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PBC in a cold climate

In this month’s ‘Focus on…’, we examine how PBC will adapt to the new financial climate. Below, Kingsley Manning of healthcare consultant Tribal sets the scene for the challenges – and opportunities – facing commissioners.

In this month's ‘Focus on…', we examine how PBC will adapt to the new financial climate. Below, Kingsley Manning of healthcare consultant Tribal sets the scene for the challenges – and opportunities – facing commissioners.

The party is nearly over. After nearly two decades of funding growth, PCT allocations for 2010/11 are likely to be significantly lower in anticipation of the difficult years ahead.

Tribal's recent policy paper, Industrial transformation in the NHS, forecasts no real growth in funding, leading to a deficit of perhaps £20bn a year by 2014/15 or an average of 20% across the system. The recent years of funding growth have certainly delivered significant benefits in terms of capacity and key areas of service quality but this has not been reflected in increased efficiency and productivity in the NHS.

The scale of expansion in services and capacity over recent years provides substantial opportunities for operational efficiencies, but these may only make modest inroads into the deficit. Improvements could certainly be made in the referral patterns for patients (to reduce service use) and in providers' productivity, both in the acute and community sectors.

Over time and with political will, the cost of salaries – the single largest element in the systemic inflation in NHS costs – could be tackled, but there will still be a significant gap in funding. Therefore many health economies will look to tactical changes and practice-based commissioning should have a key role in this.

There could be organisational changes such as provider mergers, including those between community service providers and in vertical integration between community providers and acute hospitals.

Although these tactics may produce some benefits, the evidence suggests that the promised savings are rarely delivered. But as the prime customer, commissioners – in partnership with their PCTs – can be the driving force in demanding a better performance from providers.

The cases studies from Dagenham and Catch-On Group show how PBC can assert its ‘consumer rights' by looking at the local counting and coding systems.

Practice-based commissioners can also take a lead in encouraging PCTs to decommission both inefficient providers and unnecessary services, as discussed in the article on pafe

Practice-based commissioners need to question local service consolidation, ensuring provider mergers don't simply reduce choice and competition without delivering any real cash savings. All the available evidence suggests that any link between scale and efficiency is overrated, if it isn't coupled with a radical restructuring and reduction in the workforce.

Therefore operational and tactical initiatives alone will not be enough. PBC must become strategic and introduce radically different models of care; models that shift not just the location of services but also the way care is delivered, so that the skill mix alters and service costs are reduced.

PBC can also lead the way in moving from a reactive illness service to a proactive health management service. The natural development for PBC is towards not just integrated care but also into care and disease management. Such developments will only be possible if PBCs work together.

The forthcoming financial crunch provides an opportunity to redesign the service for another generation and PBC should be at the heart of that process.

Kingsley Manning is the director of Tribal's strategic health consulting practice

PBC in a cold climate PBC in a cold climate Industrial transformation in the NHS

Industrial transformation in the NHS

Read the Tribal report

To read the full Tribal report on 'Industrial transformation in the NHS', click here.

PBC Masterclass

PBC Masterclass: Regional events

What: These regional PBC events are designed to equip you with the sophisticated skills needed to overcome barriers and push on towards PBC success.

When: 10 individual events running from October 2009 to January 2010

Where: 10 different regions throughout England. Each event has been tailored to address the learning priorities highlighted by practice-based commissioners in that area.

Next steps: Find out more and book

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