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Round table: Love me tender

Optum round table July 2014
Optum round table July 2014

Effective support for commissioners:
Innovation and funding

The Health & Social Care Act 2012 recast the NHS’s commissioning landscape. Not only did the legislation lead to the demise of primary care trusts and strategic health authorities, but it heralded the rise of clinical commissioning groups (CCGs), commissioning support units (CSUs) and challenged the health service to unleash the expertise and innovation of its clinical leadership.

Even now, over a year since CCGs took the reins of the health service, it’s difficult to say whether or not that challenge has been met. The new commissioning environment has fostered some true innovation and created pockets of excellence, but it has also been dogged by inconsistency and uncertainty.

But as the health service adapts to new ways of working it is imperative that best practice becomes the rule, not the exception, across the NHS. For this to be achieved, the level of clarity around the role of commissioners and what excellence and innovation really looks like will have to improve – and initiatives such as the Lead Provider Framework (LPF) for commissioning support will be central to this.

To consider how excellence in commissioning can be achieved across the NHS – not least against a backdrop of continued funding pressure and political uncertainty – HealthInvestor and Optum held a round table discussion on 24 July in central London where leading figures in the sector debated the challenges facing the health service and the future commissioning support requirements.

Vernon Baxter: Ian – given your recent experiences with Oxfordshire CCG, perhaps you provide us with an insight into commissioning in today’s NHS?

Ian Busby: My view is that even the biggest clinical commissioning groups don’t have the scale of talent and resource that’s really needed to effect change. As chair of a CCG, it seemed to me also, and I wrote many papers on this for the Department of Health and the Field Review, that what we really needed was very, very strong commissioning support which would do two things; one, it would take all the commodity activity away from CCGs, and it would also have some capability to deliver high quality, value-add services where you needed to drive transformation. It’s clear that hasn’t really yet happened. What I see is commissioners who have sought to throw the problem over the wall to the provider community rather than address the question. CCGs lack capital to build themselves into effective businesses, and I think as we move forward and we look at CSU autonomisation one of the key things that’s got to happen is a substantial injection of capital in the form of actual capital or in the form of strategic partners who are going to be able to bring resources to these environments.

Vernon Baxter: Lots to unpack there. Charles, how can CCGs and CSUs square the resourcing problem?

Charles Alessi: I’m looking to CSUs to reinvigorate themselves, which I think they’re in the process of doing. The process of consolidation that’s taken place over the last year or so has been very welcome, and I hope we’re looking to a world whereby the pairing of CSUs with more commercially minded organisations will lead to more commercially minded institutions that understand who the customer really is.

Bob Ricketts: There’s some good learning from Staffordshire. They have focused very much on the outcomes – in this case, Macmillan’s nine outcomes for patients – and then they spent two years doing all the engagement stuff, and despite some of the flack nationally around politicisation and ‘privatisation’ they have actually done remarkably well. The only serious opposition they’ve actually had has been from one of the national Colleges, whose members elsewhere felt very threatened by this approach.

In response to the issue of prime contracting as an abdication of responsibility, commissioners should be concerned about outcomes, priorities, the behaviours they want, how much money they’re going to spend, who’s going to give them the best deal, and remorselessly holding them to account but not specifying how they do it. So I don’t think that is an abdication of responsibility, I think that’s good strategic commissioning.

Love me tender
Love me tender

There’s some good learning from Staffordshire. They have focused very much on the outcomes – in this case, Macmillan’s nine outcomes for patients – and then they spent two years doing all the engagement stuff, and despite some of the flack nationally around politicisation and ‘privatisation’ they have actually done remarkably well.

Bob Ricketts

Ian Busby: When I started life looking at how you might change the public sector, back in the days of electricity privatisation, there were very, very few acceptable models out there. The world has changed dramatically. We’re in a regime now where it’s much, much more acceptable to create autonomous companies within the public sector. The CSU autonomous company initiative is probably one of the first of these on a major scale and will be a good test bed for bringing capital and other resources into an NHS environment.

