Using ‘payment by results’ to fund the treatment of dependent drug users—proceed with care! Alan Maynard 1 , Andrew Street 2 & Rachael Hunter 3 Department of Health Sciences, University of York, Heslington, York, UK, 1 Centre for Health Economics, University of York, Heslington, York, UK 2 and Department of Primary Care and Population Science, University College London, London, UK 3 ABSTRACT The UK government is changing its system of payment for drug treatment services in order to reward the achievement of better patient outcomes. This is a model that may be taken up internationally. This ‘payment by results’ funding system will reward providers for achieving good outcomes in terms of whether clients are drug free, employed and/or not convicted of a criminal offence. Providers will also receive a payment based on health and wellbeing outcome measurement. The definition and measurement of success in achieving these outcomes is complex and challenging, as is the need to bridge treatment costs during the period in which outcomes are pursued. This experiment requires careful evaluation if the delivery of drug treatment is not to be jeopardized or fragmented. Keywords Drug treatment, outcome, provider payment. Correspondence to: Alan Maynard, Department of Health Sciences, University of York, Heslington, York Y010 5DD, UK. E-mail: akm3@york.ac.uk Submitted 27 April 2011; initial review completed 27 April 2011; final version accepted 10 May 2011 INTRODUCTION Throughout the world governments are confronted by the economic and social consequences of illicit drug use. Control of the supply of drugs is expensive and incurs significant costs for the military, the police, the judiciary and the prison system. Policy interventions to tackle the demand for drugs with methadone maintenance and abstinence-orientated treatment are also expensive and appear to have qualified success. Political and social frustration with the high costs and limited benefits of these policies has persuaded some gov- ernments to adopt radical and novel interventions. In the United States the Obama administration is allocating sub- stantial funding for ‘pay for success’ social programmes as part of the 2012 Federal budget [1]. The UK govern- ment has outlined similar plans to pay for success in drug treatment services. With world-wide interest among policy makers in developing incentive systems to improve resource allocation, international emulation of these ini- tiatives seems likely. The UK Coalition government’s 2010 drug strategy sets out a new vision for addressing dependent drug users and related societal harms [2]. The previous Labour administration’s aim was to enter problem drug users into treatment, with activity-focused targets that did little to incentivize efficiency or innovation in treatment delivery [3]. Under the new strategy, the Coalition government makes clear its commitment to a stronger emphasis on recovery.This means that the aim of the drug treatment system is not only to facilitate dependent drug users’ access to treatment, but also to ensure full recovery from drug dependence, defined by the government as getting off drugs and alcohol for good at least cost [2].To achieve this, the government proposes to reform the payment system. Until now, providers have been paid on the basis of the ‘numbers in effective drug treatment’. It can be argued that this creates a perverse incentive for providers, as it rewards them for allowing people to stay on mainte- nance therapy for extended periods of time but gives little incentive to improve clients’ outcomes by pursuing discharge from treatment and recovery from drug dependency. To support the shift of policy focus, outcome-based payments are being designed to reward providers for dis- charging users from services drug free, a financing policy termed in England as Payment by Results (PbR). The purpose of this paper is to assess PbR and its potential to improve the efficiency of the drug treatment system. FOR DEBATE doi:10.1111/j.1360-0443.2011.03503.x © 2011 The Authors, Addiction © 2011 Society for the Study of Addiction Addiction, 106, 1725–1729