Archive

Archive for January, 2013

Jan
27

In April 2012 we outlined the risks that the establishment of ‘PropCo’ or NHS Property Services would create for CCGs (http://ccginformation.com/?p=121).  It seems these are now starting to be realised.  The Health Services Journal reported on the 24th January that, ‘the new NHS property company is likely to charge clinical commissioning groups for any assets it takes ownership of whose costs are not fully met by rents or service charges’.  It states, ‘the cost of plugging this gap could be £500M a year’.

Most PCTs charge a ‘service charge’ to providers for use of commissioner estate.  However, the definition of this is generally weak, and it tends to sit as a summary addition to the contract.  Turning this into individual specifications for service lines for each building will be almost impossible because of the variation of buildings, on-costs and maintenance.

Formal rents are generally not in place with providers.  It was not in PCTs’ interests to do so, because the rent would have simply added to the cost of the commissioned service.  CCGs are about to become the unwitting victim of these historic decisions.  NHS Property Services will now be free to determine the rental value of the estate, and the risk is these valuations will end up restrictively high.

So property is given to NHS Property Services for free.  They in turn will charge a full rent back to CCGs to use the property, one that is potentially too high based on their own valuation of the property.  CCGs either pay the rent as an additional cost pressure, or increase the charge to those providing the service for the building.  Either way the CCG loses, because in the latter scenario the provider will simply charge the CCG more to provide the service.

The key issue is statutory compliance.  While PCTs were prepared to manage the estate essentially through capital funding, NHS Property Services without the back up of the rest of the commissioning budget cannot.  The level of backlog maintenance across all of the PCTs is unquantified, but it is certainly hundreds of millions of pounds.  Large parts of the commissioner estate are old community hospitals that will never present a risk free environment for patients.  The Treasury currently provide insurance and indemnity cover, and for NHS Property Services to obtain this independently it would require a massive upfront investment in the estate they inherit.

All this points to the cost of community estate reaching PFI levels.  This will slow down the shift of services out of hospitals to a crawl, just at a time when CCGs need to be stepping on the accelerator.  There is something soporific about estates and estates people, because they talk in an impenetrable language that make most of us glaze over within minutes of a conversation starting.  But CCGs that do not actively engage in the debate out NHS Property Services soon could easily find themselves in serious financial difficulty next year.

So what should CCGs be doing?  Below are four urgent actions every CCG should be taking now:

Sell vacant estate. The problem has been exacerbated because the PCT estates functions are transferring to NHS Property Services.  As such there has been no incentive for them to sell vacant estate.  On the contrary, there are incentives for them to take that with them.  CCGs must not let this happen.  In the transition work with the outgoing PCT they must be adamant that this is sold now without any further delay.

Review the financial returns.  It is critical that CCG Governing Bodies are sighted on the financial returns that are being made by the PCT in relation to the estate and the transfer to NHS Property Services.  This issue has to be on the Governing Body’s radar now.

Signal a rent charge to providers for next year.  CCGs cannot afford to just absorb this as a cost pressure.  They will need to understand the cost implications and identify what that means for the estate they are using and intend to use.  It is important that where rent charges need to be introduced for providers that this is signalled now.

Review planned QIPP schemes.  The changes means that gaps between property costs and income generated from rent and service charges will be revealed.  Many CCG QIPP schemes rely on using community estate to deliver services out of hospital.  These plans need to be critically analysed to ensure that they still make the saving required when the full estate costs are taken into account.

 

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Jan
20

How as a CCG do you know if you are getting what you need from your commissioning support provider?  Is it if you have agreed specifications and these are being met?  No.  Is it if strong relationships are in place between the leadership teams? No.  Ultimately it is because you are being successful as a CCG. 

This point is lost on most commissioning support leadership teams.  Their world is checkpoints and recruitment and managing the NHSCB.  They want service specifications finalised and agreed and to be able to demonstrate an operating surplus.  Most have no idea what the current performance of the CCGs they are supporting is. 

CCGs around the country are in different positions.  Some have few performance problems and are receiving a high quality offering from their commissioning support provider.  While there are probably one or two areas that need to be improved, on the whole the relationship is developing well and both sides are happy.

