Regional leaders plan hospital contract shake-up

Regional health leaders are drawing up plans to abandon payment by results based on national tariffs and move to a cost and risk based contract for acute providers, along with an STP-level control total.

The changes, backed by NHS England, are part of the Humber, Coast and Vale sustainability and transformation plan and are scheduled to be in place by April. A “control total” for the STP area will be issued for 2017-18 to incentivise organisations to manage activity levels and reduce costs.

It is planned that payments will reflect the cost of services, adjusted to make allowances for volume and financial risks on acute providers from the change.  CQUIN payments and performance fines will also end under the planned new system.

The STP, which has a £3bn budget across all services, intends to invest the savings from reducing bureaucracy involved in policing and servicing payment by results contracts in areas with specific additional needs, such as those due to rurality or deprivation.

Acute services in the patch are delivered by York Teaching Hospital Foundation Trust, Hull and East Yorkshire Hospitals Trust, and Northern Lincolnshire and Goole FT. Finance teams will monitor the impact of the new payment system on organisations once it goes live and manage risks when they occur.

Officials hope to put similar plans in place in shadow form for other areas of NHS spending, including mental health and community services, by April. Payments to providers outside the STP area will continue as normal.

Full story in The HSJ 1 December 2016