A tariff to support transition

by Andrew Monahan

09 January 2020

The consultation on the 2020/21 national tariff has a distinctly transitional feel to it and offers some insight into future years. But how long until future changes are introduced?

Finance professionals recognise their role as a support service, enabling frontline colleagues to provide the best care possible. And as frontline services adapt and evolve to meet the demands of a growing and ageing population, support services and mechanisms, such as payment systems, need to facilitate the transition as much as possible.

At the HFMA Welsh Branch conference, I heard a clinician comparing changes in the NHS to a non-Newtonian fluid – a fluid that behaves differently depending on the applied stress or force. Try to change NHS services too quickly and you’re likely to be met with opposition, too slowly and frustration will be the collective response.

It appears that the recently published 2020/21 national tariff payment system consultation is doing its best to get this difficult balance right. The changes aim to support systems looking to redesign their care models. But this will be at a pace that still fits with the ambition of reducing the burden the payment system places on providers and commissioners.

Building on the current year’s introduction of blended payments for emergency care and adult mental health services, the use of blended payment is now being extended to outpatients (The right blend, Healthcare Finance December 2019). The stated intention is to support the long-term plan pledge to avoid up to a third of face-to-face outpatient visits over the next five years by encouraging new ways of delivering outpatient care. This could involve one-stop shops, advice and guidance services, virtual clinics and overall moves to more digital services.

The inclusion of specialised services outpatients in the blended approach may have come as a surprise to some, as it wasn’t part of the engagement proposals. Can a blended payment approach, theoretically encouraging new ways of working (shifting care outside of a hospital setting for example), be adopted for services supporting people with rare and complex conditions where there are arguably less predictable levels of activity than other services?

For outpatients, the blended payment approach is suggested as a first step towards a way of paying for activities across care settings, allowing services to be delivered at the most appropriate time and in the most appropriate setting. This theme of a transitional tariff is echoed by the proposal of two options for the payment approach for maternity services. Local maternity services (LMSs) will be able to choose either the current pathway payment or a blended approach.

With a clear intention to adopt the blended approach as the default mechanism in 2021, it will be interesting to see how many local systems choose early adoption. And will the measures put in place be enough to ensure LMSs with multiple clinical commissioning groups are able to avoid providers having to manage two different payment approaches?

The tariff engagement workshops and webinars included a proposal to introduce blended payment for adult critical care. However, in response to feedback from the sector, this is no longer being proposed. But the consultation clearly states an intention to consider a blended payment again as part of the consultation on the 2021 national tariff with pilots to be carried out during 2020/21.

So, we have blended payments in for outpatients, half-way there for maternity services, and not quite there for adult critical care. But these are, of course, default approaches – which raises the question: what are local systems actually using or intending to use?

To offer some insight into the various types of payment systems in use across the NHS in England, and how they are helping to shape integration, the HFMA is preparing a briefing on payment systems. We have contacted the director of finance of each provider and commissioner to help us understand the systems currently being used and their views on the advantages and disadvantages of each model. We hope to publish this in early February.

We are also working closely with NHS England and NHS Improvement to run a webinar in February that will focus on the future of the payment system.

We face a number of years of transition for outpatient, maternity and adult critical care services and for payment approaches in general. Which service is next for the blended payment treatment. And what is the mechanism to follow blended payments – capitation budgets? The answers may well depend on just how our non-Newtonian NHS reacts to this latest tariff.