Private health providers are set to take a fifth (£20bn) of the NHS market by 2020, according to corporate finance consultant Catalyst.

CCG commissioning and the new ‘any qualified provider’ rules, combined with the shift to community-based care, will greatly increase the opportunities for the private sector, the Catalyst report says.

Catalyst predicts a major increase in M&A activity within private healthcare, with growing interest from overseas investors in NHS assets and businesses from other sectors seeking to enter the market.

Justin Crowther, Catalyst’s Director and co-author of the report, said that NHS commissioners “are increasingly using the skills and capital of the private sector” – for example, “to turn around underperforming hospitals, operate GP surgeries, deliver community services or create centres of excellence in areas such as pathology”.

The report points to the “landmark contracts” recently awarded to Circle, Virgin Care and Serco as a sign of the growing trend.

In particular, it notes the growing opportunities for private sector providers of primary and secondary care, accelerated by “the removal of barriers” through the new ‘any qualified provider’ rules.

Catalyst also predicts that the shift of healthcare to community settings will open up £2bn of business for the private health sector by 2020, while commissioning support services will create another £1.3bn of opportunities.

In all, it predicts that private health providers will command £20bn of the NHS market – 20% of the whole – by 2020.

Commissioning Support Services have been rebranded. But what will incoming CSUs actually do?

The infrastructure of commissioning support has evolved rapidly this summer. In the past month, the NHS Commissioning Board Authority has renamed Commissioning Support Services (CSSs) as Commissioning Support Units (CSUs), and introduced 23 CSUs that will be managed by the NHSCB during the transition period. The rebranding is designed to distinguish the NHS units from the wider commissioning support services marketplace. 

The move marks the first part of wider efforts to develop a sustainable network of CSUs. This will be led by a CSU Transition Programme team that will focus on establishing key components of commissioning support, including a standard contract, a CCG procurement framework, market development and the commercial development of CSUs. The Transition Programme Team will be appointed shortly. In the meantime, details of how CSUs will collaborate to provide essential services at scale have been unveiled, following an NHSCBA business review.

CSUs will provide at least one of four ‘scale services’ for CCGs. These are:

• Business intelligence

Business intelligence services will comprise data management and integration centres that provide data validation, integration and storage to cleanse and link national and local data sets. This will ensure that meaningful data are available for further analysis by CCGs and CSUs.

• Healthcare (clinical) procurement

These comprise market management activities such as market engagement, analysis and development. It also includes procurement strategies such as procurement project management, strategy development and process compliance.

• Business support

This includes HR, payroll, procurement of goods and services, legal services, information management and technology.

• Communications and engagement service

The configuration of this area is yet to be finalised.

At present, a number of CSUs are evaluating their capabilities and determining which scale services they wish to provide. However, 23 have been assessed and approved.

Dr Joe Rafferty (pictured), Director of Commissioning Support at the NHSCBA, said the national configurations go a “long way” towards providing stability for CCGs when they take over the responsibilities of PCTs next April.

Context and progress
The NHS reforms opened up a free market to service providers. Officially, any organisation can assist CCGs in tendering for services. But the introduction of support organisations by the NHSCBA provides a safety blanket for CCGs when in need of external commissioning assistance. Although CSUs have been given titles referring to different regions they are free to provide services to any of the 212 CCGs in England. 

CSUs are currently completing the third ‘checkpoint’ stage introduced by the NHSCBA to ensure not only that they are competent and financially robust, but that any “potential commissioning and financial risks are manageable” when they are fully authorised. The Board has made it clear that although it will oversee the transitional stage of these organisations, staff will not be employed by the NHS – nor will it be responsible for the services they tender. CSUs are transitional partners in a shift away from the old healthcare system dictated by top-down management. Also, CCGs have been informed that they will be responsible for the services organised by CSUs.

After the CSUs passed the Board’s first checkpoint at the turn of the year – a peer review process which assessed the preparedness of CSSs to be “responsive” to CCGs’ needs – three CSUs were disbanded during the second stage of the authorisation process. Plans for West Mercia, Peninsula and NHS Communications and Engagement Service CSUs were scrapped after the three were found to have “failed outright in their development”. A further nine CSUs were identified by the NHSCBA as being in need of  “rigorous management” – though the Board agreed to develop them further through its own business development unit. 

