Archive for December, 2012


Now that the distraction of the authorisation process is largely out of the way, CCGs need to ensure they are fully ready to take on their statutory duties from April 1st.  Below are 5 resolutions for CCGs for the New Year:

1. Get rid of any outstanding conditions

While some have fared well through the authorisation process, many CCGs are left with a number of conditions.  It is critical that CCGs do everything in their power to get these conditions removed as quickly as possible.  Life is going to be difficult enough, without having your left arm tied behind your back!

2. Stop tolerating poor quality commissioning support

The majority of CCGs are not being well served by their commissioning support provider.  While CCGs are taking on responsibility for operational and financial delivery, those providing commissioning support are primarily focussed on set up and preparation for 2013/14.  Promises of high quality information tomorrow, and world class contracting teams in the future, are no good to CCGs that have already started the most important contracting round in their short histories.

CCGs have demonstrated remarkable patience with those setting up commissioning support.  It is time for this to end, because it is CCGs that are suffering, and CCGs who are accountable when this support yet again fails to deliver.

3. Build a strong relationship with the Local Area Team (LAT)

The NHS Commissioning Board (NHSCB), whatever our view of it is, is here to stay.  The LATs within the NHSCB need strong successful CCGs, as they are charged with performance managing them.  The relationship that each CCG builds with its local LAT is a pivotal one, and one that will be critical to the future success of both organisations.

If the CCGs and LAT are seen by the providers to be vying for power, both trying to claim system leadership, and to be holding opposing views, then there will be an open door for the providers to play the CCG and LAT off against each other.  A relationship that allows differences to be aired in private but consistency to be demonstrated in public is required to prevent this from happening.

4. Agree a primary care strategy with member practices and the LAT

As we have discussed on this site at length in recent weeks, the success of CCGs and individual GP practices is dependent upon general practice changing.  A new model of general practice that can offer an extended range of services, that drives demand management through the system, and that integrates care around the needs of patients is what is required.  This change needs to be happening now, because without it, CCGs will not be able to deliver the rest of the change that is required.

The lack of clarity about whose responsibility general practice is persists, as the NHSCB tries to get to grips with its direct commissioning role alongside its role performance managing CCGs.  This creates an opportunity for CCGs to direct the LAT into agreeing a strategy for general practice, rather than wait for the NHSCB to develop some unworkable top down directive.  Ultimately the key stakeholders that need to be bought into the strategy are not the LAT but the member practices.

5. Work with other CCGs to share learning and support

Despite the competition between CCGs that the authorisation process created, one of the most valuable assets and sources of support that each CCG has is other CCGs.  CCGs will stand or fall together.  The whole NHS expects CCGs to last 2-3 years before they are replaced with the next iteration.  If CCGs act alone then it is likely that these predictions will come true.  But if CCGs can genuinely learn from each other, help each other, and work together to make clinical commissioning the force it has the potential to be, then there is no reason why CCGs cannot continue to exist for many years to come.

2013 will inevitably be a difficult year for CCGs.  It will start with the press that will come from the conditions that many of the CCGs in later waves have already been allocated.  Any end of year trouble will be picked up as lack of readiness by the CCGs to take on their statutory responsibilities from April.  Inevitably there will be transition issues, and as  PCTs no longer exist this can only come back to bite CCGs.  And the financial challenges facing the NHS will continue to increase.

But 2013 will also be the year when the shackles that have been placed around CCGs are finally removed, and where clinical commissioning can come into its own.  It is the time to demonstrate to all that clinicians leading decision making will drive improvements in outcomes and quality of care.  It will be the start of the journey to form a partnership with the public as to the shape of health care in the future.  Good luck with the challenges that lie ahead, and a very happy new year!

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The NHS Commissioning Board (NHSCB) has launched Christmas with the publication of the Operating Framework last week, which it now confusingly calls ‘Everyone Counts’.  For all the language used by the NHSCB, this was always going to be the real test of how different things are really going to be in the new landscape of the NHS next year.

