Payment models: bringing budgets together to develop coordinated care

New payment models to support integrated care

Traditionally, the NHS and local government have paid for delivery of services rather than outcomes. Commissioning care in this way has contributed to a health and care system in which services are fragmented and service users experience gaps or delays in care.

Developing person-centred, coordinated care, in which services are designed to meet the holistic needs of people, requires new models of care and new ways of financing, commissioning and paying for services.

Innovative finance, commissioning and payment systems are some of many levers that can be employed to integrate health and care. Creating solid foundations, based around strong relationships and the pooling of budgets, is the first step in enabling the development of more sophisticated payment methods in the future.

For a decade now, there have been a variety of different policy drivers trying to provide the framework for integrated care. The fact these have differed tactically over the decade does not signify the fact that governments cannot ‘make up their mind’– rather it designates the strategic importance of the agenda. Every major health care system in the world is struggling to better integrate health and social care. None are finding it simple and all will be working on it as an issue for many years to come.

Paul Corrigan CBE, National Care Integration Adviser and Non-executive Director of the Care Quality Commission

Designing contracts to support coordinated models of care

True integrated care radically shifts the focus for commissioners from the traditional approach of contracting separate providers for episodic activity, towards achieving a pathway which leads to outcomes for the individual. In the traditional contracting model, each provider is accountable for the episodic care they provide. No one has accountability for, or visibility of, the whole cycle of care. To successfully provide a coordinated pathway of person-centred health and social care, the accountability for delivering outcomes and the drive to reduce costs need to be joined up, which will, in turn, require existing contracting models to change. This section explores the development of different coordinated models of care.

Some areas of the UK have developed a model of joint commissioning for health and social care provision, while others have developed a joint accountability agreement between existing providers and commissioners to support coordinated provision.

Some commissioners create change through novel contracting models and commissioning tools, which are used by local authority and NHS commissioners to drive transformational and sustainable service integration. Others bring together all the main providers and commissioning organisations in the system to share experiences, learn, and jointly develop and implement better care for individuals.

Depending on where an organisation currently stands on the journey to integrated commissioning, it may need to take different steps. Example case studies show that it takes several years for programmes to deliver the intended transformation. Contractual vehicles do not replace the need for continuing to work at cementing local relationships and ensuring there are strong foundations on which to develop integrated commissioning (see Building trust as a key foundation).

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As commissioners of health care at both a national and local level, we want a commissioning architecture that gives people the best possible opportunity to achieve the outcomes and commissioning models that align incentives for those people that provide care with the outcomes that matter most to the population we serve.

Ros Roughton, Director of Transformation, Department of Health and Social Care, former National Director, NHS England

Evaluating the options against different payment models

There are three main types of payment model that can help incentivise integrated working across health and social care systems:

The potential benefits and disadvantages of using each model are discussed below, drawing on insights from the North West London toolkit, and payment system guidance from the World Bank.

How to... bring budgets together and use them to develop coordinated care provision
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