NHS long-term plan: tariff and capital spending changes proposed

The Commons Health and Social Care Committee and the prime minister had asked NHS Improvement and NHS England to draw up proposals for ‘carefully targeted’ legislative changes to help NHS organisations to work together in patients’ interests. And at today’s board meeting in common NHS Improvement and NHS England put forward a series of proposals with a prime focus of making integration easier.

The national bodies will engage with the NHS, partner organisations and other stakeholders on the proposals until 25 June – subsequently a report will be published with recommendations for the health and social care secretary. Legislative changes could be made once time is found in the Parliamentary calendar.

Though NHS England and NHS Improvement recognised there was significant flexibility in the national tariff to support new care delivery models, they said legal changes could offer even more flexibility in developing new payment systems.

Under the proposals, national prices would be set as a formula rather than a fixed value so prices payable would reflect local factors. National prices would be applied only in specific circumstances – for example to cover acute out-of-area treatments – but local commissioners and providers would agree appropriate payments for services received at the local main hospital. Tariff adjustments would be allowed during the tariff period – to reflect a new treatment, for example.

A further proposal reflects the development of integrated care systems (ICSs) – this would remove the requirement to seek NHS Improvement’s agreement for unilateral local modifications to national tariff prices, putting the onus on local commissioners and providers to agree local variations.

There would be potential changes in the provider sector. NHS Improvement would be given powers to agree annual foundation trust capital spending, in the same way as it does for NHS trusts currently. The paper said this would remove the risk that high-priority capital spending in non-foundations is unfairly constrained and help NHS Improvement to work with local systems to schedule large capital projects. It would also help ensure the NHS and the government do not exceed capital spending limits.

Last year, the HFMA raised concerns about the operation of the capital system in general (see NHS capital – a system in distress).

Under the plans put forward by NHS Improvement and NHS England, the health and social care secretary would be empowered, in specific circumstances, to set up new NHS trusts to provide integrated care. And NHS Improvement would be able to direct mergers or acquisitions involving foundation trusts, where clear patient benefit could be demonstrated.

A number of measures designed to promote competition would be removed, including the Competition and Market Authority role in reviewing mergers. Legal barriers to NHS bodies working together and with local authorities, taking decisions jointly, would be abolished.

NHS Confederation chief executive Niall Dickson (pictured) welcomed the ‘broad thrust’ of the proposals.

But he added: ‘We must be alert to the risk of unintended consequences where new powers or requirements may interact with existing statutory or board duties. For example, we will be consulting our members about the potential impact of new powers for NHS Improvement to set foundation trust capital spending limits.

‘We do need to make sure that local systems can offer choices for patients, and therefore support personalised budgets and the strengthening of patient choice rights. We also want to make sure there are clear mechanisms to hold individuals and systems to account and that we avoid creating conflicts of interest,’ he added.