Payment by results
March 2008
Introduction
Payment by results (PbR) is the name given to the system of reimbursement for providers introduced in phased fashion over the last four years. Under PbR, contracts are struck between commissioning bodies and providers on the basis of predicted levels of activity adjusted for casemix. By casemix, we mean the way in which different diagnoses and treatments together with their differential resource implications are taken into account.
PbR is predicated on a single price or tariff for a given activity regardless of where it is performed, the intention being to drive down costs as those with costs in excess of the tariff seek to bring them into line. A number of objectives have been claimed for PbR including all of the following:
- to provide a transparent, rules-based system for paying NHS providers
- to drive and reward sustained improvements in efficiency
- to support patient choice and encourage hospitals to respond to patient preferences
- to encourage plurality of provision
- to encourage activity for sustainable waiting time reductions
- to maintain and improve quality of care
- to encourage commissioners to provide effective care in the most appropriate settings
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