Feature / Mental wealth

The care pathways and packages project offers a basis for developing a currency for mental health payment by results but significant amounts of work remain to be done, says Peter Howitt

The gradual introduction of payment by results to the acute sector since 2003/04 has transformed the transparency of healthcare finances. Although still being refined and improved, the use of healthcare resource groups (HRGs) as clear contract currencies and the application of national tariffs to take away haggling on price have been accepted as beneficial by most commentators.

Providers and commissioners from the non-acute sector generally, and mental health in particular, have looked on with envy. Mental health providers want a funding mechanism that rewards them based on the work they do, not on their historic costs, and see a payment by results-type system as preventing arbitrary cuts to budgets in times of financial shortages. Meanwhile, mental health commissioners would like to know what outputs and outcomes they can expect from the money they hand over; a funding system that will shine a light in the ‘black box’ of mental health finance. 

Clear priority
Respondents to the Department of Health’s Options for the future of payment by results consultation identified mental health as the top priority for any future expansion of payment by results. And this has been acknowledged by the Department, with its inclusion of mental health as one of five priority areas for payment results development.

With such support for a payment by results-type system for mental health, why is it taking so long to develop one? Essentially, it is because describing what you are paying for in mental health is difficult. It is easy to pay for a hip replacement, as there are clear start and end points and visible outcomes. Contrast this with a person suffering from severe depression, whose condition oscillates without being ‘cured’ and where the evidence-base on the efficacy of different interventions is limited. What do you pay for in the latter case?

It is a question that other countries have found challenging – only the Dutch have developed a payment system sophisticated enough to cover inpatient and outpatient mental health services.

In England, we believe we may now have the answer with the work done by the 2006 care pathways and packages project. This project  took the unusual approach of trying to place service users into clusters based on their needs.

Service users were assessed in 17 different dimensions such as substance misuse, cognitive problems and suicide risk, and the scores in these areas were used to allocate them to one of 13 different clusters. Two service users with the same diagnosis, such as anxiety disorder, could therefore end up in very different clusters if one had a stable family situation and a job, while the other was unemployed and lived alone, reflecting that the latter was likely to require a more intensive package of care.

This clinically intuitive approach offered the potential for developing currencies for mental health services. It has proved popular within the mental health community. An HFMA survey of finance directors at the end of 2007 found that more than 70% of mental health trusts and more than 55% of PCTs thought this approach best. The Department of Health has responded by confirming care pathways and packages work as the basis for currency development for mental health services and the challenge now is to build on the work done.

More trusts than the original six in the North East and Yorkshire and Humber strategic health authority areas need to be using the project’s standard needs assessment tool to allocate service users to clusters. A focus is needed on refining the clusters (the original 13 are now 22) and carrying out some robust costing of the different clusters. We need to examine if it is possible to use the clusters themselves as the currency, such as paying for a service user in cluster x, or if payment should be linked to the underpinning packages of care supporting the clusters.

Thought needs to be given to how to include outcomes and assess progress in meeting service users’ needs. The correct period for payment and review also needs to be defined – Australian experience has suggested a three-month period may be appropriate for an ongoing condition.

Timescale is ambitious
These are significant pieces of work. The Department’s mental health payment by results development project initiation document timescale of using national currencies for mental health in 2010/11, is ambitious rather than conservative. 

We have focused on currencies rather than tariffs initially as the creation of national payment units will allow benchmarking and enable us to see if there are unavoidable cost differences in delivering services to areas with significant deprivation, high rurality and ethnic diversity. Only then can we determine if a national tariff is appropriate.

Although the Department is co-ordinating the work centrally, it is vital that local commissioners and providers get involved. The HFMA is interested in hearing from its members where people are already doing work in this area, or keen to commence, so that they can be linked into the national project. If you can contribute please contact [email protected]

Peter Howitt is payment by results development manager at the Department of Health


Comment on this article