7. Financial Impact

Region by region, financial impact assessments have been carried out to identify the financial impact to both providers and commissioners. The financial impact assessment for London was carried out by the Finance Working Group and chaired by a Director of Finance. On the whole, there is a general saving to commissioners of between 5% to 25% within each region. The variance within region can be considerably higher.

Case mix does not appear to significantly disadvantage providers.

financial impact and case mix

These financial impacts are before any change in behaviour adopted by Providers as a result of the Tariff. The Tariff has been designed to encourage the integration of services and a patient-centric approach to care delivery.

  • The risks to a provider or commissioner gaining or loosing are:
  • Tariff prices are incorrectly set
  • Provider costs are above/below average and not accounted for in MFF
  • Previous block contracts were poorly negotiated (under / over paying for care)
  • Providers are not accurately recording their data under the Integrated Tariff
  • Perverse incentives in First/Follow-up GU Tariff were being realised
  • Providers fail to realise benefits offered by integrating services
  • Current view of costs or charges is not accurate

The impact of cross charging and de-hosting makes a consistent gain of 2% to 5% for commissioners.