Feature / Commission Impossible?

PCTs have been set the challenge of transforming commissioning. Steve Brown talks to one PCT finance director about what commissioners can do to achieve world class status 

For decades the NHS has been talking about bringing care closer to the patient home, empowering patients, involving clinicians in management and doing more in primary and community care. But the reality has been increasing investment in secondary care, with weak commissioners portrayed as being unable to move services outside of strong hospital providers.

The mission under the new  world class commissioning initiative, should primary care trusts choose to accept it, is to correct this imbalance and design and deliver patient care pathways that better meet the needs of their populations.

The Department is convinced that change will not happen by itself, but needs to be driven by strong, competent world class commissioners and PCTs are not there yet. Mark Britnell, director general for commissioning at the Department of Health, has been making the case. He told a conference earlier in the year: ‘It is not conceivable to think of an NHS that is fit for the next 50 years that is solely reliant on supply side strength.’

Talking to Healthcare Finance, Stephen O’Brien, director of finance at Croydon Primary Care Trust, backs this verdict.  He suggests that there can be a tendency for hospitals to want to do things the same way as they’ve always been done and to retain control. But this will not necessarily be in the best interests of the patient. And if it was left for trusts to deliver changed pathways, it would simply take too long. 

‘For instance if you go back five years, haemophiliac patients would have to go to hospital to have their clotting factor,’ he says. ‘Now a service can be provided in the patient’s home – a clotting factor home delivery service. But it has taken us a while to get this past some trusts. They can fight against this because it takes control away from hospital-based services and confidence in primary and community based services is not yet there.’ He says the loss of funding also plays a part but believes that the loss of control is often the over-riding issue.

‘It is this resistance to change that has created one of the imperatives around world class commissioning,’ he adds. Alongside other initiatives – such as penalty clauses in contracts for failing to deliver mostly based around activity but with a much greater emphasis on quality in future years, Mr O’Brien says the world class commissioning programme is happening at the right time.

Croydon Primary Care Trust is already something of a pioneer in terms of commissioning and identifying new pathways that better meet patient needs. Its virtual ward project, which uses predictive software to identify patients at high risk of future hospitalisation, has already won it numerous awards and accolades.

But even with these real successes Mr O’Brien believes that the PCT is a long way from being world class – the ambitious target set by the Department of Health.

Pioneering pathways

Few would argue with the overall vision of ‘adding life to years and years to life’. This will require commissioning to deliver better health and wellbeing for all, while dramatically reducing health inequalities. Quality services will be the key, with far more emphasis placed on the evidence-base for decisions and services. PCTs will be expected to deliver more control and choice for patients and to make investment decisions in an ‘informed and considered way’ so that improvements are delivered within available funds.

The vision is backed by 11 identified competencies that detail the knowledge, skills, behaviours and characteristics that underpin effective commissioning. PCTs will be judged against these competencies – along with improvements in outcomes and their overall governance – under a national assurance system (see diagram right).

With the assurance framework having just been unveiled before summer, PCTs are in the throes of amassing the paperwork – eight strategies and reports plus details of their practice-based commissioning governance arrangements and examples of provider contracts and pathway redesign – and self-certifying themselves against the competency indicators and governance measures.

This undeniably requires a huge effort on behalf of PCTs, and despite statements from the centre that the assessment would not require extensive data collection and would make use of existing documents, it is clearly the focus for commissioning organisations.

Finance is key to world class commissioning. Mr Britnell has made it clear that the NHS financial position – one of continuing surplus – means the service is ‘in a stronger position than ever to directly impact on people’s health by commissioning services in new and innovative ways’, hinting at the potential to cover double running costs as services bed in. But good financial management and financial support feature throughout the competencies – not just the 11th financial competency of ‘making sound financial investments’.

The framework for measuring the 10 competencies, other than the main financial competency, is clear, with PCTs self-assessing themselves against the competency requirements and these scores being reviewed at a subsequent panel day – a sort of Monitor-style ‘board-to-board’ meeting that is the real focus for the commissioning programme.

Three indicators have been published for each competence and PCTs will be rated from one (low) to four (high) – in a style similar to the Auditors’ Local Evaluation key lines of enquiry (see table). There are financial aspects and indicators in several of the competency descriptions, including competencies covering clinical collaboration, prioritising of investment, stimulating the market, procurement skills and managing the local health system.

