Differences between Payment by Results in acute healthcare and mental health

This post is one in a series on Payment by Results in mental health, written for both professional and personal reasons. The full series is introduced and linked to here, including a post with all references in it.

There are some clear differences between PbR in acute care and in mental health.

Some of these are positive. For example, unlike in physical health, PbR for mental health covers both hospital and community care (RCP, 2012:5). Similarly, by linking payment to individual service users, rather than to services, PbR in mental health in theory builds an incentive to providers to reduce the need for more specialist mental health care through preventative interventions (DH, 2010:6).

From a financial point of view, and despite worries that PbR in mental health may be seen (erroneously) as an attempt to save money on mental health services (CHE, 2009:iv) if mental health services were to be funded under PbR, this could protect mental health funding against pressures to disinvest from the acute sector. Other strengths could include integrating health and social care commissioning, supporting best practice, enhancing choice, and encouraging community or primary care (CHE, 2009:50).

However, there are also reasons why introducing PbR in mental health may be less positive and/or more difficult. These include the following, all of which flow from the fact that mental health care is more complex than acute care:

  • Mental health episodes are more difficult to define
  • Mental health diagnoses are less clear-cut
  • There is less clinical consensus on optimal care pathways, making cost variations more pronounced
  • Interrelationships with physical health are complex, with mental health problems having a substantial impact on health conditions (CHE, 2009:45).

Similarly, figuring out the appropriate costing models that underpin mental health is challenging, for the following reasons:

  • There is a complex relationship between mental and physical health
  • Mental health problems typically imposes costs and benefits in non-health sectors Mental health problems may be acute or chronic and the course of the illness may vary unpredictably over time
  • There are shortcomings in both the availability and quality of activity data for mental health, which make very difficult the development of robust remuneration.

Provision of mental health services varies considerably (CHE, 2009:1).


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Man of letters & numbers; also occasionally of action. Husband to NTW. Dad of three. Friendly geek.

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