Payment by results: bright new dawn or riding into the sunset?

Andrew BrownDirector of Policy, Influence

and Engagement, Drugscope

“Payment by Results (PbR) is a powerful idea – it has translated a commissioning and procurement mechanism into a brand that is intuitively appealing, politically potent and hard to contest in principle. Developed by New Labour, it has been placed at the heart of the coalition Government's approach to the reform of public services.“It's a very simple idea in theory. Pay organisations who receive public money for what they achieve for people, not simply what they do with them: for outcome, not process.”

Dr. Marcus Roberts, Chief Executive of Drugscope. Chair of the NCVO PbR Working Group

Source: Sheil, F. Payment by Results and the voluntary sector, NCVO (2014)

“there can be no justification for spending public money … without considering the impact on the outcomes that people care about”

Photo by Flickr user Conservatives

Drug and Alcohol Recovery Pilots

In its 2010 Drug Strategy, the government announced it would pilot payment by results in the drug and alcohol sector. Service providers would be paid a proportion of their contract based on specific successful outcomes. Eight areas took part in the pilot:

- Oxfordshire - West Kent - Wakefield - Wigan - Stockport - Bracknell Forest - Lincolnshire - Enfield

The pilots started in April 2012 and an independent evaluation of the pilot programme will report in spring 2015.

Issues and Challenges identified by UKDPC

• Getting the outcomes and tariffs right• Encouraging cooperation between sectors and

services to meet multiple needs of clients• Compliance with clinical and evidential standards• Avoiding perverse incentives and gaming the

system• How to encourage customer choice without

reducing effectiveness• Achieving good workforce development• Balancing recovery ambitions and harm reduction

interventionsSource: Roberts, M. By their fruits… applying payment by results to drugs recovery, UKDPC (2011)

One year in…

• 9,663 clients engaged (2/3 drug dependent, 1/3 alcohol dependent)

• Outcomes were mixed– 5% better than national performance on abstinent from all

presenting substances (but alcohol lower by 2%)– Significant drop in those successfully completed treatment,

free of dependency (esp alcohol clients 15% lower)– Alcohol clients more likely to have resolved housing

problems (5%) over national figures– No difference in those drug clients who stopped injecting

from national picture– Fewer meeting quality of life outcome than before pilot, but

higher than national average

Source: Performance of Payment by Results pilot areas: April 2012 to February 2013, Department of Health (2013)

One year in…

• DrugScope and RSA national providers summit– Change takes time (esp. when lots going on eg

Troubled Families, Health and Wellbeing Boards etc.)

– Trust in the Local Area Single Assessment and Referral Service (LASARs)• Therapy or payment, complexity of client needs,

simplicity vs robustness

– Trust in the motivations of providers & commissioners• Baseline data, reasons for declining referrals,

performance payments

Key messages after year 2Outcome data

• Noise annoys:– Noise has been found in the drug and alcohol outcome data,

meaning the data may not necessarily reflect providers’ input – they could sometimes be paid when their work has not led to improved user outcomes, and sometimes not be paid when their work has led to improved outcomes.

– The impact of unexplained variance on providers is largely determined by the size of the client-base (too small)

– The unexplained variance falls outside the acceptable range for the outcome data to be a robust reflection of provider input.

• Suggestion– Allocating a smaller proportion of overall contract value to

specified outcomes (e.g. up to 20%) will reduce the financial impact of unexplained variance.

Key messages after year 2Process outcomes

1. PbR has sharpened providers’ focus on achieving sustained recovery for drug and alcohol users and helped encourage innovation.

2. Commissioner and provider staff have to spend a lot of time monitoring performance under PbR and it has been administratively burdensome.

3. Partnership working is essential: understanding what the data shows, sharing this information and negotiating any necessary action are all vital if to PbR is to work.

It may be too soon to draw conclusions, but seven of the eight areas are saying they will continue with the approach after the pilots have ended.

Bright new dawn or riding into the sunset?

Photo by Flickr user Damian Gadal

Thank you

Andrew BrownDirector of Policy, Influence and EngagementDrugScope

@andrewbrown365andrewb@drugscope.org.ukwww.drugscope.org.uk