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?
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 The draft guidance implies that commissioners cannot be trusted to define value for themselves.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.