The extension of “payment by results” to the treatment of drug addicts will test the method’s limits

AT PHOENIX FUTURES in Birmingham, Karen is six weeks into a programme of group therapy sessions, life-skills training and one-on-one meetings with her keyworker, Dean. Things are looking pretty good. A former heroin user, she was on methadone for years before going into residential rehab last October. Karen now takes a relatively low dose of Subutex, a weaker heroin substitute, which she intends to come off altogether over the next six weeks. She credits her treatment with giving her the stability to have her three-year-old son to stay with her at weekends, and hopes to take a course or get a job—and eventually to work with drug users—once she is fully abstinent.
There are many Karens in Britain, though most are not doing as well as she is. Around 320,000 people are thought to be on heroin or crack cocaine or both in England alone. Many more use cannabis (the most popular drug), powder cocaine or a constantly changing clutch of designer drugs and legal highs: in all, almost 3m in England and Wales used some sort of illegal drug in 2009-10. A big push by the previous Labour government lifted the numbers in treatment (see chart), and drug use seems to be falling a bit now. But it remains high by European standards. Some argue that too many users have been “parked” on methadone rather than encouraged to kick chemical dependence altogether.
Intent on remedying what the Conservatives see as the persistent ills of “broken Britain”, the Tory-led coalition government has big ambitions in drugs policy. It wants to get more people through treatment and functioning again—free of drugs if possible, but also employed, housed and law-abiding. There is a moral dimension to its emphasis on recovery rather than harm reduction, but also an economic one. Use of heroin or crack cocaine is linked to between a third and a half of all acquisitive crimes; an estimated 400,000 benefit claimants who are dependent on drugs or drink cost the Treasury £1.6 billion a year; and demands on the health service and criminal-justice system are great. The coalition’s commitment is real: at a time of screaming budget cuts, central-government funds for drug treatment in communities and prisons have barely been hit.
A key plank of the strategy is “payment by results”. This approach to delivering public services—rewarding charities, community groups or private firms not for what they do but for how well they do it—has been seized on gratefully by a cash-strapped government. Versions are being tried to get welfare recipients into work and discourage criminal reoffending. Now eight drug-treatment pilots are to be launched. This breaks new ground internationally, says Martin Barnes, the head of DrugScope, a drug-information charity.
No magic wand
The theoretical argument for payment by results is that, by rewarding only success, it drives up standards while reducing costs. “It will make organisations focus on delivering quality services because they won’t survive if they don’t,” says David Biddle, deputy chief executive of CRI, a charity whose drug and alcohol services have grown rapidly. Kent is one area chosen for a payment-by results pilot. “Commissioners will now have the opportunity to reward those who innovate, and deliver efficient and effective services,” says Amanda Honey of Kent County Council.
Not everyone is sure that payment by results will work in drug treatment, however. Outcomes are hard to measure. In welfare-to-work schemes, a claimant either gets and holds a job or he doesn’t. A prisoner is convicted of reoffending or he isn’t. With drugs, progress often consists of baby steps on various fronts, which is why the government proposes to pay for a range of positive outcomes including jobs, housing and so forth. Coming up with precise measures is proving hard.
Setting tariffs is difficult, too. Payment by results works only if risk is transferred to the provider. But drug users are prone to relapses, and recovery can take years. Most not-for-profits in drug treatment are small; they need payment along the way to cover their costs. If instead they become subcontractors to larger outfits, a one-size-fits-all approach could replace the tailored solutions seen by many as a key to success. Whoever is contracted, “if the basic tariff isn’t enough, it will wipe out the chances of the provider doing anything good. If it’s too much, then there is no risk transfer. If it’s the wrong mix [of incentives], then it encourages gaming,” says Lord Adebowale, the chief executive of Turning Point, a health and social-care organisation.
Despite the challenges, Turning Point and CRI are both interested in the trials. For its part, smaller Phoenix Futures has started offering a payment-by-results option off its own bat. “I wanted us to be ready,” says Karen Biggs, its chief executive.
But other uncertainties loom, as more administrative power is pushed down from Whitehall. From 2013 the funds earmarked by central government for drug treatment in the community (currently about £500m) will be handed over by Public Health England, a new bit of the NHS, to local authorities; drug and alcohol funding will merge, and perhaps disappear into the overall public-health pot. New elected police and crime commissioners will have a say in this area, as might local GPs newly charged with commissioning health care.
Anne Milton, the minister for public health, is determined that money will not leak away from drug treatment, counting on a national “outcomes framework” to make sure that needs which are not regarded as a priority locally continue to be met. Payment by results in this complicated and difficult area might prove transformative in all the right ways—or it might turn out an unholy mess. If it does work, says one sceptical charity, “they can use payment by results to deliver absolutely anything.”

Source: www.economist.com 14th April 2011