NHS pricing authorities will require all providers to deliver another 3.8 per cent in efficiency savings next year, while tweaking the controversial “marginal rate” for emergency admissions to ease the financial strain on smaller hospitals, plus the rest of today’s news and comment

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5.15pm The Royal College of Psychiatrists has welcomed an NHS England-commissioned reportpublished earlier today on the commissioning of services for people with learning disabilities and autism.

Ashok Roy, chair of the body’s faculty of psychiatry of intellectual disability, said: “Having a ‘Charter of Rights’ for people with learning disabilities and autism, together with improved advocacy,  would provide a strong moral imperative for embarking on and delivering sustained improvements to services for people with learning disabilities.

“The Royal College of Psychiatrists has been trying - with limited success - to influence improved commissioning standards. We have tried to get commissioner support for local and latterly national guidelines, but this has not been acted on as far as we can tell. It is therefore encouraging to see clear support for a mandatory commissioning framework and a single accountable commissioner.

“We support a programme of planned closure of ‘inappropriate institutional inpatient facilities’ which do not contribute to timely and positive outcomes for people with learning disabilities.

“Unless their overall capacity is reduced the number of admissions will always keep pace with the number of discharges, impeding any progress in transferring people with learning disabilities out of institutional care and into the community. 

“Community facilities must be in place before this happens, but there has also been a distinct lack of a clear strategy for building up the capability and capacity of staff in community services, so the idea of a workforce development Academy is to be supported.

“We further welcome the report’s recommendations on pooling budgets, implementing integrated personal budgets, creating a Social Investment Fund, a Payment by Outcomes Fund and a Social Property Fund, all of which set out a clear vision on how to fund an ambitious and much needed user-led programme of service improvement and transformation.

“However, given the scale of the task in improving services for people with learning disabilities and autism, there are still a number of obstacles that need to be overcome, including inadequate funding sources, deficient information systems, poor organisational structures and work practices, and ineffective local commissioning arrangements and relationship with NHS England.

“The government and NHS bodies must make this a priority if they are to ensure that people with learning disabilities and autism get the support and treatment they both need and deserve.”

5.10pm Meanwhile, NHS England chief executive Simon Stevens said:These changes represent four important steps towards the Five Year Forward View.

“First, we’re rebalancing the payment system to help support smaller and middle sized hospitals - where the funding pressures are greater, partly because they have a higher share of patients funded from the tariff and as emergencies.

“Second, we’re moving to more equally balanced risk-sharing between commissioners and providers on both emergencies and specialised services to drive the integrated partnership working we need across health economies.

“Third, we’re injecting purchasing power into mental health services to support the move to parity of esteem.

“And fourth, we’re explicitly signaling a willingness to work with local areas who want to get started next year on testing new payment models to support the new care models set out in the Forward View. So while next year is going to be tough financially, these changes move us in the right direction.”

5.09pm Following the publication of the 2015-16 tariff by NHS England and Monitor this afternoon, David Bennet, chief executive of the FT watchdog, said:”The NHS is facing unprecedented operational and financial pressures and our proposals for the payment system in 2015-16 will provide incentives for NHS organisations- providers and commissioners -to manage their resources better while meeting increasing demand for services.

“We believe the national tariff offers a realistic balance between the need for providers to maintain quality services and the ability of commissioners to pay for them.

“The national tariff itself is not designed to balance the books, but we are doing as much as we can through the payment system to support this objective. For example, the efficiency factor is a stretch target that reflects our expectation that all parts of the NHS will have to make an exceptional effort in 15/16.”

5.05pm Commenting on the 2015-16 tariff, Rob Webster, chief executive of the NHS Confederation, said: “Monitor and NHS England acknowledge that this tariff sets a difficult challenge for the NHS next year, especially considering it will cut prices for the fifth year running.

“The tariff has been an effective way of pricing in efficiencies over the last few years. Providers and commissioners have responded magnificently in making record efficiencies and we understand the need to continue to deliver savings. 

“We reiterate the view of the whole system, along with the Foundation Trust Network and NHS Clinical Commissioners, when we highlight that our members are concerned there is a limit to how much of the same can be done for less and are keen to stress a better balance between this and transforming care by doing things differently.

