Payment by results or payment by outcome? The history of measuring medicine
Authors: Rory J O'Connor, Vera C Neumann
Journal: Journal of the Royal Society of Medicine (2006)

Provision and funding of healthcare in Britain today is undergoing one of the most profound revolutions in the 58 year history of the National Health Service. Clinicians and managers are being presented with a series of organizational reforms that affect how care to their patients is delivered and funded. Choose and book, practice-based commissioning, and payment by results are new concepts that introduce a more business focused healthcare economy. The evidence base for these initiatives, and the benefits that they will deliver, has not yet been made explicit.

Healthcare outcome assessment is an essential aspect of reforming health provision successfully. Currently, the NHS records outcome based on measures of activity and process, such as waiting times and the number of patients treated. What really matters to patients is the outcome of their healthcare intervention, what effect it will have on their wellbeing, and the length of their life.1

Since 1991 there has been a series of changes to funding within the NHS.2 The latest reform to be introduced is PbR which, the Department of Health assures, will:


`... reward efficiency and quality in providing services; support greater patient choice and more responsive services; and enable PCTs [primary care trusts] to concentrate on quality and quantity rather than price'.3


These are laudable aims for any healthcare reimbursement structure. Nevertheless, it would be unwise to adopt too narrow a definition of quality. Too much concern with the technical management of illness, and too little attention to prevention, rehabilitation, coordination and continuity of care, will result in a poorer outcome for the overall health community that the reforms are meant to improve.4

Most observers recognize that biomedical measures such as clinical or laboratory indices do not provide a complete representation of the effect of a treatment on an individual.5 These measures, while important in their own right, are being supplemented by measures of constructs that focus on issues of importance to the patient such as functional status, health-related quality of life and emotional well being.6 Compared with concrete measures like blood pressure, constructs such as pain relief, walking ability or depression are complex to measure. They generally require the use of patient-based outcome measures, where the patient gives his or her opinion on the construct in question.7

Measuring outcome remains the ultimate validation of the effectiveness and quality of healthcare. Only by systematically recording the outcomes using methods that are appropriate to the patient group under consideration can a healthcare system promote quality in all activities.8 However, payment by results will fail to meet the objectives set out by the Department of Health if the wrong outcomes are measured. We aim to examine the introduction of the payment by results policy within the history of healthcare outcome measurement and suggest how the policy may actually match its purported outcome.