The King’s Fund is urging the Department of Health to use the “reinvigoration” of practice based commissioning announced in the next stage review to set out a “clear vision” for the initiative.

Primary care trusts should retain responsibility for strategic commissioning but with clinician involvement. High performing practice based commissioners should be rewarded with increased independence but should not become responsible for the entire healthcare budget.

Individual responsibility

Report author and senior fellow Nick Goodwin said it was essential that the government told people “exactly what the roles and responsibilities of individual parties are”.

The report said even though GPs had received nearly £100m in incentive payments, few were commissioning new services, instead focusing on changing service provision.

From:
practicebased_commissioning_an_expensive_failure_kings_fund.html

The Department of Health said the predicted surplus, based on financial performance for the three months to June, would “stay within the NHS to improve patient care”, adding “this is an excellent start to the year”.

The results mark a significant turnround for the health service in the two years since it recorded a £547m deficit. Only five trusts were in operating deficit for the first quarter of this year, compared with 82 in 2006-07, officials said.

But opposition parties questioned the rationale of the NHS amassing cash at a time when access to drugs and treatments is still being rationed.

“There continue to be hospitals where funds are far from stable,” said Andrew Lansley, the shadow health secretary. “The government should explain why money voted in by parliament for healthcare is not being used to make sure patients get the medical treatments that they need.”

Norman Lamb, the Liberal Democrats’ health spokesman, told the FT that a massive NHS surplus was not “something that should necessarily be celebrated”.

“We seem to have gone from bust to boom,” Mr Lamb said. He warned that payment by results was leading to “distortions in the way NHS funding is being allocated”.

The government and Tories traded blows over how the £90bn-plus annual budget for the NHS should best be spent.

Mr Lansley criticised the decision by the NHS to use measures of deprivation, as well as age, to determine the health needs of different geographic areas. This approach was leading to relatively “greater resources for poorer areas and less for areas that are less deprived and more elderly despite age being a more significant determinant of the relative burden of disease”, Mr Lansley said in a speech to the Reform think-tank.

Labour responded by accusing the Tories of planning to “cut health spending in poorer areas”. The opposition party “would take funding from NHS services that need it most”. said Ann Keen, health minister.

But Mr Lansley hit back, telling the FT: “Public health money should be spent where health outcomes are worst, so that money will go to where the need is greatest. Do Labour really have a problem with that?”

The Lib Dems said a hybrid approach was needed, with public health funding – such as campaigns to tackle obesity and smoking – targeted on the most deprived areas, and funding for combating diseases linked to areas where the demand was highest.

From:
http://www.ft.com/cms/s/0/c3f920f2-747c-11dd-bc91-0000779fd18c.html?nclick_check=1

A source at a data management service revealed that third quarter data was due in April but had been delayed by ‘various data quality issues’.

Teething problems

It has emerged that some trusts have experienced problems in submitting statistics since the data collection hub – the NHS-wide clearing system – was replaced with the secondary uses service at the end of December.

This appears to have caused delays in the processing of the first statistics extracts because some hospital patient administration systems have been incompatible with new software, meaning some extracts are missing from the latest dataset.

Paul Robinson, external relations manager of independent health service information provider CHKS, said he knew of trusts that had experienced this problem.

Others, he said, had faced delays because they were waiting for new third party software to be accredited. An information manager confirmed this was the case at his Midlands trust and said that the hospital had supplied its episode statistics direct to its PCT, bypassing the secondary uses service, to avoid further delays.

Data duplication

Mr Robinson also said he was aware of some hospitals submitting data under both old and new PCT codes, resulting in duplication of records. ‘Even if the data is published now it is still significantly out of date information to be basing benchmarking on,’ he added.

Dr Paul Aylin, assistant director of the Dr Foster unit at Imperial College London, said: ‘We have certainly heard there are some issues with the third quarter data.

‘If you’re missing records this will impact on benchmarking and payment by results. If you don’t have up-to-date information then the whole issue of charging becomes difficult.’

Information Centre for health and social care operations director Roger Dewhurst admitted: ‘A minority of NHS organisations have had difficulties in submitting the necessary data over the last few months.

‘As a result of the reorganisation of PCTs in October last year, some organisations used incorrect PCT codes to correct previously submitted data. This resulted in a higher number of duplicate patient activity than usual. These have been removed from quarter three statistics and organisations are correcting this through re-submissions.’