“We stress the need for a better balance between applying price cuts and achieving savings through transforming care and doing things differently. In the NHS Five Year Forward View, this was described as enabling a ‘frontier shift’ to establish new and better ways of working. If pushed too far, the efficiency factor in the tariff could serve to undermine collaborative local relationships at a time when they have never been more important.

“We cannot ignore the fact that even if the challenging savings demanded by the 2015-16 National Tariff Payment System are realised, almost half of providers will likely be in deficit. If we fall short, more than three-quarters could be in the red. This funding gap must now be addressed and the Government needs to use the Autumn Statement to set a more sustainable funding envelope for next year.

“Ultimately though, this will be a political choice. Whatever decisions the Government makes about funding the health and care system, national bodies must understand what can realistically be delivered with the resources made available. This must be reflected in their respective planning guidance and in the way they behave in undertaking their regulatory duties.”

He expressed concern about the the introduction of a marginal rate for acute prescribed specialised services, saying: “We’re concerned that an approach described as ‘risk sharing’ could turn into a risk transfer of £170million from NHS England to providers and their local commissioners.

“In certain parts of the country, this could have a significant impact, as next year some providers will effectively have three price cuts hit them in one year. Monitor and NHS England should ensure that the impact of this approach is monitored and will need to focus on how local systems can manage demand for specialised services, with effective contingencies in place.”

On the changes to the marginal rate for emergency admissions, Mr Webster added: “We were clear in our response to the tariff engagement that we could support a marginal tariff as a transitional step toward a better arrangement, especially if this is on the basis of the full tariff being invested across the system for the cohort of patients who are admitted as emergencies.

“These changes in the balance of risk will be welcomed by our acute provider members. They do not though address the ultimate need for local discussions about solutions to rising emergency admissions and determining how the “remaining” tariff is spent.”

“Following on from an unfair differential tariff this year, these proposals indicate a tough challenge for mental health providers next year. Mental health has seen a year-on-year real terms cuts in funding and a real step change in investment will be needed to make good on the commitment to see parity of esteem.”

In regards to prices for community services and ambulance trusts, he said: “Following on from an unfair differential tariff this year, these proposals indicate a tough challenge for community and ambulance service providers next year. We note the use of the tariff arrangements as a signal for pricing in community and ambulance services rather than a hard and fast rule. We anticipate that commissioners will work closely with their local providers to ensure effective contracts and appropriate investment in the system across health and care.”

5.00pm NHS Clinical Commissioners has said the national tariff payment system consultation document launched today “is a really important part of ensuring the wider NHS can transform care and deliver more services out of hospital and in community settings”.

NHSCC co-chair Steve Kell said: “A reform of the payment system needs to empower the whole system, locally and nationally, and to bring commissioners and providers together around the needs of the local populations, and the tariff needs to reflect the ambitions of the Five Year Forward View to enable new and better ways of working.  We would have liked to have seen that level of ambition reflected in this document so we see a whole scale approach to the payment system that looks at outcomes rather than activity.”

The body’s director Julie Wood said: “A single efficiency factor of 3.8p per cent is roughly as we anticipated in the tariff engagement document. Local systems now need to work that through, using their local relationships, to determine what is right for patients and local populations.”

“We share the whole system view with the NHS Confederation and the Foundation Trust Network that lower prices will continue to drive savings for the NHS next year, but our members are concerned there is a limit to how much of the same can be done for less and are keen to stress a better balance between this and transforming care by doing things differently.” 

4.50pm In response to the publication of today’s 2015/16 tariff this afternoon, the Foundation Trust Network has warned that an NHS cash crisis is “inevitable”. It notes that the new tariff takes up to £1.2bn away from NHS providers’ 2015-16 budgets. 

Chief executive Chris Hopson said: “The 2015-16 tariff was always going to be an impossible balancing act between an underfunded NHS and growing demand.

“An NHS cash crisis now feels inevitable next year as the new tariff proposed by Monitor and NHS England takes over £1.2bn (3.8 per cent) out of budgets from frontline NHS services in 2015-16.

“The only way this can now be averted is by providing extra funding in the Autumn Statement next week. Any extra funding for the NHS will be welcome but there is a £2 billion gap to fill.

