Local tariffs can cut risk for providers and commissioners

The price is right

I read with interest the recent exclusive in HSJ, Data quality fears delay national mental health tariff.

Payment by results offers a unique opportunity for all stakeholders in mental health service provision to improve outcomes for individuals with mental health issues through better alignment of resources. However it does present a significant financial risk to both commissioner and provider.

Activity based pricing carries an element of uncertainty, particularly at the beginning of this new pricing mechanism. Our approach is to reduce this risk by building a common understanding, shared by commissioner and provider, of what the financial implications of particular tariff structures are.

For example, working with commissioners in the Isle of Wight, we have developed and delivered a mental health payment by results tariff planning tool which can be used by both commissioner and provider to calculate a local tariff based on reference costs and activity data. Using the tool with the current data has exposed the same data problems that have emerged elsewhere in the country. But data problems can be navigated step by step. Our work with the Isle of Wight allows us to pick out specific clusters and develop local tariffs calculated using those parts of the data set that are judged more reliable. So the block contract is not undone all at once, rather piece by piece.

In this way, we can reduce financial risk to both provider and commissioner and, in a complementary piece of work, help them to innovate further by incorporating health and wellbeing outcomes into their agreed objectives for the service.

Dr Tim Gardener, Capita Consulting (Health)

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