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RESEARCH:
Shelley Farrar, Deokhee Yi, Matt Sutton, Martin Chalkley, Jon Sussex, and Anthony Scott
Has payment by results affected the way that English hospitals provide care? Difference-in-differences analysis
BMJ 2009; 339: b3047 [Abstract] [Full text]
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Rapid Responses published:

[Read Rapid Response] Are you getting what they’ve paid for?
Erin S Cottrill   (6 September 2009)
[Read Rapid Response] Payment by results discourages sustainable healthcare.
Andrew Connor, Frances Mortimer, Charles Tomson   (9 September 2009)
[Read Rapid Response] PbR and Market Failure
Rudiger Pittrof   (11 September 2009)
[Read Rapid Response] Has Payment by Results affected how hospitals provide care - or simply how they record it?
John P Watson   (16 September 2009)
[Read Rapid Response] PbR - Questions still remain.
Peter J Robertson   (2 October 2009)

Are you getting what they’ve paid for? 6 September 2009
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Erin S Cottrill,
Medical Scientist
Melbourne Australia 3052

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Re: Are you getting what they’ve paid for?

Has payment by results affected the way the English hospitals provide care?

To the editor, It was difficult to measure quality of hospital care in 1982;1 twenty- seven years later; we are still none the wiser. Farah et al highlight our shortfalls in understanding, measuring and interpreting health care quality.2 Effects of payment by results on length of stay and volume have been successfully demonstrated, whilst the effect on quality of care in hospitals remains a mystery.

Since the introduction of payment by results, emphasis has been placed on cost and timeliness with little data investigating the impact on quality.3 Although Farah described no measurable detriment or difference to quality of care, this ‘common result’ is a reflection of inadequate investigation into the many facets of health care quality. Conventional indicators of quality care (e.g. mortality) are minor representatives for exploring impact on quality.

Along with the outcome measures of timeliness and cost of care, we need thorough investigation into the effect of payment by results on primary dimensions of quality. Dimensions deserving attention are effectiveness of processes (treatment plans, preventative medicine, teaching and research), safety (adverse events, safety improvement rates) and patient centredness (patient experience of care, equitable care, satisfaction and accessibility).4,5,6

Although seemingly difficult, assessing the quality of health care has been described for quite some time.8,9 It would be of great benefit to develop uniform national parameters (adjusted for risk, population, patient group, location, ownership) to benchmark levels of health care quality.5,6,7 In doing so, giving rise to more valid and comprehensive assessment on the impact of health care quality.9

Until we have defined quality of care parameters the effects of introduced policies will continue to be largely unknown in the realm of health care quality. There is much room for further investigation to realise the full impact of payment by results. We should now focus on quality.

Competing interests: None

Erin Cottrill Medical scientist

Royal Children’s Hospital, Melbourne, Victoria, Australia erin.cottrill@rch.org.au

References 1) Anderson G. The effect of payment by results. Editorial. BMJ 2009;339:b3081 2) Farrah S, Yi D, Sutton M, Chalkey M, Sussex J, Scott. Has payment by results affected the way the English hospitals provide care? Difference-in -differences analysis. A. BMJ 2009;339:b3047 3) Christianson J, Leatherman S, Sutherland K. Financial incentives, healthcare providers and quality improvements. A Review. 2009 Available from: http://www.who.int/pmnch/topics/economics/financialincentives/en/index.html 4) Institute of Medicine. Crossing the Quality Chasm: a new health system for the 21st Century 2001. National academy press. Available from: http://www.nap.edu/books/0309072808/html/ 5) Centor R M, Taylor B B. Health care reform: Do hospitalists improve quality? Editorial. Arch Intern Med 2009;169(15) 6) Lopez L, Hicks L S, Cohen A P, McKean S, Weissman J S. Health care reform: Hospitalists and the quality of care in hospitals. Arch Intern Med 2009; 169(15): pg 1389-1394. 7) Wharam J F et al. High quality care and ethical pay-for-performance: A society of general internal medicine policy analysis. J Gen Intern Med 2009;24(7):854-9 8) Donabedian A. The quality of care. How can it be assessed? JAMA 1988; 260(12):1743-1748. 9) Pronovost PJ, Nolan T, Zeger S, Miller M, Rubin H. How can clinicians measure safety and quality in acute care? Lancet 2004;363:1061-67

Competing interests: None declared

Payment by results discourages sustainable healthcare. 9 September 2009
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Andrew Connor,
Green Nephrology Fellow
The Campaign for Greener Healthcare, Oxford, OX2 7LG,
Frances Mortimer, Charles Tomson

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Re: Payment by results discourages sustainable healthcare.

Payment by results (PbR) is a fixed tariff payment system based on case mix that reimburses hospitals for the type and number of patients treated – a better term would be ‘payment by activity’. Farrar and colleagues have shown payment by results to reduce unit costs without detrimental impact on the quality of care provided.(1) The impact on the volume of care provided was less clearly demonstrated, but an increase in activity was suggested.

The primary intention of PbR (to incentivise higher outputs and lower costs per patient) is commendable – but the current system is flawed. Take the example of a patient who has, until now, regularly travelled long distances to attend the nephrology clinic for management of longstanding but stable chronic kidney disease. Rather than arrange a further clinic appointment, the nephrologist may prefer to discharge the patient to the primary care setting, or to manage the patient through a ‘virtual clinic’ model (where patients are followed by phone consultation in combination with blood tests undertaken locally). Both options will require the patient to travel less – reducing the environmental impact of the healthcare.

