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NHS: Block Contracts

Volume 684: debated on Tuesday 25 July 2006

asked Her Majesty’s Government:

Whether block contracts will be allowed in the National Health Service (NHS) after Payment by Results has been implemented in 2008-09; what support and guidance will be provided to those NHS Trusts which maintain block contracts; and how NHS providers will be scrutinised to ensure that the system is being correctly implemented. [HL7153]

What assessment has been made of the effects of maintaining block contracts in the National Health Service. [HL7154]

We anticipate that an increasing range of National Health Service services will be commissioned through payment by results, but there will always be some services for which alternative commissioning arrangements are required.

As well as publishing the tariff and core technical guidance, we are putting in place a payment by results code of conduct and assurance framework. These emphasise the importance of:

transparency and rigour in coding and costing systems;

excellent monitoring and making use of shared data; and

the need for mature relationships between commissioners and providers, to achieve the maximum benefits for patients.

In the past, services were largely paid for through block (fixed-cost) contracts between purchasers and providers of care. This gave few incentives to purchasers and providers to understand and respond to the needs and preferences of patients.

The patient-led NHS allows huge potential for more responsive services and puts a premium on strong and effective commissioning with clear functions and new skills, which focuses on meeting the specific needs of the local community and groups within it.

On 13 July 2006 “Health Reform in England: Update and commissioning framework” was published. Within this document is a consultation to inform the further development of a “national model contract” which will be used to procure services from NHS trusts, foundation trusts, independent and third sector providers.