Tipping point for the tariff

Tariffic

For the last 15 years, the badly named “payment by results” has seen acute trusts paid in accordance with their activity.

But 2019-20 marked the beginning of a new phase for the tariff. A “blended” payment is now the nationally-set default option for emergency care, and will be expanded to further areas next year.

For emergency care, the blended tariff involves a fixed payment based on expected activity, plus a risk share element in which trusts receive a 20 per cent payment or refund for activity above or below plan.

The basic idea is to provide stability to both commissioner and provider - and incentivise them to work together to curb activity.

In an engagement document for the 2020-21 tariff, NHS England/Improvement say they are sticking with this and will look to support more trusts to implement it (it’s not actually clear how many have bothered so far).

There has likely been some reluctance from providers, due to there being little evidence or evaluation of its merits, outside a general assumption that it seems like a good idea.

Although most people in the NHS agree with a broad move away from PbR, the concern with the blended tariff is commissioners could be disincentivised from investing in out-of-hospital care, as they get an 80 per cent discount on any emergency activity above plan.

Meanwhile, crucial time and effort continues to be poured into fiddling around with contracting mechanisms between acute trusts and clinical commissioning groups, when everyone knows that general practice, social care and mental health are equally important cogs in the system.

In their defence, regulators describe the blended tariff as a step in the right direction, rather than a long-term solution.

Because we don’t know how many trusts have started using it, it’s not clear whether a 4 per cent rise in A&E attendances in the first half of 2019-20 is more evidence in favour of change, or evidence the change has made no difference. The growth rate in attendance in the first half of the previous four years from 2015-16, was 0, 4, 1, and 4 per cent.

All in the blend?

As well as retaining blended payments for emergency care, the latest engagement document proposes an expansion to cover outpatient appointments and maternity care, with critical care to follow the year after.

These new areas are probably less controversial, but further expansion means elective care, where there is a much stronger argument in favour of PbR, could come closer into view.

David Williams, senior policy advisor at NHS Providers, told FTM a potential “tipping point” is getting closer, with electives soon to be the only area still running on the old system.

Electives will soon start to look slightly odd outside the blend, but real tensions will arise if efforts are made to take electives off PbR, especially when there’s a record waiting list that could benefit from its proven incentives.

The NHS long term plan also commits to maintaining patient choice over where to receive treatment (including private hospitals), and it’s hard to see how moving away from activity-based payments would not impact adversely on patient choice.