Administrative bills at acute and primary care trusts have risen by £90,000-£190,000 each due to running payment by results, according to a government-commissioned report.

Administrative bills at acute and primary care trusts have risen by£90,000-£190,000 each due to running payment by results, according to a government-commissioned report.

The York University report recommends that costs could be cut by 'centralising some of data-cleaning activity such as stripping out duplicate hospital episode statistics' after it carried out in-depth interviews in London and South Yorkshire.

It also recommends that trusts invest in costing systems so they can avoid building capacity in 'unprofitable' areas, and make better use of 'resource data' to inform financial planning.

And it said the Department of Health must 'be more prescriptive' on the detail of reference costs as there was currently 'too much scope for interpretation'.

Finally it suggests that 'greater centralisation' of auditing of trust activity information should be considered to take the burden off PCTs to validate information they receive.

Meanwhile, a report from the South Yorkshire PbR laboratory project has concluded that the system can be made to work in the NHS.

The report looks at the first year of PbR in the South Yorkshire health economy. It credits PbR with bringing managers and doctors together, but says that clinical engagement relies on a simple and credible tariff.

Activity measurement and recording need to be 'rock solid', it says, and there is a need to make sure that the new financial incentives are better aligned to ultimate service objectives.

It calls for long-term thinking, saying: 'Responses to PbR need to be carefully thought through and result in sustainable and not short term patterns of service delivery.'