However, many CCGs are unhappy with the support they are currently receiving.  The commissioning support organisations are having to make significant changes to set themselves up effectively.  These organisations have become inwardly focussed on making the progress the need to get through the checkpoints.  As these CCGs go through their own authorisation process they are criticised because of the poor quality service they are receiving.  In authorisation terms this is picked up as, ‘failure to manage commissioning support effectively’.

The consequences of this are significant.  There are a number of CCGs that have already changed their commissioning support provider.  This has been determined by geography so far.  There are other CCGs who have determined to change their provider as soon as the opportunity arises.  In many places the relationships between the two are ‘difficult’ at best.

These negative cycles need to broken, and broken quickly.  The key to this is developing a partnership relationship between the two organisations, rather than one supplying (or not) a set of pre-determined inputs.  So how do CCGs create this shift in the relationship?  Below are three suggestions:

1. Set the expectation that the success of the relationship ultimately depends on the CCG being successful.  It is critical that CCGs choose partners whose priority is CCG success.  If a member of staff in a commissioning support provider cannot respond to an urgent CCG deadline because they are too busy developing the next checkpoint submission for the NHSCB, the relationship is not right.  Leaders of commissioning support organisations need to be clear that failure to prioritise the CCG needs will ultimately result in procurement of a commissioning support provider that will.

2. Put in place a mechanism for making the current CCG priorities visible.  There are different ways that this can be achieved.  A member of the commissioning support organisation can be invited onto the CCG director meeting.  Regular executive to executive meetings can be set up to share priorities and progress.  A relationship is needed that enables the commissioning support provider to input into the decision making, to identify how its own resource can best be mobilised, so that it can function effectively as a partner.

3. When there is a performance crisis, involve the commissioning support provider.  If a CCG has a big deadline to meet, or the finances go significantly off track, or performance dives in a certain area, there has to be an expectation that the commissioning support provider will contribute actively and directly to the resolution of that problem.  It is important that the CCG involves the commissioning support provider in the crisis discussion directly, rather than providing a list of actions that need to be completed.  Partnership is a two way process, and this starts with the behaviour of the CCG.

It is the responsibility of CCGs to change these relationships.  CCGs are the organisations that are accountable.  As over 200 different CCG to commissioning support provider relationships develop, it is critical that learning and good practice are shared.  If you have a developed a strong partnership relationship with your commissioning support provider or CCG we would love to hear from you, so that we can share your story with others.  Email us at mail@ccginformation.com

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Jan
12

We have talked recently of how the long term success of CCGs is inextricably linked to the extent to which primary care can transform, so that it can take on an extended range of services.  Equally we have discussed how practice income is under threat and continuing to fall.  One GP recently said to me that if it carries on like this he will be paid less than the Senior House Officers (it is a while since he trained!) in the hospital.  Yet even knowing that, GP practices are resistant to changing.  Here are 10 reasons why:

  1. Loss of personal lists.  At the heart of general practice lies the relationship between the GP and the patient.  It is one built over time and means that the GP is much better able to deliver meaningful and timely support and interventions.  It does not necessarily follow that larger practices delivering an extended range of services means losing personal lists.  However, many believe that it does, and as a result will not change.
  2. Loss of independence.  If a GP wanted to be part of a large business or corporation, they probably would not have become a GP.  Larger practices with a management structure are very different entities, and not the type of business that most GPs want to work in.
  3. Lack of support for the innovator.  Often there are one or maybe even two GPs who start to push the idea of growth and change.  However, they often find it hard to convince their partners of the need to change.  As long as they are in the minority, the way practices work mean they will not be able to progress their ideas.
  4. Relationships with other practices/GPs.  Even if a practice as a whole starts to think about growing and potentially merging with another practice, the first consideration is often the GPs working in the ‘other’ practice.  If they don’t like them, or have a poor relationship with them, then this prevents those thoughts from developing into any action.
  5. Disparity in income between practices. Not all practices are equally profitable.  As a result, if two practices start to have a conversation about working together one side will always feel like it is about to subsidise the other.  This then often stops that side progressing the deal.
  6. Lack of suitable premises.  The buildings practices operate in are often full and at capacity.  Even if they want to carry on an extended range of services, they are not able to because of the physical constraints around them.
  7. Too busy.  There is an irony in the fact that many GPs simply do not have time to give medium term business strategy any serious thought because they are so busy keeping their head above water in the here and now.  It is a vicious circle, as the need to work harder and harder creates less and less capacity for change.
  8. How to get started.  Some practices get to the point where they know they need to change. They decide that things cannot carry on as they are.  The problem is that they do not possess the skills that are needed to change the model of the business, and they do not know where to get them.  The role of the practice manager to date has been far more about day to day operations than strategy or business development.
  9. Lack of forward thinking leadership of general practice.  Most practices look to the LMC locally and the GPC nationally for leadership.  These groups generally see their role as protecting and preserving the status quo, not facilitating change. 
  10. Others are not changing.  The biggest reason that there is not a mass movement by general practice is actually because not everyone else is doing it.  There are examples of practices changing and becoming profitable through a much lower dependence on the core contract and delivery of a much wider range of services, but they are few and far between.   There needs to be a much bigger critical mass, before the majority will start to think seriously about change.

