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. This proposed that in order to get the best from extra resources there would be major changes to the way money flows around the NHS and differentiation between incentives for routine surgery and those for emergency admissions.

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.

The Department of Health first consulted on its plans for introducing PbR in NHS Financial Reforms: Introducing Payment by Results on 15 October 2002 and published its response on 10 February 2003. Since then, there have been a series of important developments beginning in the acute care sector from 2003/04.

PbR in mental health

For many years the introduction of PbR in mental health services did not seem to happen.  All too frequently this was because it was seen as too difficult and too complex. Reasons offered and delays explained that these were primarily due to the much greater challenges of devising a structure for reimbursing treatment and care, sometimes over the long term, when problems and disorders do not easily fall into discrete biological categories unlike other services where these have proven to be relatively easier to introduce.

Despite these apparent setbacks, there have however been in the last couple of years an increasing range of different efforts made to address these and the project is now reported to be in its second and about to enter its third stage. The Department of Health reports work is still continuing on developing currencies for use in the commissioning of mental health services for adults of working age and older people with the ultimate goal being the creation of a national tariff for these currencies.

Rather than the straight adaptation of the existing PbR system, the approach taken by those who have been developing this for mental health, theirs has been to create a new approach within the NHS based on grouping service users into a number of different “clusters”, 21 in total.
This model has also enabled a sharper focus on the characteristics of individual service users, allowing a tailored approach to care. It also means that it is in tune with the need for personalised care where service users are intended to benefit from an informed discussion of their care options as well as a clear understanding of the support they should receive.

In summary whether you are a service provider, or a commissioner, a service user, or simply someone with an interest in what’s happening regarding PbR in mental health services, the value of this website is to offer you a series of useful information and other guidance to help prepare you with the requisite knowledge and expertise you need about its development not just nationally but also, particularly in the South West.