Feature / The emerging picture

Steve Brown starts a round-England tour of PBR development sites with a look at work under way to develop tariffs for urgent care and cystic fibrosis

The Department of Health has attempted to develop payment by results (PBR) in a collaborative way. Since its inception it has asked for comment on tariff proposals. In 2007 it launched a consultation on future options for the tariff, covering all aspects from underpinning coding and classification to the scope of PBR. It considered what should be included and what were the highest priorities.

The consultation paper also announced the ultimate central/local collaboration – getting the service to work up its own ideas for new tariff/currency approaches in a series of development sites.

Having already established three basic models for PBR – national currency, national price; national currency, local price; local currency, local price – there were few limitations. The Department made it clear it was not simply interested in exploring areas not yet covered by the national tariff; it was also keen to consider new ways of remunerating services already with tariff, perhaps looking at how services could be bundled or paid for on the basis of pathways.

There was huge interest from around the service. About 40 development sites were running in 2008/09 despite no central funding being on offer. For development sites the attraction was to find local funding solutions to local issues while potentially informing national policy and getting ahead of the game.  For the Department of Health the development sites are providing a rich source of on-the-ground learning about how future models of PBR could function.

The up and running development sites cover a range of activities from specialist cardiac services to community, mental health and ambulance services. A second round of development sites is expected to be announced later this year and at the end of 2009, the Department will publish a report evaluating the work done to date.

In this series of articles, Healthcare Finance takes a whistle-stop tour around some of the development sites to give an insight into how the tariff might look in future.

Development site 1
Birmingham East and North PCT and Solihull NHS Care Trust
Service area: urgent care

The key aims of a project in Birmingham are to integrate primary and secondary care services to reduce accident and emergency (A&E) department attendances, reduce short-stay admissions and facilitate supported discharge.

The project – to develop a primary care discharge unit at Good Hope hospital (part of the Heart of England NHS Foundation Trust) – is one of two initial schemes chosen from 13 prioritised areas that form an urgent care project being taken forward under the Department of Health’s payment by results development site programme.

Overall, the project, led by Birmingham East and North PCT (BEN) and Solihull Care NHS Trust, aims to design and test a new urgent care system with a payment system that will incentivise providers in the best interests of patients.

The primary care discharge unit will be located alongside the A&E department at Good Hope. It will be led by a senior GP with support from a multi-disciplinary primary care team including intermediate care, drug and alcohol workers, social workers, therapists and admission avoidance nurses. It will build on an existing GP-led out-of-hours service currently based on the site. 

Caroline Nolan, urgent care project director at BEN, says: ‘Patients will benefit from the usual high standards of diagnostics and assessment at A&E but also be able to access the full support of primary and community services in a one-stop service that aims to discharge patients with full support packages.’

Rather than being a primary care filtering service placed in front of A&E, this will be a service into which A&E attendees are discharged. In practice there will be three types of A&E attendee: very minor cases that can be discharged straight to the new unit; patients discharged into the unit after assessment; and traditional A&E patients who are either treated in A&E, discharged or admitted.

In particular, the new system is seen as providing a more appropriate response to patients. For instance, an 80-year-old woman brought to A&E after a fall may, under the previous system, have been admitted as a short-stay emergency admission. Even with no broken bones, she may live alone, be in a state of shock and unsteady on her feet and admission has been a way of providing a stepping stone to returning home. The four-hour A&E target has also underpinned this response. 

But the primary care discharge unit, using its multi-disciplinary team and its understanding of the primary and community care system, would be better placed to arrange a package of support enabling the patient to return straight home – perhaps with the help of a night-sitting service. ‘The avoidance of an emergency admission is not just better for the patient but avoids unnecessary expense for the commissioner,’ says Roxanna Modiri, urgent care project manager at the PCT. ‘It also reduces demand on the acute provider, removing pressure from the A&E itself, enabling it to focus on meeting the four-hour rule for appropriate A&E patients and reducing demand for short-stay beds.’

The challenge then is to put in place a funding system that incentivises this new system. Paul Taylor, finance director for the project, explains there are three partners that need to be incentivised – the PCT as commissioner, the PCT as provider and the acute provider.

‘On straight tariff, the acute provider loses about £2m, with 90% of that in lost admissions,’ he says. ‘Meanwhile the new arrangements will require around £1m in additional primary care resource, either in the discharge unit or in the community. So it is attractive for the PCT, which could save £1m.’