The third and final checkpoint will “comprehensively test the full business plan, strategy and overall feasibility” of commissioning services. The deadline for this has been set at the end of September 2012.

Services
Long before the introduction of CCGs and the controversial NHS reforms as part of the Health and Social Care Act, staff working within PCTs were tasked with commissioning services to meet local health needs. It’s expected that the majority of these staff will continue to play prominent roles in future CSUs – allowing pharma to maintain important contacts within the health service. In fact, the first 16 managing directors of the 23 CSUs have now been appointed by the Board and include a number from high profile PCT positions.
The NHSCBA has called upon the units to be “innovative” and provide “greater value for money”. It is expected that the main functions of support organisations will be to assist in transformational and transactional commissioning functions such as procurement, contract negotiation and monitoring and risk stratification.

The NHSCB’s Developing commissioning support: Towards service excellence outlines how CCGs may wish to utilise the services provided by CSUs:

• ‘One stop’ commissioning – CCGs share the services of support units to form a collective power when negotiating with healthcare providers. These services are expected to be built on medium to long-term arrangements.
• Specific products and/or services – although currently delivered by a range of suppliers, CCGs may ask CSUs to deliver assistance through a wider end-to-end commissioning support service.
• Business support – services such as key decision-making activities must be carried out by CCGs but highly transactional functions are likely to be outsourced.
• Scale services support – services that should be delivered for larger populations by a large number of organisations.

The response
A recent report by the National Association of Primary Care and the NHS Alliance found that half of the 212 CCGs across the country expect to source services from CSUs. Slightly less than a third (32%) indicated they plan to use their own in-house expertise with just 5% saying they plan to use services outside the NHS to commission.

CCGs also indicated they plan to work with their local CSUs – and maintain a working relationship with the commissioning support service used as part of their authorisation process. Although concerns were raised over the cost of outsourcing commissioning, nearly half (45%) of CCGs said the costs associated with CSUs were affordable. Only 12% disagreed.

But not all commissioners are sold on the idea of outsourcing services. Only 8% of respondents said that commissioning units can deliver support in a more innovative way than had previously been experienced. Also, the majority of CCGs called for further information on procuring commissioning support and information on choices available to them.

There has also been criticism from CCGs about the number of CSUs across the country and the speed of their development. As part of their own authorisation, commissioning groups must establish a contract with a support organisation. But Dr Joe McGilligan, Chair of ESyDoc CCG, recently revealed that the “most difficult” challenge his organisation faces is finding a CSU. He added that when an offer was received by his local CSU it far exceeded their budget.

Those claims were echoed by the NHS Alliance. Its chair Dr Michael Dixon said there needed to be more than 23 CSUs across the country to serve the 212 CCGs. He said a bottleneck was being created as commissioning groups moved through their own ‘waves’ of authorisation and that a “lack of sellers” may push some commissioners towards the private sector.

The NHSCB recently staged a commissioning support unit scenario to explore the proposed relationship between CCGs and CSUs, and to try and anticipate likely challenges which may be faced in the future. However, if the Board continues to slow down the authorisation of CCGs, it’s expected that many will be forced to turn to the private sector instead of their preferred support unit options. 

CCGs are the core of the new NHS – but are they running the game?

The emerging clinical commissioning groups (CCGs) embody a core principle of the new NHS: that commissioning decisions should be made locally, by clinicians, and be focused on community-based care. According to Andrew Lansley, the defining feature of the NHS reform is a “shift of power” from national and regional organisations to local ones, of which the CCGs are the most important.

The role of CCGs in the new NHS is both structural and dynamic. They will commission healthcare at a local level, spending £60 billion of the £80 billion NHS commissioning budget, and will hold together the relationship between patients and providers. They will also work with providers and business partners to redesign local services, and those new solutions will spread through the NHS. The CCGs will thus be the drivers of healthcare innovation.

