Published: 30/09/2004, Volume II4, No. 5925 Page 5

The Department of Health looks set to exclude the costs of specialist services and private finance initiative schemes from payment by results tariffs.

Speaking exclusively to HSJ, health minister John Hutton said the government was examining ways to shift the costs associated with specialist treatments and PFI schemes 'off-tariff '. He also insisted that no cap will be placed on the 'profits', which acute trusts can keep and reinvest under payment by results.

Trusts offering a high number of specialist services have argued that the national tariff - which is based on average treatment costs - does not properly compensate high-cost specialist treatments.

And trusts with PFI schemes, agreed under the previous financial regime, are concerned that they will not be able to afford repayments based on their income from payment by results.

Mr Hutton said DoH guidance due out in the next few weeks would spell out exactly how some of the costs associated with specialist trusts and PFI will be excluded from payment by results tariffs.

On specialist services, he said: 'I do not want to exclude all of them - that would be 10 per cent of NHS work. But the guidance will spell out which services will be excluded and which will not.'

In a recent speech to the Council of Heads of Medical Schools, Mr Hutton said there had been an 'overwhelming response' in favour of an adjustment to the national tariff for specialised services.

Mr Hutton said the DoH was now working on 'service-specific payments which will target funds accurately and fairly'.

He said he believed that these provided a more robust foundation against which activity could be measured than 'trust-level indicators - such as the status of the institution or how far patients travel to obtain treatment'.

And he told the council that until all healthcare resource groups could be further refined, some might need to be excluded from the tariff system altogether - while others would get top-up payments.Mr Hutton did not enlarge on how trusts with previously agreed PFI schemes will be compensated.

Mr Hutton also acknowledged concerns about the costs of medical training, and he said the DoH was doing more work to ensure the national tariff properly reflected those costs.

Speaking to HSJ, the minister insisted that the government will not allow acute trusts to see their profits 'capped' - a possibility raised in the review of payment by results by Birmingham and the Black Country strategic health authority chief executive David Nicholson (news, pages 5-7, 26 August). 'We are not going to cap profits, ' he said.

He made the point more dramatically in his speech to the council in which he argued it was vital that payment by results provided the 'maximum stimulus' for 'innovation and enterprise'.

'We will not be putting a cap on aspiration, we will not be putting a cap on ambition and we will not be putting a cap on profit to be reinvested in better services, ' he said.

But Mr Hutton confirmed that the DoH is considering introducing split tariffs so primary care trusts are paid for their contribution to care pathways.

University College London Hospitals trust chief executive Robert Naylor welcomed the concessions being considered.He said that under the current proposals, a trust like UCLH, which sees small numbers of high-cost specialist patients, would not be adequately compensated for treating them.

And he told HSJ: 'My view all the way has been to keep it simple: the more you try to change, the more complicated you make it.

Excluding more complex treatment is preferable. You have to have a fair system that everyone can work under or you need to increase the number of items on the tariff.'