Payment by results has yet to deliver significant improvements, according to a report published today by the Audit Commission.

Under PbR, productivity has not risen greatly although the report conceded that the policy had not borne out fears it would damage patient care by cutting costs.

Audit Commission chair Michael O 'Higgins said: "Payment by results needs to develop so that it does what it says on the tin. In order to encourage a more efficient way of working, the NHS should set the price of procedures at the lower levels that some hospitals have shown can be achieved, rather than the average cost".

To read the report click here