My mission statement

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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The proposed new architecture of the NHS – Commissioning

Filed Under (Accountability, GPs, Reform of the NHS, Secretary of State) by Paul on 17-06-2010

Over the next few days I will post a series of blogs on how I see the new architecture of the NHS proposed by the Secretary of State working. These will be updated after the health white paper in July but this is my best guess.

Obviously what is important is adding all the different bits of architecture together, but that’s a bit long for a post so you will have to do that yourself for the moment.

There will be four different posts each examining the proposed new architecture of the NHS

• Commissioning
• Provision
• Transactions between commissioning and provision
• Public Health

followed by “What is it like added it together”

Commissioning

Over the last 9 years the way in which some NHS health care is bought has changed a great deal. But the way in which some of it is bought has hardly changed at all. The proportion of NHS spend that is commissioned properly with a view to markets, alternative provision, and value for money is still not large.

The new architecture proposed by the new Secretary of State will change this. This is NOT simply moving the deck chairs and the people around, it is a radical change in state structures and an even more radical change in commissioning organisations.

I think the new architecture for commissioning NHS care looks like this.

1 From DH to National Commissioning Board

Moving the DH from the central office of the NHS to an independent Commissioning Board.

This is a big step that has two linked, but very different aspects to it. At the moment David Nicholson is the Chief Executive of the NHS. This title and the fact that he sits in Whitehall means that there is a very close line of command between the Secretary of State for Health and the Chief Executive of the NHS. They will meet often and constitutionally the Secretary of State has a right and duty to tell the CEO of the NHS what to do. The creation of the independent Board will transform this relationship.

The Independent Board will have a contractual relationship with the Secretary of State. He will hand over a cheque for about £100 billion to the NHS board and they will have to meet a set of criteria around which they will commission care. This contract will replace the operating framework.

I don’t know where Parliamentary accountability will be for this but it could be that the Board is accountable to the Health Select Committee – with its new chair Steven Dorrell. They could call the board to account on a regular basis but it will be the contract with the Secretary of State that will be the main form of accountability.

There is however a second change which is in some ways more significant. The National Commissioning Board will not simply transfer the skills and functions of the current NHS leadership to the new Board. The current leadership of the NHS have nearly all established a considerable managerial expertise in NHS provision. They have run hospitals and have then gone on to run parts of the NHS where they have had responsibility for performance managing hospitals. The frame through which they see the NHS is the frame of NHS provision. Virtually none of them have ever bought any health care.

Yet the National Commissioning Board will be just that – the organisation that is responsible for the Commissioning of health care for England. It will be absolutely necessary that they have the skills to commission health care and not just the skills to provide it. Some of this skill will come from outside the NHS and some will come from the experience of commissioning inside the NHS. There will also be a Chair and non execs on this board, and it would be wise also if they also had experience of buying health care and not just providing it.

To ensure that commissioning goes well they will have to have contracts with a number of organisations. Most of this will be handing over £60 billion a year to those that are commissioning health care in localities – see below. But they will also have to buy the primary care in each locality. At the moment the main lever over GPs is the national NHS contract. This will remain the most significant aspect of performance management for primary care and will now be implemented from the National Commissioning Board.

2 From SHAs to Regional Offices of the National Board

There will be regional offices of the National Commissioning Board where there will have to be strong experience of commissioning.

These will be completely different from SHAs. SHAs have Boards that represent the localities to the DH. This will change and they will be clearly regional offices of the National Commissioning Board. They will be a part of a National Organisation.

Secondly, as with the National board the prime skill that will be necessary is understanding contracts and how to get the most out of them when you are on the buying side. SHAs have changed but in truth the main expertise within their senior staff also comes from the provider side of the NHS. In the regional offices of the NHS there will be a premium on commissioning skills in these regional offices.

At the moment there is a National Commissioning organisation for that buys health care for rare conditions. This could become a part of the Board or there could be contract between the Board and a separate body who would carry this out. It may be wise to place the regional commissioning functions in this organisation as well. At the moment the funding for this is top sliced from the PCTs. Since PCTs will not be commissioning care the money will have to be provided from the National Commissioning Board.

3 From PCTs to GP-led commissioning consortia

Commissioning of health care in the localities will be the biggest and most radical change. At the moment there are152 state organisations covering the whole of the country and they receive the commissioning money for health care in their localities from the DH. This money is on a ’capitation’ basis (that is per head of the population in that locality) but the “per head” is weighted by a number of criteria around issues of deprivation. This means that GPs will get paid more for your health care in a poorer area than in a better off one. This system is based upon a straight line of accountability between the Secretary of State for Health and the PCT CEO. The PCT CEO is the accountable officer for the money that comes from the Department of State.

This will all change. Over the next 22 months a number of GP-led consortia will be set up who will commission care in their localities. It is not clear at the moment what sort of population these will cover but they will probably have to cover about 80,000. These organisations will be collaboratives of GP practices which are themselves private sector organisations. This means that the National Commissioning Board will have a series of contracts between themselves and private companies called GP commissioning consortia.

There are two important reasons for this change. The first is that at the moment GPs spend most of the NHS’s money by referring people to other parts of provision. These referrals spend the NHS’s money. The idea behind GP-led commissioning is that since the GPs are spending the money at the moment then they might as well control the budget that they are spending. This brings medical accountability in line with the financial accountability. They will be spending money for which they have responsibility.

This is the most significant change in the architecture and where the most anxiety about the new architecture exists. At the moment very, very few of these organisations exist. Yet in 22 months time they will be responsible for £60 billion pounds of commissioning of NHS care. In a short time this is an enormous developmental task. And it will need great care and attention from everyone involved.

The organisations will have to be developed – and then someone will have to make the decision that these organisations are capable of receiving the money and of using it correctly. There will need to be some form of assessment of these organisations. In the secondary care sector Monitor carries out an assessment process which decides whether an existing acute or mental health trust has the capacity to run its own business. It seems to me that it would not be too different for Monitor to make a decision about the GP commissioning consortium capacity to carry this new role.

There is a further issue that is of the greatest significance. This architecture makes a very tough distinction between commissioning and provision.The HQ of the NHS is all about commissioning. But the GPs are not just commissioners. These same people are also providers. GPs are most interested in providing new forms of care. The problems would come if GPs were to commission provision from themselves. This way of distributing public money – buying services from yourself- will be outside of competition law. Public money needs to be spent within a series of fair markets and buying provision from yourself excludes others from buying that care. The economic regulator – see the third post – will have to deal with this.

Conclusions

This is a very big change in the way in which health care will be bought by the NHS. It will make commissioning the main set of skills that the leaders of the NHS will need (by-passing most of the people who are there at the moment). In the localities of England GPs will form private organisations that will commission health care for their registered populations.

Comments:

3 Responses to “The proposed new architecture of the NHS – Commissioning”


  1. Thanks for this insight, looking forward to the rest of the series


  2. In addition to conflicts of interest where GPs are commissioning from themselves (or friends and family) there is another potential conflict — where GPs’ interests conflict with those of the patients for whom they are commissioning. This raises the issue of the accountability of GP commissioning –who makes sure that patient needs and demands are informing and driving service changes? This topic is being covered on the patient-centred healthcare blog http://patientcentredhealthcare.wordpress.com/ which we invite readers to view.


  3. In some of these already set up consortia are key players who previously ran PCGs/PCTs and were responsible for redesign of hospital services at very large NHS Hospital Trusts,public health leads also engaged in the process/plan.
    All this is just a continuation of the previous plan with a couple of extra’s.The main issue is with what happens to Foundation Hospital Trusts and who will control them.

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