Finance director: Bob Dredge on PbR (Part 1 of 3)

Recent articles by Connolly1, Hamilton2 and Sussex3, published in HES, have been somewhat pessimistic about the impact that Payment by results (PbR) will have on the NHS and the suppliers of products and services’ Bob Dredge.

They imply that PbR will further destabilise the financial position of trusts, leading only to cost reduction measures which may compromise the development and provision of new technologies and treatments. There are logical arguments to suggest that this could happen. However there are equally strong arguments, and some international evidence, to suggest that it will not.

Some clarification of the design and intent of PbR is therefore needed to counter the pessimism. First, why was PbR introduced? As Dr Colin Connolly (Connolly Research Consultants) notes, it is a system where money follows the patient. It started in a small way in 2003, first wave foundation trusts took it on in 2004, and the rest of the NHS began full transition in 2005. And it is intended that some 80%+ of NHS spend will be made under the system by 2008.

It is a prospective payments system, following the model used in many other counties. It is not a new concept; although the scale and speed of the English roll out ‘ it is not being introduced in the same way in the rest of the UK ‘ is among the most ambitious.

Both Connolly and Jon Sussex (Office of Health Economics) focus on PbR as a driver for greater efficiency in the NHS. And anyone who sees the productivity trends can understand why the Government would want to achieve this. But more than this, it is a process that will provide a fair and transparent way of funding local services. Transparent in that all providers will be paid the same price for the same product’s (with the caveat of an additional, differential payment to allow for unavoidable geographical cost differences’ the market forces factor).

This price is set by the Department of Health (DoH), not negotiated locally, and is published for all to see. This means that the Government and the taxpayer are assured that inefficient providers are not protected by having their costs reimbursed, irrespective of relative efficiency. The system it replaces does exactly that. It allows for local negotiation of prices and means that a primary care trust (PCT) accepts the provider’s price. In terms of equity it means that no matter how elaborate the weighted capitation allocation formula to PCT’s is and there is much written and discussed on this not least by those PCTs with so-called under target allocations’  the fact that PCTs have been prepared to pay local providers 10, 15 or even 20% above the benchmark price for no service benefit has sparked little debate. In effect they have been depriving their populations of other services by supporting high cost hospitals.

This is why it is fair. But it will only be fair if the price the DoH sets is itself a fair one. Currently the price is based, indeed generally matches, the Reference Cost for each service. These have been collected by the DoH for ten years, and are submitted by each provider on the basis of a fully absorbed costing exercise. This exercise is expected to follow a well defined national costing protocol, and the results are subject to external audit. So the DoH should be able to place a fair degree of reliance on them.

Connolly argues: The current system is loaded with overheads and clinically non-specific. I would dispute this in detail, yet space only allows me to say that product’s that are costed, generally those within Health Care Resource Groups, are defined with significant input from clinicians. They follow established methodologies and reflect the outputs of a clinical service. They are currently being fundamentally re-designed, following revisions introduced for the early days of PbR. As for overheads, I am unaware of any enterprise that does not have them, and they need to be somehow absorbed. The most elegant and detailed costing methods will need to cover them. The point is the basis upon which they are allocated, and the way this then plays back through the price structure.

Under PbR everyone will have the same price; the challenge is to manage costs such that the total cost of activities  all activitie’s  is recovered through the fixed price. This means that some services will make a positive contribution, some not. Overall the mix of services delivered must cover their costs. This is why, as Sussex and Louise Hamilton (Siemens Financial Services) point out, a focus on cost structures and opportunities to reduce total delivery costs is essential to survival under PbR. This is also where innovation and opportunities for moving and reducing costs outside of the conventional hospital setting will become important. The PCT will now save the full costs of patients not seen in hospitals, and there are processes in the PbR system that allow for the tariff to be shared with non hospital providers if the overall care pattern and pathway needs to be changed to deliver a better, more cost-effective service.

So the NHS will be more interested in examining how technology can improve the overall cost of treatment, in a holistic way, rather than in simple cost paring at the margin.


Memory aids and techniques [Summary] (Report 05057)

The aim of this report is to identify the memory management methods used by carers, professionals and memory aid users, and report their comments on their positive and negative features.

Devices marked as memory aids and products in development are also listed with their features and functions. The information was compiled in tables to enable users and providers of memory aids to develop a system to meet the needs and abilities of users.

The report includes information on cueing devices; note-based memory aids; strategies used to aid memory; telephone and electronic devices; medication management; reviews of products marketed at the time of the study, including pill dispenser’s, blisterpacks, NeuroPage and Memo Minder (voice reminder alarm); and products in development (packaging design for tablets, Memojog, Neurotxt, an object locator, a bath monitor and a cooker monitor).


CDx SensoCard Plus talking blood glucose system (Report 05088)

This is an evaluation of the CDx SensoCard Plus blood glucose meter with the SensoCard test strip which is intended for home use for diabetics.


The system, which uses non-wipe biosensor technology to measure glucose in capillary blood, has the ability to provide instructions and test results via synthesised speech for visually-impaired people with diabetes. The system requires 0.5 l of blood, has a measurement time of five seconds, is simple to operate and requires minimal maintenance.

In the clinical study when results were compared with those obtained using the hexokinase method, there was a significant variation in bias between the results from the two batches of test strips. However, there was no significant meter-to-meter variation in bias. Error grid analysis against the hexokinase-adjusted results would classify the system as clinically acceptable for both meters tested, with all of the results falling into Zone A. The system also met the criterion for acceptable imprecision and acceptable total error.