“Whilst NHS providers have successfully realised nearly £20bn of savings over the last four years, everyone acknowledges that providers can’t carry on realising 4% efficiency savings each year without extra investment.

“The ‘so-called’ efficiency factor of 3.8 per cent proposed today is therefore both unrealistic and unsustainable. It is, effectively, a straight forward cut branded as efficiency and is likely to mean that providers of ambulance, community, mental health and hospital services will end 2015-16 over £1.1bn in deficit.

“We are pleased to have won our long-standing case over the marginal tariff for emergency admissions which Monitor and NHS England have effectively conceded by moving the current arbitrary 30 per cent to a new 50 per cent rate. We strongly welcome this shift as the first step to the abandonment of this policy which has failed in its stated aim of stopping demand for A&E services rising.

“However, much more should be done for our chronically underfunded emergency services. We need swift progress towards developing more appropriate payment mechanisms in urgent and emergency care to support NHS providers in the acute, mental health, community and ambulance sectors.

“Commissioners must also ensure they are investing the withheld marginal tariff funding in a transparent and effective way if we are to truly ease the funding crisis facing urgent and emergency care services.

“We also welcome the announcement that NHS England and Monitor will consider proposals from local health economies to move to entirely new models of funding emergency care in 2015-16.

“Too little progress has been made in developing payment systems to better support providers of community and mental health services who are facing rising levels of demand.

“This is now urgent because the early indication about how the new mental health access targets in 2015-16 will be implemented through the service development fund is key and we urge NHS England and Monitor to properly cost and test these proposals with providers to ensure they are credible and deliver best value for patients. 

“We need an urgent debate on whether the allocated £80m to support new mental health access targets is sufficient and the best way of distributing it.

“We are disappointed by the proposals to create a new marginal rate for specialised services which is simply a price cut of over £200m from funding for care for the most vulnerable patients with complex and rare conditions.

“It is disappointing that the discredited marginal rate for emergency care is now being introduced for specialised care. Rather than tackling the underlying cost and price issues this approach will only shift budgetary pressures from the national commissioner NHS England to NHS frontline services.

“These proposals are essentially a second efficiency factor for all providers of specialised services and will greatly affect their ability to maintain and improve these services.

“Without amendment, it is hard to see how these proposals will lead to anything but a deterioration in the quality and financial sustainability of services for patients with the most complex and rare health needs.

“We recognise the arguments around controlling the growth of the specialised commissioning budget and the balance between large specialised and small DGH providers. However, these are complex issues and such a fundamental change requires appropriate evidence and a dialogue with affected providers, which has not adequately happened here.

“We continue to support the evidence-based and consultative approach by Monitor and NHS England where it is being used.  There are some major changes here so this consultation must be a genuine engagement exercise rather than just a rubber stamp.

The need for longer term and more sustainable funding regime is urgent. Consequently, we have come together with the NHS Confederation and NHS Clinical Commissioners to make a system-wide response to today’s publication.

“Our members are concerned there is a limit to how much of the same can be done for less and are keen to stress a better balance between this and transforming care by doing things.”

3.15pm Reviewing this afternoon’s Prime Ministers Questions, George Eaton, political editor of The New Statesman, writes that Ed Miliband determined to keep the NHS, his party’s strongest issue, at the top of the agenda.

However, he notes that “some in Labour regard Miliband’s reliance on the NHS as a mark of his weakness and his failure to conquer new political territory”. 

3.08pm BREAKING: NHS pricing authorities will require all providers to deliver another 3.8 per cent in efficiency savings next year, while tweaking the controversial “marginal rate” for emergency admissions to ease the financial strain on smaller hospitals, HSJ can reveal.

Under the marginal rate rule, hospitals are paid just 30 per cent of normal prices for all emergency admissions above 2008-09 levels.

However, the national NHS “tariff” for the coming financial year, which will be put out to consultation by Monitor and NHS England later this afternoon, proposes to increase this rate to 50 per cent.

3.00pm The chief executive of the NHS Trust Development Authority has said some trusts will not be authorised for at least another four years.

David Flory last week told the Commons public accounts committee that some of the NHS trusts it is responsible for will not attain foundation trust status until 2018 – two years later than the latest expected date when the organisation was set up in 2012.

