Uncertain future for Payment by Results system

The future of Payment by Results looks even more unsure this week after the GPC said it was open to looking at alternative systems, and revealed that the new NHS chief executive was not keen on the initiative.

The tariff system, which will set prices for all hospital procedures, was withdrawn last week (GP, 10 March), and no date has been set for publication of a new tariff.

GPC chairman Dr Hamish Meldrum said: 'Payment by Results seems a fundamental plank of health policy, so it would be difficult to withdraw.

'However, with the roll-out of practice-based commissioning, there is the potential for greater problems,' he said.

'The principle that money follows the patient is not a bad idea', he said, although he would be keen to see Payment by Results scrapped if a better alternative could be found.

Dr Meldrum said Sir Ian Carruthers, who replaced Sir Nigel Crisp after he resigned last week as NHS chief executive, was understood not to be a fan of the initiative. Sir Nigel's resignation coincided with the withdrawal of the tariff system and the revelations about the size of NHS budget overspends.

Dr Meldrum added: 'When Sir Ian moved from Dorset to Hampshire, the first thing he did was unilaterally pull the plug on Payment by Results.'

Alan Butler, director of finance at Hampshire and Isle of Wight SHA, denied the tariff system had been suspended by Sir Ian when he moved to the SHA, saying only that some arrangements had been 'modified'.

Meanwhile, the DoH has told SHAs to cut 2.5 per cent off PCT budgets to set up a contingency fund to cover overspends.

Dr Meldrum said: 'This is going to make ambivalent GPs even more difficult to convince about practice-based commissioning. The budgets will allow 2.5 per cent less activity than last year, so you've got to save 2.5 per cent before you can break even.'

PCTs will face tougher assessment of financial management this year.

The Healthcare Commission has revealed that the Annual Health Check for PCTs 'will involve a tougher approach on the assessment of financial resources management'.

Under the star ratings in 2004/5, a non-foundation trust was scored lowest on finances if it was overspent by more than 1 per cent of turnover or £1 million.

In the 2005/6 Annual Health Check, a non-foundation trust will need to break even to avoid such action.


- Royal Cornwall Hospitals Trust: 300 job losses.

- Altrincham General Hospital, Cheshire: will not accept in-patients.

- Peterborough and Stamford Hospitals NHS Trust: cutting 185 posts.

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