The NHS Commissioning Board is moving “quickly but carefully” to adopt year of care tariffs, which are considered essential if the service is to meet its £20bn efficiency challenge.

Improvement and transformation director Jim Easton said “most people believe [year of care tariffs] are the future”, in an HSJ online seminar this week.

Under the tariffs, NHS providers would be paid for caring for a patient for a year, rather than per episode of care such as a hospital admission. Proponents of the system hope it would offer incentives to trusts to deliver the best care for patients and keep them out of hospital, rather than incentivise maximum hospital activity.

Mr Easton said that, while payment structures were not the only important factor in the “change process”, they were useful in “encouraging and reinforcing the right change”.

“This is not complete pie in the sky,” he said. “We’re about to recruit the first groups of people who will put those tariffs in the patches over the next year, and making money flow associated with that.”

Mr Easton said the board was designing a new payment by results system now. “We’ve started the work to build the actual contract models which will enable you to pay for the right things,” he said. “We’re just beginning the programme now and we’re looking for some initial sites to work with to begin in a real way to put real money and real contract types.

“Let’s fight to keep the PBR system, but let’s work really briskly to change the currencies within there… moving quickly but carefully is where we are.”

Mr Easton also suggested that year of care tariffs could be varied locally.

He said the NHS Commissioning Board had a “couple of years” to get year of care tariffs operating on a national scale. This is because the next phase of the quality, innovation, productivity and prevention programme will depend on moving services out of the acute sector and into community and primary care services. Existing payment by results tariffs would “rub up against” those plans, Mr Easton argued.

Mr Easton also said he was “disappointed” that only one NHS foundation trust, Southend University Hospital FT, had exercised its freedom to enter into local pay deals rather than the Agenda for Change framework.

He said out-of-hours work had been “overpriced”, and that nursing jobs would need to be “radically different” in future, as new technologies gave patients more control over their care and enabled care to be delivered closer to home.