2.22pm In Resource Centre this afternoon, there still appears to be little clarity as to where best to access urgent care out of hours, with the majority of patients still turning to accident and emergency departments, writes David Colin-Thomé

2.13pm If a trust has a bad night, the on call manager is expected to account for it and justify their own actions. The expectation on managers reflects the dominance of ‘management to targets’, writes Robert Royce, director of strategy at Barking, Havering and Redbridge University Hospitals Trust.

1.36pm Stringent conditions have been placed on Medway Maritime Hospital following a third CQC inspection of its struggling accident and emergency department.

The regulator imposed the conditions on Medway Foundation Trust immediately after it inspected its A&E department at the end of August and found a lack of improvement, it has been revealed.

The CQC has previously refused to reveal the details of these conditions for “legal reasons”.

1.11pm In an exclusive interview Jeremy Hunt makes it clear he will challenge the NHS to improve, but he also needs to give it hope, says HSJ editor Alastair McLellan

1.02pm Jeremy Hunt has accepted the need for “investment in new primary care estate” and revealed the government is examining how to better encourage foundation trusts to sell their unused land.

The health secretary’s comments follow an assessment by national NHS leaders in the NHS Five Year Forward View that the NHS could only make required efficiency improvements if it secures the infrastructure and investment to move rapidly to new care models.

The forward view said some of the upfront investment could be raised by selling surplus NHS land and property.

12.56pm Jeremy Hunt has asked the prime minister to keep him in the health secretary post until 2017, claiming he “would be very happy if this is my life’s work”.

The health secretary revealed the request in a wide ranging interview with HSJ about the government’s response to the NHS Five Year Forward View.

He said his priorities would now be the modernisation of out of hospital care and prevention of ill health.

12.32pm EXCLUSIVE: Patient choice is not key to improving NHS performance, the health secretary has declared, in a major break from a policy favoured by Conservative and Labour governments over the past 12 years.

The health secretary added he did not believe “the market will ever be able to deliver” in the top priority area of integrated out of hospital care. The health secretary’s views on improvement were outlined in a wide ranging interview with HSJ in which he set out his response to the NHS Five Year Forward View vision, published independently by the service last month..

11.59am Responding to NHS England-commissioned report published todat, Stephen Dalton, chief exective of the NHS Confederation’s Mental Health Network, said: “Service providers will welcome this refreshed focus on the needs of those who have contact with both hospital and community learning disability services.”

Mr Dalton was speaking on behalf of the Mental Health Network’s members who provide learning disability services.

He added: “The scale of transformation recommended by this report will need serious consideration in terms of the financial cost of the ambition and workforce implications. The community infrastructure and staff required to allow people, currently in residential settings, to live more independently simply isn’t in place right now - but it can be developed.

“More than in any other sector of health care, we understand and have a track record of moving care from institutional settings to more independent living. We must, however, work in partnership with people who need our services.

“Additionally, we must ensure we maintain an effective balance of hospital and community services, which is sensitive to local circumstance and demand, if we are to avoid a scenario whereby a massive reduction in beds means people being shifted - in crisis - to beds many miles away from home.”

11.00am NHS Providers, formerly the Foundation Trust Network, has also called for the government to use the Autumn Statement “to avoid an NHS cash crisis in 2015-16”.

Chief executive Chris Hopson said: “The Liberal Democrats are calling for £1.5bn for the NHS in 2015-16; the Labour Party is now calling for an extra £1 billion. We need the coalition to formally commit to extra funding for the NHS in the Autumn Statement.

“60 per cent of acute hospitals are already in deficit half way through this year and the entire NHS provider sector is heading for a financial crisis next year unless the government does something in the Autumn Statement.

“It may be tempting to think that eleven months of the next financial year are  beyond the General Election so this is an issue for the next Parliament. But a decision is needed now.

“If there is more money, it’s vital that the government does two things. First that extra funding is routed through the NHS tariff and related mechanisms – the mainstream system for NHS funding -  so that NHS providers can plan properly and the money fully reaches the acute, mental health, community and ambulance frontline where it is needed.

