Submitted by Mike Birtwistle on 02-02-2012

There is a consensus that, if the NHS is serious about quality, then it should be prepared to pay for it.  But the question is how?  Block contracts establish little incentive to improve quality, volume or efficiency.   The tariff – designed to reward providers for ‘results’ – is actually all about activity.  

So successive governments, beginning with the publication of High Quality for All, have sought to introduce payments specifically linked to quality.  Never events have been introduced to ensure that providers are not rewarded for mistakes which should absolutely not happen.   Best practice tariffs have been developed to ensure that higher quality care pays.  And the Commissioning for Quality and Innovation (CQUIN) scheme has been established to enable commissioners to incentivise particular quality improvements. 

Introduced in 2009, and with payments set to increase from 1.5% to 2.5% of NHS contract values next year (over £1 billion nationally), CQUINs are now an established part of the quality landscape.  Yet, to date, no comprehensive analysis has been undertaken of the impact of CQUINs on providers or performance against them.

Paying for quality – An analysis of the impact of the 2010/11 Commissioning for Quality and Innovation scheme in London provides a detailed analysis of the impact of CQUINs in London, examining which issues were incentivised in 2010/11, how providers performed against their targets, as well the financial impact of this performance. 

The financial consequences of the failure to hit quality targets are now clear.  In 2010/11, London hospitals missed out on nearly £22 million of revenue as a result of failing to meet CQUIN goals – some 23% of the total available.  This is enough to fund the posts of over 350 nurses for a year.

With trusts in London set to report a combined deficit of £123 million this year, achieving quality payments should become an ever more important focus for providers, with implications for financial survival as well as the quality of patient care.