Letter to Howard Stoate MP from the NHS
Confederation (COM 101A)
I was interested to read the transcript from
the Health Select Committee's recent evidence session on commissioning
held on 4 January where you said, "The NHS Confederation
is actually pretty impressed by PbR, they have some very positive
things to say about it, particularly for example their view about
the independent sector providers and bringing them into the market."
Whilst we do feel that payment by results has
an important role to play, we would not go quite so far as to
say we are "pretty impressed" with it overall and I
wanted to make sure we had been sufficiently clear to the Committee
about our view of the significant benefits and real concerns with
this policy.
We believe that the general principle that providers
should be paid for the results they achieve is right. For elective
surgery fee-for-service arrangements, like the current tariff,
are in use in many countries and a nationally set price has the
advantage of removing the transaction costs of negotiation. These
mechanisms can also encourage efficiency and innovation where
there are effective controls in place to avoid provider-led changes
in clinical thresholds for treatment.
Tariff systems can work in emergency care and
for long term conditions but unless they are used carefully they
have the risk of providing incentives that are not really aligned
with what patients or the wider health system needs. In particular,
it has the potential to create incentives for providers to generate,
rather than help manage, demand for secondary care. There are
alternative approaches to payment for results mechanisms that
do not rely on a fee-for-service payment which reward efficiency
and coordination across whole pathways which would be preferable
to the current arrangements.
As our written evidence to the Committee has
also suggested, we are keen for PbR to be rolled out to other
service areas—not least mental health and ambulance services—but
in these cases it will be important that the payment system supports
the objectives of policy in this area: a system designed for elective
surgery can not just be translated into these areas.
We would be happy to discuss in further detail
our views on PbR if that would be helpful, and we look forward
to seeing the Committee's eventual conclusions on PbR and wider
commissioning issues.
8 February 2010
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