Feature / Hitting the button

Payments for quality begin next year but the acute sector has little experience of performance-related pay. Seamus Ward talks to NHS North West, which has launched the first region-wide quality incentive scheme.

Payment by results, at least in its original incarnation, has done its job. That’s the view of Department of Health policymakers who are content that PBR has helped reduce waiting times, increased capacity and is supporting plurality of provision. But now the initiative must move away from paying for activity alone to also paying for quality.

The new direction was signalled in a speech by the prime minister in early summer, which suggested quality incentives, as well as penalties for poor performance, would be introduced. More recently, health minister Lord Darzi’s Next Stage Review outlined the commissioning for quality and innovation (CQUIN) initiative; described as a ‘simple overlay’ of the current PBR regime. In the first year (2009/10), payments will be made to trusts for providing quality performance data. But from 2010 the scheme will reward outcomes.

CQUIN will be funded by a cut in the tariff rise and there has been speculation that quality payments could be 3% of trusts’ PBR income.

The Conservatives, too, are interested in incentivising quality. In June’s health green paper, they promised to transform payment by results into payment for performance. Healthcare resource groups (HRGs) would incorporate quality standards and payment of the tariff would be conditional on meeting quality and value conditions in contracts. ‘Our scheme would reward hospitals that are performing well and allow funding to follow the patient,’ a Conservative spokesman said.

The NHS already has a pay for performance scheme in the quality and outcomes framework for general practice but up until a year ago little had been done in the secondary sector. Then, NHS North West launched its Advancing Quality (AQ) pilot (Healthcare Finance July 2007, p20), which was rolled out to the whole of the region at the beginning of this month.

It is a three-year scheme initially, developed with Premier Inc, a not-for-profit firm that has developed a similar scheme in the United States. The North West programme focuses on five clinical areas – acute myocardial infarction (AMI), pneumonia, heart failure, hip and knee replacement and heart bypass operations.

Full sign-up

The voluntary programme officially started collecting data on 1 October and all the acute trusts that provide one or more of the clinical areas have signed up (24 trusts). The AQ team has also held discussions with local private sector providers of NHS services, with the aim of getting them involved in the scheme.

‘It’s early days in terms of data collection and it could be spring 2010 before we publicly report on the outcomes for the first year, which runs from 1 October this year to 30 September 2009,’ says AQ programme director Janet Ledward. ‘The reason for that is we don’t want to put in the public domain any information that could be misleading – we don’t know how the seasons could affect trends, for example. We are clear public reporting will not happen until after the full year has run its course and the Audit Commission has completed an audit to make sure the data is robust.’

There are 31 measures across the five clinical areas, mostly covering processes, such as administration of aspirin for AMI patients. Ms Ledward says the measures will change over time to reflect best practice.

‘The majority are process measures but we also have measures such as readmission rates within the hip and knee clinical area and we have other outcome measures in the AMI area.’

She adds that the Department of Health has agreed to fund an independent evaluation of AQ, which is due to commence around the turn of the year. ‘We are trying to save lives, reduce complications, reduce readmission rates and improve mortality.’ Ms Ledward stresses that the scheme is about more than clinical outcome measures. Over time it will have three facets, the others being patient-reported outcome measures (PROMs) and patients’ assessment of their experience. She admits the latter will be difficult. ‘We have a lot of work to do on that,’ she adds.

The SHA has recently awarded a contract to the Royal College of Surgeons to collect PROMs from hip and knee surgery patients. The AQ team is also developing patient experience measures, and the intention is to report all three measures (these and the clinical outcome measures) in the future.

The SHA is urging  trusts to collect PROMs data from 1 January 2009 and it is developing an incentive scheme. ‘We haven’t come down to any decision on that yet but I think it’s likely to be pay for reporting in the first year.’

Much of the interest in the programme will centre on the incentive scheme for clinical outcomes. Incentive payments will be calculated using the national tariff. ‘It depends which HRG the procedure is coded to and we have a group of HRGs covered by the scheme,’ she adds. ‘We have a clear definition of the patient population in the scheme. It’s only the population relevant to AQ that counts.’

The top quartile in each of the five areas will be paid 4% of national tariff for the qualifying patients they treat. Those in the second quartile will get 2%. The remaining organisations will not be penalised. Incentive payments must be used to develop patient services.

Ms Ledward says the incentive scheme does not involve huge amounts of money. ‘A 4% reward on hips and knees for a big trust might be £200,000. It’s relative to the amount of activity they’re doing – a smaller trust doing 300 procedures might get £50,000.’

The North West Ambulance Service NHS Trust will also benefit from the scheme. Ms Ledward says it contributes about 25% to the AMI measure so will receive a 25% top slice of the AMI top performance. This will be passed to the relevant local sector of the trust.

The scheme is funded by a top slice of about 1% of PCTs’ growth money for the first year. This amounts to up to £7.1m and includes more than £5m that will be set aside for the incentive scheme. The rest will be allocated to running the programme, including providing trusts and PCTs with money to help them roll-out the programme. The figure could rise to £10.6m in future years to allow the SHA to expand the programme and focus on more areas of care.

‘The year two incentive scheme will change slightly because following the publication of the year one results we will have a baseline position on clinical outcomes and PROMs data. This will enable us to reward most improved providers as well as the top performers. This means there is the potential to benefit from the scheme even if you are not a top performer,’ she adds.

CQUIN links

But how will Advancing Quality fit with the CQUIN initiative? Ms Ledward says CQUIN is different from Advancing Quality because the former will withhold tariff payments to acute trusts until the required quality levels are met. This will be achieved by top-slicing the tariff. In Advancing Quality PCTs’ growth allocations rather than the tariff is top-sliced.

However,  the schemes could be interlinked, and Lord Darzi has shown a lot of interest in the North West scheme. ‘We are still talking to the Department about AQ and how the SHA manages the scheme. As a team we are supporting local health economies and we can also support the CQUIN agenda.’

The Advancing Quality programme could coordinate local measures under the CQUIN scheme. ‘It’s still early days to be talking about CQUIN because the Department’s guidance has not been published but the general consensus in the SHA is that it will fall under the umbrella of AQ, though no final decision has been made.’

While these decisions are for the future, NHS North West has made AQ a central part of its strategy. It is looking to extend the programme beyond the five clinical areas, possibly into mental health and stroke care. It is clear the drive for higher quality is here to stay.