Page last updated at 10:36 GMT, Tuesday, 26 August 2008 11:36 UK

NHS funding 'risk to cancer care'

Hospital ward
Ministers have introduced market-style reforms

Cancer services risk missing out on vital funds because the system is not sophisticated enough to deal with complex care, a government report says.

Consultants were asked to look at how cancer care was affected by payment by results - a funding system started in 2003 in England to boost competition.

They said reform was needed to avoid hospitals being deprived of cash for complex care and new equipment.

The government said the new system would evolve over time.

Payment by results is a key part of the government's NHS reform programme.

This report is a devastating critique of the problems the new system of funding is having
Norman Lamb, of the Lib Dems

It means hospitals are paid per patient treated for most of the work they do rather than getting lump sums based on past trends as happened before.

The system is still in the process of being rolled out, although there is already a national tariff for thousands of different types of treatment.

For cancer care, over 1.5m episodes of care, including tumour removal and diagnosis, fall under payment by results each year.

And over the coming years chemotherapy and radiotherapy are also expected to be included.

The approach in England does differ form other countries that adopted similar systems. In Australia, for example, such incentivised pay is only applied to the most basic procedures.

The report, by PA Consulting, cited examples of where payment by results did not reflect the nature of cancer treatment.

For example it said a complex renal cancer procedure estimated to cost the NHS about 25,000 could only be coded as kidney removal which under the tariff which is worth 4,000.

Meanwhile, the tariff breaks technology investment into a series of bands based on an NHS average.

However, cancer technology, such as radiotherapy equipment, is among the most expensive to buy and therefore trusts may be "discouraged from investing".

The report said changes needed to be made to make the system more responsive.


It comes after a review of payment by results by the Audit Commission earlier this year found it had not yet improved efficiency.

Lib Dem health spokesman Norman Lamb said the system was "penalising" specialist services.

"This report is a devastating critique of the problems the new system of funding is having."

He also accused the government of trying to hide the findings - it was actually published on the day the Olympics started earlier this month.

The government denied this.

And a Department of Health spokesman added: "By linking payments to individual patients, payment by results introduces much more transparency than the previous system of block budgets, but we have always been clear that the system will change and evolve in response to patient needs."

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