Making Commissioning Real Regional PBC Event 24 October 2006

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Making Commissioning Real Regional PBC Event
- 24 October 2006

• Bob Ricketts
• Head of Demand-Side Reform
• Department of Health

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Making Commissioning Real

• Context
• Reform
• Why a decade of commissioning hasnt worked
• Commissioning cycle
• The Commissioning Framework - New roles, new
• levers
• What will it mean for
• Commissioners?
• Providers?
• Questions/discussion

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Context The reform programme

• Completed
• Health reform in England update and next steps
  (December 2005)
• Our health, our care, our say (January 2006)
• The NHS in England operating framework (January
  2006)
• Health Reform in England update and
  Commissioning Framework (July 2006)
• Focus for current policy development
• System Management and Regulation
• Incentives (including primary care contracting)
• Commissioning Framework for Health Well-being
• Quality Framework
• Direction for patient Choice
• Provider development

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Update and Commissioning Framework (13 July)

• Updates
• Reform programme
• Choice and commissioning
• Provider development
• System management and regulation
• Tariff, incentives and information
• And published the Commissioning Framework

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Context Commissioning is one element of a
comprehensive health reform programme
Better care Better patient experience Better
value for money
More choice and a much stronger voice for
patients (demand-side reforms)
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Context Failure of NHS Commissioning

• NHS has had commissioning for over a decade,
  but
• Command control delivery model has
  consistently reinforced the provider line
• Commissioners have lacked robust levers
• Not all available levers have been used (joint
  comm)
• Inadequate regulatory regime system bailed
  out provider failure
• Low investment in developing commissioners
• Seen as low status stories role models?
• Highly variable fragmented practice
• Lack of legitimacy (linked to voice)

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The Commissioning Cycle
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The Commissioning Framework New roles levers

• Main Themes
• Better clinical and community engagement
• Better information to support commissioning
• Incentives and contracts

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Better clinical and community engagement

• Strengthens practice based commissioning
• Clarifies procurement requirements
• Encourages local incentive schemes
• Makes proposals on governance and accountability
• Provides a stronger voice for patients and
  communities
• Introduces a PCT Prospectus
• Makes proposals on triggering community action
  petitions
• Legitimises commissioning decisions

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Better information to support commissioning

• Sets out the approach to improving information
• Using the insights provided by patients,
  providers, communities and local authorities
• Developing strategic solutions such as CfH SUS
• Supporting PCTs to buy-in private sector skills
  (OJEU)

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Incentives and contracts

• Using open tendering to attract new providers
• Encouragement of Third Sector providers
• Using time-limited financial incentives and
  activity guarantees where appropriate
• Makes proposals for a national model contract

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Incentives and contracts

• Quality bonus payments for the highest performing
  providers
• Incentives to encourage new providers
• Tariff supplements
• Contractual guarantees minimum income length
• Use of contracts to manage PCT financial balance
• Clear apportionment of financial responsibility
• Pay below tariff rates for activity significantly
  exceeding planned levels
• Temporarily state maximum number of cases to be
  treated per annum and per quarter

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Commissioning for Health Well-being(December
2006)

• SCOPE
• Strong focus on Health Improvement
  Inequalities
• Commissioning for LTCs (including
• mental health)
• Future of joint commissioning
• Interface PBC Social Care (individual budgets)
• Inclusive commissioning third sector

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Commissioning for Health Well-being(December
2006)

• CONTEXT
• Our Health, Our Care, Our Say implementation
• Local Government White Paper
• Third Sector Commissioning Taskforce Report
  SEU
• Review of primary care contracting
• Opportunity for reviewing social care
  commissioning
• Impending Direction for Choice Quality
• Framework

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Commissioning for Health Well-being(December
2006)

• APPROACH
• Strategic set goals provide overall
  framework
• Inclusive - aimed at Local Government NHS
• commissioners
• Focused on system re-design incentives,
  rules,
• accountabilities
• Permissive, not prescriptive
• Practical, not patronising (robust, relevant
  evidence-
• based tools)

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Making Commissioning Real The Operating
Framework for 2007/08 November/December 2006

• The Operating Framework is the DHs KEY VEHICLE
  for implementing the Commissioning Framework
  setting the direction for the NHS
• SCOPE
• Key service priorities for 2007/08
• Financial resources sustaining stability
• Accountability mechanisms
• National model contract
• Governance framework budget-setting for PBC

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What will it mean for Commissioners ?

• They become centre-stage (but with very high
  expectations of them)
• Step-change in
• strategic needs assessment prioritisation
• patient, public community engagement
• partnership working
• levers
• clinical engagement (through PBC)
• contract management negotiation
• organisational individual capacity
  competence
• Key market-making role
• Potential for tactical use of Tariff
  unbundling
• Greater accountability transparency
• PRIMACY OF CONTRACTS

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What will it mean for Providers ?

• Will require an upping of the game
• Commissioners will have more powerful contractual
  levers
• Choice PBR will create much greater
  contestability
• Where this isnt sufficient, Commissioners can
  enable market entry
• Increasing upward pressure on quality
  productivity
• Greater transparency on clinical quality
• Active reputation management
• Will need to flex staffing , assets cost base
  to match shifting demand
• For acute providers , potential for large-scale
  reconfiguration
• Strategically need to get ahead of the curve
• PRIMACY OF CONTRACTS

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The Future is Commissioning

• QUESTIONS?
• CHALLENGES?