However, given that GPs are meant to lead the CCGs, the concerns raised by many GPs about the new system are significant. Will CCGs really have the opportunity to improve care, or will they simply have to drive through spending cuts? Will they really be run by clinicians or by the private sector? Is the heart of the new NHS dynamic and responsive, or divided and unstable?

Development of CCGs

In July 2010, the white paper Equity and Excellence: Liberating the NHS spoke of “putting GP commissioning on a statutory basis” through the development of ‘GP consortia’. These new organisations, to which every GP practice would belong, would run each local health economy: they would contract providers, partner with local authorities, and be accountable to patients and the public for outcomes. They would be authorised by a new national body, the NHS Commissioning Board, which would also commission GP services.

The initial reaction of the GP community was positive. Being in the driving seat of a fast-evolving NHS, able to redesign local services for their patients, appealed strongly. However, the codification of the reforms in the Health and Social Care Bill led to growing opposition among GPs. Issues raised included the power of the Board to direct GP consortia and the requirement that consortia embrace provider competition. Above all, the deepening economic crisis made GPs fear their role would be one of rationing services, not finding solutions.

The Government’s ‘listening exercise’ did not resolve the concerns about competition and rationing, but it led to a stronger assertion of the autonomy of the consortia. An important change concerned the scope of clinical representation: the new ‘clinical commissioning groups’ were defined as including specialist consultants and nurses as well as GPs. That was a step towards the ‘integrated care’ that the BMA had highlighted as a priority.

Breaking the waves

The NHS Commissioning Board Authority, set up in October 2011, has the primary responsibility of putting in place a nationwide system of CCGs to replace the PCTs by April 2013. A total of 212 CCGs have been approved to go through the authorisation process in four waves: 35 in wave 1 (commencing in June 2012), 70 in wave 2 (July), 67 in wave 3 (September) and 40 in wave 4 (October).

The authorisation process is designed, according to the Board, to ensure that CCGs have a “strong clinical and multi-professional focus”; have meaningful patient engagement; have credible plans to “deliver the QIPP challenge”; have proper governance arrangements; are set up to collaborate with other CCGs, local authorities and the Board; and have strong leadership.

It has not always been a smooth road, however. The Board, concerned at the prospect of CCGs competing for providers of commissioning support, announced it would take over the appointment of leaders to Commissioning Support Services. One CCG has already protested that its authorisation has been delayed by this.

Another issue is lack of GP leadership. Clare Gerada, chair of the Royal College of GPs, said that only “about 25 GPs” in England were actively interested in leading local commissioning. The reason, she said, was that the “transactional” aspects of commissioning as a business did not appeal to them. 

GP-led commissioning

CCGs will be responsible for commissioning community health services (including mental health care and services for children and elderly people) and hospital care (both A&E and elective care). The NHSCB will be responsible for commissioning primary care as well as pharmaceutical and dental services. Local authorities will be responsible for public health, with the NHSCB covering certain aspects.

Collaborative working between CCGs and the other statutory organisations involved in healthcare is anticipated, but the model is not one of top-down control – rather, it is one of business partnership. The NHSCB can provide assistance or support to CCG commissioning; this may take the form of extra funding or access to staff and other resources. CCGs have a duty to co-operate with local authorities in supporting aspects of public health, including child health and mental health.

CCGs are able to buy in support from external organisations, including the CSUs whose development is currently being governed by the NHSCB. For more details on the CSU landscape. CCGs can also buy in support from the private and voluntary sectors, but will retain control of commissioning decisions. These relationships will differentiate CCGs, as some are keener than others to engage in private sector partnerships.

Commissioning of hospital services is also likely to differentiate CCGs, especially as many hospital trusts are facing financial challenges as they shift to foundation trust status. CCGs will influence the development of FTs through their commissioning strategies – for example, they may promote private providers both within and beyond FT-provided services. The acute sector will have a voice in CCGs, though its representatives on a CCG board cannot come from the local area.

The GP-led nature of CCGs is variable. Fewer than 50% of current CCG board members are GPs, and there is potential for the management of local commissioning to be outsourced. CCG boards should include a non-practice nurse and a specialist consultant, but local government are excluded.