It starts reasonably well, and on the surface of it the shift to a much stronger focus on outcomes is a really positive step.  However as ever, there is a sting in the tail, which sits in 3.4 of the document,

The NHS Standard Contract is a key enabler for commissioners to secure improvement in the quality of services for patients.  It supports the approach set out in this guidance and as such will be the basis on which commissioners should commission NHS funded services from providers.  Commissioners must enforce the standard terms, including the financial consequences for under-performance or failure to provide data on which to assess performance.  We will be rigorous in supporting CCGs and our direct commissioners to ensure the contract terms are implemented.

Littered throughout the document are also references to specific situations in which the NHSCB will expect CCGs to implement financial penalties, including completeness and quality of data, individual 52 week breaches, and ambulance handover delays over 30 minutes (with a further fine for delays over an hour).

This is not something that is going to start on the 1st April.  Right now many CCGs are being asked to report directly and in detail to the NHSCB as to how contract penalties are being applied where providers are failing performance target.  It would seem that the NHSCB strategy for maintaining ‘grip’ in the new world is ensuring that CCGs are implementing contract penalties.

I know there are mixed views on this.  There is a camp, even within CCGs, that support this approach wholeheartedly.  The contract is viewed as the key tool by which commissioning is delivered, and strong contracting is seen as the enabler by which providers will understand consequences and therefore improve performance. 

For me this does not really stack up.  Clinical commissioning at its core is about clinicians working together to develop services that best meet the needs of patients.  It is built upon trust and honesty and strong working relationships.  It is very difficult for a CCG to on one day have a conversation with its local hospital about working together to transform the urgent care system, and the next day to issue a fine for failure to achieve the 4 hour target.

Do fines really incentivise providers?  Is it really helpful when a hospital has been under severe pressure over a sustained period of time, and front line staff are at breaking point, for the commissioner to issue a financial penalty – one that most likely will lead to more cuts, lower staffing, lower morale, and most likely even worse performance?  As commissioners in our heart of hearts do we think the real issue is that hospitals are not taking performance seriously, and that it is simply a question of insufficient effort, which needs to be galvanised through punitive action?

I do think that there is a role for contract penalties.  There are times when for whatever reason providers take their eye off the ball and do not meet the standards that we expect for our patients.  What CCGs need to do is set their own strategy for use of contracts and contract penalties.  We need to be explicit about what we will fine for and, more importantly, how we will use any income gained from fines.  There is a huge difference between using it to offset an in-year financial problem and using it to reinvest in resolving the identified issues. 

CCGs need to share this strategy with their providers up front, in the explicit context of the Everyone Counts document, and then stick to it.  Page one needs to restate that it is clinical relationships that will drive long term success, not contracts.  If as CCGs we do not do this we will be on the back foot with the NHSCB from the start, and will be storing up trouble and impossible relationships for the future.

Enjoy your Christmas.  Hopefully you will have time to amidst agreeing how the winter money will be spent, producing the first draft of next year’s plan, and responding to all of the Local Area Team’s urgent requests for information!

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One of the huge confusions caused by the introduction of Clinical Commissioning Groups (CCGs) is whether general practice is a provider or a commissioner.  Many fight hard to draw a line between when a practice is commissioning and when it is providing.  Rules are instigated to guard against the conflict of interest, which effectively separate what a practice does as a provider and what it does as a commissioner.

So many CCGs don’t see their role as anything to do with the provision of general practice.  They will tell you that is an NHS Commissioning Board (NHSCB) responsibility.  But it is a huge mistake, because success for a CCG depends on its ability to invest in health prevention, the management of long term conditions, and schemes to prevent people going into crisis when it is avoidable.  This requires investment in primary care, or an expanded version of primary care that delivers a wider range of services that are linked to the core of the general practice offering.

General practice, however, is stuck in a vicious cycle.  General practice is bursting at the seams and has no capacity to develop and deliver an expanded model of primary care.  The busier it gets, the less able it is to change itself.  But without changing its model, the quality of service it is able to provide is going to deteriorate, and as a business model it will soon begin to seriously flounder.

Without a change in general practice, and no expanded model of primary care to invest in, more and more activity goes into hospital, costing more and more money, with no corresponding improvement in outcomes.  CCGs themselves are stuck in an equally vicious cycle.  

So the fate of general practice and the fate of CCGs are intertwined.  One depends on the other.  CCGs need general practice to be able to offer and expanded model of primary care.  General practice needs investment in service models outside of the core GMS/PMS contract. 

