Hospitals and other providers of NHS services are paid for the number and type of patients they treat. The cost of patient care varies depending on a number of factors including the condition and treatment required, and individual patient characteristics such as age and general health and wellbeing.
Accurate pricing is essential to ensure that hospitals are paid the right amount for quality services they provide to patients. Accurate pricing information helps GPs, commissioners and providers alike to plan and budget to get the right treatment in the right place at the right time to meet people’s needs. Pricing can also be used to encourage providers to improve the quality of services for patients. If providers are not properly reimbursed, this can reduce the quality and efficiency of care they offer and threaten the future sustainability of their services.
The Act gives Monitor responsibility for pricing, working with the NHS Commissioning Board. This is expected to start from the 2014/15 tariff.
The Act gives the primary responsibility for specifying the services for pricing to the NHS Commissioning Board, who will have to agree these with Monitor.
Monitor will collect data from providers and design a suitable pricing methodology. It will set prices in agreement with the NHS Commissioning Board and publish them in a document called the National Tariff. The Act introduces important checks and balances, including the potential for appeals to the Competition Commission.
Monitor's pricing role will be supported by the new provider licence, which will enable us to collect the information we need to set prices and require providers of NHS-funded services to comply with the National Tariff, as well as to ensure that essential services can be continued.
Our aim is for our decision-making in pricing to be consistent and transparent. We will be publishing reports and conclusions from our work on the Monitor website and we will be seeking feedback and responses to our findings and conclusions. You can find further information on how the pricing system will change, here.