Organisations will be able to correct any inaccuracies until mid-June before the final set of annual data is published later this year, Mr Dewhurst added.

From:
http://www.hsj.co.uk/healthservicejournal/pages/N1/p9/070607

The shambles that is Payment by Results was posted by Health Direct on March 01, 2007 in Why the NHS finances will never add up under bliar’s crooked books

A short letter published in the Telegraph this week highlighted the contradiction inherent in the Government’s attempts to improve the cost-effectiveness of the NHS. NHS hospital surgery is paid for on an ill thought out tariff basis that could cripple the health service.

Every price for every procedure on the list is a guesstimate. No one in the whole system can say for certain that the price hospitals charge a PCT for work has any relation to the real cost of that procedure. In the majority of cases, it is simply wrong.

The debate on whether labour’s Payments by Results (PbR) ended on 30 Oct 06 when Health Direct highlighted that PbR Payment by Results are fundamentally flawed says Clinical Coding chief

The current system of Payment by Results (PbR) is ‘fundamentally flawed and unacceptable’ the head of the Professional Association of Clinical Coders warned last week. Managing director Sue Eve-Jones told an HSJ conference last week that the quality of data in the NHS could compromise any chances of ensuring fairness under PbR.

Her presentation was subtitled ‘doing the best we can with a fundamentally flawed and unacceptable system’.

And Ms Eve-Jones concluded that the NHS payments system ’scares me witless’. ‘It’s like going into Tesco, filling up your basket, and getting charged different prices depending on which checkout you go to.’

David Nunn, a consultant orthopaedic surgeon at Guy’s and St Thomas’ Hospital Trust pointed out that the drive to reduce waiting lists by performing more operations means that hospitals are losing substantial sums for each additional operation carried out.

“This is unsustainable,” wrote Mr Nunn. “Tony Blair knows that his policies will lead to an implosion of the NHS but he will be out of office when it finally occurs.”

What Mr Nunn was referring to is an accounting error built into the NHS, an error which means that, despite the most drastic measures, such as ward closures, staff cuts and withdrawal of certain treatments and services, the books can never be balanced.

The introduction of the NHS tariff in 2002 – a standardised price list for operations and procedures to apply nationally – was intended to reform hospital accounting.

It was also seen as crucial to the war on waiting lists, helping to ensure better use of beds and theatre time by allowing patients to travel around the country for their operations with the procedure being paid for by their own primary care trust (PCT).

Money following the patient in this way was a fine idea in theory, but in practice the tariff has one massive flaw.

Every price for every procedure on the list is a guesstimate. No one in the whole system can say for certain that the price hospitals charge a PCT for work has any relation to the real cost of that procedure. In the majority of cases, it is simply wrong.

When the tariff was first set up, financial directors from hospitals around the country were asked to submit the price they put on a particular procedure.

The figures varied enormously, so the administrators took a mean figure and decided that was close enough.

None of the participating hospitals performed an audit to crosscheck the figures they had submitted.

No one asked the surgeons if they thought these figures were correct. Whitehall signed them off – and the price list was fixed.

Mr Charlie Chan, a surgeon specialising in breast cancer at Cheltenham General Hospital, says no one has any idea how much operations really cost.

Yet, as he points out, pricing them is not a difficult thing to do.

“We know the cost of running a hospital theatre, we know the costs of hip implants, for example. Even though surgeons operate at different speeds and use different quantities of sutures, it is possible to work out a consistent rate, as any ’sensible’ audit would find.”

Following the introduction of the tariff, hospitals managed to balance their books by juggling operations.

As many as possible of the cheaper, quicker jobs, hernia repairs or bunion removals, for example, were slotted in around major life-saving procedures that cost tens of thousands of pounds. In effect, the simple operations subsidised the complicated ones.

But with the opening of independent sector treatment centres (ISTCs) – privately run clinics endorsed by the Government with the intention of helping to cut NHS waiting lists – there were fewer simple operations for the hospitals to perform.

Bunion sufferers no longer had to wait or go private. They could have their operations performed much more quickly at an ISTC or at special NHS clinics established for the same purpose.

The ISTCs weren’t governed by the troublesome tariff system either. The NHS would pay a fixed lump sum, in separately negotiated business contracts, for the procedures to be carried out there.

Economies of scale meant that a smart, bustling little unit carrying out routine surgery from 9-5, with an hour’s lunch break, using cheaper, sometimes foreign staff, found it much more economical to operate on a bunion than the giant teaching hospital next door, which was paid according to the inaccurate tariff.

