Our contracting approach
We are moving towards value-based contracts pay providers for delivering better outcomes rather than paying for more activity. This means payment and rewards are linked to things that matter to people, like quality of life and experience, not just the number of appointments.
We will use contracts to
- support our care model: contracts will match how we want care to be delivered, not the other way round.
- share responsibility: providers will work together and share accountability for whole care pathways.
- reduce unfair differences: contracts will help us spot and reduce unwarranted variation in care.
Working with groups of providers
We will often contract with groups of providers, not just single organisations. Sometimes one “lead provider” will hold the main contract and work with others.
This will:
- reduce complexity: fewer separate contracts to manage
- support joined-up care: clearer responsibility for the whole journey of care
- manage risk better: risk will sit where it can be best understood and managed.
Focusing on outcomes and inequalities
We will agree outcomes that are clear, measurable and shared across collaborating providers
Outcomes will be measurable, transparent, and shared across collaborating providers. Success will be defined by collective achievement, not organisational performance in isolation. Reducing health inequalities will be a core part of every contract, shaping how services are designed, delivered, and improved.
Building on relationships and trust
Contracts will focus on what matters most: relationships, experience, and outcomes. Continuity of relationships—alongside continuity of care— will be the cornerstones of place-based delivery. We will keep contracts high trust and low burden, avoiding excessive KPIs and compliance-heavy processes.
Service specifications will be clear but not over-detailed. There will be room for professional judgement, new ideas, and local solutions, as long as agreed outcomes are met.
Sharing money, risk, and reward
We will use various funding and payment models including blended payments, pooled budgets and pathway-based funding envelopes.
These approaches will:
- share both gains and losses with provider collaboratives
- encourage early help and proactive care
- support good use of services in line with our five-layer care model.
We will use multi-year, place-based contracts where we can. This gives providers more freedom to reinvest money within an agreed budget as needs change.
Using data well
Good data is essential, not optional. Contracts will set clear rules for data sharing, data quality and timely reporting.
Reliable data helps to improve quality, keep finances under control and provide assurance and oversight.
Data will be treated as a key tool for learning and improvement, not just an admin task.
Changing and improving over time
Our contracting models will develop over time. We will use different types of contracts, such as:
- Fee-for-outcomes contracts: payment linked directly to agreed improvements.
- Bundled pathway contracts: one payment for a whole care pathway.
- Population-based contracts: payment for the care of a defined group of people.
We will start with simpler models and increase complexity only when skills and confidence grow. At every stage, we will stay focused on value, outcomes, and reducing inequalities.