Life after April 2013

Securing GP ‘buy-in’ remains an issue for the NHS reforms, but those GPs who support the reforms have been most active in developing CCGs. The CCG boards thus represent a more pro-market segment of the GP profession. Pharma companies may find that their CCG customers and GP customers require a nuanced and varied approach.

Each CCG will have a different mix of GPs, hospital clinicians and financial or management specialists. It will also be dealing with local health issues, which are also impacting on local government and the local Healthwatch body. Every CCG will have to find its own balance between clinical outcomes and economic success.

CCGs will also face a tension between the ‘autonomy’ stressed by the NHSCB and the need for partnership with other stakeholders, within and outside the NHS. Will this tension lead to fragmentation and paralysis, or to dynamic innovation driven by the local synergy of clinical and commercial talent? Whatever the answer, the CCGs hold the key to the success or failure of the new NHS.

The NHS Commissioning Board Authority (NHSCBA) has appointed its 15th Commissioning Support Unit (CSU) managing director.

Tim Andrews has been appointed to lead the Cheshire, Warrington and Wirral CSU after serving as its interim MD. He also previously led the Commissioning Lab.

His appointment follows five other MDs being selected by the NHSCBA in the second round of recruitment. The Authority initially planned to appoint 14 MDs during the second phase of recruitment but failed to fill its target of 14 positions.

The Commissioning Board has been criticised by certain CCGs for the amount of time it has taken to fill all 23 MD positions for CSUs. Dr Joe McGilligan, Chair of ESyDoc CCG, claimed the delay in appointing a MD for his regional CSU was slowing down the group’s authorisation process.

The Board recently renamed commissioning support organisations as CSUs in an attempt to differentiate those which are to be hosted until 2016 and suppliers from the private sector.

The national configuration of some key aspects of commissioning support has been outlined by the NHS Commissioning Board.

Business intelligence, clinical procurement and business support services will be provided by the emerging Commissioning Support Units (CSUs), individually or in collaborative networks.

Communication services are likely to be provided nationally by four or five centres, but details have not been finalised.

The NHSCB now uses the term CSUs to cover the 23 NHS commissioning support service providers that it will host until 2016, as opposed to the wider market in commissioning support services that will be open to CCGs.

Business intelligence services will manage and integrate clinical data. Nine providers have been approved: collaboratives for North West, North East and North Yorkshire and Humber, South and West Yorkshire, Greater East Midlands, London, and the South; and the single CSUs Central Southern, Best West and Birmingham, Black Country and Solihull.

Clinical procurement services will cover market analysis and engagement as well as procurement activities. Thirteen providers have been approved: North West collaborative, North East, South Yorkshire and Bassetlaw, Greater East Midlands, Norfolk and Waveney, Essex, North Central and East London, North West London, Surrey and Sussex, Commissioning Support South, Central Southern, Best West and Birmingham, Black Country and Solihull.

Business support services will include HR, payroll and legal support. All individual CSUs will be allowed to provide or source these services.

These announcements follow the assessment of CSUs’ ability to provide these ‘scale’ services according to defined standards, within an appropriate and sustainable cost framework, and with the capacity to deliver across the stated region.

The NHS Commissioning Board (NHSCB) has appointed five more managing directors for commissioning support units (CSUs) in the second round of recruitment – nine less than expected.

They include Nick Relph at South London CSU, Clodagh Warde Robinson at Surrey and Sussex CSU, Maddy Ruff for North Yorkshire and Humber CSU, Alison Hughes, West Yorkshire CSU and Daryl Robertson, Kent and Medway CSU.

The Commissioning Board said it will make further appointments in “due course”.

The appointments come after the NHSCB confirmed nine managing directors in the first round of recruitment.

Also, Andrew Kenworthy, Chief Executive of NHS South London, is set to join the Commissioning Board Authority’s Commissioning Development Directorate via an IMAS assignment as Director of the CSU Transition Programme.

Meanwhile, the Commissioning Board Authority has recruited three Very Senior Managers. Bob Ricketts joins as Director of Commissioning Support Strategy and Market Development, the DH’s Colin Douglas has been appointed Director of Communications and Ann Johnson has been recruited as Director of Financial and Corporate Performance.

