Is there going to be tariff turmoil for the second time in three years?

HSJ has discovered that the wheels are coming off a new tariff regime being road-tested in the West Midlands. The simulation of the draft 2009-10 tariff is causing wild fluctuations in projected trust income.

The aim of the new system is laudable. It is an attempt to recognise the extra costs incurred by specialist and teaching hospitals, which take on more complex cases.

But the pricing of the hundreds of new codings added to the tariff system has actually had the reverse effect - district general hospitals are gaining while specialists are losing out.The faults are so fundamental that the Foundation Trust Network believes the introduction of the new tariff is now in jeopardy.

Echoes of the past

We have been in this territory before. The 2006-07 tariff was published that January, withdrawn, and reissued one week before the start of the new financial year. An independent inquiry into the debacle highlighted the rushed testing and inadequacies in the Department of Health’s payment by results team.

Given the criticism of the DH’s performance it seems barely comprehensible that the department is again well on the way to botching the tariff - which determines the distribution of more than£22bn of health funding. The implication is that it has not learned the lessons from its previous mistakes.

Just as many trusts are building the foundations for long term financial stability, they are at risk of being thrown off course because the DH is having trouble with its sums.

The tariff is too important to be rushed. If there is a danger the new system is flawed it would be better to postpone its introduction by a year than risk undermining the very hospitals it is trying to help.

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