How does the NHS Operating Framework influence pharma’s engagement with the NHS?

Economics continues to dominate the healthcare headlines. There has been much conjecture in recent weeks about NHS spending and how crucial promises of a ‘ring-fenced’ NHS budget appear to have been broken. Treasury statistics show that frontline spending on the NHS has increased by £3.4 billion since last year. But opponents claim the £1.6 billion surplus reported by PCTs and SHAs in 2011/12 has not been ploughed back into the health service – breaking David Nicholson’s 2010 vow that ‘every penny’ saved by the NHS would be reinvested in patient care. The DH says the surplus is being made available in the 2012/13 budget. With the NHS facing up to the realities of the ‘Nicholson Challenge’, the political debate over healthcare spending will run and run.

Operating Framework

The latest NHS Operating Framework clearly outlines the spending plans for 2012/13. It confirms that SHA/PCT surpluses will continue to be made available during 2012/13 and final year-end surpluses will be carried forward to the NHS Commissioning Board in 2013/14. PCT surpluses are expected to be made available to the relevant local health systems in future years. Conversely, PCTs carrying a legacy debt will be required to clear it during the year. Incoming CCGs will not be responsible for PCT legacy debt but they are expected to work closely together to ensure the situation does not arise.

PCT recurrent allocations will grow by at least 2.5% in 2012/13. PCTs are required to set aside 2% of their recurrent funding for non-recurrent expenditure. SHA clusters will hold these funds, with PCTs required to submit business cases to access them. The cost of organisational change during 2012/13 will need to be met from the 2%.

Tariffs and incentives

The framework outlines developments to the payment system in 2013, to incentivise the realisation of QIPP efficiencies and drive the quality and integration of services. Payment by Results has been expanded to encourage best clinical practice and better patient outcomes. Best practice tariffs are extended to:

• Incentivise more procedures being performed in a less acute setting
• Incentivise same-day emergency treatments where appropriate
• Increase the payment differential between standard and best practice care for fragility hip fracture and stroke
• Promote the use of interventional radiology procedures

Quality improvements are also incentivised in areas such as adult mental health, chemotherapy delivery, HIV services, podiatry, trauma, maternity care and paediatric diabetes. CQUIN is also being developed to provide a stronger incentive to deliver QIPP objectives. The amount providers will be able to earn for incremental quality increases above the standard contract will rise to 2.5% – across all standard contracts. Existing national goals for VTE risk assessment and responsiveness to the personal needs of patients will remain. In addition, two new national goals are introduced:

• Improving diagnosis of dementia in hospitals
• Incentivising the use of the NHS Safety Thermometer

Planning and accountability

The final chapter of the Operating Framework outlines the accountability arrangements for the final year of transition to the newly structured NHS. In 2012/13, the DH will continue to work through SHA clusters to hold PCT clusters to account – handing the baton for accountability over to the NHS Commissioning Board in April 2013. The framework warns that NHS organisations must improve the quality of services provided through the year, while delivering transformational change and maintaining financial stability – with under-performance likely to include ‘intervention from the centre.’
In 2012/13, the key accountability arrangements are:

• The current statutory framework – where SHAs and PCTs remain the statutory units of accountability
• The NHS Constitution – securing patient and staff rights
• Contracts between commissioners and providers
• CQC – regulating NHS providers
• Monitor – ensuring Foundation Trusts are meeting their terms of authorisation and delivering against priorities

Transition plans

The transition to the newly structured NHS is a dominant theme throughout the 2012/13 Operating Framework, and measures to plan for it within the current accountability arrangements are clearly articulated. In fact, given the ambitious nature and close proximity of the reorganisation, details around the planning arrangements for the final year of transition are surprisingly brief.

‘As the industry waits for clarification of individual CCG plans, broader strategies designed at PCT cluster level are already available.’

According to the framework, PCT clusters are each required to develop an integrated plan for the period 2012/13 to 2014/15. The plan should have a clear focus on quality and the national priorities outlined in the Operating Framework. The narrative should be supported by ‘data trajectories for each PCT’, and bring together elements around QIPP, finance, activity, workforce, informatics and transition to the new structure.

