David Flory, Chief Executive of the NHS Trust Development Authority, has said the current reforms have left the NHS without the management capability it needs.

Over 40% of senior NHS management professionals have lost their jobs or quit in the last few weeks, he said, and the result is the greatest “loss of experience” he has seen in healthcare.

Senior roles in clinically or financially challenged organisations (including hospitals) are getting harder to fill, he said, and the NHS no longer has enough people with “the requisite capability”.

Speaking to the Health Service Journal, Flory said that filling such roles was a major priority for the NHS Trust Development Authority.

The formal abolition of SHAs and PCTs on 1 April followed a year of their functions being wound down, with staff leaving in great numbers. NHS England claims its “running costs” have been reduced by 50% compared to the old system.

“The scale of the change and loss of experience is greater than I’ve seen in any reorganisation before,” Flory commented.

He also warned that “challenged” hospitals increasingly lacked leadership as their number increased. “In that sector the evidence shows us we have not got enough people with all the requisite capability.”

Coming at a time of increasing concern among doctors about the effects of provider competition on NHS services, Flory’s comments will be seen by many as showing that the Government intends to let struggling NHS providers be taken over or replaced by the private sector.

The new NHS structure came into force on 1 April, with local commissioning now entrusted to clinical commissioning groups (CCGs) that combine business and clinical expertise.

The CCGs are managed by NHS England (formerly the NHS Commissioning Board) and governed by new laws that enforce a ‘level playing field’ for provider competition.

The 152 Primary Care Trusts are now abolished, and all NHS hospital trusts are required to qualify for Foundation Trust status within the next year.

NICE, renamed the National Institute for Health and Care Excellence, will set standards for both health and social care services, promoting integrated care.

The statutory role of CCGs in facilitating competition between providers of NHS services has polarised opinion, with only a third of GPs in a Pulse survey saying they felt empowered by the new system.

According to private health analysts Laing and Buisson, the NHS in England spent 11% more on services from private providers in 2012 than in 2011 – a clear sign that the provider base is already shifting.

Professor David Haslam, the new Chairman of NICE, commented: “It is a time of huge risk. We know in medical care in hospital that the greatest risk is when patients are being handed over from one person to another. It is a risky time for the system, so it is important that the big players work together.”

Mike Farrar (pictured), Chief Executive of the NHS Confederation and a long-time champion of community-based healthcare, warned that trying to improve patient safety while reducing costs would place great pressure on the new NHS.

“We need to recognise the huge challenges facing the health service,” he said. “New structures alone won’t enable us to tackle these challenges, and we should not see them as a silver bullet.”

Is QIPP really about ‘doing more with less’?

The NHS Quality, Innovation, Productivity and Prevention (QIPP) Challenge was launched in March 2010 as a strategy to facilitate major cost savings within the NHS, in response to the impact of the global recession. The principle of QIPP was that given the need for austerity budgeting, serious planning and rethinking were needed to ensure ‘smart’ cost-cutting that did not harm patient outcomes. The QIPP agenda was about identifying solutions that held together the four key principles, reducing overall costs by making interventions more timely, efficient and effective.

The new Government’s NHS reforms promised to facilitate QIPP by empowering local providers and commissioners to develop the best solutions for their communities. However, the economic pressures on CCGs and Foundation Trusts within the new system, combined with the ‘Nicholson challenge’ of cutting £5 billion out of the NHS budget in each of four successive years, have meant that the dominant theme of QIPP at a local level is cost reduction.

The first full year of QIPP (2011–12) delivered savings of £5.8 billion against a target of $5 billion. However, reports of NHS rationing and ‘postcode prescribing’ have proliferated. QIPP was devised as a strategy to combine two goals: the shift towards community-based healthcare and the urgent drive towards NHS cost-cutting. Is that still the agenda, or have the pressures of NHS reform reduced its four principles to one: reducing expenditure? Is QIPP really about “doing more with less”, as Andrew Lansley claimed, or is it just about doing with less?

