Improving quality will become the national priority under the Darzi review. This essential ingredient for reform should bring together better commissioning, better skills and greater incentives for organisations and clinicians

We are coming to the end of the Darzi process and are already seeing the output from local clinical consultations in reports from the strategic health authorities. Lord Darzi's final report is expected in June.

The health minister is right to make quality his priority. We know the NHS does not always match up to the best international standards. For example, five-year survival rates for male lung and prostate cancer are nearly half those in the US. We have made real progress in strengthening financial management in the NHS; now we need to do the same for quality.

But if we are serious about improving quality and delivering value for taxpayers, here are some things we should look out for in Lord Darzi's final report.

Improving quality must be the national priority for the next phase of reform. The Department of Health needs to lead the development of a shared understanding of what it means to deliver world class care. Where commissioners and providers are given a clear national priority, real change is possible - look at NHS waiting times. Raising the bar to delivering world class quality will not only maximise clinical returns from the significant investment made since 1997, it will also unite staff and the public behind a compelling vision for the NHS.

Where it means service change, we need to explain this to the public. For example, Specialist centres for cancer surgery have mortality rates three times lower than the average. The argument for access to CT scans in three hours for stroke is similarly convincing. Leading Local Change, the next stage review report published this month, rightly puts clinicians in the lead to locally design services to reflect the latest developments in clinical practice. It will also need politicians and NHS leaders to stand up and describe why service redesign is the right thing for patients.

As Lord Darzi says, delivering world class care is a moving target and we need to accept, embrace and lead change.

Effective commissioning is the best way to improve quality across the NHS. Top-down management of providers has got us so far, but because it limits local innovation and decision making it cannot deliver the improvement in responsiveness and clinical care that we need. Commissioners have the levers to lead service improvement. As guardians of our money, they should be held to account for the quality of care they purchase.

Commissioners will need care pathways based on strong clinical evidence. It does not make sense to duplicate this across 152 primary care trusts. The DH should take the lead to ensure a national clinical evidence base is used effectively by commissioners. The clinically led Darzi process will kick start this work with proposals for improved patient pathways. These proposals will need to become commissioning intentions and plans, starting with those changes that will deliver the fastest improvements.

Skills push

For commissioners to lead a world class NHS, there needs to be a definite step up in their capability and skills. Commissioning is about specifying and buying clinical services so should be clinically led, but clinical leadership needs strengthening in many primary care trusts. The world class programme is the opportunity to target skills gaps. There should be no artificial cap on PCT administrative spend, which would prevent the necessary clinical, analytical and purchasing skills being put in place.

Commissioners cannot make decisions based on quality without outcome-based information measures. Quality performance should be transparent. Proven measures exist, such as patient reported outcome measures, but they are not being used consistently. The most important change Lord Darzi can make is to lead the development and use of a standard set of comparative information on quality. With clear, consistent information the public will become more aware of variations in quality between hospitals. Patients, commissioners and clinicians can start making their choices based on quality and providers will start responding to the new incentives.

Only by measuring and reporting on the quality of care and by holding commissioners, providers and clinicians accountable will the performance of the NHS significantly improve.

Providers and clinicians are motivated by peer comparison and comparative quality data will provide reasons for improvement. Financial incentives can also play a powerful role, as shown by the experience of US hospital performance improvement alliance Premier. Results from a three-year pilot across five clinical areas are compelling. Quality improved across all 260 hospitals involved and variation decreased with significant reductions in mortality and improved per patient costs.

So we welcome the government's plan to increasingly base payments to hospitals on patient reported outcomes and patient satisfaction.

Pay for performance should provide an effective incentive to as many organisations as possible, by making bonus payments to hospitals that deliver significant improvements against specified quality criteria, as well as those which achieve the highest scores. Pay for performance does not have to mean an increase in the total funding for secondary care; the bonus could be matched by slower growth in baseline payment by results prices. But for impact it would need to be material, perhaps 2-5 per cent of revenue in services covered by the bonus scheme.

Consideration should also be given to penalties for poor quality care. This could mean withholding payment for the care of patients harmed during treatment or for post-operative readmissions if complications could have been prevented. A good place to start would be by not covering the full cost of complications due to patients contracting MRSA.

The DH should start rewarding hospitals for reporting quality data, moving quickly to paying for performance. Incentive levels could be negotiated nationally and implemented through local contracts, with some national settings to ensure local schemes relate to driving up quality.

Providers need the flexibility to use incentives at a service line level and with individual clinicians. At service line level, those incentives could support increased autonomy to invest in services, to hire and fire staff or to vary staff rewards. For individual clinicians, contracts could be used more effectively, allowing fees for service payments with a quality bonus, linking nurses' pay to patient experience or doctors' pay to patient reported outcome measures.

Better boards

For providers, fundamental to being responsive to commissioners' quality objectives is how well they know and manage their business. Effective management starts with effective boards. US research tells us hospitals deliver better outcomes if the board spends more than 25 per cent of its time on quality issues. Boards should see improving quality as their role.

This means boards need the right mix of skills and experience to set objectives, track performance, challenge executives, make strategic decisions and refine investment proposals. At present, not all boards are operating effectively. Recruiting the right people into non-executive positions and developing relevant board skills are big challenges now. The current market for board development in the UK health sector is poorly served and may need short term central investment to help the market develop.

The natural unit for delivering quality improvement in providers is the individual service line. At this level, senior clinicians can best understand performance across a balanced scorecard of indicators and take decisions to improve quality and invest in their services while maintaining financial stability. Over the past year the regulator Monitor has worked with some foundation trusts to introduce service line management and develop the clinical leaders who are such a defining feature of the world's leading healthcare providers. Further development and wider adoption are now necessary, including improving training for senior clinicians stepping into service line leadership roles. The next stage of reform is not about choosing between improving quality, being financially strong and delivering the government's 18 weeks and healthcare acquired infection targets. It is about working better to do it all.

Being financially strong and delivering national commitments are essential for the NHS to have the headroom to focus on improving quality. Lord Darzi's review should not be seen as an opportunity for more organisational tinkering. We need to get value from the levers we have and the changes already under way.

Nor should the review lead to a long shopping list of new initiatives; we need five to 10 big ideas on quality to feed into our current programme and commitments.

The critical point? Only by measuring quality and holding commissioners, providers and clinicians accountable will the performance of the system ever significantly improve. Only with usable information on quality will patients be able to make good choices. Better measurement leading to greater transparency of the quality of healthcare at a detailed level is the single most important change we could make over the next three years.

See more HSJ coverage of Lord Darzi's next stage review