Nancy Hollendoner: On capital, of course the problem is investing without knowing what the return is going to be. What you really want is somebody to kick-start this process and be brave enough to do it in the belief that some good is going to come out of it. It does strike me that we’re in danger of trying to impose structures without really knowing what it is we want to achieve, and it’s awfully chicken and egg. So maybe the watch words here are flexibility and performance.

Vernon Baxter: David – on the point about returns, does this uncertainty impact on the appetite of your members to invest in tendering for services?

David Hare: The access to capital point is a really important one. My sense is we need to move pretty quickly to a situation where there are much longer term contracts. One of the reasons there is benefit in the kind of prime contractor model that they’re looking at in Cambridge and other places, is actually you then begin to bring well-resourced organisations in who take risk over a long period and build their own supply chains with different kind of providers. I don’t see that as chucking it over the wall, I very much see it as bringing in the right kind of organisations who can take that level of risk, and then that needs to be performance managed over the contract period. With shorter term contracts, I just don’t think there will be anything particularly innovative on the provider side.

Karen Rosenbauer: With my background being in marketing I always think about how we’re saying it, but the reality is that if you’re sharing risk based on outcomes how can that actually go wrong? Because what you’re doing is you’re both bringing to the table something that’s important, and the only end is what the outcome is. So from my perspective, it’s more of a sharing of risk. The only way we’re going to provide outcomes that are acceptable for the individuals, no matter who they are, is if we do it together.

Pam Garside: As Bob said, it’s managing that in a muscular way, but if you talk about risk-based capitation models and sharing risk and risk profiles to quite a lot of middle managers they don’t get it.

Karen Rosenbauer: It’s not an easy concept, but I think part of the private sector’s responsibility is to educate. We need to have that open dialogue between both sides, so that you can get to that end result, because the world is changing daily. To think that you can have a three to five year deal with a private contractor and that there aren’t going to be changes along the way that need to be dealt with is unrealistic.

Bob Ricketts: One of the things that gets in the way is the culture. There are a whole series of urban myths, but if you want innovation then it ultimately comes down to changing the culture.

Clodagh Warde-Robinson: The big issue is that people tend to ask ‘How much is that going to cost me?’ but they don’t look at the return. Obviously with any equity investment in a new market you need to have longer contracts so you can ride it out and make sure you see development. This is a massive paradigm shift for the NHS, to go from a one year contract to three or five or seven, and yet what we’re asking of the CCG is mostly to manage these contracts. Now, are these people really getting the key commissioning tools? Do they have a true systematic approach to using variation data to understand, ‘How should I prioritise?’.

Karen Rosenbauer: And the data is only as good as what is being analysed. In the US, what we’re doing is we’re trying to show, if I intervene with someone who is presenting X, Y and Z, I know from my data that I can avoid a hospital stay, so it may cost me $100 right now to do this, but if I don’t intervene at that particular moment it will cost me $100,000 later on, and the only way we know that is because of the data.

Ian Busby: It’s one thing to tell everybody to behave differently, it’s another thing to actually have the capability to act differently. One of the challenges we have is that when we look at the UK commercial sector, there is not a lot of capability in relation to this type of healthcare system management. So for me, one of the critical things is how do we get the know-how imported? How do we find ways of encouraging people in organisations who have succeeded in another healthcare environment to bring that expertise into this environment? My sense is that there is potentially a fear overseas about trading in a UK system which is actually quite hostile to the private sector.

Charles Alessi: But every organisation, every country is hostile to people from abroad. I have been literally all over the world, the moment you go and say ‘I come from the NHS, we can actually tell you how to do this’, you can absolutely guarantee that you will be shown the door within about two and a half seconds. Every system needs translation.

Liz Jones: As an investor, we have invested most of our capital into social care businesses rather than healthcare. It just strikes me how frustrating it is to invest in healthcare providers in the UK, because if you go back to the start of the market in social care, there wasn’t all this language around contracts – what you had is examples of entrepreneurial behaviour at local levels. All the language I’m hearing today is really unfriendly to enterprise, because if I think about businesses I would love to invest in – small MSK providers, end of life providers – the only way they’re going to be successful in this new environment is becoming subcontractors from primary contractors of all these complex contracts. And actually I’m pretty scared about investing in that because I don’t know whether I’m going to make any money.