CCGs need to break through these barriers.  Ultimately success will only come if they can be broken down.  Practically CCGs can share stories and create publicity about those practices that are changing, so that a visible critical mass does develop.  Organisations representing CCGs could forms strong alliances with those representing general practice, instead of creating clear lines between each other.  And collectively we need to start building a cadre of management with the skills to support general practice to transform.

Jan
06

Pulse have reported that in a snapshot poll of 226 GPs 51% believe the GPC has done a poor or very poor job in representing the profession in negotiations on the 2013/14 contract.  When asked what action the GPC should take 52% said they would support a call from the GPC to boycott commissioning.

So what does this tell us?  Primarily it points to the dissatisfaction that exists within primary care.  Practices are having to work harder to take home the same or less money.  If they do not want to work harder, and maintain the level of capacity required to deal with the increased workload, then a fall in drawings is inevitable.

So have the GPC let the profession down?  I don’t think so.  The reality is that efficiency requirements placed on the whole of the NHS are being placed on GP practices.  The problem GP practices have is that as small businesses they cannot find 3-4% efficiency year on year.  And we have explored in a previous post the pressures on future income for general practice http://ccginformation.com/?p=262 .

The heart of the issue lies in the fact that in order to be profitable primary care needs to change.  A conversation I had with a GP recently was that GP practices have been fine for the last 60 years so why do they need to change now? 

The facts are that the funding available for core general practice (i.e. that funded through the core GMS/PMS contract) is going to go down, while expenses will rise.  The opportunity for general practice lies in extending (not replacing) its service provision into areas beyond that which is currently considered core general practice, areas such as urgent care centres, observation beds, multidisciplinary teams, outpatient procedures etc. 

This opportunity exists because if these services are delivered by primary care, linked to the gatekeeping role of primary care, and used as a mechanism to train and upskill general practice professionals, it enables the NHS to provide care that is both cheaper and closer to home.  There is a potential win for primary care and for the NHS as a whole.

To be fair it is much more than an opportunity.  It is essential.  CCGs need to invest in this extended model of primary care, in order to be able to disinvest in hospitals.  Without it, presenting demand will continue to rise year on year and eventually bankrupt CCGs.

So the future of general practice and of CCGs is inextricably intertwined.  If general practice can change, CCGs can be successful.  For general practice to be able to change quickly and effectively they need commissioners who will invest in them.  With CCGs general practice has a once in a lifetime opportunity.  PCTs would not invest in primary care the way CCGs will, and neither will any successor body. 

General practice sees CCGs as a separate entity, rather than as a fundamental part of its core.  The reality is that every GP practice has to be part of a CCG.  Clinical commissioning is now part of general practice.  Most GPs (52% if the results of the survey are anything to go by) resent this, and certainly have not accepted it.  The desire to boycott commissioning is testament to where we currently are.

The challenge for CCGs is to persuade general practice to embrace clinical commissioning, both as a mechanism to improve quality and outcomes, and as a mechanism to change itself.  Boycotting commissioning is one of the biggest mistakes general practice could currently make. Practices will not have this opportunity again to transform themselves.  It is our job as leaders of CCGs to ensure that we, collectively, seize the moment.

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