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Creative thinking

Creative thinking
23 February 2015

How can commissioners think differently about collaboration and relationship building?

How can commissioners think differently about collaboration and relationship building?

A more permissive national policy framework and the need to respond to increasing pressures on the health system have together created an opportunity for clinical commissioning groups (CCGs) and other commissioners to think differently and experiment with alternative approaches to commissioning and contracting. The recent report from The King’s Fund, Commissioning and contracting for integrated care, examined the practical development of several of these approaches and identified lessons in best practice for CCGs that might be considering new contractual solutions.

The ambition to collaborate and deliver more integrated care has driven many developments at a local level over a number of years. However, providers and commissioners often feel that they have made as much progress as they can through informal relationships and networks. They also find they are restricted by extremely complex, and potentially conflicting, payment systems that incentivise some providers to maximise activity or treatment, but encourage others to manage care differently.

The challenge for commissioners is in knowing how to use their contracting tools innovatively and effectively, particularly in the face of relentless commissioning cycles, the sheer number of fragmented and complicated contracts, and a continually changing regulatory framework. For these reasons, some CCGs are working with providers to consider new approaches to commissioning and contracting that overcome some of these limitations and instead incentivise providers to work together towards shared goals.

The report’s intention was to develop a typology of different contracting options, outlining the circumstances under which particular approaches might be adopted, and the pros and cons of each one. However, it quickly became apparent that no definitive demarcation exists between particular models and the ways in which they are implemented. Prime contractor, prime provider, integrator, lead provider, accountable provider, accountable care organisation and alliance – all are terms used frequently and interchangeably, but have very different meanings. Furthermore, through the process of defining a model, the original purpose of delivering more integrated and coordinated care for patients can be lost. The report therefore attempts to clarify the broad structural innovations, explains how they are applied in practice and reaffirms the ultimate aim of achieving better integration and coordination of services for patients.

What is clear from the evidence gathered is the importance of developing contractual solutions that meet the specific needs of local health systems and their patient populations – rather than starting with a contractual model and working backwards to fit providers and care pathways into the structure of the contract. Commissioners should start by diagnosing the problem
they are trying to solve and then work together with partners to identify an appropriate solution. The outcome will depend on a number of factors, including the segment of the population being considered, the local provider mix and any gaps, the specific problems identified, desired clinical outcomes and the vision for the delivery of care both now and in the future. This process will also expose whether there is a need to test the market through an approved and robust procurement procedure.

Stimulating greater collaboration and improving integration of services is the key driver across many efforts to contract and commission in different ways. The contract itself provides the structure and accountability mechanism for the integrated model of care. However, the contractual frameworks themselves do not automatically motivate providers to share information, simplify care pathways or work together to deliver more coordinated care. As many of the problems that patients and service users experience in their care relate to gaps between services and providers, contracts should focus on holding providers to account for streamlining the delivery of care across these gaps for the patient group in question.

Whichever approach is chosen, commissioners will be required to invest significant amounts of both time and resources; the amount of time, effort and additional, often unforeseen difficulties involved in establishing new contractual models should not be underestimated. The examples I have drawn on in the report demonstrate how CCGs can spend up to two years planning and engaging with local stakeholders in order to agree the best approach and to define meaningful outcomes. The financial cost to commissioners is very high and requires considerable upfront resource.

Innovative contracts are not in themselves a panacea or shortcut – the contract itself will not solve problems, lead to integrated services or fix poor working relationships – and every new approach relies heavily on effective procurement and supply chain management to ensure integrated delivery. When done at scale, it is unlikely that planning and contracting for this level of transformation can be successfully achieved within existing resources. In most cases, it will require dedicated personnel to lead the process and seek engagement from others across the local health system.

CCGs need to consider what investment they can make in developing and supporting new contractual models and contract-holders, particularly if the decision is made to go through procurement. These contracts are often designed to transfer some commissioning responsibilities and risk to providers or integrators. However providers may not have the skills to manage these responsibilities and level of risk, in which case governance and assurance processes may need to be revised, and they may need ongoing support.

It is becoming increasingly evident that CCGs will be required to develop a new range of competencies to establish and monitor new contractual models. These should include a detailed understanding of procurement rules and regulations, mechanisms for holding provider organisations to account for outcomes, and working with new entrants into the market place. As different models are tested, there will be opportunities to develop a new range of templates and for commissioners to share their experiences through learning communities and increase the support they receive from existing organisations, such as Commissioning Support Units (CSUs) or NHS Clinical Commissioners.

The Government and other national bodies also have a role to play in helping commissioners and providers navigate this new world of contracting and commissioning. They can gather and share lessons from early innovators, in order to develop new contractual vehicles and foster closer partnership working, including engagement with local stakeholders. They will also need to provide support for under-resourced commissioners and support them in offering help to providers to ensure they can fulfil their emerging responsibilities for supply chain management and managing financial risk. Continuing reforms to the payment system will also help eliminate barriers to integrated care by allowing more local flexibility in managing payment arrangements.

As the cost of developing new contractual approaches is high and the process is difficult and resource-intensive, the enthusiasm of commissioners and providers is key. Alongside a strong determination to succeed, teams must ensure they have the right mix of skills in procurement, contracting and commissioning to design and operate these alternative arrangements. That is not to say there are not real opportunities to move from traditional processes to better, more innovative ways of working, but we need to be realistic about the scale of the challenge and ensure commissioners and providers have the resources and knowledge to effect sustainable change.

Rachael Addicott is a senior research fellow at The King’s Fund.

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