The bar has not been set too high for 2008/09, with most PCTs expected to score one or two for each competency. Everyone will be learning in this first year including those doing the reviewing. Mr O’Brien says that London Strategic Health Authority has been asking for some returns early – other SHAs have been doing the same – so they can do some benchmarking. ‘The issue is with some of this: what are they benchmarking against? What exactly is a good example of a contract management document or a good contract or a good joint strategic needs assessment? They are doing a lot of this for the first time too.’

While the general competency assessment framework is clear, it is less obvious how the financial competency (competency 11) will be judged as part of the governance element.

Under governance, PCTs will be given traffic light assessments on strategy, finance and board. The ‘making sound financial investments’ competency was described in December’s document covering all 11 competencies, but there are no indicators and descriptions of different levels of performance. So what would lead to a red, amber or green assessment on finance is not clear.

PCTs know the assessment will look at sustainability of the PCT’s financial position, its ongoing financial management and the accuracy of its planning and that the five-year financial plans, submitted with the strategic plan, will be the main source of information. The Department says only that: ‘If it is deemed that a PCT’s financial plan sets out a sustainable financial position, and that the PCT’s variance against the previous year’s actuals on key parameters is within a realistic range and its future projections are appropriate, then the PCT will be rated as “green”.’

Mr O ’Brien says world class commissioning is a team game – and finance will be key members of that team. But he says finance staff will need new or enhanced skills to support successful world class commissioning. Perhaps key among this skill enhancement will be a far greater understanding and familiarity with programme budgeting information.

Team effort

Croydon is already in the vanguard of PCTs starting to use national data that enables PCTs to compare spend and outcomes across 23 programmes of care. Croydon has followed North Yorkshire and York PCT by producing a report analysing local spending, comparing itself with national and cluster averages, mapped against activity and outcomes in those programmes. ‘Programme budgeting doesn’t provide the answer, but it does give you the analysis,’ says Mr O’Brien. ‘It provides a case that at least needs to be proved or disproved.’

He says spending on respiratory system problems provides a good example. Croydon is one of the lowest spending PCTs ranked 148 out of 152 PCTs and spending 20% less than the London suburbs cluster average. Croydon has statistically high mortality rates for asthma and pneumonia. Based on correlation between the mortality rate for these problems and PCT spend, an increase to average spend would be significant. Mr O’Brien says the point is the PCT was not aware of this potential issue before the programme budgeting data was broken down and analysed in this way. Further analysis is needed but a world class commissioner needs to know these types of issues and address them.

He says finance managers need to become far more fluent in programme budgeting, so they can provide the information and support clinical and public health teams in interpreting the figures. He believes the use of data such as the programme budgeting information is the key to world class commissioning – helping PCTs to understand where their resources are currently invested, what outcomes they are getting, and whether they have the right services in the right places to deliver improved outcomes in future.

He also believes finance managers in general need a broader understanding of the whole health economy, not just their own organisation. For Croydon that means having a grasp of the issues facing local acute hospital Mayday Healthcare NHS Trust and not just primary and community care and commissioning. ‘We buy 90% of Mayday’s clinical work and we can’t afford for them to fail,’ he says. ‘So if we don’t understand what we are doing to them , we won’t understand when things are going wrong.’ He adds that if Marks & Spencer had a major supplier, it might even have people on the supplier’s board and that this kind of mutual understanding needs to be enhanced under world class commissioning. The benefits work both ways as the PCT has offered a secondment to a foundation trust deputy finance director to gain some commissioning experience.

Negotiating skills are another area that need attention and Mr O’Brien also believes PCT finance managers need to improve their monitoring skills, particularly around payment by results activity levels and the relationship between tariff and non-tariff activity. The PCT is currently undertaking an exercise to identify the skills that will be needed by all its 200 governance, finance, commissioning, public health and IT staff.

Many organisations will be challenged by the demands of world class commissioning, but Mr O’Brien believes it offers a route towards a more even power-sharing relationship between commissioners and providers – with patients and the public being the intended beneficiaries. To be successful, world class commissioning will need to be more than just an initiative and more than just passing an assurance test. Instead it needs to become the ingrained way of doing business among PCTs. Only at that point will it be commission accomplished.

Note: The 11th indicator - Make sound financial investments - is assessed within the governance element of the assurance framework