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The new NHS payment system – what does it mean for patients and medical technology?

As part of the NHS’s commitment to ‘more joined up and coordinated’ care, as set out in its Long-Term Plan, the health service is looking to change the way it pays for some services. This new ‘blended payments’ model involves a combination of financial incentives, moving away from the previous system based exclusively on payment by results.

What are blended payments?

The blended payments model consists of a fixed payment based on forecasted activity levels, paired with the choice between an outcomes-based payment, financial risk-sharing elements, and/or a variable element reflecting actual activity levels.

This new model is expected to become the main way the NHS will do business in the future. It is first being rolled out in emergency care, then being extended to outpatients and maternity services in 2020/21, while also being piloted for adult critical care.

The blended payments system offers a more patient-centric approach than its predecessors. For example, the following principles, among others, should apply:

  • Any agreed payment approach must enable patient choice.
  • The approach must be in the best interests of patients.
  • The approach must promote transparency via improved accountability and sharing of best practice.

What do blended payments mean for patients and access to medical technology?

The blended payments model is designed to support patients by aligning funding to efficient and effective service provision. In our view the combination of these principles is a positive step, as it moves towards prioritising patient outcomes over the delivery of services.

The system also reflects the tangible deliverables of medical technology, which can improve both physical and personal outcomes for patients. In our report, ‘Keeping Britain Working: How medical technology can help reduce the cost of ill health to the UK economy’, we quantified the impact of just eight technologies. It illustrated how medical technology allows patients to better manage their condition, access rapid diagnostics to prevent the worsening of their condition, and improve pain management for example. It also highlighted some less obvious, but equally significant outcomes, such as allowing patients to get back to work, regain independence, and lead a full life, all of which can lead to wider societal benefits.

With patient outcomes an established focus, we hope that the new blended payments model can counter previous notions that technology and the treatments that depend on technological inputs are a cost-driver. In turn, we hope that this will dissuade commissioners from limiting patient access in order to deliver savings.

What are the concerns around blended payments?

While the new approach may enable providers and commissioners to plan according to their local needs, it could also result in wide variation around what are considered outcomes-based quality measures. This could further exacerbate inequity in access to treatments for patients.

Furthermore, the success of this new payment model is highly dependent on strong collaboration during the creation phase of the blended payment. Considering not all Integrated Care System plans have materialised yet, it remains to be seen what measures will be implemented to ensure this takes place in a way that protects patients, as it is intended to do.

This post includes elements of summary of an in-depth analysis developed for Medical Technology Group members.

March 2020

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