Payment by results moves to 'bundled' contracts

Senior health service management sources are expecting the NHS operating framework 2012-13, expected to be published this month, to endorse moves to bring in “bundled” or block payments.

Some primary care trusts and acute trusts have already moved away from the payment by results tariff for some areas of service.

It means the PCT does not have to pay significant extra sums as hospital activity continues to grow.

One senior source said the framework was expected to encourage such “risk sharing” arrangements. It will mean commissioners can apply the provider efficiency saving, likely to be required in the framework, by setting contract values at the current year’s spending on the services covered, minus the efficiency requirement.

The source said it was a response to concern that, without the change, increasing numbers of commissioners would run out of money as demand and activity continued to grow. There is particular concern about PCTs ending next year in deficit as they pass budget responsibility to clinical commissioning groups.

The move also responds to growing calls for a long term move away from the current payment by results tariff, as it encourages providers to increase activity rather than creating more integrated services and preventing demand.

One senior management source said: “A lot of places are [already] making significant progress in getting around payment by results.”

The source explained the intention was to “improve productivity and share the benefits”.

Whittington Hospital Trust in north London has already put plans in place for a bundled tariff system of the kind planned by the DH.

As HSJ revealed earlier this month, the organisation, which provides hospital and community services, has offered to cap its income at present levels and to absorb cost from any extra activity itself.

By year three the Whittington proposes to split any net gains with GPs, once the trust’s financial risk rating has satisfied Monitor requirements.