Nuffield Trust comments on the Health Committee’s latest report on NHS commissioning

Read Nuffield Trust Chief Executive Dr Jennifer Dixon's response to the Health Committee’s latest report on commissioning.

Press release

Published: 18/01/2011

Responding to the Health Committee’s latest report on commissioning, Dr Jennifer Dixon, Chief Executive of the Nuffield Trust, said:

‘The report is a sound analysis of the issues. We agree the key priority facing the NHS at present is the need to make efficiency gains of 4 per cent per annum. To do this, clinicians need to be much more involved in how health services are planned than they are now. The question is whether a strong focus on GP rather than wider clinically-led commissioning is the best model for strengthening their influence. In particular the challenge is to manage better the demand for hospital care, address large and unaccountable variations in clinical practice, and develop more integrated forms of care for people living with long-term conditions. While primary care commissioners have had some success extending primary and community care services, historically they have struggled to make an impact on the way that secondary care services are organised.

To be more effective than their forbears, GP commissioners will need to work closely with their specialist colleagues in community, social care, mental health, and secondary care settings, as the Committee report notes. New, and urgently needed, forms of care that transcend traditional primary and secondary care and social care boundaries are unlikely to emerge otherwise. Equally, the Department of Health needs to describe more clearly how it intends to foster the conditions necessary for creativity, for example by reforming the payment by results system to enable commissioners to ‘bundle’ service tariffs along care pathways, or allowing networks of providers to take on the financial risk of a capitated budget for an enrolled population while being accountable for quality.’

Dr Dixon added. ‘These changes will be happening at a time of tremendous financial stress for the system. The reforms are extensive and much detail still has to be worked out. Reinforcing the recommendation by the Committee to speed up the formation to PCT clusters to help manage the transition, we go further and suggest five key areas that might reduce the risks of unintended consequences and ensure the Government’s objectives of improved outcomes and efficiency are delivered. They are:

  • Speed up the formation of PCT clusters and give assurance about their longer term existence. PCT clusters will be, amongst other things, helping to shape the development of GP Commissioning Consortia, commission services that maintain or improve quality, and manage down PCT legacy debt. The clusters are to be operational by June 2011, but given the turmoil in primary care trusts, should form as soon as possible. It is critical that these clusters attract and retain the best quality talent, and so they should be given more definite assurance of their longer term role and existence. There may be a long term role for them for example to help manage financial risk, provide commissioning support, or even to help manage the contracts for local primary care providers on behalf of the NHS Commissioning Board (now NHS England).
  • Set the shadow GP Consortia an explicit threshold for authorisation to proceed to fully fledged Consortia status. Evidence from the last 20 years of various forms of GP commissioning, and from international experience suggests it will take years for GP Consortia to become effective and well functioning (1) (2). They will need support from PCT clusters and elsewhere, with constrained management costs to carry out the duties expected of them, in particular to help improve quality and manage financial risk. Akin to the authorisation regime for Foundation Trusts, GP Consortia could have a similar explicit authorisation regime to allow them to manage the commissioning of good quality care, and handle increasing amounts of NHS funds effectively. This would allow the evolution of Consortia, with shadow Consortia needing more support being given it by PCT clusters that could remain in existence beyond 2013. By allowing the most developed groups to achieve Consortia status first, the most enthusiastic will join and there may be earlier successes and fewer obvious failures. Consortia joining later would have more chance of learning from previous waves.
  • Reverse intended freedoms to allow negotiation on price for NHS care: the NHS Operating Framework 2011/12 allows maximum prices to be set and negotiated in key areas, in particular for services for mentally ill people. International evidence shows that price competition in hospital care is associated with a reduction in quality of care.
  • Bring together GP commissioners and secondary care providers to develop integrated care for patients, particularly with chronic illness, for example in local clinical partnerships (3). There have been some radical and promising developments across England so far. These may be at risk because of the fast pace of organisational reform, and could be more actively supported and evaluated, because they hold promise to help reduce unnecessary hospitalisation and support people better at home. For example through ensuring appropriate regulation to allow vertical integration where appropriate, allowing bundled payments across pathways of care, and allowing provider networks to be at financial risk of a capitated budget.
  • Increase transparency in the way that financial risk is managed and resources allocated, in addition to reporting outcomes and performance. In Liberating the NHS: Legislative framework and next steps, the NHS Commissioning Board ‘may establish a contingency fund to make payments to consortia to discharge commissioning functions. The NHS Commissioning Board will also have the power to adjust consortia allocations in future years to reflect previous underspends or overspends’. The principles of allocation to the NHS are on the basis of health needs and there is potential for allocations outside this process to be ‘regressive’ i.e. not based on need. Further, it will be important for it to be made completely transparent to Consortia the principles and rules for sharing financial risk, for the Consortia to be confident that there is a fair and predictable process.

Notes to editors

References

1. Smith J, Curry N, Mays NDixon JWhere next for commissioning in the English NHS? Nuffield Trust, March 2010.

2. Thorlby RRosen, R and Smith JGP commissioning: insights from medical groups in the United States, Nuffield Trust, January 2011.

3. Smith J, Wood J, Elias J. Beyond practice based commissioning: the local clinical partnership Nuffield Trust, November 2009.

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