Headlines: August 5th, 2005

The Department of Health has set out a draft code for ensuring that patients receive maximum benefit from the shake-up that will result from the introduction of payment by results. The code aims to support high quality patient care by promoting positive and collaborative relationships between healthcare organisations, which effectively are in competition with each other. It has been drafted with a working group which included representatives from NHS organisations, independent sector providers, arms length bodies and the Department of Health.Under payment by results, providers are paid for each patient they treat, according to a national price list. The new arrangements will facilitate patient choice and reward efficiency, with successful providers able to reinvest surpluses to improve services for patients. Providers whose services are currently above average cost will need to make cost savings between now and 2008-09 when the system takes full effect.

The code emphasises the importance of collaboration, efficiency and transparency on the part of healthcare organisations, to ensure that patients and communities come first. It also includes specific rules on how payment by results should be operated in practice.

Payment by results was piloted in 2003-04 and extended in 2004-05. In 2006/07 non-electives, outpatients and A&E will be included for all trusts. There will be a three-year transition path for most trusts. This will ensure that trusts can adjust local costs to fit the new arrangements. It is expected that by 2008 the majority of hospital and community healthcare trusts will be fully reimbursed through the national tariff. NHS Foundation Trusts are already operating payment by results.