Feature / Untying the knot

If hospitals receive tariff payments for complete bundles of care – covering the whole treatment cycle from referral and diagnosis through to treatment and rehabilitation – then there is a danger that services will not develop. To prevent this, the Department of Health is keen to see the tariff unbundled where appropriate, breaking the full tariff payment into a series of components. But despite pushing the idea for a couple of years – with a focus on unbundling diagnostics and stroke rehabilitation – experience of unbundling around England remains patchy.

Unbundling is taking place, although the projects are often small in financial terms and more often provide funding for existing services rather than to develop new services. But understanding these early experiences will be key to any future expansion of unbundling.

In Swindon, Swindon Primary Care Trust and Swindon and Marlborough NHS Trust have been working together to unbundle the rehabilitation of stroke patients. Rather than moving patients into a new alternative service, the PCT was keen to ensure its existing dedicated rehabilitation unit – the Swindon Intermediate Care Centre or SWICC – was put to best use for as many patients as possible.

The SWICC was opened in December 2002, shortly after Swindon and Marlborough NHS Trust opened its new Great Western Hospital, built using the private finance initiative. Owned and managed by the PCT, the SWICC cost £6m to build, costs £3.6m a year to run and is located on the same site as the Great Western, sharing many of the consultants and doctors with the trust. It can support up to 60 patients – 30 set aside for patients recovering from stroke or other neurological conditions and 30 for the rehabilitation of patients with complex needs. It boasts up-to-date equipment including gyms, therapy rooms and ‘training’ kitchens and is manned by inter-professional rehabilitation teams.

When the centre opened, the care of stroke patients by the acute hospital was covered by block contracts. This meant that in effect the rehabilitation services provided by the centre were an additional cost for the PCT. The arrival of payment by results saw little change to this – although the acute care provided for stroke patients was now covered by a national tariff.
However the Department of Health’s call for local health economies to look at ways of unbundling the after care component of stroke care provided an opportunity to maximise use of the centre, free up beds at the Great Western for more acute cases and provided an ‘income’ (in the form of reduced tariff payments to the acute trust) for the PCT.

Both the trust and the PCT are keen for the SWICC to be used to best effect. There is agreement that the best care pathway comprises the acute phase being carried out in the hospital’s dedicated stroke unit and rehabilitation in the SWICC. The key is financial incentives that support this preferred pathway.

Stroke treatment
Treatment for stroke is predominantly a non-elective intervention with activity falling into two healthcare resource groups: A22 (non-transient stroke or cerebrovascular accident >69 or with CC) and A23 (non-transient stroke or cerebrovascular accident 70 without CC). Department of Health guidelines suggest that the acute phase typically lasts just over seven days and for 2007/08 it produced indicative tariffs for this acute component of the care pathway. This national guidance was the basis for the contract in Swindon. For every A22 patient discharged in seven days or under, Swindon and Marlborough would receive £2,697 – £1,703 less than the full tariff of £4,400 (figures before application of market forces factor). For A23 cases (discharged in five days or under), the trust faced a tariff cut of £654

Despite these potential ‘losses’ on early discharge, the trust fully supports the initiative. It believes early discharge into SWICC is the best care pathway for patients. There are also benefits for the trust. Earlier discharge should reduce the pressure on stroke beds in the trust.
Swindon and Marlborough finance director Charlotte Moar says a 10-bed stroke ward would cost about £2m a year to run including nursing and junior doctor costs. Basic analysis suggests each bed costs £200,000 and each bed day £550. So reducing demand makes sense.

While the trust may be looking at a £1,700 cut in income per early discharged stroke patient, this may provide capacity for greater day cases in other areas, income for which could either replace the ‘lost’ income or at least offset it. In reality, pressure on dedicated stroke beds in Swindon can mean stroke patients being looked after in general medical beds, which can affect surgery beds. This could lead to cancelled operations, reduce tariff income for surgical interventions and impact on referral to treatment milestones and targets.

For Swindon PCT, the incentives were to maximise the use of its SWICC unit, given it was already paying for the centre. In addition the unbundled tariff would provide at least some ‘income’ (by paying a reduced tariff for the acute phase) to offset the therapy costs provided through SWICC.
But Jan Trethewey, acting deputy director of commissioning at the PCT, says the principal purpose is to reinforce the best pathway. ‘What we get with this arrangement is a consistent approach for patients,’ she says. ‘That’s really important.’ This consistency is provided by the same medical staff providing cover both in the acute and intermediate care settings. Patients also get to see that the different therapy teams have talked to each other about patients’ needs.

The project has not involved a big change in financial flows – about £38,000 in total has been ‘saved’ by the PCT in terms of tariff payments. But Nicola Dunn, the PCT’s finance director says important concepts are at stake. ‘We have money following the patient,’ she says. And while the total sums are not huge compared with the SWICC’s running costs, it is a welcome contribution.

Results assessment
Both the PCT and the trust are now assessing the first year’s experience. Some 250 patients admitted to Swindon and Marlborough were coded to either A22 or A23 during the year. About 50 of these patients transferred to SWICC, with only around half of them falling under the set length of acute stay and so triggering the unbundling arrangements.

Ms Dunn says that financially it has been straightforward. ‘This was a really smooth process,’ she says. ‘It is clearly laid out in contracts which HRGs are covered and it is clear about the costs. From that point of view it has worked really well.’ Ms Trethewey agrees that ‘conceptually it has been a success’ adding it has helped to underpin the preferred pathway. Yet Ms Moar says the trusts and PCT agree it has not yet had the results hoped for.
In terms of all stroke patients, discharge rates at Swindon and Marlborough in under seven days (A22) or five days (A23) are around 45% and 60% respectively compared with a local target for early discharge of 75% (see table 2). Ms Moar says this is similar to the proportions for the previous year. Given the aim of increasing the use of earlier appropriate discharge to intermediate care, it hasn’t yet had the desired effect. ‘We are reviewing this together to see what would,’ she says.

This might mean boosting SWICC capacity at key times or ensuring all staff are familiar with the pathway. This is perhaps the key learning point from the work so far. The PCT and trust agree the pathway needs to be right and clearly understood before putting in financial arrangements. ‘If the care pathway and thresholds were clearer, it would help,’ says Ms Moar. Ms Trethewey agrees. ‘We need to be much clearer about our commissioning specification before we initiate any unbundling of tariff, and do some scenario planning.’ This may well involve discussion on how the system could work more flexibly rather than using ‘all or nothing’-style triggers.


Wanted: case studies
The HFMA Payment by Results Special Interest Group is keen to produce a briefing examining progress with unbundling over the last year. The briefing will be based on case studies, highlighting experience from across England. The group is keen to talk to any organisations that have been using an unbundled tariff, whether in rehabilitation or diagnostics. It would be also interested in early work looking at unbundling of echocardiograms and adult hearing services in 2008/09. To discuss further please contact [email protected]


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