Activity based financing in England: the need for continual refinement of payment by results

Andrew Street and Alan Maynard

Health Economics, Policy and Law, 2007, vol. 2, issue 4, 419-427

Abstract: The English National Health Service is introducing activity based tariff systems or Payment by Results (PbR) as the basis for hospital funding. The funding arrangements provide incentives for increasing activity, particularly day surgery, and, uniquely, are based on costing data from all hospitals. But prices should not be based on average costs and the potential of PbR to improve the quality of care is yet to be exploited. Without refinement, PbR threatens to undermine expenditure control, to divert resources away from primary care, and to distort needs based funding.

Date: 2007
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