Digital detectors for general radiography (Report 05078)

Direct digital radiography (DDR) systems are replacing film/screen radiography for general radiographic examinations in many hospitals and its use is likely to rapidly increase with the national programme for the installation of picture and archiving systems (PACS) across the NHS, scheduled for completion in 2007.

This report summarises evaluation data on a range of digital detectors: Canon CXDI-31, Delft ThoraScan, GE Revolution, Hologic DirectRay, SwissRay dOd HP and Trixell Pixium 4600.

The pre-sampled modulation transfer function (MTF) shows the faithfulness of the transmission of the incoming signal of the detector. The Hologic has a much better MTF than the others while the Delft is poorer in the scan direction of the scan array and there is a slight difference between directions for the SwissRay which uses lens and mirror coupling.

The Hologic detector also has a very different normalised noise power spectra (NNPS) frm the others, with good transmission of high frequency information but also of high frequency noise. But all of the detectors are satisfactory for measurements of detective quantum efficiency (DQE).

The GE Revolution an dthe Trixell Pixium 4600 have the highest peak of DQE of the six detectors. The Hologic DirectRay shows variability of DQE with dose, which indicates significant structural noise in the image.


3D imaging at microscopic levels

maging system in order to improve the visualisation of patient data for doctors, surgeons, pathologists and research scientists.


The Imaris 3D system incorporates features that allow time-based visualisation of images, the creation of 3D or multi-channel images, or the production of animation movies. One feature, for instance, can be used to monitor temporal changes in biological systems. The system also seeks out filaments such as neurons, microtubules or blood vessels and retains and calculates topological information for the user.

The Imaris system can also be used in conjunction with a stereomicroscopes or endoscopes either to get a real-time and deeper view of patient tissue or as a training tool for future surgeons.


Cleaner and warmer patients

Kimberly-Clarke has announced the launch of its Patient Warming System that improves patient outcomes and reduces healthcare-associated infections across a range of surgical procedures. The new system allows anaesthetists and surgeons to precisely manage patient temperatures during complex, lengthy surgeries.

The system is a stand alone unit that circulates water at a precise temperature through disposable hydrogel pads placed directly on a patient to deliver an even and all-body warming process. When the patient’s ideal temperature is reached, the system adjusts the water temperature to maintain the preset target. The unit can either be set at automatic or customised depending on the requirements of each procedure.

Through the direct application of its novel hydrogel warming pad, the company says that users of the patient warming system would only have to cover 20% of a patient’s body and manage patient temperature effectively.


GE LightSpeed RT CT scanner technical evaluation (Report 05070)

The GE LightSpeed RT is a third generation four-slice helical CT scanner with a gantry opening that is wider than those found on standard diagnostic CT systems.


Because it has a wide aperture of 80cm, it allows flexibility in patient scanning positions, especially for those in radiotherapy treatment. It is suitable for use in the scanning of obese patients, trauma patients attached to life support equipment and interventional procedures where easy patient access is important.

As well as having a larger gantry bore, the RT also allows images to be reconstructed with a larger field of view than a standard CT system, allowing images of up to 65cm to be generated using the RT’s extended field of view. These images can be used to visualise anatomy that lies beyond the scanner’s standard 50cm field of view. However, it should be noted that the portion of the image in the extended field of view will have a reduced image quality with respect to spatial resolution, noise and CT number accuracy, compared to that in the primary field of view.


Computed radiography (CR) systems for general radiography: a comparative report, edition 2 (Report 05081)

This report compares evaluation data on the Fuji FCR XG1, the Konica Minolta Regius 170, the Kodak DirectView CR500 and the Agfa CR 25.0.


All four CR systems were clinically and technically acceptable in terms of image quality, ease of use and performance. Each reader uses a different method for cassette and image plate handling. But if either the Kodak or Agfa cassettes are inserted into the reader the wrong way round, the mechanism could potentially damage the cassette. The Konica has a significantly higher throughput as it can handle more than one cassette at a time. All systems had good post-processing functions, although the Kodak and Konica Minolta systems did not allow free text to be added at the review workstation (Konica Minolta has now added this feature in CS2 and CS3 software). And the modulation transfer functions of all the systems were similar.

Although the Kodak is a desk-top unit, it has the largest footprint. The Fuji is the most space efficient as the review workstation can be placed on top of the reader.


Defibrillator: Zoll AEDPlus (Report 05092)

The Zoll AEDPlus is an automated external defibrillator (AED) intended for lay first responders trained in basic life support and healthcare professionals trained in advanced life support (ALS).


It is designed to be portable and is available with either a graphic user interface for lay users or a professional interface. However, a possible disadvantage is that it requires a PC for configuration. In addition, the professional interface version intended for advanced users does not have a manual mode which could be useful for emergency defibrillation where medical staff are not familiar with the device.

On the other hand, it does not need a propriety battery cartridge’s using commercially available non-rechargeable lithium batteries which can reduce consumable costs. And it comes with disposable, self-adhesive defibrillation pad sets with a built-in aid for the delivery of CPR. The device has a hard cover that can be removed and placed under the patient’s shoulders to maintain an open airway during resuscitation. Overall, the device is a compact AED suitable for lay users, first responders and emergency services.