Shadow CCGs must support the plan, so they have a strong base on which they can develop their own planning for 2013/14. Likewise, the integrated plans need to reflect the outcomes of local Joint Strategic Needs Assessments. As with the NHS Outcomes Framework, emphasis is placed on integrating all care sectors – with PCT clusters urged to ensure that the public health transition elements of their plan are supported by local authorities.

Implications for pharma

The Framework stated that all PCT clusters’ integrated plans needed to be prepared – and approved by SHA clusters and the DH – by the end of March 2012. These plans are of major importance to pharma. They will contain vital information on the priorities, population needs and long-term ambitions of local health organisations. With the four-wave process to authorise 212 CCGs in England well under way, further data on the specific needs of individual local health organisations will emerge in the coming months. The requirement to publish Commissioning Intentions, updated JSNA and a whole variety of other forward-looking documentation as part of the authorisation phase promises to provide pharma with a comprehensive view of its market environment at the local level. But as the industry waits for detailed clarification of individual CCG plans, broader strategies designed at PCT cluster level are already available.

At a time when finances across the NHS are being squeezed yet the bar for quality and clinical outcomes is being raised, insight into the challenges facing key customers is a valuable commodity for medical sales professionals. The transition of the NHS to a new structure can be a catalyst for proactive medical sales professionals to improve their environmental monitoring, and significantly develop their understanding of customer need. The challenge for the industry is to ensure that key account managers speak in the same language – the same currency – as the customers with whom they seek to engage. The nature and scope of that currency is defined in national documentation such as the NHS Operating Framework and NHS Outcomes Framework, and within the vast local plans that are emerging as the NHS transition gathers pace. And well beyond it.

Success is about finding a common currency with your customers. The clues are out there.

Together with its health reforms, the UK Government has developed a programme to accelerate the uptake of innovative therapies in the NHS that is not only ambitious but concrete and immediate. Thoreya Swage examines the new innovation agenda and what it offers to the pharma industry.

Although the main focus of Government health policy is reform, the development of new commissioning processes and structures and saving £20bn of annual NHS spend, the powers that be at the top at the NHS are still keen on accelerating the adoption of innovation in healthcare.

With that in mind a document, Innovation Health and Wealth, was published in December 2011 by the DH to speed up the process by establishing a set of measures to support change in the practice of healthcare and to identify a timetable for implementation. Unlike similar exhortations in the past to ‘speed up innovation’, this document has a sense of urgency, with a requirement to start immediately and build the actions set out in the report in the planning cycle for 2012–13.

The document recognises that by adopting innovation, the NHS can improve its own productivity – essential for achieving QIPP. It can also provide much-needed support to the life sciences industry at home and abroad through exporting new ideas and expertise, working in partnership with UK industry and generating new business for UK-based companies.

Of course, the ultimate outcome is to improve patient care.

What’s in store?

Innovation is defined in the document as “an idea, service or product, new to the NHS or applied in a way that is new to the NHS, which significantly improves the quality of health and care wherever it is applied”. The term covers a wide range of processes, technologies and uses of pharmaceutical products. The main thrust of the document is to ensure that change is disseminated throughout the NHS, and does not remain in isolated pockets in the more progressive parts of the healthcare system.

The listed barriers to the dissemination of new ideas are probably familiar to all in the pharma industry. They include:

• limited access to data and information

• lack of recognition of those who innovate

• inflexible financial levers that oppose change

• commissioners not having the tools or capability to drive innovation

• lack of consistent leadership to support change

• poor structure and processes to drive innovation.

The actions are highlighted to overcome these barriers are listed below.

1. Ensuring compliance with new ideas

In addition to introducing a value-based pricing structure for new medicines from 2014 – to ensure that patients can access effective treatments that reflect their value, the Government plans to set out in statutory form a NICE Compliance Regime that attaches funding to NICE Technology Appraisals in order to ensure rapid and consistent implementation throughout the NHS, so that patients receive the clinically and cost-effective technologies and medicines their doctors believe they need.

