Changing the way we pay the NHS

Published on Wednesday, 02 March 2011 11:25
Posted by Scott Buckler

The NHS must modernise so that it is paid for the quality of care it provides, not just for the amount it does. This will mean patients get better care and the health service is more efficient......That will be the message from Health Secretary Andrew Lansley today as he speaks at the Nuffield Health Trust Annual Summit.


 Mr Lansley will discuss the current system of “Payment by Results” and explain why its name is misleading and the system has to modernise.
At present, the majority of hospital activity is covered by a tariff which pays for activity. Hospitals are largely paid based on the volume of activity they carry out, rather than for the quality of their results and the outcomes for patients.

Speaking at the summit in Dorking, Mr Lansley will say:

We need modern, successful public services, and we need to pay them for the results they achieve for patients. I want every incentive and every reward to have the same goal - improving outcomes for patients. That means better survival rates, a faster, fuller recovery, more prevention, and the effective management of long term conditions.At the moment, this is far from the case.

“We have a system in the NHS misleadingly called ‘Payment by Results’. But organisations aren’t paid for results. They are paid for activity. They are rewarded for processes and ticking boxes, for doing stuff and not necessarily for delivering the best possible patient care.
“The current system has perverse incentives. If a hospital provides poor service and discharges a patient only for them to bounce back a couple of weeks later through A&E;, the hospital is not penalised for it - it’s rewarded.”

Using maternity services as an example, the Health Secretary will set out his vision for change and how it will benefit patients, for example, expectant mothers. He will say:

“Take maternity services. Within antenatal care, the more activity a provider can record, the more money they are paid. It’s actually in the best financial interests of the hospital to provide care on a purely reactive basis, dealing with problems as they arise rather than preventing them from happening in the first place. The hospital benefits. The mother certainly does not.
“The current system pays for activity, encouraging a reactive approach that increases the chances of last minute interventions. Clinical responsibilities will hopefully override this, but why should the tariff and clinical quality not coincide?”

Under the modernised tariff system, there could be a “pathway-based” tariff, which reflects risks and encourages early assessment. Newly expectant mothers will first see a midwife to discuss their options. The midwife would discuss the mother’s choices – including choosing birth plans and pain relief. The midwife would also carry out a risk assessment and consider factors such as whether there are any underlying health issues or previous birth complications. Depending on the results, the provider would receive a fixed amount up front, possibly for the entire maternity pathway, based on the relative risks of the pregnancy.

It is then in the interests of the provider to be as pro-active as possible for that mother, to manage any other conditions and to prevent the need for any interventions. Their tariff income can then be used to further improve their maternity services. In this way, the tariff is designed around the needs of the mother - rather than the mother having to accept what the tariff has been designed to provide. Most importantly, the quality of the mother’s experience and the health outcome are both improved.
Whether at home, in a midwife-led unit or in an obstetric unit, mothers-to-be should be supported by an integrated service which has clear quality standards and which is focussed on the outcomes – a healthy baby, a healthy mother and a good birth experience. The tariff should support the quality and service needed, not distort it.

The NHS Commissioning Board, with consortia, should be able to design a tariff which pays for the results they need: high quality, accessible, efficient services. Monitor should ensure the tariff prices are fair to commissioners and to providers, reflecting the continuity and calibre of services required in commissioning plans.

Source: ©DH



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