patient spent in that unit (for e.g. theatre hours or bed days). Within that 'pooled cost', there is little recognition of variations in nursing effort/inputs, patient dependency, and skill. In order to begin to illustrate any connections between nursing costs and the resources given to providers under PbR, the RCN commissioned a study which observed around 117,000 nursing activities on 60 wards over a 48 hour period. This activity was then converted to a daily cost to compare with PbR reimbursement. This study is the first time that patient dependency has been linked with HRGs and proposes that further work needs to be done to address the invisibility of nursing within PbR if it is to achieve its policy goals of driving efficiency and improving the quality of patient care.
Whilst recognising the study's limitations, it suggest that an understanding of nursing care processes within a fix priced case-mix activity base payment system might be an important addition to the existing understanding of hospital patient care costs.

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