Stevens promises ‘wholesale shift’ in funding rules

A plan covering the financial years from 2019-20 to 2021-22 is being developed with NHS Improvement and in discussion with the NHS and will be set out at the end of September, then confirmed in November, Simon Stevens revealed. 

Asked whether there would be a decision to move away from the activity based payment by results tariff, Mr Stevens said: “Over the course of the next three years we’re going to see a wholesale shift.”

Asked about whether sustainability funding would be ended at the latest by the end of the three year period, the NHS England chief executive said it would. He added that the future of control totals – representing the other key part of the highly contentious current financial system for NHS providers – had to be decided by NHS Improvement, but “there’s a shared recognition that the regime needs to evolve”.

HSJ understands options under discussion include phasing out sustainability funding, and/or transferring it directly into a mixture of commissioning budgets and tariff, and new system level funds.

The funding plan in late September is likely to include three years of firm clinical commissioning group allocations and two years indicatively.

When pressed on whether the five year NHS funding settlement announced last month was sufficient to deliver the required improvement in NHS services, Mr Stevens stressed the importance of releasing new funds by “radical” changes to large service areas which “could create headroom over and above the marginal increases” in NHS funding from government.

This included around £10bn spent on outpatients and a similar sum on community health, the NHS England chief executive said.

He added this meant getting “more health value” out of the services, while also examining the “cost incurred”.

“We’ve got to be probably more radical about what does that look like and more specific about how we want to see wholesale service change than we have been hitherto,” said Mr Stevens.

Asked whether this meant combining acute and community services as recently suggested by Lord Carter following his review of the sector’s efficiency, Mr Stevens said: “His report did show there is both unmet need and a big efficiency opportunity in community services. I spent part of yesterday with social enterprises many of whom are running community health services and the point a number of them would make, as would NHS community health trusts, is that a lot of that value they’re unleashing is not now being properly synched up with what the local hospital organisations are doing.”

HSJ revealed last month that the tariff for next year is likely to cut payments for outpatient appointments, which both Mr Stevens and NHS Improvement chief Ian Dalton have said are often working in an “obsolete” way.