Trusts must collect better data about patient services and involve clinicians in decisions if payment by results is to expand successfully, health minister Andy Burnham has warned.

He spoke as the Department of Health last week published the final version of its consultation Options for the Future of Payment by Results: 2008-09 to 2010-11, in which it outlines plans to further roll out payment by results in the NHS over the next four years.

Mr Burnham told NHS managers that it was 'really important' for them to work with clinicians to expand PbR to cover all services, not just elective and emergency care. He said: 'Clinical involvement is crucial - we have to make sure the data we rely on is collected and organised in a way that makes sense to clinicians.'

His comments were backed by Peter Spilsbury, chair of the steering group tasked with writing the DoH paper and director of strategy at NHS West Midlands, who has said that PbR will not be able to be reflect local care priorities unless clinicians are involved.

Although Mr Spilsbury described the system as 'well embedded in the NHS' he said PbR needed a 'broader definition' so it was 'not just based on a national currency and national tariff model but also for some services locally defined currencies and tariffs are developed'. It was 'essential that building blocks such as data quality and clinical engagement' were addressed, he added.

The consultation paper states that 'outside the acute sector, there is significant variation in the robustness of data collection' which is hindering the process of rolling out the use of PbR to all NHS services.

The DoH has said it will 'road-test' the PbR tariff for 2008-09 in September and promised that the tariff will be finalised by December.

It also intends to set up PbR 'development sites' to test out proposals to extend the scope of the system. The sites test out 'local currencies for services outside of the national tariff' and 'alternative currencies or funding models for services already covered by the tariff'.

However the DoH has delayed plans to roll out a new version of the healthcare resource group tariff which puts prices on different services.. The government had signalled that the latest version, known as HRG4, would apply to the national tariff from 2008-09 but has delayed its implementation until 2009-10. It will stick with version 3.5 for the next financial year.

The document says the delay is a 'consequence of the earlier timetable for 'road-testing' and publishing the tariff that was introduced for 2007-08'. Analysis of the 2006-07 reference costs on which HRG4 will be based will start this July.

Other DoH proposals include adopting a 'pay for performance' system to operate alongside the national tariff. This would see financial incentives set at contract level between commissioners and providers and offer 'bonus payments' for providers offering patients 'service excellence'.

The document also proposes scrapping hosted services - where a 'host' primary care trust provides services to patients regardless of where they live.. It says better information flows and the availability of tariffs for accident and emergency and sexual health services - the two most commonly hosted services - mean that they no longer need to be hosted.

It adds that hosting may 'limit the potential to realise the benefits of PbR in terms of greater transparency'.

NHS Confederation policy director Nigel Edwards said: 'The time is now right to see how the [PbR] system can be developed to deal with issues including the treatment of people with long-term conditions, shifting care outside of hospitals and improving the overall quality of patient care.'

Timeline: key steps towards the new tariffs

  • July/August 2007 Costings based on HRG4 will be submitted for analysis
  • September 2007 Department of Health set to publish road-testing of 2008-09 tariff
  • December 2007 Tariff for 2008-09 finalised
  • 2008-09 HRG3.5 will continue to be used
  • 2009-10 HRG4 will be introduced after a year's delay