Feature / Best foot forward

Our tour of PBR development sites stays with community services this month with a look at work to develop currencies and local tariffs for podiatry

Development site 1
Plymouth PCT
Service area: podiatry

Plymouth PCT has been introducing links between funding and activity across its community services for the past couple of years. For all inpatient activities, it has operated a 100% variable system, each additional patient treated attracting the full per patient rate.

For other services, where activity levels and casemix were seen as more volatile, tolerances and marginal cost payments were used. Podiatry – treatment of disorders of the foot, ankle and lower leg – has been in the latter category. Adjustments to planned payments were only made if actual activity differed from plan by 5% or more, when adjustments were made at 30% of unit rate, reflecting the marginal rate.

Plymouth’s provider services has taken the opportunity of a redesign in podiatry to introduce a more sophisticated PBR currency. As podiatry was relatively discrete from other activities, it made an ideal candidate for developing its activity-based contract.

Ruth Gilfillan, contract accountant at Plymouth, says the link with activity has made a big difference to data recording and the quality of data and has improved engagement between the service providers and finance. But for podiatry the crude link – simply counting contacts – was only a temporary measure.

‘In 2008/09 the rate we applied was £36.93 per contact and the planned activity level across all our commissioners was just over 28,500 contacts,’ she says. While this was a step forward from block contract financing arrangements, it failed to recognise the range of different activities and cost drivers in the service. Greater granularity was needed.

Under reference costs, community podiatry costs within NHS Plymouth (provider) are collected in three main categories – outpatient first and follow-up attendances (outpatient code 653) and other community services/ podiatry (code N910). This effectively counts contacts and so offers little sophistication. 

Greater granularity has been introduced for 2009/10 in Plymouth with a local tariff that recognises five different levels of treatment/intervention plus an additional payment rate for educational services (see box).

Helen Faulkner, lead manager for podiatry, explains. ‘Under the old system, we would get paid the same for a 20-minute appointment with an assistant podiatrist as for minor surgery – for instance, to remove toe nails. But under the new tariff, we get paid according to the type of activity we undertake.’

This is important for the service as it has recently reconfigured its caseload to focus on high-risk patients, with more frequent interventions for these more time-consuming patients. This means that overall there has been a cut in activity – which would have led to a reduction in income under the previous payment system.

The PCT is clear the correct weighting of the service costs across these treatments could only be achieved through full engagement of the services.

Ms Faulkner says the new tariff’s benefits go beyond direct payment. ‘It helps us understand the activity we are undertaking, it helps with workforce planning and it will support us in improving the service,’ she says.

The service is keen to take on more minor surgery for acute in-growing toenails. ‘It is more appropriate and the evidence base supports podiatrists having a better clinical outcome for this condition than referrals to orthopaedics,’ she says. The commissioners would also pay less for a podiatry-provided service than an acute service. She believes the tariff means the incentives and financial flows are aligned to help deliver this kind of win-win.

Ms Gilfillan says the more granular tariff means the service gets funding matched to the quantity and intensity of its activity. Commissioners get better understanding of what they are buying. And the provider arm has better information to engage with the service – whether the initial target level of activity is right, for instance. She says it also provides the platform for moving to income-based budgeting and service line reporting.

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