Payment by Results introduced in mental health: background

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.

Mental health services, and the £8bn health spend on them (DH, 2011a:42), had been earmarked for the introduction of Payment by Results for almost as long as Payment by Results in the health system had existed.

The principles underlying a PbR approach in mental health services developed the reasons for introducing PbR in the wider health system. They include:

  • Facilitating understanding of clinical processes between commissioners and providers, and between clinicians and service managers
  • Distributing the burden of financial risk fairly between commissioners and providers, including financial risks arising from demand for services, service activities, service quality, and service efficiency
  • Incentivising both commissioners and providers to deliver effective, efficient and equitable models of treatment and care (MHN, 2011b:8).

Overall, the aim of the future mental health payment system is (DH, 2013:9):

“… to understand the relationship between needs, price and outcomes, and make this transparent across local and national health economies.”

In July 2010, the White Paper, Equity and Excellent: Liberating the NHS reaffirmed the commitment to introduce Payment by Results in mental health (DH, 2011b:3), and in 2010/11 the Department of Health published a mental health currency – the care cluster (discussed in more detail later) – as a first step towards a tariff (DH, 2011a:42).

A Payment by Results system for mental health has developed iteratively since then. The year 2012/13 was a significant one for implementing this agenda: during that year, the use of mental health currencies was mandated by the Department of Health, meaning that all patients seen by secondary mental health services had to be allocated to one of 21 mental health clusters that reflected their needs. In 2013/14, the momentum behind PbR in mental health continues with, for example, all existing contracts in mental health now required by mandate to be set out on the basis of clusters, and with the mandatory use of some quality and outcome measures (DH, 2013:9).


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

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