NHS issues plan for two-year payment tariff

2 Aug 16

National NHS bodies have proposed creating a two-year payment tariff in the health service in a bid to increase certainty across the sector following the announcement of a financial reset.

Publishing the first stage of a consultation today on the national payment tariff, NHS England and NHS Improvement said that this was in response to feedback from across the sector calling for greater certainty and stability from the NHS payment system.

A two-year tariff for 2017/18 and 2018/19 would match the planning round announced by the national NHS bodies, which is intended to cut the 2015-16 NHS deficit of £2.45bn to £250m in 2016-17 and to begin 2017-18 in “run rate” balance.

Today’s tariff engagement document does not set out the efficiency factor that is to be applied to prices, which was likely to be set out in September. However, NHS Improvement told Public Finance they were not expecting the target to be above 2% for the duration of the NHS Five Year Forward View.

In a statement, a spokesman for NHS Improvement and NHS England, said: “Moving to a multi-year tariff will give providers and commissioners critical financial information earlier than ever before. This greater certainty will help providers and commissioners make robust investment decisions, and support their joint plans on how best they can deliver services to patients.

“A two-year tariff is a first for the NHS, and we believe answers the call for greater stability from the payment system. We see this change as a continuation of work on strengthening the payment system, so that it does more for patients, and promotes better financial management amongst NHS organisations.”

This is the first tariff consultation issued by NHS Improvement, which was formed in April from Monitor and the NHS Trust Development Authority. NHS finance staff have been more involved in the development of the tariff, according to the organisation, while there is additional work being done with groups such as NHS Future Focused Finance on the tariff plan.

NHS finance staff have been urged to respond to the consultation through NHS Improvement’s website, ahead of a formal consultation on the plan, including the efficiency factor, which is expected later this year.

The spokesman added that the stability of a two-year tariff would provide patients with high-quality, sustainable care, whilst also encouraging innovation and transformation in how health services are provided.

“This consultation is a key opportunity for the NHS to have its say on next year’s tariff. So we urge providers and commissioners to feed back on the proposed changes as early as possible,” he added.

Responding to the publication NHS Confederation chief executive Stephen Dalton said he was pleased that the case for a multi-year tariff had been recongised. If implemented well, it could contribute to stabilising planning during a difficult period for the NHS, he added.

“This is an opportunity to move away from the fraught annual tariff process and instead consider bolder reforms to the NHS payment system,” Dalton said.

“As always, we are keen to work with partners and the national bodies to achieve this.”

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