So how do we break out of the cycles we are in?  A number of CCGs are now developing their strategies in a much more aligned way to general practice than PCTs ever did.  They are starting with the strategy of each individual practice, of how it is going to grow its business and reduce reliance on the core contract.  Inevitably this involves working in partnership with other practices, as a larger critical mass of population is required to deliver profitable services that are more niche than core general practice. 

The strategy of the CCG, or more commonly the locality within the CCG, is then built around the strategies of the practices.  Instead of writing an any qualified provider (AQP) specification or a LES that no practice has the capacity or capability to undertake, they produce service models they are confident that practices can deliver.  These can be big projects, like the development of an urgent care centre, or a diagnostic centre.  Because the practices have already thought through how they can deliver it, it starts to become possible.

Because the CCG is responsive and creating new service models as quickly as the practices can take them on, the practices are able to grow and develop more capacity to be able to grow faster.  Sometimes practices create formal federations, or even mergers, to keep up with this new demand.  What started as a vicious cycle becomes a virtuous cycle where practices are growing their business and stopping the decline in profitability, and CCGs are able to shift resource out of the acutes into models of care that genuinely reduce demand and improve outcomes.

At the heart of all of this is a genuine partnership between the practices as businesses and the practices as members of a CCG.  The CCG is not separate from its practices (it is made up of them!) and this is its biggest and most important asset.  Creating an artificial line that must not be crossed between practices as providers and their role as commissioners as members of the CCG is a huge mistake, that must be avoided at all costs!

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The current model of GP practices delivering primary care is broken.  The income that has been secure for GPs as independent contractors for over 60 years is no longer secure.  GP earnings have reduced year on year since their peak in 2005/06.  This reduction is set to speed up rather than reverse for at least the next six years if the current model continues.

Many GPs sense this, but do not seem to have this formulated clearly in their minds as an issue that needs to be tackled.  Below we try and bring some clarity, by laying out the threats to primary care income.

1. Renegotiation of the primary care contract

The most obvious place to start is the core GMS/PMS contract.  As responsibility for this has shifted to the NHS Commissioning Board (NHSCB) the pressure on the contract has already grown.  Whereas most PCTs struggled to introduce any move towards a ‘fair shares’ contract (with some notable exceptions), it is clear that the NHSCB will end the minimum practice income guarantee (MPIG) and shift towards some form of single weighted capitation formula over the next 7 years.

There will be some significant losers in this, but others receiving less than average stand to gain.  The proposed changes to the quality outcomes framework (QOF), however, will affect all practices.  The way that payments for practices are calculated is to be changed (expect to get less), and the thresholds are to be increased to upper quartile as a minimum, and 95% in some areas, making the payments much harder to achieve.  There is also already a clear indication that the QOF organisational indicators will be removed.

While the NHSCB claims that there is an uplift in the contract overall, this will only relate to potential income, and does not take into account the additional expenditure that practices will need to incur.  Built in each year will of course be the efficiency savings requirement.  As small independent contractors it is much harder for GP practices to realise an efficiency saving than for a large acute trust.

2. Diversification of Local Enhanced Service (LES) funding

The LES funding is much more under threat.  For a start it will be contracted by a range of commissioners rather than one as previously.  Public health, CCGs and the NHSCB will all have specific LES contracts they want to negotiate.  Each commissioner of LES contracts under the new competition rules must demonstrate why they are restricting access to these contracts to general practice.  As a result an increasing number of LES contracts will become any qualified provider (AQP) contracts, with much greater completion for them.

The only outcome for this for general practice is a weaker negotiating position in the value of these contracts (as they will no longer be the monopoly provider), and a reduction in the overall income they receive from them.

3. Access to Capital and Capital Gains

Investment in GP practice premises using the facilities afforded by the borrowing cost requirement and the notional rent arrangements has traditionally been regarded as a low risk moderate return capital investment for GPs.  However, property values have fallen and with the state of the economy there is now the real risk for many of reductions in notional rent or negative capital returns.

Therefore what was historically a sound source of additional income through capital gains for general practice no longer really exists.  Practices looking to expand have now to find the capital to do this, and run the risk that the notional rent they receive when complete will be insufficient or cut in future.  The introduction of the National Property Services as a semi-autonomous entity within the Department of Health, which may be privatised at some point in the future, makes this risk even more real.

