PatientFocused Funding

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Patient-Focused Funding Payment by Results
The UK ExperienceCEO Forum, Kananaskis,
AlbertaFebruary 16, 2009

• Robert J. Bell Chief Executive
• Royal Brompton Harefield NHS Trust
• London, UK
• r.bell_at_rbht.nhs.uk

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The NHS (2008)
DEPARTMENT OF HEALTH
STRATEGIC HEALTH AUTHORITIES
PRIMARY CARE TRUSTS
ACUTE CARE TRUSTS

• Manage and provide Medical and Surgical care in
  Teaching and District General Hospitals,
  Specialist Hospitals and DTCs
• Contract with PCTs for services to patients on a
  local/regional basis

• Contract for (commission) hospital care, locally
• Manage and integrate primary care for medical,
  dental, pharmaceutical and optical services

THE LOCAL HEALTH ECONOMY
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The NHS (2008)

• 10 STRATEGIC HEALTH AUTHORITIES (SHAs)
• For a population of 51 million
• 152 PRIMARY CARE TRUSTS (PCTs)
• Average population of 330,000
• 230 NHS TRUSTS
• Acute, Mental Health, Ambulance

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The NHS (2008)
MAJOR REFORMS THE PAST DECADE
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Payment by Results
THE NEW WAY OF DOING BUSINESS
PbR
BLOCK FUNDING
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Payment by Results (PbR)
(Payment by Activity)
KEY ELEMENTS
HRGs
Health resource groups
National Tariff
Activity
Payment to provider by PCT
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Payment by Results (PbR)
WHY WAS IT INTRODUCED?

• TO FACILITATE DECENTRALISED WAITING TIME
  REDUCTION (TARGETS)
• TO REWARD EFFICIENCY AND QUALITY
• TO SUPPORT PATIENT CHOICE (MONEY FOLLOWS THE
  PATIENT)
• TO PROVIDE A TRANSPARENT AND FAIR WAY TO PAY
  PROVIDERS
• TO REDUCE TRANSACTION COSTS AND NEGOTIATION
  DISPUTES

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The NHS (2008)
PCTs and Commissioning
PCTs
PbR (Payment by Results)
PRACTICE BASED Commissioning

• National Tariff
• Patient Level Costing

PATIENT CHOICE

• GPs

Choose Book
PLURALITY
18 WEEK PATHWAYS

• Foundation Trusts
• ISTCs
• NHS Trusts
• Etc.

• Integrated Care

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Payment by Results (PbR)
THE KEY ELEMENTS
HEALTH RESOURCE GROUPS (HRGs)
NATIONAL TARIFF

• Developed in Australia
• Implemented in the UK (1992)
• Standard Grouping
• Clinically similar patients
• Consume similar level of Healthcare
• Used to set a National Tariff (Price/HRG)

• Based on average reference costs
• Separate Tariff (Elective vs Emergency)
• Tariff paid according to actual work
• Trusts compensated through national
  contracts/local SLA

BASELINE ACTIVITY

• Agreed level of work between PCT and Trust
• Adjustments subject to SLA and risk sharing

FINISHED CONSULTANT EPISODES (FCEs)

• HRGs counted by FCEs

SPELLS

• Providers paid for a spell that may include
  several FCEs

SPECIALIST TOP UPS

• Complex rules/algoritism
• Specific uplifts for certain combination codes

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Payment by Results (PbR)

• Has it really worked?
• Did the UK get the Balance right for the NHS and
  the Taxpayers?

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Payment by Results (PbR)

• The Combination of PbR and National Targets has
  markedly decreased Wait Time for Admission to
  hospital

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Payment by Results (PbR)

• Lower Hospitalisation has been experienced

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Payment by Results (PbR)

• And Short stay activity has increased

                                      
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Payment by Results (PbR)

• Increasing efficiency
• Rewarding and increasing quality

THE JURY IS STILL OUT
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Payment by Results (PbR)
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Payment by Results (PbR)
However,                                      

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Payment by Results (PbR)
Data Quality has substantially improved .
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Payment by Results (PbR)
So what does the future look like?

• PbR is here to stay
• current HRG version 3.5 to be replaced by
  version 4.0
• PbR has been extended to Mental Health
• HRG unbundling to support PCTs in shifting local
  commissioning to community settings and GPs
• Pay for Performance may be next (linking Quality
  and Outcomes)
• PbR may be applied to community and home based
  services