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From contract to engagement

One of the reasons for shifting commissioning responsibilities to GPs was the observation that PCTs had struggled to maintain a grip on hospital care expenditure or hold providers sufficiently to account for the quality of care. These two challenges cannot be separated – to have more effect on expenditure and quality, GP commissioners need to work together with specialists, patients, and indeed local authority social services to reorientate care.

The question now for GPs is whether they can make more of the levers inherent in the commissioning or ‘paymaster’ role than PCTs did, while also exploiting the potential advantages this new organisational form offers. These include the greater scope for establishing clinical consensus across the primary-secondary care divide and – due to the ‘make and buy’ possibilities – the option of developing with acute and community providers new service models that distribute risk and responsibility differently.

At the Nuffield Trust, we have made a point of following cases where commissioners and providers have tried to anticipate this new mode of working. Often, countervailing forces at the policy level and entrenched cultures locally have limited their effect. But collectively they point to
a new, possibly more sustainable, way of doing business. Common to all is an attempt to overcome the differences – whether they be staff contracts, employment arrangements, funding approaches or approaches to service provision – that contrive to make multidisciplinary teamwork difficult.

In a quasi-market context, it is understandable that allegiance may be primarily focused organisationally, rather than on any wider concept of economy-wide benefits. In such a context, pathway redesign involving disinvestment may be profoundly unsettling for some. Culturally, ‘stopping doing things’ is not what NHS providers are used to.

Nevertheless, providers face tough cost improvement targets, and changes to the payment system for emergency admissions will put pressure on hospitals to reduce unnecessary admissions and work with GP commissioners to develop new forms of urgent care, community support and reablement.

This creates an opportunity for commissioners. More than at any other time in NHS history there is growing awareness of the need to avoid unnecessary over-performance in relation to commissioners’ agreed levels of activity, given that commissioners may not be able to pay for such over-performance.

Commissioners need to be cognisant of, and sensitive to, this context when thinking about how to extract the right kind of higher performance from their acute partners. Involving them at a strategic level, encouraging greater dialogue – particularly at the clinical level – and investing in decision-making tools that can help generate the levels of data necessary to challenge existing models appear to be the factors that underpin progress.

Working with the acute sector on priority setting

Priority setting is now accepted as inevitable as the demand for NHS services increases, driven by an ageing population, advances in medicine and higher patient expectations combined with the need to establish procedures for allocating scarce resources. We know from our research that prioritising healthcare is difficult and often controversial, but a patchwork of different tools and approaches has developed under PCTs. Although involving patients, the public and other health organisations is seen as vital, this can be difficult to achieve.

Engaging the acute sector proved difficult for many commissioners we interviewed. The acute trust’s ‘power’ and the differences in culture, focus and strategy make priority setting spanning the whole health economy a challenge.

As a result, where successes were reported these tended to relate to modifications to patient pathways rather than engagement in decisions over the explicit rationing of resources according to agreed criteria. In places where attempts to redesign pathways were made, it often proved difficult to actually implement decisions.

Of the sites studied by researchers in depth for the recent Nuffield Trust report Setting Priorities in Health, Morebeck (a pseudonym chosen for a PCT serving a population of 700,000 with complex health inequalities) reported the most success establishing a joined-up approach.

The priority-setting work there comprised two strands: a QIPP programme concerned with core spend, pathway redesign and reallocation of funds across disease areas, and a business case development strand based on the Darzi work streams, in this case focused on establishing a referral centre and creating a rapid response team. Several factors stand out in Morebeck’s approach.

The first was the use of programme budgeting and marginal analysis (PBMA) to aid decision making. Programme budgeting is a retrospective appraisal of resource allocation, broken down into meaningful programmes, with a view to tracking future resource allocation in those same programmes. Marginal analysis is the appraisal of added benefits and added costs when new investment is proposed (or lost benefits and lower costs when disinvestment is proposed), in an incremental way.

Those leading the process at Morebeck suggested that the use of evidence in the PBMA approach acted as both a carrot and
a stick. On one hand, it provided a common language that spoke well to clinicians and to policy directives around QIPP, while on the other it gave commissioners the opportunity to question poor performance and to engage clinicians in improvement initiatives.

Morebeck was also unique among the sites we studied in that all the chief executives – from both primary and secondary care – were represented on the priority-setting board, which laid the ground for a more holistic approach.

The emerging relationship between PCT commissioners and practice-based commissioners also proved fruitful as a mechanism for shaping discussions with acute trusts.

Specifically, the involvement of clinical commissioners was seen as a helpful way to engage acute partners in discussions about priority setting across the local health economy – not least because in the context of disinvestment, implementation was considered to require clinical acceptance.

Getting acute trusts on the same page

A consistent finding from our research into commissioner-led integration has been the importance of involving providers in the planning and development work from the outset. This is illustrated by the drive to integrate care in Trafford, a borough of 215,000 people in Greater Manchester.

Trafford had been dogged by a long history of financial problems, and it was becoming increasingly apparent that the acute trust could not retrieve its financial position without severe consequences for the population. Recognition that a major change was needed was the first key step for Trafford, culminating in its first Clinical Congress in September 2008 attended by 110 people, mostly clinicians.

Out of that meeting, the vision was formed for health services to be accessed very differently, with registered GP lists as the basis for planning care. Large general practices and community hospitals would deliver many of the services patients needed, while the acute trust focus would be emergency care or specialist surgery.

The initial plan was to develop an integrated care trust, but the SHA was unable to support this because of doubts about the longer-term financial viability. The focus therefore shifted to creating a integrated care service rather than on structural change in one integrated care organisation.

Leaders have been clear the need to make efficiency savings means reducing some clinical services in the acute trust, but this has also meant developing new services – for example, a local orthopaedic surgical centre has been set up in partnership with one of the local foundation trusts. 

The Trafford approach inevitably led to a situation where the PCT wanted to develop a clear description of services on offer from local providers, while the latter first wanted details about commissioning intentions. An impasse was avoided by seeking agreement between commissioners and potential service providers on issues such as:

• the likely available budget and an agreement to scope future services within it
• the pursuit of quality improvement as part of the core business of organisations
• a commitment to developing quantifiable ways of measuring quality and integration as experienced by patients and carers
• the development of a challenging and agreed set of health outcomes that local services and organisations could achieve.

The Trafford vision of integrated care has had to change and adapt to external factors. Its experience demonstrates it is possible to make progress on service redesign even while structural issues are being worked through. As one acute trust consultant said: ‘The theme is not discharge or need to follow up, but the best care for the patients at the right time and place without duplication of service.’

Shifting acute focus to outcomes

One of the issues identified as being key to the development of more integrated care for patients is the development of new payment incentives and local currencies. Commissioners have a range of options open to them and PCTs have begun to include CQUIN (see box, page 33) in acute hospital contracts.

Clinical commissioners can seek to increase the use of pooled budgets as a way of enabling closer health and social care collaboration, or use quality-based incentive payments across pathways of care to encourage best-practice models and partnership working.

In Milton Keynes, the PCT set out to develop new forms of commissioning to manage care. It was faced with the need to make substantial savings, reduce waste and inefficiency and address misaligned incentives. Specifically, payment by results created incentives to increase hospital activity when the aim was to give more emphasis to prevention and care closer to home.

The PCT’s strategic refresh emphasised the use of new payment methods that would incorporate significant outcome-orientated incentives. Initially, it explored this new approach to commissioning focused on specific diseases, such as COPD. It quickly realised a more ambitious approach was needed, focusing on larger blocks of care such as maternity services and services for people with learning disabilities. A decision was taken to start the project with a focus on urgent care.

The PCT sought to identify a lead provider to take responsibility for delivering the care within each block, in association with other providers who would work as subcontractors. The lead would manage the supply chain and work with other providers to achieve a more integrated approach. To achieve savings and improve performance, the lead provider would be expected to deliver care with a budget comprising approximately 90% of existing expenditure with the prospect of receiving an additional 5% based on performance.

Of the several challenges Milton Keynes encountered, the complexity of commissioning in this way and the varying technical skills that commissioning blocks of care called for were particularly troublesome. In the early stages the PCT and partner organisations spent considerable effort defining categories of care. It also recognised the need to define care pathways for specific conditions within the blocks of care.

Map of Medicine was seen as the best way of doing this, as it provided 400-500 evidence-based care pathways that could be taken off the shelf and used in the commissioning process. Developing clinical leaders in both primary and secondary care was found to be necessary to support this way of working.

Equally important to the decision-making progress was the choice to work with providers at a ‘whole health economy’ level, mapping health needs for the area and linking them to available resources, then developing commissioning priorities and plans across a range of services. Providers were major strategic partners in Milton Keynes.

For more detail on the case studies presented here, visit the Nuffield Trust website where the reports can be downloaded free of charge:

Morebeck Setting priorities in health: a study of English primary care trusts, by Suzanne Robinson et al

Trafford Towards integrated care in Trafford, by Dr Sara Shaw and Ros Levenson

Milton Keynes Commissioning integrated care in a liberated NHS, by Chris Ham, Dr Judith Smith and Elizabeth Eastmure


The Commissioning for Quality and Innovation (CQUIN) payment system is a national framework for locally agreed quality improvement schemes. It ties a proportion of hospital income to the standard of care. CQUIN has attracted attention recently with the announcement that its ceiling will rise to 2.5% of the contract value. CQUIN schemes are not intended to cover all service areas, but are designed to focus minds on locally agreed priorities for year-on-year improvement. They should not duplicate the minimum quality and performance expectations set out in contracts, but reflect priority areas outlined in the NHS Operating Framework as well as local priorities.

Put another way, they provide an opportunity for commissioners to agree either sweeping goals that exceed minimum national requirements or translate national priorities into specific local action. For 2012/13, acute CQUIN schemes must include two national goals on reducing the impact of venous thromboembolism and improving responsiveness to the needs of patients. Two additional goals focusing on the use of the NHS safety thermometer and improving dementia diagnosis in hospitals have also been set.

But CQUIN is just one method for using payment to reward quality and performance improvement. Increasingly, commissioners are using contracts to ensure hospitals bear more financial risk for patient outcomes, as well as sharing gains. These include contracts that are part block and part performance, in which the rewards for high performance become larger over time so long as results are sustained and improved on.