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Payment by Results

A transparent, rules-based system introduced in 2003-04 which was intended to change the arrangements by which providers of care receive their funding. It aims to reward efficiency, support patient choice and diversity and encourage activity for sustainable waiting time reductions. Payment is linked to activity and adjusted for casemix. Providers will be paid for the activity they actually deliver, and commissioners will have sufficient funding to look for alternative providers if agreed activity levels cannot be not met by the usual providers.The intention is that trusts should be able to reinvest surpluses they earn if they provide care atcosts below the tariff rate, while meeting quality standards.The system aims to ensure a fair and consistent basis for hospital funding, rather than being reliant principally on historic budgets and the negotiating skills of individual managers.

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