Practical Commissioning’s Jargon Buster explains the meaning of the term ‘Payment by Results’.
Historically, hospitals and other providers relied on block contracts for commissioning purposes. But this produced a perverse system where the more work a hospital had to do the more money it received so there was little incentive to bring workload, particularly waiting lists, down.
Under the new PbR system, hospitals are reimbursed for the activity they carry out using a tariff of fixed prices that reflect national average costs. Trusts are paid for a number of individual treatments they provide, based on a system of coding.
However PbR has many critics who accuse hospitals of ‘gaming’ to create more work – and more payments. For example consultants creating a follow-up outpatient appointment when the patient might just as easily attend their local GP practice.