However, PbR clearly discourages the nephrologist from discharging the patient to primary care. Furthermore, although the current PbR model includes some provision for virtual care, current guidance on this area is extremely limited.(2) Implementation is further hampered by the absence of guidance on tracking virtual activities. In the example above, PbR unfortunately therefore favours promotion of increased provider activity through the provision of another unnecessary low-cost, low-added-value outpatient visit.

The scale of carbon reduction needed to mitigate the effects of climate change cannot be achieved without the health sector playing its part. Furthermore, after a period of relative plenty, the NHS is likely to face budget cuts (or at least reduced expansion of funding) in the light of a growing awareness of how the financial crisis will impact upon it. The NHS must therefore embrace initiatives to stream-line service provision. The current purchaser/provider split between primary and secondary care does not always encourage this. New funding models within PbR are required to support more sustainable care.

Andrew Connor, green nephrology fellow, the Campaign for Greener Healthcare, Oxford OX2 7LG. andrew.connor@kintoa.org

Frances Mortimer, medical director, the Campaign for Greener Healthcare, Oxford OX2 7LG.

Charles Tomson, consultant nephrologist, Southmead Hospital, Bristol BS10 5NB.

References

1. Farrar S, Yi D, Sutton M, Chalkley M, Sussex J, Scott A. Has payment by results affected the way that English hospitals provide care? Difference-in-differences analysis. BMJ 2009;339:b3047.

2. Payment by Results Guidance for 2009-10. Department of Health. Available at http://www.dh.gov.uk/dr_consum_dh/groups/dh_digitalassets/documents/digitalasset/dh_097469.pdf (last accessed 6th Sept, 2009)

Competing interests: None declared

PbR and Market Failure 11 September 2009
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Rudiger Pittrof,
Consultant in integrated sexual health and HIV
Enfield Community Services , EN1

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Re: PbR and Market Failure

At its conception PbR was intended to enable commissioners and providers to focus on quality rather than price. The idea was that providers compete on quality rather than costs. Farrar et al showed that quality (as measured) did not change. Either the health care market cannot be used to improve quality, or PbR is the wrong tool to improve quality or the assessment of quality was in Farrar et al’s study inadequate. In line with the two previous comments I suspect that all three explanations apply.

Farrar et al showed a small improvement in productivity. This may be more than offset by the additional administrative costs that occur with PbR both at commissioning and provider level.

Farrar at al could not show that the introduction of PbR has not let to a change in case mix. Indeed the increased number of day case procedures undertaken could reflect that overall "healthier patients" received treatment. In my own area of health care (sexual health) PbR rewards the provision of minimal services for the worried well while it “penalises” targeting those who have most to gain from using the services - and are the most expensive patients.

Finally Farrar et may not have compared PbR with no PbR but early adaptors of an innovation with late adopters. Organisational cultures are likely to differ between those groups and it might explain the observed differences better than the introduction of PbR.

Competing interests: None declared

Has Payment by Results affected how hospitals provide care - or simply how they record it? 16 September 2009
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John P Watson,
Consultant Physician
St James University Hospital, Beckett St, Leeds LS9 7TF

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Re: Has Payment by Results affected how hospitals provide care - or simply how they record it?

Farrer and colleagues have demonstrated that adoption of Payment by Results has changed the recorded inpatient activity of hospitals. However, what is not clear is whether this represents a genuine change in activity, or simply a change in the way activity is recorded. To take an example, upper gastrointestinal endoscopy is a common procedure performed on patients who are not otherwise staying in hospital.

Historically, some hospitals recorded these procedures as day case admissions, others as outpatient procedures. It did not matter, the patient got the test, and the hospital got paid under the block contract. Under Payment by Results, however, the hospital gets more income for a day case admission with procedure than for an out patient procedure. The astute business manager will have ensured that activity is recorded for administrative purposes in whichever legitimate manner will maximise income.

The side effects of such a change in recording include boosting many perceived positive indicators of "good" or "efficient" care. The number (and proportion) of day case admissions goes up. If other admissions are unchanged, the total number of admissions also goes up, and the added day cases reduce the average length of stay. Since very few patients admitted for day case endoscopy die, in-hospital mortality rates also fall.

Such changes in recording for endoscopy and similar procedures could account for a significant proportion of the "benefit" of Payment by Results described by Farrer and colleagues, without any change whatever in the actual activity, cost, or quality of patient care.

Competing interests: None declared

PbR - Questions still remain. 2 October 2009
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Peter J Robertson,
Researcher
Great Billington, LU7 9BJ

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Re: PbR - Questions still remain.

Farrah, S. et al. find evidence of payment by results improving efficiency, i.e. a reduction in length of stay and increase in the proportion of day cases, and an increase in the volume of activity (1). However, no discernable effect is noted upon the quality of patient care (with reference to the proxy measures used).

Interestingly, the majority of the outcomes point to difference-in- differences when Scotland is used as the control group. While reassuring to note that payment by results has improved provider behaviour in England relative to their counterparts in Scotland, it remains questionable whether the policy has had a discernable impact across English providers. Indeed, Farrah, S. et al. find evidence that 2004/05 non-foundation trusts actually reduced their length of stay at a faster rate than foundation trusts. This corroborates conclusions drawn by the Audit Commission that the fixed tariff system had a questionable impact on efficiency (2).

In light of these findings it seems logical to argue for further investigation into the impacts of the payment by results policy with particular attention placed on the objectives set out by the Department of Health (3).

References:

1. Farrah S, Yi D, Sutton M, Chalkey M, Sussex J, Scott. Has payment by results affected the way the English hospitals provide care? Difference-in -differences analysis. BMJ 2009;339:b3047

2. Audit Commission. The right result? Payment by results 2003-07. London: Audit Commission, 2008.

3. Department of Health, Reforming NHS financial flows: introducing payment by results. London: Department of Health, 2004.

Competing interests: None declared