There will also be a requirement for all NICE Technology Appraisals to be added to relevant local NHS formularies, and a NICE Implementation Collaborative (NIC) will support timely implementation of NICE guidance. The NIC will be made up of the NHS Commissioning Board, NICE, the Chief Pharmaceutical Officer, the NHS Confederation, the Clinical Commissioning Coalition, the Royal Colleges and the life sciences industry. It will identify areas that require support and develop implementation guidance and solutions for the NHS, as well as helping pharma companies to improve their value propositions to NICE.

2. Improving information

There will be a single comprehensive web portal for innovation in the NHS, which, among other things, will ‘showcase’ and exchange ideas, and an ‘innovation scorecard’ to track compliance with NICE Technology Appraisals. Both of these will be available publicly.

The web portal will hold a database of case studies, implementation guides and tools, and e-learning programmes for clinical staff to support the introduction of new practice.

A later development will be the inclusion of the existing database of current clinical trials for drugs and medical technologies, which permits patients to participate in clinical studies. The aim will be to encourage more patients to get involved in research and so generate better data for new interventions.

Public awareness of innovations will be driven by consumer campaigns – developed by Which? – to promote effective new ideas in health.

A secure data linkage service will be set up by the Health and Social Care Information Centre by September 2012. ­ This will provide data extracts based on information generated by primary and secondary care and other sources, permitting an improved understanding of which interventions work best, when and why. A complementary secure data service, the Clinical Practice Research Datalink (CPRD) will be set up by the MHRA to support the needs of life science researchers.

3. Architecture for delivery of innovation

­This is a key action through which more robust relationships will be developed between academia, science and industry to develop solutions to healthcare problems and ensure the dissemination of ideas. A designated number of Academic Health Science Networks (AHSNs) will be established nationally, with the first to go live during 2012–13. Every NHS organisation will be affiliated to its local AHSN, which will act as a gateway for NHS professionals requiring help with innovation and provide industry with a point of access to the NHS. Details of the designation process will be published this spring.

The many existing organisations that have been set up to support innovation will be rationalised in a review of all DH/NHS-funded or sponsored bodies.

4. Incentivising innovation

­The funding structure of the NHS will be altered to allow savings yielded to be used for innovation, to prevent ‘silo budgeting’ and to permit cross-boundary working. Tariffs for healthcare will continue to be developed on the basis of outcomes, thereby promoting cost-effective approaches. At the local level, there will be opportunities to use existing tariffs flexibilities to improve care through the development of ‘Best Practice’ tariffs.

NICE will be responsible for stating which activities and tariffs should be decommissioned or reduced as a consequence of new and improved practice or medicines being introduced.

Achieving change will be slow – however, a few high-impact innovations are identified to kick-start this process. Most of these interventions are technologies, but the management of dementia in accordance with NICESCIE guidelines is highlighted.

From 2013, compliance with high impact innovations will be incorporated into the CQUIN requirements.

5. Procurement

Procurement processes will be smartened up, beginning with a procurement strategy that will be produced shortly to enable delivery of about £1.2bn of the £20bn savings required of the NHS. Among other priorities, there will be a focus on innovation and the emphasis will be on building partnerships with industry that deliver mutual value rather than just transactions.

6. Education and leadership

Innovation will be established as an integral part of clinical and managerial education, training programmes, continuous professional development and competency frameworks in the NHS.

A jointly funded industry and NHS training and education programme will be established to enable senior NHS managers and clinicians to work and train with their industry counterparts, together with a new industry and NHS CEO network.

An NHS Innovation Fellowship Scheme, drawing experts from different sectors including industry, will provide coaching and mentoring for senior NHS staff, conduct master classes and provide advice and support on innovation strategies.

An Innovation Pipeline Project to accelerate the adoption and dissemination of proven interventions will be established by the ABPI, the ABHI and the NHS Confederation. Between 15 and 20 joint working projects will be up and running by December 2013.

Chief executives of Clinical Commissioning Groups (CCGs) and the NHS Commissioning Board will be personally responsible for ensuring that research, innovation and adoption are taken up and are part of commissioning plans. This will be reinforced by a statutory duty on CCGs to seek out and adopt best practice.

What’s new for pharma?

Although much of the Innovation document is focused on medical technologies, there are a few key actions for the pharmaceutical industry.

A few more details are still required, but the action is starting now, with NHS commissioners prioritising the adoption and spread of innovation and good practice using the CQUIN mechanism of payment.

