PbR is unfit for society’s health needs, says King’s Fund

 The payment by results (PbR) system for healthcare reimbursement is unfit for meeting the changing needs of society, according to the King’s Fund.

The think tank identified the current tariff as a barrier to the shift of healthcare from hospitals to the community.

A range of payment systems would be needed, the report argued, to encourage local innovation and to balance the priorities of quality, cost and supply.

The report explored the payment systems used in the NHS and other health economies, and examines whether PbR is able to support such long-term objectives as disease prevention and the care of long-term conditions.

Payment by results incentivises hospitals to continue treatment, thereby blocking a shift to preventative and community-based care, the report said.

It concluded that different services require different payment systems: PbR is most appropriate to elective care, but less suited to other services.

In addition, the King’s Fund said, payment systems need to be flexible to assist adaptation at a local level and trade-offs between priorities.

The NHS needs a new reimbursement framework that allows different payment systems for different types of service, the report argued.

Monitor, the foundation trust regulator, commented that it could “recognise many of the areas for improvement identified in the report” and would give it “careful consideration” when developing its pricing strategy.

Health Minister Lord Howe said: “We are working to make sure a payment system supports care being delivered closer to patients’ homes.”

He added: “We are working to expand our best practice tariff programme which supports patient-focused care, encourages innovation and makes better use of resources.”