There are no winners to be found in the battle over NHS prices

There’s an old trick journalists use when required to make sense of complex situations – look for winners and losers.

However, it’s hard to pick a winner in the pricing dispute that has raged through NHS boardrooms in recent months.

The most obvious candidate is NHS England.

The situation the organisation found itself in a month ago looked impossible: tariff proposals for 2015-16 had been rejected by providers accounting for three-quarters of the relevant services, and with no official means available to set prices before April it was hard to see how any part of the health service could plan for the year ahead.

‘It’s a good result for NHS England’

Yet it has now managed to get 210 out of 240 NHS providers to sign up to an amended “voluntary” tariff.

Those amended prices will cost more than the original offer - about £150m that would have been held back by the Department of Health for year-end bailouts will have to be transferred to upfront spending, and NHS England will carry additional financial risk on top of that.

But at least there’s some certainty, where there was none. From this perspective, it’s a good result for NHS England.

Through gritted teeth

From the same perspective, you might argue providers have done as well as can be expected.

The argument goes (with the caveat that 2015-16 is going to be the most difficult financial year yet for everyone) that providers made a straightforward economic choice.

For most, the voluntary tariff was most beneficial.

For a minority, it was better to continue on 2014-15 prices, even with the loss of commissioning for quality and innovation payments worth up to 2.5 per cent of income.

‘Many trusts have serious concerns about the consequences’

But you’d struggle to find any provider that recognises this version of events. It is clear many trusts that accepted the voluntary tariff did so through gritted teeth, and with serious concerns about the consequences.

HSJ has heard from providers on the voluntary tariff that felt “blackmailed” by the threatened withdrawal of CQUIN, that did not feel able to make a properly informed choice, and that now expect to go into the red next year for the first time in the current austerity period.

Trusts that rejected the voluntary tariff are similarly dismayed.

A number in this position have said they faced going into deficit under either option, but felt they could not accept a marginal rate for specialist care.

Some emphasise their objection to the inclusion in that marginal rate of high cost drugs and devices. They argue these costs have never before been included in the tariff because they vary so wildly, that they have always been reimbursed at full cost, and that providers cannot take a chunk of that risk and hope to remain viable in the medium term.

Local and national negotiations

Most fundamentally, this group can be expected to push for further negotiation locally and nationally. How that plays out will be key.

On the one hand, NHS England will say there is no better deal on the table. On the other, the list of those that rejected it is more or less a roll call of the most high profile teaching hospitals and specialist trusts in England. In many cases, they represent the last remaining islands of financial stability in the provider sector.

‘The task of building a consensus for reform now looks more daunting than ever’

If they also go into the red, we face a fundamental shift in the dynamics of the sector - a return to a situation where most hospitals expect to run at a loss.

All this points to the urgent need to increase NHS funding, reform payment systems, and reconfigure specialist care. But much of the goodwill built by the NHS Five Year Forward View and the autumn statement has burned away.

Relations between the big NHS power bases - the centre and the major hospitals - are more strained than at any time in recent memory. The task of building a consensus for reform now looks more daunting than ever.