Page last updated at 12:35 GMT, Wednesday, 14 May 2008 13:35 UK

Performance pay for NHS hospitals

Hospitals are paid per patient treated

Hospitals are to have pay linked to performance by using patient experience to measure the quality of care.

Gordon Brown, in his draft version of the Queen's Speech, said it was part of making the NHS more "patient-centred".

It is likely to mean a tweak to the payment by results funding system under which hospitals in England are paid a set price for each treatment.

But experts remained sceptical over how performance could be incorporated into an "already complicated" system.

The government is not setting out the full details of the changes.

But Mr Brown said: "For the first-time payments to NHS hospitals will be adjusted according to patient satisfaction and health outcomes."

As expected, he also said there would be an NHS Reform Bill which will pave the way for an NHS constitution setting out what patients can expect in terms of access, safety and quality.

And the prime minister confirmed personal budgets will be introduced to give people with long-term conditions, such as diabetes, more control over their care.

The concept is right, but what we do not need is for the changes to be rushed
Jonathan Fielden, of the British Medical Association

Payment by results has been rolled out across most hospital services in recent years.

It means NHS trusts are paid for each patient they treat rather than getting a lump sum as happened in the past.

It was designed to reward the best hospitals, but the system has not been easy to introduce with many complaining it did not reflect the complexity of treating people.

A recent report by the Audit Commission said it had not led to the improvements in efficiency that had been envisaged.

And problems with the thousands of different individual tariffs have led to health chiefs having to constantly update them.

Complicated system

Professor John Appleby, chief economist at the King's Fund health think-tank, said he was sceptical over the merits of changing an "already complicated" system.

He said it would make more sense to get primary care trusts, which are responsible for buying services off hospitals, to use data already available to commission from the best-performers.

And he added: "You will end up putting primary care trusts in a situation where they have a choice of paying to give fewer patients top quality care or more patients average care. It puts them in a difficult position."

Jonathan Fielden, chairman of the British Medical Association's consultants committee, said: "The concept is right, but what we do not need is for the changes to be rushed."

But Steve Barnett, of the NHS Confederation, said: "The NHS needs to focus more on patient experience and health outcomes and a review of the payment system will be a helpful step in realising this."

Warning over NHS funds shake-up
10 Oct 05 |  Health

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific