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The times we are working in now need a great deal of accelerated change and there must be no negotiating that down. So my mission statement for this part of my consultancy career is to be clear that there needs to be and will be a lot of change from the work that I do with individuals and organisations and if organisations don’t want that, then it is probably best to go somewhere else.

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Give us the tools….or we can’t do the job

Filed Under (GP Commissioning, Reform of the NHS) by Paul on 25-03-2011

This week’s posts have discussed the potential clash that is taking place on the ground as NHS reforms develop the two very different approaches represented by the work of the National Commissioning Board and the work of the GP Commissioning Consortia. This week I have posted on the two different cultures and on how GPs could be empowered in carrying out their new roles.

Today I want to continue that by talking about what appears to be a very arcane aspect of commissioning but which now strikes me as increasingly important – the nature of the contract between GP Commissioning Consortia and the acute secondary care organisations from which they commission.

This issue has been significant for some time. In 2008/9 and 2009/10 every PCT published a commissioning strategy plan. Many of these were quite good documents but they remained at the level of plans that did not create real change because they failed year after year to limit the amount paid to acute care.

Nearly every plan set out the intention to limit out-patients in patient and emergency care, but what panned out was nearly always an increase in spending.

There are many reasons for this – not least the failure in most parts of the country to limit demand for acute care. But even when they managed this the PCTs did not feel that the national contract gave them the levers to reduce the amount paid to hospitals – even if there was reduced activity. The contract never seemed to be that specific.

It did not provide a relationship between commissioner and provider that could solve any disputes about how much work was done and, in the light of that work done, who would receive how much money. That makes it rather different from contracts that we sign and use in the rest of our lives.

It also makes it different from the contracts that are used by GPs when they buy goods and services for their practices. You can’t imagine a GP having a block contract for medical supplies which could lead to them paying over a sum of money – irrespective of how many goods and services they receive.

Quite the opposite, the point of the contract is very specific. If you don’t buy something you don’t pay for it.

For all small business people the relationship between price and contract is very important. It’s why they don’t become bankrupt.

These are a part of the experiences and skill sets that GPs bring to commissioning. They understand the importance of cost and they understand the importance of the management of contracts as both a buyer and seller of services.

Over the last few months I have seen GPs enter the commissioning space and try and use these skills and experiences in the existing commissioning scenario. They find mainly that the PCTs to whom they talk can’t make their contracts work in the way they need to. It’s not that the contracts that GPs expect are particularly nasty to providers of services, it’s just that they are expected to be much more specific.

And by and large current NHS contracts don’t work that way.

If GPs are to be successful in developing much better commissioning then they will have to be able to use contracts that work. The development of these contracts will be one of the tasks carried out by the NHS Commissioning Board and will be one of the many activities that the Board can either deliver through the framework of the past or the framework of a GP commissioning in the future.

But there is another and very important source from which contracts for GPs can come. Across the country all GP practice has had legal advice in developing the economics and contractual forms of their practice. There are some very capable and competent lawyers who have worked with GPs up to now to develop the legal basis of their practices.

These lawyers now need to turn their attention to developing contractual forms that GPs feel they can use to implement their commissioning intent.

  • If they succeed in reducing outpatient appointments by 5% will they pay 5% less to the acute provider in next year’s contract?
  • If they reduce the frail elderly returns to emergency care beds by 10% will they pay 10% less?
  • If they reduce the number of days spent by COPD patients in hospital beds by 15% in that year will they pay 15% less?

Contracts may be a very boring subject but unless the answer to all three of the above examples is yes, then the purpose of reducing hospital activity diminishes considerably and the incentive to develop as high class GP Commissioning organisations diminishes to almost zero.

(And by 2015 the NHS goes bankrupt)

Comments:

9 Responses to “Give us the tools….or we can’t do the job”


  1. Hear, hear! The principle should be “if we didn’t order it, we’re not paying for it”. And it should apply to tertiary referrals too; if it’s not on a pre-approved pathway or specifically authorised by the GP, then it doesn’t get paid for.

    As you say, this isn’t harsh. It just makes sure that everybody knows where they stand when it comes to money. And it should make it easier, not harder, to build a constructive clinician-to-clinician relationship… as I blogged earlier:
    http://blog.nhsgooroo.co.uk/?p=705


  2. Paul
    An interesting blog in the middle of the contracting round for 2011/12. The NHS can QIPP all it wants but it cannot continue to ‘negotiate’ SLAs rather than acute contracts and buy and sell businesses without the necessary legal documents. In addition, the pressure from the centre to sign acute contracts by a particular date (and at any cost) is nothing short of bizarre.
    The 2012/13 round will be interesting if GPs are more in control.
    Caroline


  3. Does the data exist in a form that allows the ‘quantities of procedures required’ to be anything other than a SWAG (silly wild-assed guess), and will the skills exist in consortia to do the maths with the data,I.e. boring old demand (and variation) and capacity? A dull question but getting it right will be important to avoid unexpected rationing for pts and bankruptcy for consortia.


  4. Partly agree, but contracts are quite specific already, esp the Activity/Cost schedules. PBR has consistently favoured Providers, and non-PBR pricing even a greater challenge. NuffieldTrust report: activity up 3% cost up 6% http://tinyurl.com/6gw3csb. And this approach is v focused on Commissioner savings, not system-wide / NHS efficiencies and pathway redesign.


  5. An interesting point missed is that trusts often provide far more activity for the money paid and PCTs have been able to negotiate contracts on this basis.

    Every year PCTs and trusts do ‘deals’ at the year end (and increasingly at the year start) and invariably this means that the PCTs are paying less than activity x price. There are many reasons why this can be negotiated and most of these instances are due to the vagaries of the contract that are alluded to here.

    GPs, generally, have demonstrated an inability to prevent increasing attendances at A&E, & resultant increases in non-elective care, a reluctance (so far) to reduce referrals and put in place pathways to reduce follow up outpatient attendances etc. It has not been for a lack of information of the impact of these (in)actions that has prevented the increase in acute activity, but maybe the power of the negotiation stance of PCTs has over-cushioned the impact.

    “For all small business people the relationship between price and contract is very important. It’s why they don’t become bankrupt” is a non-sequitur in the case of most Acute contracts (including some ISTCS) Following the logic outlined in the blog NHS will not have to wait until 2015 to declare bankruptcy. If all activity was paid at tariff we are there already.

    Furthermore It will be far more difficult for many small purchasers to negotiate deals and for see the pitfalls of negotiating and managing contracts with trusts who have unequal bargaining power and considerably more experience of the ‘game’.

    For many reasons the contract management undertaken between PCTs and trusts overlooks the considerable leverage that there is within it to control costs – and the levers are very powerful including non payment for over performance. I expect that consortia will discover that there will be much heat before the light of pragmatism dawns and they realise that contract management of major acutes is far more art than science – much quid pro quo.

    And in the meanwhile, at least in the short term, expect Consortia to be hit with significant increase in costs for the same activity.

    Kevin Pritchard

    Twitter @chimenet


  6. Dear Bruce

    These are exactly the right questions. If GPs are expected to do this properly then the data can be made to exist. In other areas of life people don’t pay unless there is such data. There are now some good cheap invoice validation packages that can sort such data and through exceptions bring up the data for the GPs to look at.

    Without the data the peer to peer discussions that GP Commissioning is based upon cannot happen

    Paul


  7. This suggestion for contract design runs in more or less the opposite direction from the innovation that is going on now in US Medicare provider payment development around bundled payments for extended episodes of care/cycles of care. Risk allocation in contract design cuts 2 ways.


  8. Paul

    The data exists today but the issue is around the wording in the contract and the ability (or not) to achieve challenges. It would be an interesting piece of research to conduct (challenges raised and ultimately paid). The success ratio is not good.
    Caroline


  9. […] 25th March I wrote about the importance of GPs being allowed to develop real contracts which could provide them with better […]

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