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Last Updated: Tuesday, 2 August 2005, 14:19 GMT 15:19 UK
NHS payment changes
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Radical reforms in the NHS mean that hospitals will increasingly compete for patients - against each other, and against an expanding network of NHS and private treatment centres.

This week File on 4 examines the new financial system which lies at the heart of the changes.

The new system, known as Payment By Results, means that hospitals will in future be paid according to the number of patients they treat, and according to the complexity of the treatment.

The idea that money should follow the patients is seen as crucial to the government's policy of providing greater choice.

But healthcare experts warn it carries risks and creates competing incentives - with hospitals needing in-patient admissions to balance their books whilst Primary Care Trusts, who now face increased charges, want to see as many people as possible treated in the community.

File On 4 hears from health professionals about their concerns over the effects the new system will have on the NHS -- and examines disputes which have already arisen in a number of areas, including Chester and Bradford, where hospitals and PCTs have fallen out over the level of charges.

The programme also talks to Bob Dredge, the former senior civil servant who developed the new system and who says the whole intention was to create "constructive discomfort."

"There was certainly a sense that we wanted to put some radical changes across the NHS," he says.

"The old system was just too comfortable to implement the extent of changes which the Government wanted across healthcare and there had to be some discomfort."

File On 4: BBC Radio 4, Tuesday 2 August, 2005 at 2000 BST and repeated on Sunday 7 August, 2005 at 1700 BST.

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