the intuitive and policy appeal of pbr models being tested early results
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Can PBR drive improved practice?
Fraser Battye
Children England Annual Conference
15th March 2012
This presentation is in four parts and makes one central point: PbR can work well, but care is needed in its use
1. The intuitive and policy appeal of PbR
2. Models being tested
3. Early results
4. Considerations in using PbR
1. Appeal 2. Models 3. Early results4. Consider-
ations
The principle of linking results and reward in the public sector commands widespread support...
1. Appeal 2. Models 3. Early results4. Consider-
ations
There is also a clear policy direction: PbR is a central mechanism for public service reform
“...it is not enough to pay someone to provide a service with the only recourse being that if they fail they will not be re-awarded the contract. In these cases it makes sense to build in an element of
payment by results to provide a constant and tough financial incentive for
providers to deliver good services throughout the term of the contract.”
1. Appeal 2. Models 3. Early results4. Consider-
ations
PbR as an alternative to performance management / targets and terror
15 references to ‘payment by
results’
PbR is being trialled in a range of areas – including children and families services
Work Programme
Peterborough Prison (SIB)
Smoking Cessation (West
Mids)
Children’s Centres Pilots Drug
Rehabilitation
Physical Activity Programmes
Families with Multiple
Problems
London Reducing
Reoffending Programme
1. Appeal 2. Models 3. Early results4. Consider-
ations
In all cases: an attempt to make commissioning more
outcomes-focussed
Different models of PbR are being tested; they differ on a series of key variables
Results for... Payments on... PbR accounts for...
...populations
...individuals
...outcome
...output
...a % increment
...the whole contract
1. Appeal 2. Models 3. Early results4. Consider-
ations
Whatever the model, the theory is the same: incentives matter, they alter provider behaviour and so user outcomes
PbR led to improvements in smoking cessation services
Does PbR always create the right incentives?
1. Appeal 2. Models 3. Early results4. Consider-
ations
Several key considerations underpin the enterprise of maximising the benefits and minimising the risks of PbR
• Defining the ‘result’ (outcomes / outputs)
• Causal claims and attributing results
• Data / audit requirements (transaction costs will go up)
• The ‘payment’ (setting the level, staging the payment)
• Balancing risk and opportunity (commissioner / provider)
• Commissioner skills and provider capacity
In design - think through the way that incentives might work
In practice - evaluate, learn, refine
GHK specialises in policy analysis for government and the third sector.
We have undertaken several PbR-related assignments and produced two short papers:
For more information, please get in touch:
fraser.battye@ghkint.com 0121 2338900
www.ghkint.com
‘Thinking about...payment
by results’
‘Thinking about...evaluation and payment by
results’
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