Staff at the Royal National Orthopaedic Hospital in Stanmore, Middlesex, must deal with realities of this every day.

Mr Steve Cannon, for example, runs a unit dealing with complicated sarcomas (bone and soft tissue cancers), and correcting complications of knee and hip surgery.

Cannon estimates that inaccurate pricing means he loses about £1,000 a case.

“We used to balance the books by performing arthroscopies [exploratory joint surgery],” he says. “But if you remove these simple procedures, sending them to ISTCs or special NHS clinics, we can’t make any profit. The proposed tariffs for what we have to do are inadequate.”

“For an operation to excise a soft tissue sarcoma, the tariff allows £1,428 per case. Add in a minimum of three days in hospital, perhaps one night in intensive care, and a top-up payment, as it is a specialist area, and the cost we can claim is £5,216 each patient.

“At present, even with all our cost-cutting measures in place, each of these cases actually costs us £8,674. We will be short by £900,000 next year on that group of patients alone.

“Overall, we are looking at a deficit next year of £1,786,000 – all because of the tariffs. We will go on till we are bankrupt and have to close. But then where will the patients go? No one else will want to take on this work as it will cost them too much, nor will you get the same concentration of special skills. It is a horrific situation. People will suffer – this situation has become dire.”

In the longer term, the impact on surgical training is also causing concern. Mr Nunn, who wrote to the Telegraph, says that so much work is being performed in ISTCs by non-NHS doctors that there is no work in hospitals for recent surgical graduates, and no jobs for them to go to.

“Not one of our graduates at Guy’s has a consultant job,” he says.

“We will have a whole generation of junior doctors who won’t be able to do simple operations on their own, let alone complex ones; and in turn they won’t be able to train the next generation. It’s self-perpetuating. This will destroy the health service.”

From:
http://www.telegraph.co.uk/health/main.jhtml?xml=/health/2007/02/26/hnhs26.xml

The fallability of the finances was raised by Health Direct in 30 Oct 06 when we highlighted that PbR Payment by Results are fundamentally flawed says Clinical Coding chief The current system of Payment by Results (PbR) is ‘fundamentally flawed and unacceptable’ the head of the Professional Association of Clinical Coders warned last week. Managing director Sue Eve-Jones told an HSJ conference last week that the quality of data in the NHS could compromise any chances of ensuring fairness under PbR.

Her presentation was subtitled ‘doing the best we can with a fundamentally flawed and unacceptable system’.

And Ms Eve-Jones concluded that the NHS payments system ’scares me witless’. ‘It’s like going into Tesco, filling up your basket, and getting charged different prices depending on which checkout you go to.’

Perhaps Tony Blair should look elsewhere for a legacy of his premiership rather than the NHS.

Ms Eve-Jones said that healthcare resource groups, the standard treatment groupings used as units of currency within the health service, ‘are not designed to support payment systems and we are using them to support PbR’.

She painted a bleak picture of NHS data accuracy, blaming poor training and support for coders, Department of Health tariffs that have ‘no bearing on the real service’, and pressure to ‘upcode’ to generate more cash.

‘Some coders are asked by clinicians “which code will give me a better HRG?”, or you see directors of finance wandering around saying “we need more codes”. I am pleased to say that most coders are immune to this.’

And Ms Eve-Jones concluded that the NHS payments system ’scares me witless’. ‘It’s like going into Tesco, filling up your basket, and getting charged different prices depending on which checkout you go to.’

Health Direct has long warned that Payment by Results was doomed to be an expensive failure since April 01, 2005 Payment by Results- political pressure is undermining new PbR finance reforms

If you allow a whole load of unbundling – where you pay for little bits of the healthcare resource from up here and there – you destroy the principles, don’t achieve the benefits, and end up with locally based recovery systems, which is back to where we started with this reform.

Earlier this year the HSJ analysed the crazy conflict that Labour has created between PbR and the PFI schemes: June 10, 2006- NHS trusts feel the impact as PFI and Payment by Results collide “Imagine buying a house for a family with four children. Over the next few years you know you will need a lot of space to accommodate noisy teenagers. But in 10 years’ time your needs are not so clear cut: children may leave, elderly relatives may come to stay or you may be on your own.

Your income is also uncertain and not under your control: your boss has just refused a pay rise to reflect your high accommodation costs and says you can have the same as everyone else.”