Year of care tariff under development in Birmingham

If it is introduced, the system would see Heart of England Foundation Trust no longer paid according to the payment by results tariff system for some services and patients.

Instead, it would receive a lump sum for care for specified cohorts of patients for a year, giving it an incentive to treat people in the most cost effective way possible - often outside hospital.

Read the full HSJ Briefing analysis

The system is best suited to areas with high numbers of patients with long term conditions, such as the areas in east and south Birmingham and Solihull served by Heart of England.

Heart of England already have a “risk sharing” agreement with local commissioners which splits the cost of higher than planned demand for acute services.

Although Birmingham Cross City CCG want the year of care tariff system to be up and running before the end of 2013-14, Mark Newbold, chief executive of Heart of England, told HSJ that would be “ambitious”.

However, he supports the project, and has been involved in discussions led by minister Norman Lamb around setting up integrated health and care systems.

“The reason [to do this] is to try to get the trust in a place where we are a play in managing down demand… we want to be part of that and not just have it done to us,” he told HSJ.

The plans are part of the system’s plan to make quality, innovation, productivity and prevention savings in 2013-14.

Other planned changes include changing the outpatient referral pathway to involve consultants in the process.

Meanwhile a “virtual ward” system, which aims to cut admissions by keeping the most high-risk patients as healthy as possible at home is being extended across the Heart of England patch.

Although early indications suggest the virtual wards led to better care, there is no evidence yet that they will save money without being extended to include lower-risk patients.