“Second, since there is a £2bn gap for 2015-16 and rapidly rising demand and cost, the government needs to recognise that any extra funding is to enable the NHS to deliver its existing stretching performance commitments as opposed to any new, extra, performance commitments.

“The choice is stark – £2bn of extra funding on one hand or a worse quality of care for patients and unsustainable provider deficits on the other. The ball is firmly in the coalition’s court.”

 10.50am The King’s Fund has called for an additional £2bn in funding for the NHS ahead of the Autumn Statement next week.

The think tank has argued that the settlement agreed for the NHS in 2015-16 should be re-opened to prevent a financial crisis.

“Unless this money is found, it says patients will bear the cost as staff numbers are cut, waiting times rise and quality of care deteriorates,” it states in a briefing ahead of the Chancellor’s announcement next week.

Figures released by Monitor and the NHS Trust Development Authority have revealed that the NHS provider sector has plunged further into the red with a collective deficit of £630.2m halfway through the financial year.

The King’s Fund suggests it will be “touch and go whether the Department of Health will be able to balance its books this year” and a “financial crisis is inevitable next year”.

It calls for the establishment of a “transformation fund” early in the next parliament to enable community-based services to transition from old to new models of care.

“Looking further ahead, even under the most optimistic scenario outlined in the recent NHS five year forward view, an additional £8bn a year in funding will be needed by 2020, more than any of the political parties have so far pledged to find,” the briefing notes.

King’s Fund chief executive Chris Ham said: “There is scope to improve productivity in the NHS, but this will not be enough to respond to unprecedented pressures on budgets and meet rising demand for services.

“Recent pledges from the main political parties to increase funding are welcome but it is clear that none of them have yet addressed the scale or the urgency of the financial challenge facing the NHS.

“With deficit reduction still a high priority, finding an additional £2 billion in the Autumn Statement is a very big ask.

“However, unless more money is found, a financial crisis is inevitable next year and patients will bear the cost as waiting times rise and quality of care deteriorates.’

10.30am There has been a “failure” to  meet the government’s pledge to move people with learning disabilities move out of hospitals, with “still more people being admitted to such institutions than are being discharged,” according to a NHS England-commissioned report published today .

The report, compiled by Sir Stephen Bubb, chief executive of charity leaders body ACEVO, set out makes recommendations national for a commissioning framework “to address the serious shortcomings in the provision of support for people with learning disabilities”.

In an interview with HSJ earlier this year, care services minister Norman Lamb expressed his frustration that the programme, set up in the wake of the Winterbourne View scandal, was due to miss its July deadline.

The report states that the lack of progress in meeting this target has “caused anger and frustration”.

It adds: “we must have active decommissioning of inappropriate institutional care and closures of such institutions.

“The timetable and process requires further discussion but a twenty first century “failure” to  meet the government’s pledge to move people with learning disabilities move out of hospitalsapproach to the care and support of people with learning disabilities cannot be based on long-term care in an institution.”

Receiving the report, NHS England chief executive Simon Stevens said: “NHS England’s recent work with people with learning disabilities, and this new report, all now prove that radical changes are needed in NHS and social care, so that people with learning disabilities and their families increasingly take control of how the services they want and need are provided.

“This will mean challenging legacy models of institutional care, a shift in power via our new offer of personal budgets and Integrated Personal Commissioning, as well as broader action on employment rights and opportunities.”

Norman Lamb said: “The horrors of Winterbourne View exposed serious failures in the care of people with learning disabilities and autism and this report makes clear commissioning needs to change radically if services are to improve.

“It is unacceptable for people with learning disabilities and autism to be left in institutions if they can live in their own home or in the community.

“I am going to consult on changing the law to speed up delivery of the Winterbourne View commitments - to see people living in the community wherever possible and able to challenge decisions about their care.”

7.00am Good morning. We start the day with the news that the Treasury’s approval process for the private finance 2 programme has criticised by a hospital chief executive whose trust was forced to halt plans to build a new hospital.

North Tees and Hartlepool Foundation Trust last month announced its plans to shift services into a new hospital were “paused” until after the general election after failing to secure approval for its PF2 bid.

The trust had sought £100m public funding towards the cost of the hospital in addition to the £200m it hoped to secure from private sector lenders.