4. Increased Regulation

Individual GPs now need to be ‘revalidated’ every 5 years and each practice has to be registered with the Care Quality Commission (CQC).  This is unlikely to be the end, as the level of regulation and quality assurance increases year on year across the NHS.  Small GP practices are not set up to be able to provide the levels of assurance that are going to be required, and the costs of delivering what is needed are likely to be substantial.

5. Pension Changes

The changes to the NHS pension for GPs are so significant that many were prepared to go on strike to fight them, and did so on the 21st June this year.  While it has been relatively quiet since the impact remains.  The losses have been further exacerbated by changes to taxation, all further eroding the take home pay of GPs.

6. Quality Premium

The quality premium is on the face of it additional income that GPs can earn.  Latest information from the NHSCB suggests that this will be up to £5 per head, so for a practice with a population of 8,000 it represents a potential additional income of £40,000.  Not to be sniffed at.  However, it is also clear that payment will be explicitly linked to the CCG operating within its financial control limits.  As time goes on, the ability of the CCG to achieve this is almost certainly going to be linked to the ability of primary care to change.

So GP practices are facing a crisis.  Clinical Commissioning Groups (CCGs) need a different type of primary care in order to be successful, one that is able to expand rapidly, integrate effectively and take on and manage financial risk.  Ironically, CCGs want to invest, heavily, in primary care, but as it stands primary care is unable to respond.  CCGs need to work with their member practices and help them to change to create a successful future for all.

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There is some noise being made nationally about the financial ‘expectations’ being set for Clinical Commissioning Groups (CCGs) by the NHS Commissioning Board.  These will be published in the financial and planning framework due out later this month.

The basic plan appears to be that CCGs will need to set aside 2% to spend non-recurrently, which is not to be spent on routine services.  This has been the case for the last few years for PCTs, and is unlikely to come as any great surprise to CCG Chief Financial Officers (CFOs).

I understand that for some any restriction on CCGs is symbolic of a continuation of the old regime and of the lack of freedom that CCGs will be given.  However, the size of the financial challenge facing CCGs and indeed the health service as a whole means that system transformation is critical.  For CCGs to rise to this challenge it will require significant investment.

What CCGs can and must do is ensure that they use the 2% for real system transformation.  In the past this funding has been used too often to bail out overspending acute contracts.  CFOs are cautious by nature, and will want to ensure this pot is available at least six months into the year until they have a clearer picture of the likely outturn position.  CCGs must resist this temptation, have clear and strong plans for system transformation, and invest in them.  If they do not they are taking short term security at the cost of long term financial pain.

The rules that the NHS Commissioning Board put around this are likely, if anything, to be helpful.  They can set the expectation for providers and the system as a whole that this funding cannot be part of contract negotiations.  In some places providers treat the 2% funding as if they have a right to their ‘fair share’ of it.  What the guidance can do is provide more clarity that it is for CCGs to use to drive system transformation however they wish.

The remaining money that CCGs are being (potentially) asked to set aside is in two parts.  The first is the money based on the ‘control total’ that historic PCTs had to achieve.  So while this may work out as 1% for CCGs across the country (as reported by the Health Services Journal 22/11/12 p5), as long as this is returned from the surpluses that PCTs achieved I cannot imagine this will cause an issue for the vast majority of CCGs.

The second part is an expectation that CCGs will create an internal contingency to ensure they achieve balance.  I am yet to meet a CCG CFO who was not planning to do this.  The issue could be if the NHS Commissioning Board dictates an amount, but if it is a minimum of 0.5% as reported it is unlikely that many would be planning for less than this.  If anything, it will provide support for those CFOs who’s GPs are insisting that no contingency is required!

It is likely that there will be issues that need resolving between CCGs and the NHS Commissioning Board.  CCGs must pick their battles with the Commissioning Board carefully, and make sure that when the time comes they choose the right ones.  The financial planning guidance, however, is not one of these.  CCGs must demonstrate the ability to keep control of the financial position, while at the same time using the power of clinical commissioning to transform the system.  A prudent and effective use of contingency funds is key to this, and the guidance is more likely to help than to hinder.

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