Feature / Governance issues - full version

PCTs must take the lead in ensuring potential conflicts of interest in practice-based commissioning are avoided. Simon Crick gives some pointers on how this can be achieved. ARTICLE ONLY AVAILABLE ON-LINE

There is a potential conflict of interest for GPs as both commissioners of healthcare services under practice-based commissioning (PBC) and providers of those services.

The Department of Health’s PBC implementation guidance published in 2006 refers to this matter but does not give explicit advice on how this should be controlled. ‘Business cases from practices should be treated on their merits, and in a manner that is timely and transparent and ensures probity. It is for PCTs to decide how to do this. The PCT is expected to clearly identify its reasons for not supporting a business case and the actions that would resolve this,’ it says. 

Within their existing standing orders (SO) and standing financial instructions (SFIs) most PCTs will require declaration of interests in PCT business where potential conflicts arise. In principle this should be extend into PBC but there is a risk this is not done, or done adequately enough, as it is largely a matter for local discretion. 

The development of preferred supplier status known as the ‘willing provider’ has further potential to blur issues around PBC governance. The Department’s PBC guidance issued in November 2006 allows PCTs to designate willing providers in order to stimulate the market place such that free choice of provider is not constrained by traditional commissioning patterns. No tender is required under certain circumstances, and there is exemption from some European Union Procurement Directives, as healthcare is a part B service.

In Northamptonshire this guidance has been adapted by detailed schedules to cover when and where tenders are required, in line with DoH PBC guidance and existing SO and SFIs. Tenders are required for a new service or when a complete service redesign will create a monopoly or guarantees activity or finance values. This means that for all other service extensions, or if there is a choice of provider, then tenders are not required. In particular, if the service is provided by an existing medical practitioner who holds an existing GMS or PMS contract no tender is required. In this instance there seems to be significant risk that the best price is not obtained, and other methods such as benchmarking might be required to ensure value for money is obtained. 

There will be instances when PBC commissioners can agree service changes or developments, and then the services are carried out by their PBC provider arm. In order to overcome this conflict of interest decision-making arrangements should specify that any decisions-makers with a financial or material interest in the decision should declare that interest. In addition they should remove themselves from the awarding of contracts and votes on those matters. Whilst this should address most potential conflicts, it does rely on individuals to be open and honest about their involvement in service provisions. There is also a grey area around close relationships, such as where there is a relationship but no direct contractual ties that could be open to abuse.  

Enhanced Services are procured by PCT with their local GPs for various services in addition to the core contract. These have been developed under a national model as there are local, national and Directed Enhanced Services. PCTs have discretion on how many of these they commission above the Enhanced Services floor, which is a notional sum of expenditure set by the DoH as a target for primary care commissioning by PCT. 

Historically, most PCTs have tried to allocate this expenditure on an equitable basis, but some practices have been better at securing these funds than others. Monitoring of this work and contractual basis has varied across the country. In Northamptonshire the PCT requires practices to fulfil their core contract (GMS/PMS) obligations to provide essential and core services before committing to take on additional work, in particular in the role of willing provider (see PBC Governance and Accountability Agreement 2007/08, page 28). 

Another issue that may cause problems for PCTs is the PBC management allowances which were payable to practices who agreed commissioning plans in 2007/08. These sums are meant to fund the development of commissioning and commissioning management capacity within PBC groups. However, there is a risk that these sums are used to fund infrastructure within PBC groups to provide services. To avoid this conflict of interest PCTs need to ensure that the use of the magnet allowances is closely monitored to ensure it is appropriate and does not provide support to PBC service provision ambitions.   

In Northamptonshire, the PCT has established a clear governance and accountability agreement signed up to by practice-based commissioners. This document covers the whole operation of PBC for 2007/08 and was the result of detailed work with many stakeholders and advisors. 

It includes a significant amount of work using legal advisors to ensure it is legally enforceable when contracting for services. Most of the issues raised above are covered and addressed, although in some instances there would seem to be scope for some of the regulations to be circumscribed if that was the intention. 

Looking forward, the recent Darzi review outlined an increased role for PBC clusters in designing services and care pathways. This will bring further potential conflicts of interest and a requirement for PCTs to ensure that the provision of new services is open to competition and transparently procured. High Quality Care for All also outlined the piloting of integrated care organisations and this will require strong governance controls to ensure that the roles of GPs as commissioners and as providers are clearly separated.  

Simon Crick is associate finance director provider services at Northamptonshire Teaching PCT and a m ember of the HFMA Corporate Governance and Audit Committee.