Commissioners will have to keep a close on transaction costs once changes to the tariff come into play in 2011, the King’s Fund has warned.
The NHS operating framework for 2010-11, published yesterday, includes a proposal to replace the fixed national tariff with maximum prices as a lever for commissioners to get better value from secondary care.
In her response to the framework, King’s Fund policy director Anna Dixon said: “The proposal to abandon the fixed price tariff system after 2011 in favour of maximum prices has significant implications for the NHS. Although this may open up opportunities for commissioners to secure better value, it is likely to lead to higher transaction costs as PCTs return to bargaining with hospitals over prices.
“Commissioners will need to stay focused on quality and value for money when negotiating prices,” she said.
Ms Dixon added that the operating framework sent a “strong message” to the NHS about the scale of the financial challenge ahead.
She said the requirements set for PCT commissioners – for example, to fund ophthalmology, dentistry and pharmacy through efficiencies and to spend 2 per cent of budget on non-recurrent activities – left them with little room for manoeuvre.
She also highlighted potential difficulties for providers. Ms Dixon said: “Providers faced with an effective real cut of around 3.5 per cent in the prices they can charge PCTs face significant financial challenges in meeting their contractual demands with greatly reduced resources.”