­The Government appears quite serious about forging closer links with the industry through joint training and joint working projects with the NHS, and this is a good a time as any to take the initiative.

At all levels pharma has an opportunity to engage with NHS colleagues to demonstrate how their products could streamline care and improve efficiency. The breaking down of budgetary barriers will make it easier to develop a business case, for example, for a particular medicine in primary care reducing the need for a service or intervention in secondary care.

For the first time, encouraging innovation will be put on a statutory footing for commissioners, and this will develop further as commissioning for outcomes becomes the norm. Another opportunity presents itself for the industry to put forward the argument that their products can improve outcomes, and to provide examples of excellence using the local best practice tariffs.

One greatly encouraging feature is the attention given to raising awareness of innovations among patients and the public. They can be the best advocates for the uptake of new interventions, and perhaps will be more willing to support research undertaken by the industry by getting involved in clinical trials.

This document provides the best direction so far on how the NHS and the pharmaceutical industry can work together for mutual benefit.

Dr Thoreya Swage was formerly an NHS clinician and a senior manager in various NHS organisations covering acute and primary care. She has expertise in commissioning health services and is currently working for a number of NHS organisations, including DH agencies, to develop a more commercial approach to the commissioning of healthcare.

The year 2012/13 marks the last phase of the transition to the new NHS for England, and the next NHS Operating Framework sets out the template for this. Alan Jones looks into its implications for pharma.

As we approach the next NHS financial year, it is time to examine what the Department of Health expects of the NHS and what this might mean for pharma. The new Operating Framework for the NHS in England 2012/13 is rather dry, but nevertheless is one of the ’must-read’ documents as you start to prepare your business plans for the year ahead. We pick out some highlights here.

First off, the document sets out the business and planning arrangements for the NHS and describes the national priorities and the ‘system levers and enablers’ needed for NHS organisations to improve the quality of services provided, while both delivering transformational change and maintaining financial stability (aka ‘grip’). It also sets out the practical steps that need to be taken to carry the NHS through a stable transition over the coming year as it moves towards its new structures.

There is much about transforming service delivery and the major shift to a more outcomes-focused approach. The main chapters are on quality, the reform process, finance and ‘business rules’, and planning and accountability. Note that this will be the final Operating Framework for the current delivery system of PCTs and SHAs, and probably the last one of its kind, since this is the final year of transition to the new system.

Outcomes to the fore
This document is rather dry, because there is now a lot of other ‘sexy’ health policy stuff around in documents such as those on clinical commissioning group (CCG) authorisation, clinical commissioning support and the more recent 2012/13 NHS Outcomes Framework – again, all important documents to peruse, and with major implications for pharma.

Pinched from the latest Outcomes Framework are new national performance measures laid out according to the various domains, described in detail in the Annex to the document. For example, from ‘Domain 2: Enhancing quality of life for people with long-term conditions’ there are measures around early intervention (mental health measures) and unplanned hospitalisation in diabetes patients (long-term condition measures). By 2013/14 both the NHS Commissioning Board (NHSCB) and the CCGs will be held to account for such outcomes delivery, and will be expected to publish data on achievement against the indicators in the Outcomes Framework at a local level. This will be linked to the proposals for the new Commissioning Outcomes Framework (COF), which is due to go live in 2013/14.

Some of the COF indicators will be based on NICE quality standards, and as with the Outcomes Framework there will be a particular focus on clinical effectiveness. Also stressed is the link of COF not only to the NHS Outcomes Framework but also to the Public Health and Adult Social Care Outcomes Frameworks. Readers might want to examine these closely to see where they overlap with shared indicators – this is particularly relevant with the new drive towards better integration of care in long-term conditions such as schizophrenia.

QIPP and innovation
The NHS Operating Framework spends a fair amount of time going through some of the outcome measures or proxies in the five domains of the NHS Outcomes Framework – all hugely relevant to pharma. CHD/CVD, diabetes, mental health, cancer, asthma, COPD, epilepsy and venous thrombolembolism are all in the mix. With payers no longer wanting to be sold ‘pills and gadgets’ but solutions that unlock quality and value, now is the time for brand managers to finally step up to the NHS mark.