A new healthcare paradigm
The DH booklet introducing the QIPP challenge in March 2010 set the context: “The NHS needs to identify £15–20 billion of efficiency savings by the end of 2013/14 that can be reinvested in the service to continue to deliver year on year quality improvements.” The booklet placed emphasis on improving quality while reducing overall costs through strategies such as early intervention, improved infection control and home-based care. Its authors included Jim Easton, then National Director for Improvement and Efficiency. The DH described a series of QIPP ‘workstreams’ it was setting up to help clinical teams and NHS organisations “improve quality and productivity across care pathways”. The first of these related to care of long-term conditions, urgent care and end-of-life care. Further workstreams would examine safety challenges, such as pressure ulcers (bedsores), and ‘right care’ issues such as referral management and identifying “low-value treatments” (later to become controversial issues).

The authors called for “a collective response at local, regional and national level” to address the QIPP priorities. These included early diagnosis, primary and secondary prevention and patient self-management. The need for “better partnerships between primary, community and secondary care to support people with long-term conditions” was emphasised. QIPP extended from the “daily clinical practice” of individual HCPs to “the wider care pathway”, the booklet said. Each SHA had its own QIPP lead and innovation lead, and was establishing an online regional ‘quality observatory’ and Innovation Fund to help clinical teams improve quality and productivity.

These ideas were illustrated by case studies where local NHS organisations had developed better and more affordable healthcare solutions. These included the use of an electronic system to ‘re-engineer’ blood transfusion, reducing waste and improving safety; and systematic guidance on antibiotic prescribing to reduce rates of C. difficile infection. These solutions all involved using teamwork and sharing information to make the best use of available resources.

The booklet ended on a warning note: “If we do not respond to this challenge there is a real risk that the need to cut costs will overtake our best intentions to improve care for our patients.” More than two years later, the crucial question is: has QIPP averted that outcome or brought it closer?

Innovation is ‘core activity’
In June 2012, Nicholson’s annual report claimed 2011/12 had been “a remarkable year” for the NHS. He highlighted the contribution of local initiatives to maintaining service quality while cutting costs. Austerity would dominate the NHS “for the foreseeable future”, he said. However, the innovation agenda promoted by the previous Government’s Office for Life Science and revived by the current Government in December 2011 would engage dynamically with that challenge: “Innovation has to... become the core activity of the NHS.”

His report went through the elements of QIPP, noting achievements in each area. Quality achievements highlighted included: in cancer care, the achievement of key treatment standards across all eight performance measures, as well as improved early detection figures; and in stroke care, better access to specialist stroke units and faster treatment of people with transient ischaemic attacks. Community-based asthma services in South East Essex were used as an example of a successful local initiative.

The brief section on innovation focused largely on the use of technologies in the community, including telehealth and home dialysis. The preventative care section emphasised the growing role of health visitors, and drew attention to the success of a national screening campaign for risk of venous thromboembolism (VTE) with prophylactic drug treatment given where needed.

In the productivity section, Nicholson noted QIPP savings of £5.8bn and praised the “modest reduction in activity levels” across the NHS – placing these in the context of the QIPP Long-term Condition Workstream, which aims to reduce unscheduled hospital admissions by 20%, reduce hospital stay length by 25%, and maximise the role of “supported care planning” in helping people to manage their own health. However, no reference was made to the rationing of procedures or the cuts in hospital nurse staffing.

Milestones or millstones?
A recent Health Service Journal report on the DH’s QIPP tracker indicates that the PCTs (soon to be abolished) plan savings worth £13bn nationwide between now and 2015, with £4.5bn of this to be achieved through the 53 local QIPP plans. The planned savings are front-loaded: £3.8bn this year and £3.6bn, £2.9bn and £2.6bn in the next three years. However, only £2bn of the planned QIPP savings are currently being achieved on schedule, and only six local QIPP plans are on track with all of their workstreams.