Clodagh Warde-Robinson: There are tons of people out there with lots of enterprise, but the problem is that we’ve got such excellence within the large acutes, you’ve got to keep feeding the beast because they need revenues, so that means the commissioners are very focused on them. When it comes down to it what do they worry about in the end? They’re all worrying about their acute provision, and then its mental health and then its community and so on and so forth, down the chain of priorities. So there’s something about the realities that we work with in the system.

Nancy Hollendoner: You’ve hit the nail on the head, because we do have a lot of entrepreneurial activity in the UK, but it simply cannot afford the risk of trying to punch above its weight.

Liz Jones: No markets are perfect, but if you look at something like SEN schools, that is a market where local authorities will have some capacity in-house and then they will outsource generally the more difficult situations to the private sector, and they probably started doing that 15-20 years ago. It’s only really 10-15 years into that privatisation journey they really start to then think about commissioning in the way you’re describing it today. It is no coincidence that I want to put money into healthcare innovation but I don’t know where to put it. It’s far easier to go into traditional social care markets where there is an established rhythm of interaction.

Bob Ricketts: There also needs to be some recognition that these things take time. If you now look at the percentage and the cash value that is in the private sector in England, you would not have dreamt 10 years ago we’d be where we are. And it wasn’t the big flash ISTC programme that did that, it was through choice. It just takes time, because commissioners have got to learn, and providers have also got to adapt in terms of their offering.

Nancy Hollendoner: Both private and public are to blame – there have been stand offs on both sides.

Bob Ricketts: But there is an issue with how do you get SMEs to play in provision. And there are actually lots of markets where nobody has cracked that anyway, but particularly in health, the SME problem feels a much more difficult issue.

Liz Jones: The blocker really is you just can’t engage with your local CCG and just have a conversation and crack on with it, you’re always fettered by contracts.

Charles Alessi: Liz, I just want to push back, just a little, as there has been a shift towards more private provision within the NHS over the last 10 years, despite all the difficulties. I suggest this is going to continue. I don’t believe we’re ever going to be in the state of happiness you describe where it is all clear going from the start to the end. This is the difficult world we’re going to have to get used to working within. I would suggest in 10 years’ time it is more than likely that the majority of provision will be coming from the non-state sector. It’s up to us to understand how to somehow navigate through that – and I am not for a minute saying it’s easy.

Ian Busby: One of the challenges of the NHS, and I’ve found this particularly as the chair of a CCG, is that you’re surrounded by rules and controls and expectations which are actually the product of being in a very, very internalistic, hierarchically controlled environment. Hence why I think that the Cambridgeshire and Staffordshire models are examples of CCGs looking to create innovation but the innovation is created by people outside of the CCG environment.

Bob Ricketts: Currently too much of the risk sits with commissioners, and the problem is there’s not much they can do about it, so that’s why I think we do need fundamentally different models. Simon Stevens has signalled that the last thing he wants to do is to actually get into sterile debates about changing structures. We just need to get on with the current system and be brave. We need to be really quite careful in saying there’ll be another change structurally to a system that feels incredibly fragile.

Nancy Hollendoner: But I think that there’s a nervousness on behalf of most CCGs to upset those cosy relationships.

Charles Alessi: It’s more than a nervousness – they understand their inability to actually do something. You know, if I had to tell you that ‘I really don’t like you’ and I keep on telling you ‘I really don’t like you’, if I know you’re going to be here tomorrow I’m going to have to moderate what I’m saying to you and say ‘Well actually perhaps I do like you’. CCGs understand the real difference in power and so they’re not actually doing what they know they can’t deliver.

