Introduction

In this chapter we concentrate on the development of outcomes-based commissioning in the UK. This chapter starts by identifying key policies that have underpinned outcomes-based commissioning in the UK since 2010, and then goes on to describe in more detail Payment by Results programmes and Social Impact Bonds. For both PbR and SIBs we list key programmes, identify results and summarise some of the key discussions around these areas of policy. The themes of New Public Management and risk management, discussed in Chapter Two, are evident in the development of PbR and SIBs, with the theme of social innovation present but less prominent.

Policy on outcomes-based commissioning

Payment by Results

As Tan et al (2015) note, the term ‘Payment by Results’ can be confusing in a UK context because it is also the term used in the English NHS to refer to a programme of activity-based commissioning. An extensive programme of activity-based PbR was introduced in the UK health system in 2004 (Conrad and Uslu, 2011). Prior to the introduction of PbR, many hospitals were paid according to block contracts where funding received by the hospital was fixed irrespective of the number of patients treated (National Health Service, 2012). Payment by Results was introduced to support patient choice by creating tariffs so that commissioners pay healthcare providers for each patient treated (National Health Service, 2012). However, in this model payment is linked to delivery of treatments to a defined standard, but not to outcomes such as morbidity or mortality. It is therefore a form of ‘output-based commissioning’ rather than ‘outcomes-based commissioning’, and will not be a substantive focus of this book.

Payment by Results in the sense that is the focus of this book really entered mainstream policy following the 2010 UK election, which led to the creation of a coalition government between the Conservative Party and the Liberal Democrats. During the election campaign the Conservatives argued for the creation of a ‘Big Society’ with charities, social enterprises and communities playing a greater role in tackling social problems, while the Liberal Democrats emphasised strong communities and localism (Bochel and Powell, 2016).