According to the tracker, productivity gains are the main objective of most local initiatives. Common features include the redesign of care pathways for long-term conditions, including diabetes and COPD, and the development of integrated care teams for dementia patients. However, many local plans have the single goal of reducing the cost of services – for example, South of Tyne and Wear PCT notes as an objective: “reduce price paid for Gateshead Health Foundation Trust older people’s mental health service”.

John Appleby, chief economist of the King’s Fund, commented that this emphasis on savings denied the original point of QIPP: “to improve value to patients”. He also said there was no evidence of the money saved being reinvested in future services, which was a key principle of the original QIPP agenda. The Audit Commission has since reported that the NHS has £4bn in “uncommitted finances”: cash reserves created by aggressive cost-cutting. Mike Farrar, Chief Executive of the NHS Confederation, has argued that this money needs to be invested in community and primary care.

Jim Easton, the NHS Commissioning Board’s Director of Improvement and Transformation, warned in July that too many NHS organisations were relying on spending cuts without any element of service redesign. The “deeper change” of shifting healthcare to the community was not being undertaken, he said, and
QIPP was becoming a “label” for “cost improvement plans”. As a result, the QIPP savings of the past year would be very difficult to repeat. Instead of building a new healthcare model, the NHS was just cutting
parts of the old one.

Easton has since announced that the Board will fund a new innovation body to deliver a “system-wide” response to the QIPP challenge. From April 2013, the new organisation will replace all existing NHS innovation and technology adoption bodies. He anticipates that it will “provide hands-on support for great models of care” developed within and beyond the healthcare sector. However, his resignation has cast a shadow over these plans.

According to the King’s Fund, 27 of 42 NHS finance directors it surveyed believe there is a high risk that the NHS will fail to meet the ‘Nicholson challenge’. A key question for industry, and for patients, is whether QIPP can help the NHS deliver on the more important challenge of transforming healthcare to meet the
changing needs of the population.

Mike Farrar, Chief Executive of the NHS Confederation, has said the growing crisis in hospital funding demands major investment in community-based healthcare.

His statement follows an Audit Commission report showing that the number of hospital trusts in deficit increased from 13 in 2010/11 to 31 in 2011/12.

While the report called for tight control of trust finances, Farrar argued that the underlying problem is the over-dependence of the NHS on acute care.

The Audit Commission’s annual report on NHS finances said that while PCT finance was mostly healthy, there had been a dramatic increase in the number of foundation trusts and NHS trusts in debt.

There was “no room for complacency” over hospital trust finances and the need for tight spending controls, the Commission said.

Andy McKeon, its Managing Director of Health, commented: “The Department of Health and other relevant national authorities need to focus their attention on the minority of organisations whose financial position is deteriorating and on their geographical distribution and service standards.”

Farrar, who has long argued for a shift in funding from acute to preventative and long-term care, said: “This is the time for the NHS Commissioning Board to help providers, not with bailouts, but by releasing money to new CCGs so they can work with providers to help put them on a sustainable footing by changing the type and range of services they provide.

“Now is the time for big investment in community and primary care. It is worrying that the number of trusts in deficit has more than doubled in the past year. This situation is likely get worse unless we take radical action.”

Only one in five of the 211 Clinical Commissioning Groups (CCGs) has a GP in the crucial leadership role of accountable officer.

By contrast, over 70% have appointed a former PCT manager to this role – confirming opinion that the new CCGs will resemble the old PCTs.

GPs have attributed the retreat from ‘clinical leadership’ to the difficulty of combining the workload of an accountable officer with clinical practice.

According to the Health Service Journal, 38% of CCGs said in March they were planning to appoint a GP as accountable officer – but only 22% have done so.

The remaining 78% have appointed former NHS managers, including 72% who have appointed former PCT managers.

The accountable officer for each CCG will be responsible for its functions, finance and governance.

GPs make up 89% of CCG chairs, but this is a less critical role.

