The transformation of NHS hospitals into businesses was accelerated with the introduction in 2003 of a funding mechanism known as ‘payment by results’, whereby hospitals were paid per each individual who completed treatment, rather than with a lump sum for a given number of cases.
Income now became closely tied to performance, which was measured by ‘throughput’, and payments were based on a national tariff of fixed prices, adjusted for the seriousness of each case category, not on how well patients did after they were treated.
‘Payment by results’ was actually a misleading name for the arrangement – it should have been ‘payment by throughput’. It was another piece of policy bought wholesale from the USA.
excerpt above kindly reproduced from NHS SOS: How The Nhs Was Betrayed – And How We Can Save It (by R.Tallis)
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And the result of implementing 'Payment by Results'?
Hospitals act like 'conveyor belts' for dying patients
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