NICE will be required to 'rapidly' increase its library of care pathways, creating a bank of 150 of the best practice guides by 2015.
In addition, an NHS Outcomes Framework, based on indicators from QOF and other data, will be used as a 'balanced scorecard' to monitor the NHS.
The DoH said the NHS Outcomes Framework will not be used to performance manage providers, but will help determine how to improve care.
NICE said this week it would have to make savings of more than 20 per cent over the next two years to be able to operate within its budget. But, under proposals in the White Paper, the institute will also need to develop quality standards for social care and advise on NHS research priorities.
In addition, local priorities for GP commissioning will be based on NICE guidance, as will commissioning contracts and financial incentives for commissioners. The White Paper says NICE's independence is to be secured through this autumn's Health Bill, which will put NICE on a 'firmer statutory footing'.
But it warned that NHS care must not be distorted by the selection of unrepresentative outcome indicators. If data on outcomes were incomplete, there could be perverse incentives to avoid treating high-risk patients, it said.
The White Paper also reveals that, by 2014, drug pricing will be overhauled so that costs match value offered to patients.
It also commits to negotiating a new community pharmacy contract that includes pay for performance and encourages 'better value' in medicines use.