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Hospital prices slashed by new marginal tariff

Hospitals will receive less than a third of the tariff price for any emergency activity above 2008/9 levels as part of a drive to limit provider payments.

By Susan McNulty

Hospitals will receive less than a third of the tariff price for any emergency activity above 2008/9 levels as part of a drive to limit provider payments.

A big criticism of the current payment system is that hospitals are incentivised to do more work – rather than turn patients away – as they attract a payment for every patient they treat.

NHS Alliance chair, Dr Mike Dixon, welcomed the move saying PCTs were currently ‘at the mercy' of Payment by Results (PbR) which encourages trusts to increase activity.

‘PCTs should be able to limit the payments providers receive when activity exceeds planned levels' he said.

The new marginal tariff starting next year was revealed in a pre-briefing document for the NHS operating framework, due out next week.

The need to limit hospital activity was also addressed in health secretary Andy Burnham's latest strategy document ‘NHS 2010-2015: from good to great' which states the tariff system must incentivise the shift of care out of hospital settings.

The document says: ‘This will mean limiting the payments providers receive when activity exceeds planned levels.'

Dr Peter Stott, a GP and medical director of Epsom Downs Integrated Care Services, a major PBC provider organisation, welcomed the move.

‘We have to put some mechanism in place so that the hospital is no longer allowed free range to do what it wants.

‘In our hospital we have the out of hours service sitting next to A&E.

‘Patients walk in the same door and if they have rung the out of hours service they're seen there and if not they go to A&E where the PbR tariff applies.'

Dr Stott said there needed to be incentives for the A&E to transfer patients.

One possibility he said was for hospitals to commission community services to treat patients which would be at a lower cost than the tariff rate as well as working more with their local PBC groups.

The operating framework will also announce

- a 30 per cent reduction in management costs over four years across PCTs and SHAs

- increased use of Choose and Book

- greater sharing of information to enable peer comparison

NHS 2010-2015: from good to great also announced:

- a programme for high commissioning performers to be in place by April 2010

- PCTs that underperform in their commissioning responsibilities to face being taken over by other PCTs or face a change in management

- All commissioners to reach level three on the majority of world class commissioning competencies by April 2011

- Help for patients to decide whether or not they want an operation

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