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Tariff incentives aim to cut emergency admissions

Proposals give commissioners and providers equal share of responsibility and risk

Louise Prime

Thursday, 27 November 2014

Proposed changes to the NHS payment system, to come into effect for 2015-16, should incentivise efficient provision of high-quality care at the same time as encouraging better management of the increasing demand for services, according to Monitor and NHS England.

They described their proposals, which are now open for consultation, as an opportunity to “encourage the NHS to innovate and change local patterns of care in response to the needs of patients”.

The proposed “significant adjustments”, revealed late yesterday, include a revision of the Marginal Rate Rule, from 30:70 to 50:50, to “encourage providers and commissioners to work together to manage emergency admissions” by ensuring that the financial risks above a baseline budget are shared equally. Monitor and NHS England said the change would mean an extra £70m becoming available for acute providers to invest in patient care, and would also help to address some of the financial challenges for smaller hospitals where emergency admissions are a significant share of their activity.

They also propose introducing a new mechanism for sharing between providers and commissioners the risks associated with an increase in spending on acute prescribed specialised services above planned levels, which they said would help commissioners spend their budgets in ways that most benefit patients. They said: “NHS England will establish a panel comprising providers of specialised care, clinical commissioners and patient groups to help drive further improvements in specialised commissioning efficiency over the coming year.”

Further proposals include: a strong financial incentive for NHS providers to find ways of delivering care more cost-effectively, with a new efficiency requirement of 3.8%, described as “stretching but achievable” compared with last year’s 4%; a new best practice tariff aimed at driving better care for people admitted in an emergency with heart failure; and £40m committed to early intervention in psychosis, to put mental health on a par with physical health.

Monitor’s chief executive David Bennett said: “The NHS is facing unprecedented operational and financial pressures and our proposals for the payment system in 2015/16 will provide incentives for NHS organisations – providers and commissioners – to manage their resources better while meeting increasing demand for services.

“We believe the National Tariff offers a realistic balance between the need for providers to maintain quality services and the ability of commissioners to pay for them.”

He concluded: “The national tariff itself is not designed to balance the books, but we are doing as much as we can through the payment system to support this objective.”

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