Lincolnshire NHS contracts aim to cut costs and restrict patient access to treatments

This year, Lincolnshire Sustainability and Transformation Plan intends to reduce “demand” and cost for Diabetes, Frailty, Urgent and Emergency Care, elective care, stroke rehabilitation and Mental Health services.

The four Lincolnshire Clinical Commissioning Groups are doing this through a new form of contract with the county’s three main NHS providers – Lincolnshire Community Health Services, Lincolnshire Partnership NHS Foundation Trust & United Lincolnshire Hospitals Trust.

This information comes from Optum Commissioning Support Services’ response to a Freedom Of Information request about the new Lincolnshire Sustainability and Transformation Plan financial framework and contracting model.

The extra NHS funding is to get rid of “deficits”

The Long Term Plan says that a first call on the government’s extra 3.4% NHS funding settlement is the “current financial pressures across the NHS”.

In other words, this money is to be used to get rid of “deficits”. (“Deficits” being a misleading term for government underfunding of the NHS.)

I asked if this is the case with the new Lincolnshire Sustainability and Transformation Plan financial framework.

And if so, how much (and what percentage) of the extra NHS funding for Lincolnshire will be taken up by getting rid of current Lincs NHS “deficits”.

Evasive FOI response can’t hide intention to cut spending by Lincolnshire’s three main NHS providers

In their jargon-riddled Freedom Of Information reply, Optum Commissioning Support Services said,

“The Contracting arrangement that Lincolnshire is looking to embed is an aligned incentive contract with cap and collar arrangement in order to incentivise the system intentions. The starting point for acute pricing takes into account the national tariff adjustments which are designed to reduce provider deficits from the CCG allocation uplift.”


“The system will focus on the following areas to reduce demand and cost, Diabetes, Frailty, Urgent and Emergency Care, elective care, stroke rehabilitation and Mental Health.”

OK, so let’s unpick that.

Contracts with incentives to “integrate” NHS care

An aligned incentives contract is a so called “blended payment” contract. It is based on the national tariff, that pays hospitals an agreed amount for each treatment they provide – but the contract also imposes fixed upper and lower payment limits on the total amount they will be paid.

No need for consultation!

Optum says that there is no need for the Sustainability and Transformation Partnership to consult the public, or Lincolnshire Health Scrutiny Committee, about the new financial and contracting framework, because the national tariff will still exist!

Strong disincentive to provide treatments to patients.

With the aligned incentives contract, if a provider provides more services than are covered by the fixed upper limit (the cap), it will not be paid the tariff for costs that exceed the cap.

Reducing the risk of trying out new “integrated” care methods

The “collar” is the minimum amount the providers will be paid. It guarantees providers a certain level of payment.

This is supposed to reduce the risk to providers of trying out new “integrated” ways of providing care. The risk arises because care they they used to provide themselves (and get paid for) is handed over to other providers like GPs, private companies or third sector organisations. Organised into Primary Care Networks.

Incentivising cheaper forms of NHS care

If a provider provides fewer services, that don’t cost as much altogether as the lower limit (the collar), the money they “save” is equally shared by commissioners and the NHS provider.

This is intended to incentivise both commissioners and providers to reduce patients’ access to high use, high cost NHS treatments, through “integrated” care that is cheaper than current methods.

Increasing planned spend in community and primary care

I asked what increase in investment, if any, was planned for community and primary care, since cutting hospital services and moving NHS care into the “community” is key to “integrated care”.

At the time, in March 2019, the reply was:

“Contracts are currently not finalised, however the STP will be increasing planned spend in community and primary care in-line with national guidance.”

Policing GPs’ referrals and limiting treatments to keep spending below the fixed “cap”

I don’t know how Lincolnshire Aligned Incentives Contracts aim to mitigate the risks that the spending cap will not be enough to cover the cost of all the treatments that patients need. But for the Aligned Incentives Contract for Calderdale and Huddersfield hospitals, risk management actions/ outcomes may include but are not limited to:

  • A referral management system agreed and implemented
  • Limiting activity by specialty with risk shared and appropriate governance in place

It is probably worth finding out how the Lincolnshire Aligned Incentives contracts aim to mitigate risks.

Optum is in a dodgy position

Ways of cutting “demand” for NHS treatments are built into the new form of contract. They include the use of “system wide activity data” by the NHS providers.

Optum is one of the main providers of informatics and analytics that NHS providers need, in order to use such data.

As the provider of Commissioning Support Services to Lincs Sustainability and Transformation Partnership, Optum is in the invidious position of being able to advise Lincs Sustainability and Transformation Partnership that the NHS providers should hire them and buy their data tools to operate this new form of contract.

Lincolnshire Sustainability and Transformation Partnership is also looking at a Lead Provider block (fixed payment) contract for urgent care streaming

According to the ULHT news webpage, this urgent care streaming service operates at Pilgrim and Lincoln A&Es, diverting “suitable” patients to a GP or nurse.

A block (fixed payment) contract pays for a service without regard to the number of patients it treats, or the type of treatments they receive. The risk is the same as with the aligned incentives contract – that there will not be enough money to pay for all the treatments patients need.

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