Published: 07/04/2005, Volume II5, No. 5949 Page 20

Dr Peter Brambleby, director of public health, Norwich primary care trust

In your story on finance reforms (news, page 5, 24 March) former Department of Health head of financial flows Bob Dredge speaks out 'to improve informed public debate' about payment by results.

Payment by results is a misnomer. It is payment for activity irrespective of the result. Financial flow is triggered whether the patient leaves hospital better, worse or even dead. Increased throughput should not be seen as result in its own right.

Some whole-scale policy changes cannot be introduced piece-meal. For payment by results to work it would have to be applied simultaneously across emergency and elective cases, outpatient, inpatient and community activity. And only after the necessary IT was in place. Anything less is bound to lead to gaming and instability, especially when primary care trusts and hospitals are individually accountable.

Without 'unbundling' the payment by results tariffs, innovation and sensible local flexibility are stifled. In the present mixed economy, payment by results is little more than a price-fixing cartel of dubious legality.

PCTs need a thriving secondary and tertiary infrastructure and should budget to ensure these are sustainable. Neither PCTs nor hospitals benefit from a mechanism that incentivises activity per se.

Finance should flow according to health programme objectives. The primary focus of the NHS should be the health of the population, not a competitive scramble between organisations. Payment by results, paradoxically, is a threat to the stability of hospitals and PCTs. We need a better model, and in programme budgeting we have it.

Payment by results has stimulated an interesting debate.

But it will not work. Ditch it.

I serve on the DoH programme budgeting project - in my view a much more promising model, evidence-based and tested in many countries over many years. The views expressed in this letter are my own and not necessarily those of Norwich PCT.