A new report from NHS Clinical Commissioners (NHSCC), based on a simulation exercise, aims to help CCGs meet their commissioning support unit needs.

A scenario workshop held in May 2012 explored how CCGs can most effectively draw on CSU resources when commissioning local services.

The report identifies the need of CCGs for greater clarity on the CSU options available to them and how the organisations can best work together.

It describes how six emerging CCGs, four CSUs and an acute hospital trust worked together to develop an operational plan, redesign COPD services, and implement the redesign.

Key learning points identified in the report included:

• CCGs need to understand the support options available to them locally and nationally, while CSUs need to market their services more effectively.

• Both CCGs and CSUs need to understand when clinical leadership is necessary in commissioning and when other CCG members can lead the process.

• The role of the wider clinical team, including nurses and hospital specialists, in guiding the commissioning process needs to be developed.

• The customer/supplier relationship between CCGs and CSUs needs to be explored and tested.

Julie Wood (pictured), Interim Commissioning Development Director at NHSCC, said: “It is absolutely crucial that clinical commissioners receive the support they need to create a robust strategy for their work with commissioning support services.

“Not only do CCGs need a lot more clarity on the options available to them in terms of using CSSs, but they also need to be able to access a range of practical support which is relevant to their requirements.”

Dame Barbara Hakin, National Director of Commissioning Development, commented: “There is still a great deal of work to do to ensure that clinical commissioners have all the support they need, and we have used the insights from this report to inform the next phase of the NHS Commissioning Board Authority’s programme of practical, targeted CCG and CSU development support.”

Up to 6,000 jobs may be lost over the coming months as part of the final transitional stages of the new NHS structure, a leading union boss has predicted.

It’s believed that 400 jobs at the Birmingham, Solihull and Black Country PCT and a further 400 positions at Greater Manchester PCT will be the first axed.

Jon Restell, Chief Executive of Managers in Practice, said he was “expecting something big to happen” in the next three months due to the NHS still needing to “downsize”.

The wave of job cuts are as a result of CCGs, CSS and the NHSCB only now calculating how many employees they will be able to afford when they are fully authorised from next April.

The hundreds of jobs predicted to go in the Midlands and the North West have also been replicated in other parts of England. However, regions such as London reduced posts “harder and earlier” in the restructuring process, Restell said.

A reduction of 400 posts at the Birmingham, Solihull and Black Country PCT would result in a 30% reduction in staff. However, it’s expected that those who will lose their jobs will take on new roles in the local CSSs, council public health teams, Public Health England and other bodies formed after the reforms.

What does the ‘single operating model’ for primary care commissioning mean for GPs?

The NHS Commissioning Board Authority’s ‘single operating model’ for primary care commissioning represents a major step in defining the relationship between GPs and the new NHS. As such, it is essential reading for anyone with a stake in prescribing behaviours and, more widely, in patient pathways.

A major question posed by the Lansley reforms is: who should commission the commissioners? If GP-led groups are responsible for commissioning secondary care, who can commission primary care? The answer, the NHS Commissioning Board, was greeted with mistrust by many GPs who asked why they needed some Big Brother watching over the job they had always done.

In addition, the passage of the Health and Social Care Act left a lot of broken glass scattered through primary care. The relationship between clinical outcomes and money, the involvement of the private sector in the NHS and the apparent fragmentation of the health service are issues that divided
the GP profession.

So the single operating model has the task not only of outlining new clinical and business relationships, but of building professional bridges. The Board tackles this challenge by saying up front that it seeks to
achieve “the right balance between national consistency and local decision making”.

Unlike earlier documents describing the infrastructure of the new NHS, Securing excellence in commissioning primary care does not list concrete developments to be in place by April 2013. Rather, it outlines a pattern of relationships that will develop from that date, when the new single operating model
for primary care commissioning becomes operative. It represents the parts of the new
NHS working together with a clear goal of outcome improvement.

The commissioning challenge
According to Dame Barbara Hakin, National Director for Commissioning Development, the new system aims to “tackle unwarranted variation and take positive steps towards raising the overall standard of primary care”. The document notes that primary care, while accounting for only 15% of the NHS budget, has a
profound role in making “preventative interventions” and influencing all the care patients receive.