However, there are adverse impacts for the trust. The reduced demand may enable it to save about 10 beds but this would not be enough to close a ward, so many of the fixed costs would remain. Unable to cash in the savings, the trust would take a financial hit. The aim is to provide a payment mechanism that drives the right system while cushioning the impact on the acute provider.

A three-stage payment scheme is being examined. First, patients assessed in A&E would attract the usual A&E payment – at 2009 rates £59 (minor injury), £80 (standard) or £109 (high). In addition any patients from the two higher remuneration categories that were discharged to the new unit would attract a further payment – currently being considered at about £200. This is a lower cost than the £500-£800 typically paid by the PCT if a patient is admitted as a short-stay emergency but offsets some of the lost income for the trust. Finally, a third payment is being considered to be shared around the commissioner, the PCT provider and the acute provider. This would be triggered once a set success threshold is reached – measured in reduced emergency admissions.

The real driver is improved patient care. ‘The benefit for the patient is they have a greater chance of avoiding admission into hospital as they can get their discharge package of care sorted out in the primary care discharge unit,’ says Mr Taylor. ‘We need to have the right incentives in place

to underpin this improved system.’ The scheme goes live in May.

A second project in the urgent care initiative focuses on care homes. With high levels of urgent admissions from care homes, the project is looking at ways of incentivising both the PCT’s own provider, potentially to provide prescribing nurses for ward rounds, and the care homes themselves to be more proactive in contacting primary care if residents’ health starts to deteriorate.

Development site 2
Cystic Fibrosis Trust
Service area: cystic fibrosis

Cystic fibrosis is a life-limiting inherited respiratory disorder affecting 7,500 children and adults across the UK (about 5,000 in England). Commissioned by specialist commissioning groups on behalf of PCTs, it is currently outside the scope of the national tariff.

The 55 cystic fibrosis providers – separately covering both adult and paediatric services – are paid through a mixture of block and cost and volume-type contracts, which means that funding and services vary significantly

across the UK. For instance, not all services can support patients who wish to receive

their intravenous treatment at home rather than being admitted to hospital and only some would include a clinical psychologist and social worker as part of the multi-disciplinary team. 

According to Jo Osmond, clinical care and commissioning manager at the patients’ organisation the Cystic Fibrosis Trust, the International Classification of Disease’s ICD-10 (diagnosis) codes and HRGs are limited for cystic fibrosis. Under version 3.5 HRGs, all cystic fibrosis inpatients mapped to either HRGs D17 (adults) or P02 (children). HRG4 increases the granularity by introducing with/without complication/comorbidity splits.

And the granularity is set to increase further. For 2008/09 reference costs, NHS bodies have been asked to identify costs in four HRG groupings for children, with the split based on different lengths of stay.

Ms Osmond says that the HRG model used for acute care isn’t well suited to cystic fibrosis care. ‘Acute HRGs are based on spells of care,’ she says. ‘For cystic fibrosis, the spell effectively starts with birth and ends with death.’ 

Even the improving granularity of HRG4 provides only partial improvement. Length of stay splits, she argues, retain the link with hospital care despite significant amounts of care being delivered in the community. Equally, paying on an intervention basis – an inpatient episode, an outpatient clinic or physiotherapy session – is not seen as practical or helpful.

Instead the Cystic Fibrosis Trust is leading a PBR development project looking to test a currency and tariff around the provision of a year of care.

There are already well established national standards for care in the area of cystic fibrosis and the trust holds a database on all cystic fibrosis patients, providing rich data on the interventions and support given to different types of patient – for instance, how many courses of intravenous antibiotics have been administered, the number of days in hospital or the development of other complications.

This has enabled the project to identify seven categories across five bandings of patients. These stretch from band one for the patients with the mildest care requirements – possibly involving outpatient treatment two to three times a year and oral medication – to band five for those in the end stages of the illness (patients needing intravenous antibiotic treatment in excess of 100 days a year and high levels of nebulised therapy). The banding structure is currently being examined as the basis for a tariff.

The project is undergoing a costing exercise to assign costs to the different categories with the aim of developing tariff prices. The exercise involves data from 10 pilot sites – all chosen because of their progress with patient level costing – covering 1,800 patients (nearly 40% of the English patient base).

The aim will be to analyse resources consumed by patients in the various bandings and examine any differences due to age or complications. A shadow tariff could be in operation for 2010/11.

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