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Activity-based remuneration for NHS trusts no longer fit for purpose, report concludes

Activity-based remuneration for NHS trusts no longer fit for purpose, report concludes
By Léa Legraien Reporter
12 November 2018

The way NHS trusts are remunerated is outdated, a report has revealed.

A report published on Friday by doctor’s representative body the Royal College of Physicians (RCP) states that rewarding trusts on the basis on clinical value is no longer compatible with the provision of healthcare to patients.

‘No longer a solution’

The authors of the report said that rewarding organisations for ‘delivering a process efficiently many times over is no longer a solution that will ensure good outcomes for patients’.

The report read: ‘Increased activity could be seen to be incentivised, failing to encourage new national objectives for improved efficiency, preventative healthcare and provision of more care out of hospital.

‘Similarly, it hinders provider integration and collaboration as payment structures are tied by organisational boundaries, and set tariffs limit flexibility to introduce innovative care delivery.’

In 2003/04, NHS England introduced an activity-based system – the payment by results later known as the national tariff – to remunerate NHS trusts. Under the system, trusts are paid for each patient they see or treat.

The RCP pointed out that moving towards a model that rewards organisations based on outcomes instead – with the patient’s and trust’s perspective taken into consideration – will ‘provide value’.

Rethinking outpatient care 

The authors also highlighted that the system’s current approach to outpatient care is costly for both the NHS and the public, with poor communication in place and a lack of personalised care.

According to the report, outpatient appointments in the UK represent nearly 85% of all hospital activities, A&E services not included. In England alone, there are now more than 118 million outpatient appointments a year, a figure that has doubled over the past 10 years.

Commenting on the report, NHS England medical director Professor Stephen Powis said that outpatient appointments were designed in the clinicians’ interests rather than patients’.

He added: ‘The outpatient system is older than the NHS and the time has come to grasp the nettle and use tech and other innovations to improve patients’ experience and care.

‘As part of the long-term plan for the NHS, it’s right we look at ways to cut unnecessary appointments, save thousands of journeys, reduce traffic and pollution and make the NHS more efficient.’

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