Early diagnosis and treatment are stressed, as are NICE quality standards. There is to be a renewed push on implementation of the national dementia strategy, and commissioners need to ensure that providers are compliant with NICE quality standards and that diagnosis rates improve.

Interestingly, there are some reform indicators for the first time – e.g. the percentage authorisation of CCGs. NHS and NHSCB Chief Executive Sir David Nicholson points out in his foreword to the document that this is the second year of the quality and productivity challenge, and he emphasises the need for the NHS response to this challenge to accelerate.

QIPP gets considerable coverage, with examples of good practice being given and available resources noted – such as the NHS Evidence website and the Atlas of Variation, with Volume 2 of the latter now published with prescribing maps. Sir David wants more rapid diffusion of good practice (industry should be able to help here), and the new Innovation Review sets out specific measures to achieve this. Service change and clinical service redesign are seen as key, and again this is something that pharma must factor into its forward plans.

New customers galore
2012/13 is seen by the Government as a critical year for the building of the new NHS architecture and delivery system. The CCGs will have to focus on improving care of long-term conditions; clinical networks and clinical senates will be established; and the Health and Wellbeing Boards plus the NHS Commissioning Board will go onstream. There will be more NHS Foundation Trusts, though it is expected that around 20 hospitals will not make the grade. There will be continued rollout of Any Qualified Providers plus the new commissioning support organisations, and there is mention of the newly-integrated organisations that have arisen via the Transforming Community Services programme.

So there are many new industry customer groups since this time last year! Note that the first time, the document states that the Health and Wellbeing Boards should be the ‘local systems leader’ with the key role of integrating local commissioning and overseeing a clear local strategy across the three separate systems of the NHS, public health and social care through joint strategic needs assessments (JSNAs). Please remember that local government is where the director of public health will be based in future, which is another good reason to put local authorities on your radar…

CQUIN and PbR
The document also proposes new national CQUIN goals, and the amount that providers can earn goes up to 2.5% of income. It is suggested that they may want to use the measures of the Innovation Review to help them set up such schemes. Commissioners must share agreed schemes on the NHS Institute website, and if you have not visited this site there is a real treasure trove of local schemes there. Some of these case studies could usefully be shared with customers. Click here for further information.

Local CQUIN schemes that are developing will need to be watched. And watch out too for developments within PbR in 2012/13, aimed at improving the links with quality of care, driving integration and incentivising the implementation of QIPP. That means expanding best practice tariffs, incentivising the performance of procedures in a less acute setting, pathway and mental health tariffs, and both chemotherapy and HIV joining the PbR club.

Clinical Commissioning Groups
Finally, note that CCGs are expected to be given £25 per head of population to be spent on management costs. This is before any entitlement to a COF ‘quality premium’. This sum is at the lower end of the expected range for the running cost allowance, and probably places the future of some of the smaller CCGs in doubt. Indeed, some CCG mergers have already begun. Through the coming year, folk will need to track the authorisation (or not) of each CGG, as this again is essential key account management stuff!

CCGs will also be thinking now about commissioning support and whether or not they need external support. This must be highly relevant to the pharma account management strategies beginning to take shape for the new ‘payers’, as well as the folk in head office considering new ‘support offerings’. Note that some aspects of medicines management also seem to be in the mix, and some of these providers could well be private companies.

Wrapping up
So there we are: another outline sketch of the key annual NHS business planning document and the year ahead. This is all key need-to-know stuff regarding the future new customers of pharma. With an acceleration of new customer groups springing up, industry account managers will have a lot to think about. The onward development of the CCGs particularly needs to be tracked, as does the commissioning support system being proposed. The development of the NHS Commissioning Board will also need to be watched, as it will be a brand new and critically important national account. It will, for example, have a ‘medicines optimisation’ role. Who will be the gatekeeper(s) in head office?

As the journey’s end draws near, the NHS at the end of 2012/13 will look and feel very different to the NHS at the beginning of the year. Are you getting ready for the final transition?

Alan Jones is an occasional contributor to Pf. He commentates and presents widely on the ongoing reform within the NHS and its implications for pharma and is a consultant to Wellards. An independent healthcare policy analyst, adviser and NHS trainer and mentor, he can be contacted here.