bob ricketts, nhs england - open forum events' nhs commissioning and procurement conference

The Challenge for the NHS

NHS Commissioning & Procurement 29 April 14

Bob Ricketts

Director of Commissioning Support Services Strategy

The Challenge for the NHS

1. The Challenge

2. Where should the NHS focus its efforts?

3. The pivotal role of commissioning

4. Commissioning & procurement for better

outcomes

1. The Challenge

NHS faces unprecedented challenges to its sustainability:

•Demographic pressures – an ageing population

•Demand – incidence of LTCs (diabetes, dementia)

•Rising expectations – patients, public, politicians

•Quality – failures & gross variation

•Outcomes – still often poor comparatively & highly variable

•Resource constraints (potentially £30bn)

•Outdated & over-stretched delivery systems (across primary, community & secondary care)

The NHS & its partners therefore need to find bold, transformative solutions that reshape services at pace and at scale.

1. The Challenge

“Nye Bevan’s NHS has failed to adapt quickly enough to changing demography, lifestyles and disease profiles, as well as to technological

advances and rising public expectations. We face decades of rising demand for health services from an ageing population with a mix of long term

chronic conditions, many of which spring from an obesity epidemic.

AND

“We have … a health and care system that is both unnecessarily expensive and poorly designed to meet modern needs”

Solving the NHS care and cash crisis: Routes to health and care renewal

Norman Warner & Jack O’Sullivan March 2014

1. The Challenge

“Health and social care now cost the public purse about £130 billion a year … Yet services often fail to meet health needs properly for frail elderly people,

those with chronic conditions and around preventative healthcare.”

“Hospitals are treating, in expensive settings, people who should be – or should have been – cared for in more suitable and less costly environments. Research studies suggest that 30 per cent or more of the patients occupying acute

hospital beds – most of them frail and elderly – should not be there.

“This inappropriate care delivery model, largely unreformed since 1948, inflates NHS costs and limits many people’s potential to live longer and healthier lives, given our tax base, the state of the public finances, changing

population needs and the implications of scientific development.”


1. The Challenge

“An affordability gap is opening up of at least £30 billion a year – possibly more – within a decade. The status quo is becoming

economically unsustainable – given our tax base, the state of the public finances, changing population needs and the implications of

scientific development. Meanwhile public expectations of services continue to rise. We face a perfect storm.”

“The health challenge is to narrow a widening gulf between people’s potential for longer, healthier lives and the disappointing reality of what too many achieve. But any solution must also be affordable

and sustainable.”



Simon Stevens inaugural speech 1st April:

•“[creating] the health system that can solve for the really big challenges – dementia, obesity, inequalities, mental health and well-being, personalisation and empowerment”

•“An ageing population with more chronic health conditions, but with new opportunities to live as independently as possible, means we’re going to have to radically transform how care is provided outside hospital … our traditional partitioning of health services no longer makes much sense”



•Transformation

•Integration

•Personalisation

•Empowerment

•Partnership – “the power of place”

•Quality


To deliver great outcomes for patients & value for taxpayers, we need an excellent commissioning system:

•aligned around need & place

•clinically-led, driving-up quality now & leading service transformation for the future

•enabled by at-scale, professional commissioning support

One year on, we’re making good progress on each of these …

but we need to accelerate & seize the opportunities to use innovative commissioning & contracting to drive transformation



“We should also be expanding the commissioning impact that high performing Clinical Commissioning Groups can have – and certainly not wasting time on yet another drawn out debate about whether there are too many or too few of them. Instead let’s focus on actually making commissioning work. Using the full tool kit that a National Health Service can in theory provide. And in doing so, let’s test new commissioning approaches – including in some geographies and for some services bringing together primary, community, and specialist care.”


The new commissioning architecture offers unprecedented opportunities for innovation:

•Clinically-led commissioning

•Strengthened partnerships with local government, especially around ‘place’

•Renewed focus on integration (Better Care Fund)

•Opportunity to re-design primary care (Primary Care+)

•Growing regulatory support for innovative commissioning & contracting’

•Strategic planning (the ‘5 year plans’ – opportunity to “work back from where we want to be”, not incremental steps from where we are)

3. The pivotal role of clinical commissioners

Clinically-led decisions are the cornerstone of the commissioning system with every GP practice across England a member of the new clinical commissioning groups. Patients benefit from the unique role of general practices which are based at the heart of local communities and have an expert knowledge of local people and their needs and the variation in the quality of local services. Clinicians are able to work with their colleagues and partners in redesigning outdated services using their knowledge of clinical risk, best practice and improved quality and outcomes.

Lean and patient focused CCGs can draw on evidence-based practice to deliver services that offer the best outcomes for patients, adding value through effective local clinical leadership and engagement

4. Commissioning for outcomes

Simon Stevens – “let’s test new commissioning approaches”

Why?

•Traditional approaches to commissioning & contracting are unlikely to incentivise or enable bold, transformative solutions that reshape services at pace and at scale

•Hard to challenge existing models of delivery, working & relationships

•Organisational silos impede effective joint commissioning & budget pooling

•Contracts & payments focus on activity & individual institutions, not the whole delivery system; perverse incentives

•Hard to attribute (& reward) improvements in outcomes to fragmented cohorts of individual providers

•Difficulty of securing ‘cashable savings’ from ‘upstream’ changes & interventions

4. Commissioning for outcomes & value

“let’s test new commissioning approaches”

We need approaches which …

•Incentivise high quality integrated pathways which deliver high quality ‘joined-up care’

•Make the best use of resources (NHS-funded, LAs, communities, users)

•Reward delivery of the best outcomes for users, carers & communities (social value)

•Address demand risk explicitly

•Catalyse new configurations/partnership of providers

•Include, not marginalise, non-NHS partners

4. Commissioning for outcomes

What’s on offer?

