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National Tariff encourages pay ‘experiments’


4 October 2013

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From next year new rules will come into force allowing “local experiments” in the way that NHS services are funded. 
According to Monitor and NHS England, who proposed the changes, the updated national tariff for 2014/15 will encourage innovative new models of care for patients while also making services less fragmented and easier to access. 
The local price setting currently accounts for a quarter of the £67 billion covered by the NHS payment system. 

From next year new rules will come into force allowing “local experiments” in the way that NHS services are funded. 
According to Monitor and NHS England, who proposed the changes, the updated national tariff for 2014/15 will encourage innovative new models of care for patients while also making services less fragmented and easier to access. 
The local price setting currently accounts for a quarter of the £67 billion covered by the NHS payment system. 
But the proposals would encourage the use of “flexible but transparent” local approaches. 
Providers should be expected to make annual efficiency savings of 4%, the organisations claim. And providers should be paid 1.9% less, as the national tariff will take into account rising NHS costs of 2.1%. 
Adrian Masters, managing director of Sector Development at Monitor said: "Our proposals for the payment system in 2014/15 are designed to help commissioners and providers address the key challenges facing NHS care in their localities.
"We are offering them more freedom to encourage the development of new service models, maintaining incentives to provide care more efficiently and providing greater financial certainty to underpin effective planning for patients."
And Paul Baumann, chief financial officer at NHS England, said: "Providers and commissioners face a major task in constructing robust plans for 2014/15 onward which secure clinical and financial sustainability in increasingly challenging circumstances.  
"To help them succeed in this task, we are proposing tariff arrangements for 2014/15 which provide the maximum possible continuity. Meanwhile we will be taking forward our work on longer term pricing strategies to support our emerging strategic priorities and incentivise improved outcomes for patients."

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