Objectives of the payment mechanism

5.5  The objectives of the payment mechanism include:

•  allocating risks to the partner best able to bear them;

•  100% variability of payments, ie no hospital, no fee;

•  payment should only be for services received;

•  encouraging the private sector to deliver on time;

•  incentivise the private sector to design in energy efficiency;

•  providing incentives for the private sector to deliver services that meet the agreed performance standards which enable the NHS body to deliver its required level of patient care;

•  reward the private sector for efficiency savings;

•  making sure that the NHS body is able to fulfil its financial obligations;

•  limiting the direct cost items that are passed on to the NHS body;

•  simplicity and transparency (ensuring both public sector and private sector understand calibration).