Payment by results - Tariff
NATIONAL TARIFF 2005/06
The 1st of April 2005 will see a step change in the payment basis for secondary
care as we roll out payment by results. From that date the new system will cover
around half of hospital and community health service spend and for large
district general hospitals, typically some 70% of income will be covered by the
national tariff.
Over the last year, we have consulted widely on the detail of payment by results and learnt from the experience of the first wave foundation trusts which opted to move to the full tariff from 1st April 2004. As a result of these consultations and our contacts with other countries we have made some modifications to the tariff which are outlined in this document1 which will help to ensure that it is as sensitive as possible, reflecting as closely as it can the true cost of service delivery.
The changes we have made are designed to improve the system and do not alter the fundamentals of the approach being adopted, in particular:
- the use of national case mix adjusted prices with a focus in commissioning on volume and quality in place of local price negotiation;
- the freedom of providers who operate at below tariff price to deploy surpluses as they see fit for the benefit of their patients within the framework of their governance arrangements and contracts; and
- a responsibility on all parties to operate within a rules based and transparent system for the benefit of patients.
Deriving greatest possible benefit from the new system will depend on strong and effective partnerships between all parts of the NHS locally. Organisational behaviour in response to PbR will be critical to its success. We shall, over the next few months, be working with Monitor, Audit Commission and the NHS to agree a Code of Practice setting out our joint expectations for appropriate behaviours.
1 See also the Department’s response to the consultation exercise “Preparing
for 2005” at
http://www.dh.gov.uk/PolicyAndGuidance/OrganisationPolicy/
FinanceAndPlanning/NHSFinancialReforms/fs/en
Payment by Results - Tariff 2005/2006 excel file
