How can the NHS payment system do more for patients?

Q1:  We suggest that objectives for the payment system should be:

• to reimburse outcomes for patients rather than treatments or inputs;
• to promote the long term, sustainable well-being of the whole person;
• to allow for different payment approaches for different care needs with room for local flexibility bounded by rules; and
• to signal to providers and commissioners available choices that will sustainably promote better outcomes for patients.
  

How do we make sure that the payment system delivers for patients? Are these the right objectives? What is missing?

Any regulated payment system must be robust, fair, equitable and transparent; it must be based on a ‘level playing field’.  With that in mind, clearer rules around how activity is priced are paramount.  Investments in infrastructure will also be required to ensure uniformity of decision making.

A consistent approach is essential for costing.  There needs to be clarity around what has and has not been included in the cost base and a better understanding of why there are material variations in costs for activity that appears similar.

The payment system must also allow for innovation; to enable financial support to be provided to evolving services. 

The payment system influences behaviour so must be linked to patient pathways and consultant practices. How will the payment mechanism affect clinical engagement in commissioning and the design of services?  It is consultants who determine how much of the NHS budget is spent.  The NHS does not currently offer a fully integrated health system; it is departmentalised into primary and secondary care.  Providing a seamless service will require greater transparency in fund flows across the different organisations and between health and social care.

Further thought needs to be given to the suggestion of reimbursing providers for specified outcomes rather than specific elements of care.  Although we agree with the principles behind this statement we are concerned that it will lead to a significant increase in bureaucracy.  For example:  How will outcomes be measured?  Over what time scale?  Who will measure and record this?   

We are also concerned that outcome based commissioning will cause revenue recognition issues for accounting purposes i.e. at which point is the outcome (a fully recovered patient – page 15) recognised? 

There will always be an element of risk share between commissioners and providers.  How will this be managed under the current financial constraints?

In terms of whether these are the right objectives - Prior to defining the objectives for the payment system, there needs to be clarification around what it is intended to achieve.   If the intention is to provide ‘World class quality healthcare, delivered seamlessly in a stable and sustainable financial environment’ then there are a number of questions not addressed in the paper.

• Firstly the commissioner/provider divide.  Unless there are incentives that promote joint planning between commissioners and providers with alignment of short and medium term objectives there is a danger that one party will achieve its objectives at the expense of the other.  This is particularly true in the current financial environment where separate financial targets are set. 
• The joint planning between commissioners and providers then needs to feed into a collaborative approach to delivery with providers acting as a network and being focussed on delivery of safe sustainable services.  When there was a role for commissioners to act as system managers, the joint working between commissioners and main provider was quite common.  What became increasingly difficult with the increasing number of Foundation Trusts (FTs) was incentivisation of network provision of services or ‘a federated model of care’.
• The final issue is patient choice.  Patients and the public are very protective of the status quo and (it appears) more concerned about easy access than the safety and quality of care delivered.  There would need to be a completely different political approach to the NHS with the emphasis on patient safety and quality of outcome and care provision rather than being skewed to location and ease of access.  These latter issues are very important but cannot be at the expense of the former. 

Each year we develop plans to deliver key objectives of the NHS across organisational boundaries and in the scramble to sign contracts forget that it is not the rules and regulations that are important but the way that organisations work together.

Any ‘payments system’ is an enabler and should not become a driver.  

Q2:  We propose that patient needs and patterns of supply can be described in three main dimensions:

• proactive versus reactive;
• routine versus complex and rare; and
• planned versus unscheduled.

What do you think of this way of categorising patterns of supply according to patient need? Could you add to this proposal or suggest alternatives?

Although we agree that patient needs and patterns of supply can be described in this way, we do not consider that are workable categorisations from the payment and costing perspective.  We are concerned that classification issues would lead to increased bureaucracy. 

Q3:  We suggest that there is a spectrum of different ways to regulate payment.

What are your views on the different degrees of intervention in the spectrum and when they might be appropriate?

The complexity of payment by results means it is understandable by the few rather than the many, with no [publically] demonstrable link to performance reporting.  The illustrative spectrum in figure 1 appears to add to the complexity – rather than reduce it.  As with other suggestions in this document we fear that its introduction increases bureaucracy but does not necessarily improve patient care.

We question how the diagram will work in practice?  Is there a ‘fast track’ for patient care?   Will it encourage health organisations to maximise their income by providing care at a higher than necessary level?  Further clarification is needed on how the diagram will be utilised before its benefits (or not) can be assessed.

In terms of the degrees of intervention on the spectrum there are two things we believe that need consideration at the interventionist end of the scale:  the impact to 'any willing provider' and promotion of market based competition.  We also have concerns around the potential cherry picking of profitable services. 

Q4:  For 2014/15 we aim to ensure that payments are predictable, but at the same time we want to allow for experimentation as well as immediate improvements where necessary.

What do you think of this approach?

The earlier publication of prices will be welcomed by all organisations and will support more effective cashflow as well as providing a level of financial certainty.  It is important, however, that before publication the figures are properly road tested by a sufficient number of experienced organisations.

The payment system needs to recognise the increase in demand for services to ensure affordability and to facilitate and encourage innovation, for example, service reconfiguration and integration, including that outside the NHS boundary. QIPP targets are challenging and the need for innovation in service delivery is important. 

With increases in cash balances, there is a risk that 'rainy day' monies are being set aside to deal with future pressures, when perhaps investment now, supported by political will, could effect significant change. No trust would want to sign its own death warrant by reconfiguring services to a neighbouring hospital less than 10 miles away and yet this may result in the best outcome for the patient.