NHS Finance

1
NHS Finance Payment by Results
2
Where the Money Comes From

• The UK Government gets three-quarters of its tax
  revenues from just five taxes.
• Over a quarter comes from income tax on
  individuals.

3
Where the Money Goes
4
PCTs 3 Functions
5
Relationships Accountability

• Perform their functions for, and with, their
  local population in pursuit of equality, quality,
  responsiveness, innovation, efficiency and
  affordability
• Lead their local health system and develop and
  deliver their functions through effective
  partnerships
• Hold providers to account through commissioning
  and contracting
• Are accountable to their local population
  directly and through OSC scrutiny and to SHAs.

6
Funding Flows
Department of Health
Allocation
Primary Care Trusts
Contract or Service Agreement

• Secondary Care Providers
• Foundation Trusts
• NHS Trusts
• Independent Sector
• Voluntary Sector

• Primary Care Providers
• GPs
• Dentists
• Pharmacists
• Optometrists

• PCT Provider
• Community Hospitals
• Community Nursing / Health Visiting

7
Derbyshire County PCT spend 2007-08
Total Budget 2006-07 877m
8
Resource Allocation

• Weighted Capitation Formula
• Distance from Target
• Age related need
• Differences in Cost
• Additional need
• Mortality
• Morbidity
• Education
• Income

9
Ensuring Control

• Accountable Officer Guidance
• Treasury and NHS Financial Directions
• Codes of conduct and Accountability
• Corporate Governance guidance
• Standing Orders and SFIs
• Financial Procedures
• Audit Committee

10
Approach to Money

• Investments to achieve key healthcare targets and
  improve health inequalities.
• A review of commissioning strategies to ensure
  Value for Money.
• Our performance will be continually measured and
  reviewed by the PCT Board and our Auditors.

11
Challenges

• FITNESS FOR PURPOSE
• INHERITANCE TO EQUITY WITH FEWER RESOURCES
• COMMISSIONING CHALLENGE, VFM STRATEGY
• PBC and INFORMATION
• PROVIDER SERVICES
• SYSTEMS, SIZE AND INTEGRATION
• OUR NHS OUR FUTURE

12
Challenges

• Service change and redesign is crucial for the
  NHS to carry out its roles, functions and
  targets.
• The NHS needed a flexible financial currency to
  facilitate and enable wide scale change
• PAYMENT BY RESULTS

13
Payment By Results

• Instead of Commissioning services through fixed
  price block contracts, PCTs will
• Pay for the actual activity providers undertake
• Commission and monitor activity based on patient
  numbers, adjusted for complexity
• Each procedure paid for at a national rate

14
PBR (cont..)

• A transparent, rules based system for PCTs to pay
  trusts and others that
• Rewards efficiency
• Supports patient choice
• Encourages patient activity by giving incentives
  to providers to improve capacity and reduce
  waiting times.

15
PBR (cont..)

• Main areas NOT yet on PBR
• Most specialised services
• Diagnostics and Direct Access
• Mental Health
• Learning Disabilities
• Ambulance Services
• Community provision non inpatient
• Primary care provision

16
PBR (cont..)

• Facilitates and supplements for Commissioners
• Patient Choice
• Practice Based Commissioning
• The focus on quality
• The redesign of services and patient pathways
• Capacity planning and patient flows

17
PBR (cont..)

• For Providers of Healthcare
• Efficiency and effectiveness
• Quality
• Strategy for provision and services
• Market analysis and strategy
• Long term business planning

18
PBR (cont..)

• Payment by Results the next steps
• More services falling into PBR
• Increased sensitivity of tariffs
• Move towards tariff reflective of top performers
• Forces greater focus on
• Contestability within the market place
• Management of the market for PCTs
• Changes in the where healthcare is provided?