The National Tariff Ric Marshall Director of Pricing

2012 Act splits price setting role between NHS England and Monitor Monitor leads on:  Pricing methodology  Regulated prices  Local modifications  Rules for local pricing and non- tariff pricing NHSE leads on:  Scope and design of currencies  Variation rules to National Tariff currencies Close working and agreement

Formal Consultation with the Sector Section 118 Notice Consultation set out within the 2012 H&SC Act Monitor Sets the prices Costs set using reference costs from providers NHS England Defines the Currencies These are the units of healthcare – using expert input

Monitor’s Price Setting Role Tariff setting not just a method for allocating funds:  Signalling financial implications of decisions can influence behaviours of commissioners and providers…  …and, in turn, improve quality of outcomes for patients at the same or lower cost Our price setting role has potential to bring significant benefits to patients

2014/15 National Tariff

Not all prices use a National set price…. Local determined prices are: –Local modifications – increases in national prices for services that are uneconomic for structural reasons, which must be approved by Monitor –Local variations – adjustments to national prices or currencies that are agreed by providers and commissioners, and must be published –Local prices – locally negotiated prices for services that do not have national prices, including some services with national currencies Must adhere to the rules set out in the 2014/15 National Tariff Prices for ambulance services contracted by commissioning organisations will follow these rules

Patient Level Costing Costing Review Monitor has commissioned a review of patient level costing in a range of settings For Publication Summer 2014 Costing Road Map The Roadmap sets out Monitors vision of the future of costing policy For Publication Summer 2014 Engagement Period Seeking engagement from providers on the Roadmap Ongoing engagement on improving costing policy

Reviewing Urgent and Emergency Care Monitor is currently reviewing models of payment for urgent and emergency care Early Findings: –High levels of fixed and semi-fixed costs regardless of demand because of required capacity – reducing demand doesn’t reduce costs –Variety of cost structures across the components of urgent and emergency care Emerging Themes for Reform –Better coordination across providers to improve outcomes –Earlier intervention to reduce demand for emergency care –Recognition of the need to maintain a level of coverage and the fixed costs associated –Local discretion to design models that are responsive to the needs of local populations –Improving quality of data

The Pricing Timeline 2015/16 National Tariff Methodology Discussion paper Tariff Engagement Documents National Tariff Document Statutory Consultation National Tariff Document for 2015/16 Tariff development Costing Costing Guidance for 2014 Publication of 2012/13 PLICS pilot Costing Direction of Travel Early 2014Summer 2014Autumn 2014Spring 2014 Draft long- term strategy for payment design Final long- term strategy Payment system Case management Start of pricing case management and local determined prices Policy Forward Look