News / News analysis: Emergency response

Ambulance trust finance directors are united in wanting payment by results to be introduced for their emergency services, according to a survey by the HFMA.

With just 11 ambulance trusts in England, after last year’s reorganisation, eight finance directors took part in the survey. Despite promises to expand payment by results for ambulance services by 2008, pilots have only recently been established to test the merits of different currencies.

The Department of Health has singled out emergency and urgent care as one of five priority areas for payment by results, but no timetable has been announced. Last year’s consultation on future options made it clear that the Department thought a national tariff for emergency ambulance services would ‘not be possible until beyond 2010/11’. But there are fears among some ambulance service finance managers that the timescale could be much longer.

Despite this, surveyed finance directors were unanimous in their support of payment by results. Directors said that it was needed to: ‘keep ambulance services consistent with central NHS policy’, ‘ensure that the ambulance service was paid for what it did’ and to ‘allow development of cross-organisation clinical pathways’. Showing the broad interpretation of payment by results, however, one director said that supporting increased links between activity and payment did not necessarily require the implementation of a national tariff.

Generally, payment by results attracted full support but there was less agreement over the detail of how the system should operate. Two of the eight backed a currency based on incident sub-categories, as used within reference costs (each emergency incident, rated A, B or C, broken down by the problems being experienced by the patient such as back pain, chest pain or breathing problems). No one backed a currency based solely on incidents, calls or resources sent. But 75% of the survey sample said that a combination of approaches would be needed.

One director dismissed the current incident categories as too broad compared with healthcare resource groups (HRGs) in the acute sector, with a lack of consistency between call-takers making them an inappropriate basis for the allocation of costs. Instead, clinical time plus distance from nearest hospital was suggested as giving the closest relationship to costs incurred. Another preferred simplicity, using a variation on the current incident definitions to include non-physical responses (including advising patients over the phone) and cancellations. He added that clarity would be needed over whether an HRG was charged on the basis of primary diagnosis (during the call handing phase) or final diagnosis (after full assessment).

Reflecting approaches being pursued in pilots around the country, one director suggested currencies along the lines of ‘hear and treat’, ‘see and treat’ and ‘see and convey’. Another backed a more generic currency that could cover different types of urgent care, broken into the stages of access, assessment and intervention.


Who should pay?

There was the same split over who should pay for ambulance service activity.

Currently, ambulance activity would be counted against the primary care trust (PCT) covering the area in which an incident happened. Six of the eight directors said that complexities in identifying patients meant that this would have to continue under payment by results. One of the two directors who backed the idea of charging a patient’s PCT, accepted that this would be ideal but that current systems were a barrier.

Four directors believed that payment by results should involve a local tariff, with three preferring a national tariff adjusted for market forces and rurality – one of the key cost drivers for ambulance services. One director suggested a compromise, with national currencies agreed as the basis for local tariffs followed by migration to a national tariff, adjusted for rurality. This idea was picked up by another finance director, who said that the time frames between now and ambulance trusts gaining foundation status meant that developing a local tariff first was imperative.

One director said that anything other than a local tariff would mean the significant investment in the national pilots had been wasted. ‘It would make sense to use the experience of the pilots to assess whether or not a national tariff would be appropriate.’

Some directors reinforced the belief that the market forces factor is an unreliable way of adjusting for unavoidable differences in staff costs. ‘The current market forces factor is a nonsense,’ said one. While acknowledging London’s special case, he added: ‘A paramedic is on the same band, whether employed in Newcastle or Chichester.’

Assuming an adjustment was made for rurality, the question remains at what level to make the adjustment. Opinion was divided between adjusting at ambulance trust level, locality level (internally identified patches within trust area) and PCT level. The latter was the slight favourite, partly as this would align with resource allocation.

All directors accepted the need to phase the changes in, with periods between two and four years suggested. One director said four years represented a ‘reasonable trade-off’ between the need to ensure service quality was not undermined and the need to achieve equity of funding quickly.

The survey also examined preferences for paying for variations in activity compared to commissioned levels. All directors rejected applying the full tariff to all activity. And there was no support for paying full tariff up to commissioned levels and variations at marginal rate – the model used for emergency admissions in the acute sector. Directors were split over two options. Half the sample liked the idea of a block payment to cover their need to have a certain capacity in place, regardless of actual usage, with additional tariff payments for activity. The rest thought a marginal rate should be paid for additional activity in year, with the remainder paid in year two.

Ambulance services are increasingly developing clinical advice services as alternatives to sending a response, in appropriate cases. But there are a range of views on how a tariff for such services could work. Two directors believed the tariff should be the same as for a traditional response. In the acute sector, day cases and inpatients attract the same tariff, providing a financial incentive for increasing day case rates. The same approach for ambulance services could encourage more advisory services. Others believed there should be a flat fee paid for any advice given, while the majority said the fee paid should change depending on diagnosis.

The survey also addressed the issue of encouraging greater care provision by ambulance staff. There is a move for ambulance services to recruit more emergency care practitioners (ECPs) to provide immediate care, rather than simply conveying patients to hospital. If, however, tariffs are based on incident type rather than care delivered, ambulance trusts may face perverse incentives to simply transport, even if the overall costs to the health economy will rise.

Half the directors taking part backed separate tariffs for incidents involving ECPs. Local top-ups were also suggested, with one director stating that the ambulance trust should receive a proportion of the avoided A&E tariff as the incentive.

The survey reveals that finance directors in ambulance trusts around England have differing views on how to address the obstacles to setting up a payment by results regime for their activities. But it shows there is unanimous backing for such a system. While challenges need to be overcome, the underlying message appears to be that the sooner a system is in place, the better.


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