An overarching concern about block contracts is the lack of transparency and accountability after a payment has been made to a provider.
As block contracts are made in advance of a service being delivered, unexpected pressures such as increased patient demand or cost of care are not taken into account. Providers have very limited mechanisms to mitigate these pressures. An increase in patient demand or cost of care could result in providers rationing services or a decline in the quality of care as they try to manage resource constraints.
Block contracts have also been critiqued for not incentivising improved clinical care or efficiency. Perversely block contracting means that by performing less well, and thereby attracting fewer patients, providers are able to reduce their financial pressures.
In addition, block contracts allow no flexibility for capital finance or innovation where upfront investment is required, as this would directly take away from delivering a service.