Towards a joint long term

payment strategy: enabling

an integrated approach for

mental health servicesKatie BrennanPricing Development Lead

24 June 2014

GOV.UK/monitor

Aims for this session

1. Provide context for the long term payment system design

2. Share some emerging thinking

3. Set out our next steps

April 7, 2023 3

We want the national payment system to do more for patients…evidenced based approach to both mental and physical health

At a high level we are aiming for the payment system to support:• Improved outcomes for patients• More efficient use of scarce resources• Best possible placement of risk

Which requires supporting changes to existing patterns of services, in particular to deliver the 6 characteristics identified in the NHSE planning guidance:

New national urgent &

emergency care

system

Improved access to

wider primary

care

Integrated care,

especially for elderly and LTCs

Centralised specialised

services

Productivity step-

change for elective

care

Engaged patients and supported self-care

Within a very challenging financial climate

Gap by 2021/22

Improve current

services

Right care, right setting

Innovate new

services

Wage freeze to 2014/15

Remaining challenge

30 12

4

25

7

£bn p.a Monitor’s Closing the Gap report identifies three improvement opportunities:• Improve ‘as is’: provider efficiency, look again at low

value interventions• Right care, right setting: patient self-care, integrated

care, shift activity to low cost settings• New models: telemedicine, greater specialisation ... but a £7 bn gap still remains.

5

BASE PRICE ACCOMPANYING INCENTIVES

CURRENCY + +

Core Elements of a Payment Approach

• How is demand risk dealt with?o Gain / risk shareo Marginal rateso Caps / collars

• How is performance risk dealt with? (quality/ outcome measures)

• Episode of care (HRG/DRG)

• Defined care pathway • Capitation (full or partial)• Block (all activity)

• What is the basis for calculating the price (actual costs vs. efficient costs)?

• How are payments shared between multiple providers?

Design Options / Questions

• Core elements can be set at different levels

• May vary by sector, location

Pricing is a key component to enabling a more patient centred approach to care

6

The design of payments is only one element that needs to be in place to improve outcomes…

Planning and Financial A

rchitecture

DetermineCommissioning Model

Decide Contracting Approach

Patie

nt F

acin

g / C

are

Inte

rven

tions

IdentifyPatient Population

Determine Services In/Out of Scope

Design Service Delivery Approach

Design Payment / Incentives Approach

Establish Leadership & Shared Purpose

Identify Key Outcomes to be

improved

Linked Data Transactional Capabilities Workforce Skills Evaluation

CULTURE

CORE ENABLERS

CA

RE

CO

NTR

AC

TS

... Tightening rules for local price-setting,

to ensure incentives are equally

sharp

... Changing the role of national

prices – only mandating

where necessary

...Making information

more important to support local

actione.g., bench-

marking

To be credible, our regulatory stance will need to use the full range of our tool kit, through...

Improving Cost and

Quality Data

Setting Mandatory

Prices

Constraining Prices & Contracts

Setting Reference Prices & Contracts

Assessing Value for Money

TOOL KIT FOR PAYMENT REGULATIONLESS

INTERVENTIONIST

Determining Allowed

Revenues

MORE INTERVENTIONIST

Arbitrating where Local Pricing fails

...And making our regulation more predictable with longer national tariff cycles, added rigour to price calculations and fully exposing our regulatory

judgement to the sector.

...Supporting evaluation of new payment approaches, by allowing

local innovation

Aims for this session

1. Provide context for the long term payment system design

2. Share some emerging thinking

3. Set out our next steps

Address lack of information

Framework of rules

Incentivise behaviour change

REGULATORY LEVERS

Raising the quality of data that underpins the

payment system

Adopting a regulatory stance is credible

Introducing different payment approaches for

different types of care needs

POTENTIAL GOALS?

Creating an enabling environment toward positive behaviour change

Our proposed vision for payment reform – regulatory levers extend beyond price…

MultipleNeeds

Significant Risk Factors

Mostly HealthyPopulation

People with multiple long-term or significant risk factors – may need…• Care coordination & planning• Self-management tools • Single care record for all• Multi-disciplinary care• Psychosocial wellbeing support for recovery

A population who might be at low risk or healthy – may need…• Prompt first response services• Emergency care for trauma• Planned care for routine diagnostics and treatments

Patients with rare and complex conditions – may need…• Access to specialised expertise and equipment

SpecialisedNeeds

Different people have different care needs, which payment design must account for

11

NHS England’s characteristics of care raise important questions for payment design

Engaged PeopleCan payment

incentivise self-care?

Can payment incentivise greater use of remote urgent advice and safe, sustainable emergency care centres?

Can payment incentivise services designed and managed to remove error and increase productivity?

Can payment incentivise coordinated care for the 25% with frailty factors or multiple

long-term conditions?

Can payment incentivise concentration of specialised care and

links to research and teaching?

Modern Integrated Care & Wider Primary Care

A new national urgent & emergency care system

Step-change in productivity for elective care

Centralised specialised services

12

Which arguably also apply when designing payments for mental health services....

Users in controlWhat is the role for self- management,

personal health budgets and choice?

Can payment incentivise sustained provision of rapid response mental health services?

Can payment incentivise adoption of best practice that promote sustained recovery in most appropriate settings? Could these include physical health care settings?

Can payment incentivise coordinated care for users with

multiple and ongoing needs, improving outcomes and

reducing premature mortality?

Can payment incentivise provision of efficient secure mental health care,

and effective recovery pathways?

Integrated mental, physical and social care

Crisis response teams and liaison psychiatry

Delivering cost effective interventions

Forensic, secure and high cost mental

health beds

Aims for this session

1. Provide context for the long term payment system design

2. Share some emerging thinking

3. Set out our next steps

April 7, 2023 14

We are also considering what we can do in the 2015/16 national tariff, given the particularly challenging financial context

2014/15: • Introducing new

regulatory regime• Creating stability in

national prices• Freeing LHEs to use

local variations• Bringing

transparency to actual behaviours

• Establishing local modifications for structural issues

2015/16: • Improving rigour of

national price-setting method (e.g., input costs, efficiency factor)

• Transition towards long-term system by testing new payment designs (e.g., UEC, integrated care)

• Helping close the financial gap

2016/17: • Continued

improvements to rigour, especially costing data

• Rolling out priority long-term payment redesigns

• Enabling widespread service change in line with 5 year commissioning and provider strategies

15

There are opportunities to engage with us on policy formation

Dec 13

Jan 14

Feb 14

Mar 14

Apr 14

May 14

Jun 14

Jul 14

Aug 14

Sep 14

Oct 14

Nov 14

Dec 14

Dec 2013Publish planning guidance

Apr 2014• Publish15/16

NT method paper for engagement

July 2014Launch 15/16 TED and stakeholder engagement

Autumn/late 2014• Publish final Monitor/NHSE

long-run strategy• Publish NT notice for

statutory consultation• Publish LT strategy for

engagement

Feb 2014• Launch

crowd-sourcing

• Publish our 2014 Forward Look

The long-term strategy will be accompanied by a number of supporting documents on specific areas, including: enabling long-term conditions care coordination, delivering Keogh’s urgent & emergency care networks, aligning incentives, options for multi-year tariff cycles, and, based on today’s discussions, next steps for mental health.

More information:http://monitor.gov.uk/regulating-health-care-providers-commissioners/regulating-prices-nhs-funded-care

Katie Brennankatie.brennan@monitor.gov.uk