The challenge of replacing “many different systems” for primary care commissioning with “a single national
operating model” without losing “vital local responsiveness”, the Board says, depends on “establishing relationships and arrangements across the new organisations” – including CCGs, whose health strategies
will set the context for primary care.

The NHSCB will be responsible for planning, securing and monitoring primary care services. Its local area teams will manage the performance of GPs and other primary care providers (dentists, community pharmacists and opticians), and will help to support providers in difficulty and deal with major emergencies.

The local area teams will support patient “choice and control in designing services that respond to their needs”, focusing on “the basic service offer” (such as early diagnosis) to reduce variations and health inequalities. Likewise, they will support the development of “local area clinical leadership teams” that draw on the expertise of all types of primary care clinicians. Finally, their focus on patient outcomes means they will look for “improvement strategies” at all times.

All together now
Most primary care commissioning will take place through the Board’s local area teams working with CCGs, local authorities and health and wellbeing boards. The Board as a central authority will “ensure consistency” and provide the framework for performance management and quality assurance. Crucially, this system involves “fewer managerial resources” and “larger geographical footprints” than the previous system. It does not remove local initiative: it just removes the SHA and PCT management layer.

At the heart of the model are the common operating procedures for local area teams, of which the most important is “to standardise the performance management frameworks and processes at practice, provider and individual levels”. Managing variability and the healthcare market are also key priorities.

Commissioning support services may also assist local area teams: emphasis is placed on the value of
business intelligence in providing “a single flow of standardised information”, and the potential for CCGs to share support for primary care development and redesign with local area teams.

Micro commissioning
CCGs themselves will work closely with the NHSCB to review the “micro commissioning decisions” made by
GPs in “each referral and prescription”. The Board says that its work with CCGs has shown they can progress effectively together towards “quality improvement” through benchmarking, data sharing and peer review. It notes further that CCGs will be able to commission integrated “wrap-around” community-based services in which GP practices can participate, with care taken to manage conflicts of interest.

The local area teams will establish relationships with a range of partners, including CCGs, Local Healthwatch, health and wellbeing boards, local authorities, Public Health England local units and the CQC. Clinical networks will feed into the primary care system “with a particular focus on early diagnosis and timely treatment”. Public health commissioners will advise local area teams on priorities for the local
population, and work with them to develop health improvement initiatives that may include primary care.

The Board concludes: “During the next three to six months, we will fully explore all the interdependent relationships critical for the operating model and take any action necessary to ensure that they will work effectively.” It encourages discussion of the model within PCT clusters and feedback on
potential improvements.

A business network
The single operating model for primary care commissioning is not so much a ‘one size fits all’ as an ‘all things to all people’. It shows the old hierarchical NHS giving way to something much closer to a business network, with shared rules and goals but different cultures. The imprecision of the arrangements described displays the will to promote clinical innovation and business
development.

The emerging structure is designed to give GPs more confidence that they will be neither isolated nor controlled. Those who need guidance and support will receive it, while others will have the freedom to change treatment pathways and business models. This will help to defuse opposition to reform in the
profession, while setting the stage for further changes.

For pharma, the new model points to the development of a complex and flexible customer network with many points of contact. Key account managers are much concerned with how primary care operates and the factors influencing it. This model shows primary care in a dynamic field of NHS and other stakeholders, responding to ideas from all sides: an exciting prospect for suppliers.

The NHS Commissioning Board (NHSCB) has appointed Ming Tang as Managing Director of the South Yorkshire Commissioning Support Service (CSS).

The Board’s business intelligence programme leader was ear-marked for a senior CSS position during the first round of recruitment alongside eight other managing directors.

Ming Tang, who supported commissioning in the West Midlands, has nearly two decades’ experience in programme leadership and delivery of supply chain strategy, operations and transformation projects.

The NHSCB announced in June that it was to take on the responsibility of recruiting CSS leaders to ensure a balanced selection of experienced personnel. However, the Board faced problems after a lack of interest from existing PCT bosses and was forced to add a second round of recruitment.

It now hopes to appoint a further 14 CSS MDs in August 2012.