Hospitals will get payments by results

An American system of "payment by results" for hospital operations is to be imported into Britain, it emerged today.

Under a new method of funding in which money follows NHS patients, both health-service and private hospitals would be given a standard payment for routine surgery. If hospitals can carry out the treatment for less, they keep the extra and can spend it on other patients.

Californian health organisation, Kaiser Permanente, will be invited into Britain to introduce the system, which has cut waiting times and reduced costs.

But it could set Labour on a collision course with unions because of concern that it would lead to a behind-thedoors privatisation of the health service. The move will encourage private hospital groups to come here and build extra facilities for the NHS.

It is also feared that new super-regulators to oversee the reforms will create another layer of bureaucracy.

The Local Government Association is worried that councils may be penalised financially if they fail to move elderly patients into nursing homes quickly enough once they have completed hospital treatment.

The idea is aimed at ending bed-blocking. There are about 4,500 people being kept on wards because they cannot be moved out.