Clodagh Warde-Robinson: One of the things we’re looking at at the moment is ‘Right Care’, which is a particular methodology aimed at improving commissioners’ systematic approach to their challenge. It’s basically good business process but it’s not prescriptive templates, it’s an architecture that allows and actually encourages some local interpretation, it’s immensely powerful and it’s been shown to be pretty effective already.

Vernon Baxter: But how do we get the right talent into commissioning?

Bob Ricketts: You’ve got to distinguish between the actual clinical and strategic talents in CCGs, and what you can buy in. We have who we have, they are the local group, and it’s actually about giving them the political backing when they’ve decided to be brave. That’s very different from all the stuff you need to pack around yourself to be an excellent commissioner. Then it’s about making sure they can actually get that commissioning support through initiatives such as the Lead Provider framework. So we need to make sure that we’ve got really good clinical leaders, we need to make sure we’ve got the commissioning support, and I think bringing the commercial sector in there is one of those solutions, as it will challenge the CSUs.

Clodagh Warde-Robinson: Before I joined the NHS I was in investment banking. When I looked at the world class commissioning stuff I said ‘This is wonderful, these are terrific people, I’d like to hire them – if they actually exist! And can we afford to pay them? Because if they’re that good they’re not going to work there!’ I think there’s some terrifically well intentioned approaches to training, but I say ‘put them into operational roles and give them some real grit and understanding, so when they go back to policy making they understand the logistics and they understand what it’s like to be in the front line’.

Ian Busby: You can create any structures or environments you want but if the people within them don’t embrace certain ways of behaving and certain ways of thinking you’re stuck. So I think the challenge is not to imagine you can deal with the health issues in this country by simply changing structures and reorganising, it’s about how do you change minds and it’s how do you bring a different way of thinking quicker to these environments. 

 

Final word

One of the great successes of the NHS in the twentieth century was the role it played in combatting infection as the principal cause of premature death within the population. Half-way through the second decade of the twenty-first century, the challenge in many ways is far more complex to tackle: the rapid increase of non-communicable disease, for example diabetes, commons cancers, ischaemic heart disease, combined with rising expectations, and increased consumer mobility driven by technology. This requires a different response. The aim of this roundtable was to look forward: we know the trajectory of issues facing the sector, and we also know that structural re-organisation is not always the answer. However, we do know that for the healthcare system to evolve it requires much more creativity in its design. One of the components to make this happen is how we meaningfully use data; not in terms of harvesting ever more personal information for the sake of it, but how we use data to improve outcomes for the individual: by either helping to prevent disease by early intervention, or by mitigating the risk of further complications, unnecessary hospital readmissions or further distress. Similarly, we need to be much more prepared to share risk to enable better outcomes, as opposed to inputs and whose bottom line is most at stake. While acknowledging the system is in a fragile state, as we discussed, innovation will increasingly arise from a much more mixed economy – and therefore so will the funding. The priorities to enable this to happen will be both a change in culture and behaviours.

 

Karen Rosenbauer
Chief marketing officer,
Optum International

 

For information on Optum, please call 0207 121 0560

The above is an edited transcript and is not reported verbatim.

The panel met in central London on 24 July 2014.

For more information on HealthInvestor round tables, please call

0207 104 2006 or email

david.johnson@investorpublishing.co.uk

For information on Optum, please call 0207 121 0560

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Clodagh Warde-Robinson

Investment adviser, NHS England


Vernon Baxter

Managing director, HealthInvestor


Pam Garside

Partner, Newhealth


Ian Busby

Principal, Field Fisher Consulting


Liz Jones

Partner, ISIS Equity Partners


Karen Rosenbauer

Chief marketing officer, Optum International


Bob Ricketts

Director of commissioning support strategy & market development, NHS England


David Hare

Chief executive, NHS Partners Network


Dr Charles Alessi

 Chairman, NHS Clinical Commissioners


Nancy Hollendoner

Senior adviser, Smith Square Partners


One of the things that gets in the way is the culture. There are a whole series of urban myths, but if you want innovation then it ultimately comes down to changing the culture.

Bob Ricketts

 

For information on Optum, please call 0207 121 0560

 

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