Posts Tagged ‘Better Care Fund’


Since last time there are 4 new posts, all published on (here):

What is co-commissioning?  – which looks at how in a short space of time co-commissioning of primary care seemed to evolve from delegated budgets to partnership working between CCGs and NHS England.

Out of hours healthcare provision in need of urgent treatment – which suggests that with development of 111, extended primary care hours, and GP streams in A&E departments, the role of out of hours needs to be urgently reviewed.

The Lost Art of Clinical Commissioning – which says that because of procurement processes CCGs are losing their focus on inspiring and empowering clinicians from all specialties to come together to make change happen

Is the Better Care Fund preventing integration rather than promoting it? – concerns about the shift of money from health to social care, evidence about the lack of impact of integrating health and social care commissioning functions, and an overly bureaucratic process mean the potential gains of integration could be lost.

As always, any feedback gratefully received!  You can follow me on twitter @ccginsider, leave a comment here, or leave a comment on

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If we carry on down the same road we have been down every previous year, with providers operating in isolation from other providers and CCGs operating in isolation from all providers, where will we end up?

If each organisation continues to develop its own plans then it plays out something like this.  Providers and CCGs enter the contracting round with the figures they need out of the contract.  They argue about the likely success or otherwise of demand management plans.  With the deadline imminent they agree a figure on paper, but they both take away different assumptions about what will happen during the year.  The CCGs assume demand will be reduced, the providers assume demand will grow. 

The net result is a deficit gets built in to the health economy position, because both build different assumptions into their forecast outturn position.  Someone will be right and so a deficit will inevitably sit somewhere.  The value of the agreed contract figure becomes material only in terms of determining the level of monthly cash payments.  In terms of establishing an agreed end of year position it is virtually meaningless.

In 2014/15 the gap between what CCGs can afford and what providers will require is going to be bigger than ever.  Aside from ever increasing demand and inflationary pressures, the situation is exacerbated by the planning guidance.  Now we have the cost of introducing seven day working, the requirement for CCGs to fund £5 per head for general practice, the need for CCGs to keep 4% out of recurrent expenditure (2.5% non-recurrent, 0.5% contingency, 1.0% surplus), just to name a few.

Once a figure is agreed on paper and the year starts, the cracks will start to appear.  CCGs facing financial challenges will shift down a route of increased contract challenges and reducing elective activity, and providers will try to do the reverse (improve coding and increase elective activity).  Throw in the last winter before a general election and the pressure will ratchet up, and relationships will become extremely fraught.  And if next year does not finish us off the year after will, with the transfer of funds from providers to social care via the Better Care Fund.

But there is an alternative.  We could work as health communities to have a single plan.  We could work together to take the resources that are available (knowing that they are insufficient) and use them collectively to deliver a single plan.  This requires each organisation to relinquish the sovereignty that it feels entitled to; actions would be determined by the greater good, not simply by what is best for any single organisation.

In this model organisations collectively commit to what the health and social care economy must deliver.  There is a single set of assumptions that all sign up to.  Agreement is made as to how the money will be used between the organisations in order to enable delivery of the plan.  The contract negotiations focus on this, rather than simply setting the level of cash flow. 

The alternative is harder to set up.  It requires providers to work with providers and CCGs to work with providers.  It will fail if alongside the one plan organisations have their own (secret? real?) plan.  Each organisation has to commit to the system plan.  Each organisation has to be accountable to each other for delivering their part of the plan. 

Clearly this requires trust between the partners. It introduces an uncomfortable interdependence.  If one organisation does not deliver, all will suffer because delivery of the overall plan will suffer.  And of course the worse the current position, and the longer we continue along the current course, the less trust there will be.  If we wait until we trust each other to do something different, we may never get started!

There is no doubt this alternative is harder to set up, but if we understand where the route we are currently on takes us then maybe we will think it is worth it.  After all, something has to change.

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What the impact of the Integrated Transformation Fund (ITF) will be is the question at the forefront of most CCG minds.  It is without question a huge challenge for all local health economies.

There are huge cuts to local government over the next few years.  As a result of this there will be significant cuts to social services, which in turn will impact on health.  Seemingly in response to this it has been agreed that the ITF (now apparently named the ‘Better Care Fund’, but let’s stick with ITF for now) will be established.

The ITF is a £3.8bn fund that seeks to pool existing budgets from April 2015 to enable greater integrated working and the transformation of local services.  According to NHS England and the Local Government Association (LGA) guidance a key criterion for its use is to ‘compensate for social care cuts’.

A critical fact here to keep front of mind is that this is not new money.  It works a bit like a visual trick: social care understand they are receiving an extra £3.8bn and health are under the impression that they still have the same money available.  The NHS, after all, has been ‘protected’ from any funding cuts.

So where then does the money come from?  The expectation set by NHS England is that it comes from the expenditure on acute trusts.    There are two routes identified for this.  One is an expectation that there will be further savings. David Nicholson has talked about the requirement for an ‘additional’ 2-3% productivity gains.  So in 2015/16 there will be a requirement for efficiency savings of 6-7% rather than 4%.  You can make your own judgements about how realistic this is.

The second route is through the benefits that integration realises.  The theory is essentially that if health and social care work together and create new models of care that keep people healthy in the community then admissions will go down and delayed transfers of care will be removed.  But this of course sidesteps the starting point for all of this which was cuts to social care.  The money will at best protect the total current expenditure in community health and social care.

So in reality there will be no new capacity to enable the huge savings required of acute trusts.  Instead the new ways of working through integration will be expected to deliver these benefits with no additional capacity.  Herein lies the key problem that the ITF is creating: it is generating expectations of investment in community services that are not real, and using these expectations to justify the requirement for reduced expenditure in acute hospitals.

So how can CCGs respond?  There are probably two tactics available.  The first is to do everything possible to protect health expenditure.  CCGS can use the absolute minimum possible to be part of the fund, insist wherever possible that the funds used come with clearly badged expenditure, and try to limit the damage that this is inevitably creating.  CCGs could make a judgement that based on the experience of other nationally imposed financial constructs (e.g. MRET) that the incentives will not generate the changes expected, and proceed on that basis.

The second is to recognise that the only actual change proposed within the ITF construct is the integration of health and social care, and so to develop a plan that will maximise the impact of integration.  This then take CCGs into questions of scale, on the basis that the more that is integrated, the bigger the potential benefits (whilst at the same time recognising the bigger the potential risks).  The questions then for CCGs are whether they are prepared to commission all of community health and adult social care with local authorities on a whole system basis?  Are they prepared to create a single commissioning function for this that would incorporate planning, quality and contracting?  Or if not how far are they prepared to go?

Difficult choices ahead.  These choices are compounded by the timescale: the draft ITF plan is due to be submitted on the 14th February.  And we are already well into the contracting round for next year.  Acute trusts are quite rightly going to want to know what the plan is for the ITF ahead of any agreement, particularly any two year agreement.  Unfortunately there are not any straightforward solutions.

Merry Christmas to all, and a big thank you for all of your support and encouragement for this blog throughout the year!

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