Recent guidance for CCGs from the NHS Commissioning Board has indicated that accountable officers need leadership experience.

According to NHS North East Essex CCG’s accountable officer, Shane Gordon, the role is closely similar to that of a PCT leader – and for a GP, taking it on would mean having to give up nearly all clinical practice.

He noted that the programme for GP revalidation would deter many GPs from trying to become accountable officers.

Consequently, he argued, it was unclear “whether the NHS is serious about clinical leadership”.

Dr Chaand Nagpaul of the BMA’s GPs committee said the pressure of authorisation deadlines had forced most CCGs to rely on experienced managers who needed little training.

However, a Commissioning Board spokeswoman commented: “What is important is that there is a good mix of expertise in the broader leadership team, of clinicians and managers.”

JSNAs have suddenly been thrust into the limelight. But why are they so important?

Key account managers and other commercial team members in pharmaceutical companies should already be well aware of joint strategic needs assessments (JSNA). JSNAs were initially introduced in 2008. Since then local authorities and Primary Care Trusts have been under a statutory duty to produce assessments to outline operational plans for health services to meet the needs of the local population.

However, since the introduction of the Health and Social Care Act the importance of JSNAs has increased tenfold, with them being recognised as a key driver of improvement. JSNAs are now a fundamental part of the planning and commissioning cycle at a local level. Under the reformed health system there is a greater emphasis placed on the process and outputs of JSNAs than had previously been attributed – and there is a clear expectation regarding their influence on commissioning plans.

From April 2013 onwards, local authorities and clinical commissioning groups (CCGs) will have an equal and explicit obligation to devise the needs assessment document.

Local leaders and commissioners will be tasked with identifying the health needs and requirements of the local population and addressing these either through the services they commission, through the introduction of new initiatives, or through joint working and collective action with local providers. In doing so, local authorities and CCGs will be able to plan and commission services in an integrated fashion to allow health and care services to efficiently and effectively meet the needs of all members of the community.

In turn, JSNAs will be used by regional health and wellbeing boards to understand and take action to tackle local challenges. The assessments will also play a fundamental role and heavily shape the design of joint health and wellbeing strategies to set and measure outcomes; and also align these with local priorities established in the NHS Outcomes Framework – plus similar public health and adult social care frameworks.

‘Picture of a place’
Assessments must consider all of the current and future health and social care needs in relation to the area a local authority and CCG are responsible for. It must include requirements which report authors believe are achievable and which can be affected to a significant extent by the actions of the local authority, CCG or NHS Commissioning Board.

The Health Act has a clear expectation that JSNAs – and the strategies which are created as a result – will provide the basis for all local health and social care commissioning. JSNAs are a treasure map for pharmaceutical companies and their Key Account Managers. The documents, which must be published, provide a framework to examine factors that impact on the health and wellbeing of communities. Although these range from employment and education to housing and environmental factors, it is the overall impact of these on the physical and mental wellbeing of local residents that pharma should be targeting.

The DH says that JSNAs need to “articulate and address the unique ‘picture of a place’ in every region. In doing so, these valuable documents inform not only local commissioners, but their partners in delivering health services to provide a framework of objectives.

PCTs and local authorities have used JSNAs to establish the current and future health and social care needs of residents. Within the assessments there needs to be a focus over the short and medium term on taking into account anticipated changes in the demographic and infrastructure.

Captured data, information and intelligence underpin JSNAs. This evidence will also be published, giving pharma an insight into local priorities in areas where they can influence and target. But the assessments are far more than just a collection of evidence. They provide an analysis and narrative on the background of the region they cover. They process extracts while analysing evidence and allowing Health and Wellbeing Boards to develop a plan on the basis of these, using data to drive strategy and commissioning. They are a must read for a KAM to gain invaluable background information on local trends and targets.

