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Five Minute Digest: Procuring healthcare services

Helen Northall, chief executive of Primary Care Commissioning, summarises key points from the NHS Commissioning Board’s latest briefings

Effective from: Immediately

What is it?

A series of six briefings for CCGs about procuring healthcare services.

Hot topics

The briefings advise CCGs on when and how to use competition, the different contracting routes available, the decision-making process and CCGs’ responsibilities under the procurement rules, including requirements to advertise opportunities and publish awards.

What’s new?

No new policy, but fresh insights and practical advice on an important topic.

The procurement guidelines have been around for some time.  Any Qualified Provider (AQP) started life under the last government as Any Willing Provider (AWP) and competitive tendering is well established in NHS procurement.

But what’s new is the clarity of the advice and that it has been written with a CCG audience in mind.

Why it matters

Procurement is the part of the commissioning cycle where CCGs secure the best possible services for their populations. After all, the work that goes into planning and development a badly-managed procurement could be costly and time-consuming and may not deliver the required outcomes.

As well as its moral obligations, the CCG has legal obligations under the Public Contract Regulations 2006. Failure to stick to the rules could result in a legal challenge from losing bidders or a judicial review of procurement decisions.

Transparency has a number of practical consequences for CCGs, including requirements to publish opportunities, clearly state the intentions of the procurement, the pricing strategy and the scoring criteria for bidders.

CCGs need to be aware where present contracts and tenders must be advertised – on the Supply2Health website and, for tenders over a certain threshold, in the Official Journal of the European Union (OJEU) – and where they may also wish to advertise to get the best response.

The briefings cover the four main types of procurement:

  1. Contract management and variation allows existing contracts to be altered, avoiding a new procurement. Variations may not include new services or anything not envisaged in the original contract. CCGs also need to watch that in varying a contract they don’t include anything that may have changed the outcome of the procurement had it been in the original tender.
  2. AQP should be used in circumstances where the CCG is looking to create a choice of services for patients. Potential providers must accept the NHS price for the service as determined either by a national or local tariff. They must also meet the required standards for quality and fulfil the terms and conditions of the NHS standard contract.
  3. Competitive tender should be used where it would be preferable to have single provider of a service and there are multiple providers who could compete to provide the service.
  4. Single action tender should be used in exceptional circumstances where only one provider can fulfil the service specification.

Understanding the procurement rules and arrangements is important to practices, who may be on the receiving end of contracts. AQP, for example, spells opportunity to provide new services, but the element of choice also creates risks for providers. If your practice is an AQP for a particular service patients will be free not to choose your service making income unpredictable.

Unanswered questions

  • Do CCGs need to procure services every time?

Better management of existing contracts will often be enough. CCGs need to sweat existing contracts, ensure that providers are doing what they signed up for and make contract monitoring part of their commissioning behaviour. Thorough and systematic reviews of existing contracts should mean this does not remain an unanswered question for long.

Guidance for commissioners is the subject of a Department of Health consultation.  Whatever the outcome, the principles of procurement will still apply. The existing regulations are not expected to change.

Although the NHS CB will be mainly responsible for commissioning primary care services, CCGs will have the ability to commission local services perhaps similar to those currently secured through local enhanced services (LES). Practices will be able to bid for some of these services, but will need to think about their fitness to respond.

  • Do you have time?
  • Do you have the policies and procedures in place to comply with the NHS standard contract?
  • Are you prepared and able to fulfil the requirements of contract monitoring and reporting?   

If you only learn one thing

The CCG does not have to manage procurement on its own, but will be legally responsible for the process. Commissioning support units will be able to help with the paperwork, take care of advertising, publish the results and manage much of the detailed work around procurement. But ensuring the process and outcome of procurement are right remains the job of the CCG.

Link: http://www.commissioningboard.nhs.uk/2012/09/14/procure-ccgs/

Helen Northall is chief executive of Primary Care Commissioning (PCC)

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