Quality of patient services to determine hospital funding

Hospitals are to be paid a fixed fee for services they provide to patients, it has been announced today.

The introduction of the new National Tariff for clinical procedures will help the NHS prepare for a new way of funding healthcare called 'Payment by Results'.

The new system, to be phased in from April this year, links money directly to patient treatment. The more productive NHS Trusts will benefit from extra resources as a direct result of their efficiency, the health department said.

Health Minister John Hutton said the payment system was a "fundamental reform".

"Providers of treatment will be paid for the activity they actually deliver," he added.

"Where staff do more work and are more efficient their organisation will benefit. Financial surpluses will be re-invested in clinical or other services."

A report published today reveals the NHS spent around £100 million in the independent sector last year. Providing the same care through the NHS would have cost around £70 million, the government claimed.

Mr Hutton said purchasing small volumes of work from independent health providers was partly reflected in the higher costs.

The new system will also apply where the NHS purchases capacity from the private sector so these costs will be reduced.

"Using the independent sector has helped us to drive down waiting lists and treat nearly 60,000 NHS patients more quickly than would otherwise have been possible," the Minister said.

Waiting times are expected to continue falling as the independent sector treatment centre programme develops, the government claimed.

(gmcg)