JSNAs do not have to be completed on an annual basis. In fact, it is only in recent months that a number of PCTs have updated their initial JSNA. However, the DH states that assessments should build on and align with similar needs assessments in local areas to avoid duplication and to develop a “comprehensive local assessment” to inform integrated services. The aim for local authorities and commissioners is to create a single, consistent story on any given issue and to remove duplication whilst contributing across the local system.

‘Putting localism in action’
In the 2011 DH document Joint Strategic Needs Assessment and join health and wellbeing strategies explained – commissioning for populations Paul Burstow, then the Minister for Care Services, highlighted the importance of JSNAs and resulting strategies, saying they are “key to putting localism into action.”

In the foreword of the document he commented: “The strengthened role of JSNAs and joint health and wellbeing strategies will enable the local health and care system to go further than ever before. For the first time, decisions about health and care will be made on the basis of clinical expertise, evidence from the JSNA, and the valuable input of locally elected councillors and the public, via local HealthWatch and wider engagement with the community. This means decisions about action, investment and disinvestment can be genuinely local, rather than a reflection of national priorities.”

Burstow added that he was “clear” the assessments will not have a “galvanising effect on their own”. But when in combination with health and wellbeing strategies and aligned commissioning plans JSNAs have the “potential to be transformational in improving health, care, and wider services for people in our communities.”

The NHS Confederation agreed about the importance of JSNAs but warned about the quality of these assessments. It pointed out that a “good quality” assessment has the “potential to drive improvements, highlight health inequalities and closely inform commissioning.” But a “weak” JSNA is “disconnected from key decision-makers and commissioning and, therefore, removed from local communities.”

“Relatively few have been balanced by an assessment of the assets, strengths and capacities of local communities, which is clearly more desirable,” the Confederation said. “We believe that JSNAs have not yet reached their full potential for commissioning in local authority areas. The reform proposals provide a welcome opportunity to extend JSNAs to include health and voluntary partners.

“If the JSNA remains focused on health services, public health and social care alone, it may require fewer resources but will provide a limited analysis of the needs and assets of the community and may not engage or inform key partners, which is surely one of the key benefits.”

Exploiting JSNAs
JSNAs are and will be a valuable tool for pharmaceutical companies to identify the local health and wellbeing needs of specific regions across England. Although these documents contain important information on how pharma can drive improvements through system redesigns, pharma still needs to devise innovative care pathways to drive outcomes which will be financially attractive to commissioners.

A quick search of the internet reveals that no two JSNAs look the same – some are 14 pages long, others 114. The DH sees JSNAs as a means to outcomes “not just within single years, but over time.” Key Account Managers, using joint strategic needs assessments and the data available to them, must ensure they have an in-depth insight into the local challenges commissioners face and provide solutions now and in the future to create lasting relationships.

Does the CCG guidance signal a return to top-down control?

The Department of Health draft document listing the requirements for commissioners, Securing best value for NHS patients, proposes to make law what had previously been guidance in codes of practice for PCTs and SHAs. What are the implications for local commissioners of “choice and competition” becoming mandatory, with Monitor serving as a watchdog to seek out “anti-competitive” decisions? Is this an attempt to disguise top-down control of commissioning and prescribe the choices of CCGs?

Value-based commissioning
The consultation document states the case for a statutory commissioning framework in robust terms. Local commissioners are facing unprecedented challenges in terms of both demand and supply: the ageing population and the growing prevalence of long-term conditions combined with the NHS “facing one of the tightest funding settlements in its history”. As a result, their primary task is “to secure best value from limited resources”.

The question of value is therefore crucial for CCGs and other commissioners. The draft guidance implies that commissioners cannot be trusted to define value for themselves. It says they need “flexibility” to meet the challenges of commissioning through various methods: “managing providers’ performance, extending and varying contracts, widening choice of qualified provider, and tendering”. However, it argues, commissioners in the past have sometimes restricted themselves by using “bureaucratic processes” and “disproportionate or inappropriate criteria”. It is therefore necessary for external controls to ensure that they carry out “an objective assessment of different options and a rigorous evaluation of different providers”, which “has not always been the case” in the past.

