Proposals by NHS England and Monitor for reform of the urgent and emergency care payment system would be a “disaster” for emergency departments, the president of the College of Emergency Medicine has said.

Clifford Mann described the plans, which the pricing authorities believe could encourage closer working between urgent and emergency care providers, as a “thinly veiled attempt to introduce a block contract” for accident and emergency services.

The proposed reforms have been broadly welcomed by other players in the urgent care sector, although the Foundation Trust Network warned that without increased funding they could encourage unwanted “compromises” by commissioners and providers.

A discussion paper released by NHS England and Monitor last month proposes scrapping the current system, in which hospital emergency departments are paid on an activity based “payment by results” tariff while other urgent care services are on fixed “block” contracts.

Instead, all urgent and emergency care providers – from GPs and community pharmacists, to paramedics and acute hospitals – would be paid under the same regime.

This would involve receiving a “substantial proportion” of their funding as a fixed lump sum, and a further proportion based on patient volumes. The level of the fixed payment and the rate of the variable payment would be linked to attainment of quality targets.

Mr Mann told HSJ that the CEM was “very unhappy about the reform proposals”.

He said: “We think this is a very thinly veiled attempt to introduce a block contract.

Clifford Mann

Clifford Mann said ‘the scheme as outlined would be a disaster for emergency departments’

“Any form of block contract creates a zero per cent marginal tariff. The block contract is likely to be done not on current work patterns but on historical measures.

“Under such a system there is no incentive for anybody not to send people to [an emergency department]. We think that the scheme as outlined would be a disaster for emergency departments.”

The Foundation Trust Network broadly welcomed the proposals as a means of sharing risk between providers. However, it suggested that without extra funding the reformed payment system could create unwanted incentives in the system.

Sivakumar Anandaciva, the FTN’s head of analysis, said: “[Imagine] you get this new payment system but funding is set at a level that is so low that you start making compromises.

“An easy compromise with a fixed cost payment could be for a commissioner to say, ‘I’m not going to cover your fixed costs, but I’ll cover a certain percentage of your fixed costs’.”  

Anita Charlesworth, chief economist at the Health Foundation, said: “It’s very important to recognise that payment reform is a very limited tool to improve integration of care. But [these reforms] do provide a vehicle to drive up quality, depending on how they are implemented”.

NHS England’s national clinical director for urgent care, Jonathan Benger, said both his organisation and Monitor recognised “that a new approach to reimbursement could support and facilitate the transformation of urgent and emergency care”.

He added: “We have set out our current thinking, and have opened this up for consultation to encourage a wide range of views and feedback.”

 A Monitor spokesman added that there would be further “consultation and evaluation with the sector” before any final decisions.

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