It also considers the experiences of other countries using similar payment systems. It explores whether payment systems in general, and PbR in particular, are still fit for purpose, given changing policies and priorities, such as the need for disease prevention, the prevalence of long-term conditions, the changing economic environment. It argues that more flexibility should be encouraged in payment systems to accommodate change and offer the right incentives for cost-effective, high-quality care.
- Payment systems are only one of many ways of promoting health policy objectives and they may not be as effective as other means.
- Different services require different payment systems, and several different approaches are therefore needed across the NHS. PbR is most appropriate to elective care and less suited to other services.
- A radical rethink is needed to develop more comprehensive or global capitation payments, but payment systems need to be flexible so they can adapt at a local level to changing policy at a national level.
- Different objectives means there will inevitably be trade-offs; the starkest of these is between cost and quality, and cost and maintenance of supply. High-quality standards and low prices, for example, could lead to limited supply.
- The impact of payment systems is still not well researched and data is limited. The payment system needs to be underpinned by good information and analysis.
The NHS Commissioning Board and Monitor should develop a payment strategy that is clear about the role and objectives of PbR. This should be part of a new framework that allows different payment systems for different types of service, and which also allows local flexibility on a clearly agreed basis.
Such a payment strategy should recognise how trade-offs between objectives will be handled, how robust data will be gathered for evaluation, and how that evaluation will be used to develop the system further.
More on Payment by Results
- Read John Appleby's blog: Payment by Results: time for a rethink?
- Find out more about our forthcoming event on payment reform
- Read our press release on this report: Current payment systems not suited to current challenges facing the NHS, new report by The King’s Fund finds