•Outcome-based population commissioning (‘OBC’): a key vehicle to drive transformation & secure better outcomes, service integration and value for specific populations or groups (e.g. frail older people with multiple, complex problems; EoLC), or re-balance incentives by paying for outcomes

NB: Often conflated with commissioning for outcomes –

OBC is one end of a spectrum of approaches

4. Commissioning for outcomes: OBC

What is OBC?

Work in progress:

Draft narrative on OBC

NHS CA Quality

Working Group

(Paul Husselbee)


Integral to core OBC model are:

•Identifiable & measurable outcomes

•That those outcomes can be linked to desired behaviours

•That those behaviours can be incentivised through payment systems

•Spans primary, community & secondary care (compatibility with ‘Primary Care Plus’ models?)

•At-scale for populations (but can be done on a smaller scale, introducing a % payment for specific outcomes)

•More mature & long-term relationship with providers (7+ year contracts)

•‘Lead provider’ or ’Alliance’ contracting


Key components of fully-developed OBC:

•Population-based (frail older people, multiple complex problems; EoLC) or major pathway(s) (MSK)

•Outcome-focused capitation payment

•‘Lead provider’ or ‘alliance’

•Provider(s) co-ordinates care planning & delivery

•Provider(s) takes on much of the demand risk

Still emerging, but examples: Bedfordshire (MSK), Cambridgeshire (range of services for older people), Staffordshire (cancer & EoLC for 1m+), smaller-scale: Oxfordshire & Milton Keynes (sexual health; substance abuse)

Peterborough Social Impact Bond (re-offending)

4. OBC - Staffordshire:

Leading-edge exemplar …

•Collaborative: 5 CCGs + Macmillan Cancer Support (strategic partner) + NHS England + CSU

•Outcome-focused & integrated services:

•At scale: key services for 1m people across the footprints of people 3 acute provider trusts. The biggest contracts yet tendered for integrated NHS care

•Transformational : patient-centred re-design; joined-up care

•Innovative contracting: lead provider; 10 year duration


Assumes:

•Identifiable & measurable outcomes

•Those outcomes can be linked to desired behaviours

•Those behaviours can be incentivised through payment systems

•‘Lead provider’ or ’Alliance’ contracting

•Spans primary, community & secondary care

•More mature & long-term relationship with providers (7+ year contracts)

•At-scale for populations (but can be done on a smaller scale, introducing a % payment for specific outcomes)


Upside:

•Potential to deliver sustainable whole-system service transformation

•Better care co-ordination & planning> more ‘joined-up’ care, better outcomes & value

•Strong synergy with integration

•Can catalyse & incentivise providers to work differently

‘Urban myths’:

•Doesn’t preclude personalisation or choice – embed in requirement for ‘lead provider’

•Shouldn’t freeze-out SME & SE participation - enable through sub-contracting


Downside:

•Resource-intensive

•Long lead times

•Clarity re desired outcomes & behaviours crucial

•Requires commissioner collaboration at-scale

•Effective user engagement from the outset crucial

•May require substantial (and challenging) market development – will be difficult if existing relationships are immature/tense

•For most commissioners, probably one OBC project at a time

•Funding double-running costs & deferred payment (SIBs?)

Is it the right approach for the problem? “Sledge-hammers & nuts”


Innovative contracting models are emerging:

Lead Provider/Prime Contractor:

An arrangement where the commissioners issues a contract for a care pathway to a single lead provider, and the lead provider is then responsible for either providing, or subcontracting, the care specified. It is suggested that this approach to contracting is best suited to the complexity required to integrate care and enables commissioners to bring together multiple providers of care into a single pathway.


Alliance contracting:

An approach used in healthcare in New Zealand, which involves commissioners issuing a single contract with a number of providers, who share a common performance framework with collective measures. This approach cannot be taken easily within the current contract rules, but some areas are also starting to exploring it. In this approach there is collective accountability for services delivered, with providers judged on performance as a whole rather than as individual components, thereby incentivising cooperation to drive successful delivery of services. This approach was used in the Year of Care capitation tariff pilots.

•Right Care Case Book, Accountable Lead Provider, 2012

•PWC, NHS@75: Towards a Healthy State, 2013


Attribute Lead Provider Alliance

Fit local culture Requires significant trust & effective partnering

Probably easier to implement where relationships less mature/damaged

Shift in risk from commissioner

Substantial post-mobilisation

Significant post-mobilisation

Requirement for commissioners to co-ordinate care & providers

Low Low for careLow-Medium for providers – accountability & procurement processes

Resource intensity & lead times

High High

Proof of concept in NHS Limited Very limited

Evidence base in NHS? Evaluation?

Minimal Nil?

Fit NHS Standard Contract Can be accommodated Not currently

Deferred funding/pump Major problem Major problem

4. Commissioning for outcomes: priorities?

• Accessible information on who’s doing what?

• Dissemination of early learning on best practice

• ‘Bulldozing’ the perceived & real blocks

• Optimising the opportunities (Better Care Fund; Innovation Pioneers) for spearheading innovative approaches & forms

• Evaluation

Just do it!

Simon Stevens

“let’s test new commissioning approaches”

bob ricketts, nhs england - open forum events' nhs commissioning and procurement conference

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