New payment incentives support alignment of ACSs

Detail of one ACS working with the Aligned Incentive Contract.

In preparation for becoming an Accountable Care System (ACS), the Portsmouth Hospital Trust (PHT) and South East Hampshire, Fareham & Gosport and Portsmouth CCGs have agreed a new type of contract. The Aligned Incentive Contract (AIC) replaces the Payment by Results (PbR) payment mechanism that has been in place for the last 10 years.

In keeping with the STP principles, the AIC incentivises activity and cost reductions across the system as a whole rather than focussing on hospital income. This will encourage CCG’s and the acute Trust to work together to develop collaborative solutions to address the issues of affordability, rising demand and capacity constraints.

In an interview with the Portsmouth News, Michelle Spandley, the CCG’s Chief Finance Officer explained that the arrangement will see PHT work more closely with other services to ease pressures and free up hospital beds at the Queen Alexandra (QA) Cosham site. She said:

This is a building block to helping improve the system at QA. It is about opening that dialogue to transform services without PHT worrying about loss of income. We need to be working together better and making ourselves more efficient.

The AIC will see the end of reliance on CQUIN, fines and contract adjustments. Whilst a fixed income guarantee and risk reserve provides an element of a safety net, the primary focus is for all parties to work together to use the available resources to deliver effective, high-quality care that improves outcomes. The contract includes an activity reduction incentive, a cost reduction incentive and an element of cost risk share to incentivise different behaviours and working together to address rising local demand and budget constraints.

For more information please contact Paul O’Toole at paul.o'toole@nhs.net