Specialised mental health care contract design

Project theme: Applied economic evaluation and policy analysis

The Five Year Forward View for Mental Health report highlights the need to change the way mental health (MH) services are funded, developing new payment systems, which incentivise access to quality services that deliver good outcomes (Mental Health Taskforce, 2016).

This project aims to develop a new payment system for two specialised mental health services: Child and Adolescent Mental Health (CAMHS) Tier 4 and Adult Secure Mental Health Services: Low and Medium Secure, working together with the respective clinical reference group (CRG). The proposed payment system will incorporate payments for capacity, activity and outcomes, taking into account the expected length of stay for a given type of patient.

The capacity payment intends to secure the maintenance of a certain number of beds (irrespective of occupancy). The activity payments are an assessment payment to ensure patients receive the appropriate type of care and a daily payment that covers part of the variable costs of delivering care. The outcomes payments are designed to reward early recovery and incentivise the care in community settings rather than in inpatient settings.

Additionally, there are special provisions to cover the costs of care for patients that require exceptionally long periods of care.

Project team

Martin Chalkley and María José Aragón.


Martin Chalkley


Mental Health Taskforce 2016. The Five Year Forwards View for Mental Health (PDF, 2.6MB)