Simon Stevens suggests hospitals that correct medical errors should no longer be paid for doing so. Agreed, if a hospital remedies a problem of its own creation, writes Jon Sussex

However, a more appropriate incentive under payment by results would be for the hospital that remedies the error to be paid - by the one that caused the problem.

This is an example of how the payment system could be used to improve "technical efficiency" of care. Mr Stevens rightly highlights that this system cannot tackle "allocative efficiency". In other words, it cannot guide the NHS to buy the right mix of services.

The solution to that challenge requires commissioners to have comparable data on the patient outcomes achieved by the different services they pay for. Spreading patient outcomes measurement on a routine basis throughout the NHS is something we should be aiming for, as the recent report of the Office of Health Economics' commission on NHS outcomes, performance and productivity makes clear.

Jon Sussex, deputy director, Office of Health Economics