NHS England and Monitor have today published plans describing radical changes to how healthcare is paid for, which will enable the NHS to introduce new models of care.

This would enable the NHS to put into practice its long-standing commitment to better integrate hospital, community and mental health care, and provide a payment system to help introduce the examples of care models outlined in the Five Year Forward View launched in October 2014.

The use of so-called ‘capitation’ payments to NHS providers- bringing hospitals, community and mental health into line with the way GPs are funded – would particularly benefit the frail elderly and those with multiple care needs, such as the 17 million people with long-term conditions.

Monitor and NHS England are encouraging commissioners and providers to adopt this new payment model when negotiating the local price-setting arrangements. The organisations propose such arrangements should increasingly become the norm under reforms to the national tariff, which would see it become a framework of rules, rather than just a list of prices.

Simon Stevens, Chief Executive of NHS England said: “NHS payment systems are a means, not an end. Much of the current tariff system was designed to help the NHS achieve a set of goals in the 2000s, such as slashing long waiting lists for routine surgery, which have been achieved. The new challenge is to support the triple integration of care the Forward View highlights: between primary and specialist care, physical and mental health services and health and social care. Today we signal a new, locally flexible direction of travel to advance these goals”.