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On your marks

On your marks

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The timetable established by the white paper
imposes a steep and immediate learning curve upon
a great number of those people who will be charged
with management responsibility within newly emerging
GP consortia. Many of the skills acquired from years of
experience in practice management will of course be
invaluable in the coming months and years in the new NHS
landscape. However, the additional demands of operating
a commissioning business on the scale envisaged for the
The timetable established by the white paper
imposes a steep and immediate learning curve upon
a great number of those people who will be charged
with management responsibility within newly emerging
GP consortia. Many of the skills acquired from years of
experience in practice management will of course be
invaluable in the coming months and years in the new NHS
landscape. However, the additional demands of operating
a commissioning business on the scale envisaged for the
consortia, and later to operate them as public bodies, mean that there is not a moment to lose in tooling up with the
right resources in order to ensure success.

But what will success look like? Whatever the ultimate
answer to this question might be, a solid foundation is
essential. That foundation lies in effective and quality
governance. Much is being written about governance
at present which sometimes leaves the impression that
implementing an effective system of governance is yet
another task in a string of rather daunting matters to be
overcome, or simply a problem requiring a solution.

Good governance is however a crucial tool at the disposal
of consortia to help them to achieve success, and a positive
and proactive approach in designing and implementing
a governance system for a consortium will considerably
ease the burden on its management (given the pressures
of general practice that will remain), empowering quality
decision-making processes and the effective commissioning
of services for patients.

What are the key matters that need to be addressed
at the outset? One of the first will be a robust analysis of
the obligations of the consortium, in order that those
obligations can be fully understood and met.

A considerable amount of detail is required in order to
achieve this, and much of that detail is yet to emerge.
The broad aims set out in the white paper have generated
much discussion on what that detail might comprise, but
when that detail does finally emerge, the implications
in terms of the set of functions and obligations that
a consortium will be required to undertake must be
thoroughly explored.

Consortia are likely to use numerous external resources
in order to achieve this, in particular those with many
years of experience in supporting commissioning to date.

The shift in thinking required cannot be overstated,
from principally provider (although acknowledging the
commissioning role undertaken today and the history
of GP fundholding) to commissioner of services on a
macro scale where GPs will have full legal and financial
responsibility for commissioning for the first time.

Those already expert commissioning and supporting
commissioning will be a key and invaluable source of
support and advice, in order to help consortia start off on
the right foot. Consortia should look forward and remain
focused on their commissioning obligations, rather than
drawing parallels with running their existing provider
businesses and advisors, so that the right decisions can be
made and the most appropriate and experienced resources
drawn upon.

A second key matter to consider will be the choice of
structure and the organisation of internal responsibility
within that structure. It is not clear at present what the
legislative stipulations will be with regard to the structure
of consortia when they are created as statutory bodies.

What is clear, however, is that in the meantime consortia
are tasked with designing and implementing their own
systems of governance. This, and resolving the issue of
responsibility within the organisation, will be critical for
its success. The right structure will support the flow of
responsibility, and there are many factors to consider when
looking at which structure might best serve a particular
consortium – not least its size in terms of number of
practices and patient population, obligations, powers and
financial considerations.

A third crucial issue is that of accountability. A high
level of accountability in the organisation should be created on day one. If the leaders of a consortium are fully
accountable at practice level then there is likely to be far
greater buy-in from individual practices and GPs, which in
turn can be harnessed to improve the quality of decisionmaking processes, leading to successful commissioning
of services for patients and stability of the consortium
generally. An appropriate level of stakeholder involvement
may also be built into the consortium’s constitution, again
building in governance principles already established
within other parts of the NHS and which may well be
required by legislation in any event.

Building an effective system of governance
• Choice of structure – the structure should empower
quality management.
• Obligations – define and understand them.
• Responsibility – board structures and decision-making.
• Accountability – stakeholder involvement.
• Quality management principles
.
There is a wide choice of structure that might be
implemented to accommodate a consortium, so what
are some of the factors to take into account when
deciding which structure is best for your particular set of
circumstances and requirements?

Again, the size of the consortium and the patient
population for which it will be commissioning services are
two clear factors, but there are many more subtle factors
which are no less important and which should not be
overlooked in the race towards establishment.

For example, some careful thought should be given to
the external relationships that the consortium will need
to have in order to operate successfully. These are equally
important to the consortium’s internal relationships and
the principle of good governance should apply to both.

These external relationships will include:
• The Department of Health.
• The Treasury.
• Other consortia.
• The LMC.
• Local authorities (including in relation to those services
which are currently procured under s.75 agreements).
• A range of service providers and external advisors and
support organisations.
• National Commissioning Board.

Management of the relationship with the National
Commissioning Board in particular will be very important,
as it has the potential to be complex given its functions
regarding consortia operating as commissioners while on the
other hand being a party to individual practices’ primary care
provider contracts. ‘Community Interest Companies’ may be a
popular choice given the general ethos of this type of vehicle
and the restriction on dividend payments, which may be

attractive to consortia. There is a great choice however from
ordinary share companies to guarantee companies, limited
liability partnerships and others that may be considered as
suitable depending on the aims of the consortium in question.
Another influence on the choice of structure will be
anticipation of the transfer of functions and obligations to
the statutory body when that is created. When this occurs,
consortia will be public bodies and will take on a whole new
set of responsibilities that may be unfamiliar.
Public procurement law will apply to these bodies and
consortia will be obliged to follow due process or be at risk
of challenges that could be costly or damaging to their
reputation. There will be consultation obligations, Freedom
of Information Act compliance requirements, the NHS
constitution and a whole host of legislative, regulatory and
policy obligations with which to comply. Experienced public
law advice will be required. But how does a consortium
establish a quality management system to address all of
these matters?

Quality management
• Properly documenting relationships with service
providers and the consortium’s own supply chain.
• Use of service hubs and framework agreements to
procure quality and value-tested external support.
• Inter-commissioner/joint commissioning arrangements.
• Seeking appropriate advice and support from those
already with many years’ experience (whether obtained from within present commissioners or local authorities,
or their external advisers) of dealing with all of these
relevant issues.

Existing NHS bodies of course occupy this world already
and it is likely that consortia will draw on a similar set
of resources as PCTs do at present, in order to ensure
comprehensive risk management and compliance.

Appropriate decisions made on an effective system of
governance at an early stage, in order to facilitate this level
of compliance, will make the ultimate transition to a public
statutory body far smoother in the new NHS landscape.
There is much to be accomplished, but consortia will not
need to walk alone in rising to the challenge.

Capsticks is a law firm specialising in healthcare. www.capsticks.com

Colin Lynch is a partner and is head of Capsticks’ commercial

practice. Colin specialises in strategic procurement, governance, commercial and contractual advice for both public sector bodies and private sector organisations undertaking PPP projects, clinical service reconfigurations, urgent care centre projects and joint ventures.



James Clarke is a partner in Capsticks’ commercial department and advises on all forms of commissioning, governance and procurement processes. He advised on the first ever large scale outsourcing of community services under the Department of Health’s Transforming Community Services agenda.

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