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Introduction to Payment by Results

Payment by Results is a funding system for the care provided to NHS patients in England.

What is Payment by Results?

The aim of Payment by Results (PbR) is to provide a transparent, rules-based system for paying trusts. It rewards efficiency, supports patient choice and diversity and encourages activity for sustainable waiting time reductions. Payments are linked to activity and adjusted for Casemix. Importantly, this system ensures a fair and consistent basis for hospital funding rather than being reliant principally on historic budgets and the negotiating skills of individual managers.

PbR encourages stronger incentives to ensure that extra money being invested into the NHS results in improved performance and accountability. This involves making changes to the way health care is financed and the way funding flows are managed across the NHS. 

Healthcare Resource Groups version 4 (HRG4) supports PbR by providing a classification framework that represents current clinical practice. In addition, HRG4 supports service planning, costing and commissioning between PCTs and trusts by providing reliable and consistent presentation of activity data to:

  • support the focus on patient-centred care, to enable patient choice
  • support the analysis of healthcare needs and monitoring of service provision, to inform service planning.

Data collected through HRG4 allows commissioners to develop transparent service level agreements with trusts and other service providers.

Find out more on HRG4.

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