How taking the long view on prices can help stabilise NHS planning | Monique Brogan-Duffy

Monique Brogan Duffy

NHS Improvement's director of pricing on why the time is now for a multi-year tariff.

In recent years, providers and commissioners have regularly told national NHS bodies they find the annual planning process ‘fraught’. So, in response, NHS Improvement and NHS England have proposed and implemented a range of initiatives aimed at relieving this tension. Key among these initiatives has been to introduce a multi-year national tariff.

NHS Improvement and NHS England have now published interim set prices for this multi-year tariff. But, what does this mean in terms of how care is paid for, and the planning process? 

A multi-year tariff is something we have heard mentioned a lot in the last few years. As we looked at how the tariff could support stability, a longer-term tariff seemed a natural part of the solution. 

That isn’t to say that extending the tariff to cover a longer period doesn’t come without risks. Many respondents to our recent online survey on the proposals have pointed out some of these – having currencies, best practice tariffs and the high-cost drugs and devices list set for two years does reduce our ability to flex the tariff to address new practice and innovations. It is also valid to question whether now is the right moment to start a two-year tariff, given we are proposing a large-scale currency change at the same time.

We have reflected on this and concluded that these policies will indeed put the NHS payment system in the best possible place to support commissioners and providers over the next few years. Implementing HRG4+ phase three gives us the best available currency set and also means that we can use the latest available reference cost data. 

Setting the national tariff for two years introduces a period of price stability that will allow commissioners and providers to make longer-term plans. It will bring the tariff in line with other events, such as the CCG allocation cycle. And it will give the NHS pioneers and vanguards some time to work on new care models.

While stability has been an important goal, we also recognise that we need to address any volatility in income that trusts experience as they move to the 2017 to 2019 tariff. We have set ourselves the aim that no trust should experience a drop of more than 1 per cent in tariff income. We are currently looking to see how we can achieve this within the national tariff budget. You will find detail about this in the statutory consultation we launch later in the year – more of that later.

Our recent consultation on the tariff proposals received a large amount of feedback, which was excellent as it showed a really mature debate. People who attended our workshops and those who filled in our online survey gave us some detailed and well thought-through comments. In response, we have made manual adjustments to prices and we will no longer implement the outpatient follow-up block proposal.

We have published an interim set of prices now so that colleagues starting their planning round have an indication of likely price levels. We are also bringing forward the statutory consultation as much as possible. We aim to launch the consultation in late October, so if all is well, by early December commissioners and providers will have certainty on tariff prices from now until March 2019.

With all that is going on, we are confident this set of tariff proposals represents a pragmatic approach to both improving the national tariff and allowing providers and commissioners more headspace. I personally look forward to delivering this new tariff much earlier in the year than previous tariffs and then using the time to have a searching look at all aspects of the tariff and how they can be further improved.

Monique Brogan-Duffy is director of pricing at NHS Improvement. Follow the organisation on Twitter @NHSImprovement

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