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.

GP referral rates have risen by almost 10% in the last year, despite falling by 2.1% between March and November 2011.

The Department of Health figures indicate that the earlier fall in referral rates was a consequence of PCT rationing, which Health Secretary Andrew Lansley declared “unacceptable” in September 2011.

However, the subsequent rise contradicts Lansley’s recent claim that CCGs are reducing referral rates through better case management.

There were 11.6 million GP referrals in the year to May 2012, approximately a million more than in the previous year.

Mike Dixon, Chair of NHS Alliance, commented: “The reduction of the year before was due to a focus by CCGs and PCTs on demand management, but service redesign is what’s needed to make that sustainable.”

Similarly, Humber PCT cluster Chief Executive Christopher Long said the initial fall in GP referrals was due to referral management schemes that were not sustainable, while the subsequent rise was due to growing patient demand.

These comments point to an underlying conflict in DH policy on referrals: the Government wants to see referral rates fall, but not for the ‘wrong’ reasons.

According to the Health Service Journal, active referral management and restrictions on procedures of ‘low clinical value’ were the major tactics employed by PCTs to bring down referral rates.

These tactics were criticised by Lansley and effectively banned by the NHS Operating Framework for 2012–13.

The NHS operating framework provides the blueprint for the NHS in England. Pf examines its objectives around quality and reform.

The Operating Framework for the NHS in England 2012/13 is an important document for UK medical sales professionals. It outlines the national priorities, system levers and mechanisms that the NHS in England must focus on to improve patient care. The strategic framework details expectations for the NHS’ ongoing efficiency challenge and the transition to the new commissioning and management system. It sets out the planning, performance and financial requirements for NHS organisations and the basis on which they will be held to account. With QIPP imperatives at the heart of the strategy, proactive pharmaceutical companies that can demonstrate an ability to help NHS customers deliver efficiencies and improve qualities in areas of national priority will be best placed to succeed.

The Framework identifies four key themes for NHS organisations in 2012/13:

1. Putting patients at the centre of decision making in preparing for an outcomes approach to service delivery
2. Completing the final year of transition to the new system
3. Accelerating the delivery of the QIPP challenge
4. Maintaining a strong grip on services and financial performance.

Quality - a focus on outcomes

The Operating Framework says that the NHS’ model of delivery must be overhauled in 2012/13 to become a system driven by quality and outcomes. It identifies the Outcomes Framework as the catalyst for this – with its focus on clinical outcomes and the reduction of health inequalities driving changes in culture, behaviour and service delivery. The Outcomes Framework sets out the improvements against which the NHS
Commissioning Board will be held to account from 2013/14.

These measurements are set out within five domains:

Domain 1: preventing people from dying prematurely.

Domain 2: enhancing quality of life for people with long-term conditions.

Domain 3: helping people recover from episodes of ill health or following injury.

Domain 4: ensuring people have a positive experience of care.

Domain 5: treating and caring for people in a safe environment and protecting them from avoidable harm.

The Operating Framework details a range of indicators for each domain, all of which are explored in the NHS Outcomes Framework. These will be supported by NICE quality standards, which provide definitions of what high-quality care should look like for a particular pathway of care. The document also advises NHS organisations to meet the service specific outcomes strategies that have already been published in areas such as mental health, cancer, COPD, asthma and long-term conditions.

Each domain in the NHS Outcomes Framework has a strong relevance to pharma, whether through the development of medicines to treat disease in priority areas, or via collaborative service design to move care closer to patients’ homes and reduce hospital admissions. Organisations that are able to show how their innovations can improve a care pathway or be used as part of a redesigned service will enjoy
more positive NHS engagement.

The Operating Framework identifies dementia and care of older people as a key priority, and sets clear goals to integrate health and social care. It also highlights examples of initiatives where NHS organisations have successfully improved services in line with each of the four key elements of QIPP; quality, innovation, productivity and prevention.

Reform - the transition blueprint

The Operating Framework outlines the key milestones for the reorganisation of the NHS. Whilst the headlines are widely known, it is interesting to track current progress against a timetable that was set out many months before the Health & Social Care Act was passed. The Framework notes that by
the end of 2012/13:

“The NHS will have transformed the commissioning landscape into one focused on local clinical decision
making, with the development and authorisation of CCGs, assisted by commissioning support vehicles and overseen by the NHS Commissioning Board. Local authorities will take the lead role in public health, alongside the new Public Health England. Central to the new system will be the establishment of Health & Wellbeing Boards (HWB), who will provide local systems leadership across health, social care and public health. Alongside this, developments will continue to the provider landscape, through the extension of Any Qualified Provider (AQP), progress with the NHS Foundation Trust (FT) pipeline and the establishment of the new NHS Trust Development Authority.”

Key 2012/13 objectives in the transition are as follows:

• PCTs and SHAs will remain statutory organisations until April 2013. They will be held to account on delivering performance and support the development of new organisations for clinical leadership. Clinical Senates and networks will be established
• PCTs will support CCG authorisation and the transition of power before March 2013
• HWBs will be established in shadow format, becoming statutorily operational from April 2013. They will act as the local system leader through JSNA and HWB Strategies
• CCGs must be coterminous with a single HWB ‘as far as possible’
• CCGs must: play an active role in planning and budgeting, develop relationships with local partners
  including social care, deliver their share of the QIPP agenda and identify how to secure commissioning support services in line with their running cost allowance
• Public Health England will become a statutory executive agency from April 2013
• NHS Trusts are expected to achieve FT status by April 2014
• PCT clusters should start to offer patients choice of AQP in at least three services that are local priorities. There should be a presumption of choice for most services from 2013/14.

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.