Introduction

The aim of Payment by Results (PbR) is intended to provide a transparent, rules-based system for paying Trusts. It is intended to reward efficiency, support patient choice and diversity and to encourage activity particularly for general hospitals regarding sustainable waiting time reductions. Payment is intended to be linked to activity and adjusted for casemix. Importantly, its purpose is intended to ensure a fair and consistent basis for Trust funding rather than being reliant principally on historic budgets and the negotiating skills of individual managers.

Further information is available from Alex Stirzaker, IAPT Regional Lead on Tel: 01823 361000

Background

The origins of PbR date from July 2000, specifically the NHS Plan published that year. This introduced the Government’s intention to link the allocation of funds to hospitals to the activity they undertake.

Hospitals would be paid for the elective activity they undertake, and this was a system of payment by results. This reformed financial system was planned to offer the right incentives to reward good performance, to support sustainable reductions in waiting times for patients and to make the best use of available capacity.

Prior to this hospitals have usually been paid according to block contracts – a fixed sum of money for a broadly specified service – or cost and volume contracts which attempted to specify in more detail the activity and payment. But there was no incentive for providers to increase throughput, since they got no additional funding. » Read more