The DH states candidly that “we will not be able to enforce non-statutory, administrative rules in the reformed system, where commissioners and other organisations have greater autonomy… We need to put the rules on a statutory footing so that they are binding on the new commissioning organisations.”

In other words, what had been top-down guidance needs to become law in order to prevent CCGs from using their “autonomy” incorrectly. By “flexibility” the draft document means readiness to engage with the private sector, using assessment criteria that are not chosen by the commissioner. So the proposed legislation is intended to shape the emerging healthcare market.

Choice and competition
The proposed laws for commissioning are based on the existing principles and rules of PCTs. However, the DH places special emphasis on the need to protect competition – which it clearly views as an area where CCG practice may conflict with the spirit of the NHS reforms. The draft document thus reiterates the principles of tendering and ‘any qualified provider’ before stating its aim “to establish a requirement prohibiting commissioners from treating a provider more or less favourably than others, in particular on the basis of ownership, for example [whether] it is a public, voluntary or private organisation”.

A major proposed rule is: “Commissioners must secure services from providers who are best capable of meeting patients’ needs and deliver best value for money, using choice and competition, where appropriate, as a means to improving quality and efficiency in the provision of services.”

The draft document restates the principles of patient choice laid out in the NHS Constitution. These include the right “to choose any provider in England for a first consultant-led appointment for most elective services” and the right “to request that a commissioner takes all reasonable steps to offer an alternative provider when waiting over maximum waiting times for treatment”. In addition, the DH notes, “the Government intends to increase the choices that patients have”.

Choice and competition are therefore key mechanisms by which “quality and efficiency” can be achieved – with the latter defined not by CCGs, but by an external framework. To back this up, CCGs will need to “act transparently” and “maintain appropriate records” of the decision-making process.

Beware of the watchdog
Making these rules statutory raises the question of how they will be enforced. The answer is Monitor. According to the draft guidance, the economic regulator will be responsible for “preventing anti-competitive conduct” when it is “against patients’ interests”.

Monitor will not engage proactively with commissioners to achieve this, but neither does it have to wait for a formal complaint before intervening – a provision explicitly designed to reduce the need for ‘whistle-blowing’ by providers, which can damage their ongoing relationships with commissioners.

It is proposed that commissioners “shall not enter into any agreement or engage in any conduct which has the object or effect of preventing, restricting or distorting competition in the provision of healthcare services,” unless it is “indispensable to the attainment of the intended benefits for people who use these services”.

These rules avoid stating that Monitor will ‘enforce’ competition, a principle of the original Health and Social Care Bill that was removed following the ‘listening exercise’. By linking the role to patients’ interests, the document underlines its own statement that competition is a means to the end of improved patient care.

Details of how Monitor will enforce these rules are forthcoming, but the document makes it clear that the regulator will report breaches to the DH.

Laying down the law
While it is clearly concerned with managing those CCGs that try to resist the creation of a healthcare market at local commissioning level, the draft guidance also seeks to manage any conflicts of interest that could expose the system to criticism. The final section of the draft guidance states that when a conflict of interests arises, it must be managed “effectively and transparently” by the commissioner. In other words, where it cannot prevent conflicts of interest, the DH seeks to limit the harm they can do.

The most obvious source of such conflict, where a CCG might commission services from a secondary care provider that is represented on its board, is already prevented by the existing rules governing the formation of CCG boards. However, CCGs have been critical of this restriction, since foundation trusts have no financial motive for releasing clinicans to serve on a CCG board where the CCG is not a customer of the trust. The establishment of a healthcare market means that clinical and commercial priorities are always in a dynamic tension: conflicts of interest are a normal symptom of that tension.

