NHS Trusts to be paid for clearing pandemic backlog
‘There will be a laser-like focus on delivering value for money for the taxpayer as we boost NHS funding’
NHS Trusts will receive funding based on how effectively they clear the Covid19 backlog, under plans agreed by Boris Johnson and Rishi Sunak.
Ministers are planning to announce the return of a “payment by results” system for funding elective surgery, to incentivise hospital performance and demonstrate “value for money” from the National Insurance rise.
The scheme, a version of which was in operation before the pandemic, would involve NHS trusts effectively being paid for each patient seen or treated – bringing an end to the emergency system of block grants introduced at the start of the pandemic.
Ministers believe that it will help to extract “cost efficiencies” from the health service, as day-to-day spending on the NHS approaches a record 40 per cent of overall sustained departmental spending.
The move comes amid concern among senior Tories that the party could face a backlash from voters at the next election if the Government is seen to have failed to extract value-formoney from the National Insurance hike planned for April.
Sajid Javid, the Health Secretary, promised to introduce “a payment system that incentivises strong performance and delivers value for money for the public”.
A Government source said: “Reintroducing payment by results in the NHS will ensure that the taxpayer-funded uplift for dealing with the electives backlogs will result in cost efficiencies whilst also incentivising strong performance. There will be a laser-like focus on delivering value for money for the taxpayer as we boost NHS funding and tackle the post-Covid waiting lists.”
The new scheme will be a “blended” model under which hospitals receive a fixed tranche of funding and then a “top up” based on their performance against targets relating to the provision of services such as hip operations. All trusts would be set a target based on a percentage of their pre-Covid performance in the 2019-20 financial year, which would be used as a baseline.
Trusts that exceed their targets for carrying out operations and treatment under the scheme will receive “top up” funding for the services carried out over and above their target.
The extra funding will be paid at 75 per cent of the usual rate for each procedure or treatment, which is intended to cover any extra staff and other costs involved in additional activity, while acknowledging that fixed costs such as the provision of operating theatres would not increase.
In cases where a hospital fails to reach its target, it would lose up to 75 per cent of what it was due to receive for the operations or treatments that do not take place. NHS England has been pushing for trusts to lose only 50 per cent of the planned funding.