Essentially, the draft guidance proposes a model that brings the legal framework of the NHS much closer to that of company law. Legal and financial consultants will have an important role in local commissioning, on both sides: the commissioners and the providers. That classic soundbite of corporate transactions, “Your people will talk to my people”, is likely to become central to NHS service procurement. And as the draft document clearly states, the private and voluntary sectors are likely to be major players in NHS service provision.

The contentious question is: will these rules influence the commissioning decisions of CCGs? To some extent, by laying down “objective” and mandatory criteria for decision-making, they will. If a provider meets the DH’s criteria for quality and efficiency, the CCG will have to give them the contract regardless of other factors such as precedent, continuity or local culture. How providers and their legal teams exploit this framework will impact powerfully on the freedom of choice that local commissioners have.  

The draft commissioning guidelines signal a decisive shift in the culture of the NHS towards a competitive and company-based model. The use of law to enforce the rules of engagement might be seen as a disguised form of top-down management – and is undoubtedly intended to ensure that the NHS reforms are not blunted by rebel CCGs that try to perpetuate old relationships. But more importantly, it is an attempt to change the culture of the NHS by taking it into a legal framework modelled on the private sector. For the pharmaceutical industry, therefore, engaging with the new commissioners will be like looking into a mirror.

BMA representative Dr Laurence Buckman has voiced his opposition to the rationing of NHS services.

Dr Buckman, Chairman of the Association’s General Practitioners Committee, has written to the General Medical Council (GMC) proposing that quality premium payments and the rationing of care be stopped.

In the letter Dr Buckman said the BMA “think this is appallingly unethical”.

The BMA chair asked the GMC to investigate these “incentive schemes” after CCGs and PCTs had ignored warnings by the Association to end the practices.

“Taking money from patient care and pocketing it for reducing something you do for patients by a fixed percentage or number is wrong,” he said in the letter. “We have said that repeatedly. We don’t think it is a good idea to tell doctors that if you reduce your referrals by 10% you will receive a payment.

“Although you might be mindful of expenses, you should not be chopping an arbitrary piece of patient service and then taking money which you are allowed to keep. There are lots of reasons why that is bad including the fact that patients will not trust you because they will think that everything you do will be dependent on making a profit out of it, from them.”

Dr Buckman’s letter follows a survey by Pulse Magazine which revealed that doctors believed the rationing of minor treatment services was affecting their relationship with patients.

The NHS has billions of pounds which is being unused, according to a new report by the Audit Commission.

Research into the NHS’ financial year 2011/12 discovered there was nearly £4bn in ‘uncommitted finances” after PCTs, SHAs and NHS trusts restricted spending.

The NHS Confederation said the money should be given to CCGs across England to help transform local health services.

The report revealed NHS organisations had a combined under-spend and surplus of £1.6bn. However, the number of NHS trusts and foundation trusts in deficit increased from 13 in 2010/11 to 31 in 2011/12. A small number of trusts did report improved finances during the same period.

It also highlighted the financial difficulties NHS trusts have in different parts of the country. The majority of NHS trusts in deficit were either in London or around the south east.

Andy McKeon, Managing Director of Health at the Audit Commission, said the findings show there is “financial room for manoeuvre in the future.”

“The NHS has also delivered the first tranche of its £20bn savings required by 2014/15,” he said. “While nationally the NHS appears to be managing well financially, and preparing itself for the changes and challenges ahead, a number of PCTs and trusts are facing severe financial problems.

“The Department of Health and other relevant national authorities need to focus their attention on the minority of organisations whose financial position is deteriorating, and on their geographical distribution and service standards.”

Mike Farrar, NHS Confederation Chief Executive, said the funds should be used for “big investment in community and primary care” to ensure services can meet demand in the future.

“Fundamental changes to the way we provide care are necessary if the NHS is to maintain financial balance and become more responsive to patients’ needs,” he said. “Doing this will require some difficult decisions and in some cases will require changing or closing down some services, but this can only happen if we build up the capacity in the community and in primary care to enable people to be treated at home.”

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.