Take on more risk to increase share of health market, private companies told

Posted on June 12, 2009. Filed under: Journals | Tags: , , , |

Health Service Journal | BY HELEN CRUMP | 11 June 2009

Private companies must take on more risk if they want to gain a bigger share of the primary and community care market. Take on more risk to increase share of health market, private companies told

Harrow primary care trust chief executive and chair of the London PCTs’ commercial board Sarah Crowther said the perception within the health service had been for some time that risk sharing had been working in favour of the independent sector.

She said: “Perhaps what [independent sector providers] need to think about for the next period of time is how do you incentivise PCTs to change some of their provider relationships, to have the confidence to work with you.”

Ms Crowther, speaking at an NHS Confederation seminar, said the DH commercial directorate, which has been replaced by local commissioning support units, “hadn’t done the independent sector any favours” by negotiating costly deals which loaded risk back onto the NHS.

She said: “The days when it was all about how do you get the independent sector involved are gone. Actually what we’re interested in as commissioners is who is the right provider to give us the right deal to provide the right service.”

But she acknowledged not all PCTs would be taking the same approach to competition and co-operation.

“That may not be perfect, but it’s the reality. Get over it,” she said.

She advised independent providers to think about taking on projects that were not of optimum size in the first instance, in order to build a track record.

Linked to that, PCTs needed to get better at building relationships, she added.

And the private sector would need to tell commissioners how it was going to help them take capacity out of the health system.

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Necessity – not nicety: A new commercial operating model for the NHS and Department of Health

Posted on May 7, 2009. Filed under: News stories, Reports/papers | Tags: , |

Department of Health | 7 May 2009

Over the coming years, the NHS faces the challenge of continuing to improve the quality, accessibility and range of services for patients while driving efficiency hard and securing better value for money for the taxpayer. Reforms over the past decade – plurality in provision, improved commissioning, greater choice, more information for patients and contestability – provide a powerful set of levers and a tremendous opportunity to meet this challenge.

Over the last eight months, we have worked closely with a wide range of partners – including NHS providers, commissioners, the independent sector, suppliers of health goods and services, procurement experts, the Treasury, the Office of Government Commerce (OGC) and staff in the Department of Health (DH) – to identify how improved commercial capability can help meet our shared aspirations for the NHS in England. The strong consensus has been that the NHS and DH need commercial skills as never before. There is also agreement that existing arrangements and status quo will not deliver the step-improvement in capability now required for the challenging times ahead.

This document sets out why commercial skills are now integral to the NHS at all levels. It describes a new operating model for commercial capability – the way commercial skills will be organised and applied at different levels across the NHS to have maximum impact – drawing heavily on the discussions of the past months. It outlines the benefits for key groups in the NHS and DH and it sets out how we are committed to working with a range of delivery partners to bring the new operating model into being quickly – and in doing so make a timely and telling response to the ambitious efficiency challenge laid down in the 2009 Budget.

DoH says NHS needs private sector ‘more than ever’

Healthcare Republic | 12 May 2009

The NHS needs the private and third sector ‘more than ever’ according to the DoH’s latest guidance.

£20m will be spent on ‘commercial support units’ to stimulate the market and ‘secure better value for money for goods and services procured’.

The document, Necessity, not Nicety, sets out the DoH’s latest ambitions to use commercial skills and competition to make ‘unprecedented’ efficiency savings in the future.

A ‘strategic market development unit’ and ‘Procurement, Investment and Commercial Division’ will also be formed to stimulate competition and enhance procurement skills.

The new units will also provide tendering skills for NHS providers.


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Commerce units will boost NHS market activity

Posted on May 7, 2009. Filed under: Journals | Tags: , |

Health Services Journal | BY HELEN CRUMP | 7 May 2009

A £20m network of around 20 commercial support units will be set up to boost primary care trusts’ efforts to stimulate the market.

The Department of Health’s commercial strategy, expected today, confirms that it will axe the commercial directorate and the NHS Purchasing and Supply Agency.

DH director general for commissioning and system management Mark Britnell said the plans were the DH’s first formal response to the Budget and would help the NHS “meet some of the challenges laid out”.

The Budget said PCTs will be expected to save £500m a year through more efficient commissioning. Market stimulation was the area commissioners performed worst at in the first year of world class commissioning.

Mr Britnell told HSJ that if commissioners did not understand how to stimulate the market, the NHS “would not be in the strongest position to meet the downturn”.

The units, which will employ lawyers and accountants, are tasked with boosting performance on market stimulation and contracting, supporting commissioners and providers, and providing a point of contact for the third, voluntary and private sectors.

But PCTs will still be legally responsible for all contracts in their areas.

PCTs will be encouraged to participate by being held back at level one in world class commissioning’s market stimulation and contract management competencies unless they can show they are performing at the same level as the units.

The DH hopes joint working through the units will allow commissioners to pool the available talent and improve more quickly.

Mr Britnell said: “It is neither feasible nor desirable for 152 PCTs to develop world class commercial and procurement skills.

“And as we move into a colder economic climate for public services, we don’t wish to encourage PCTs to have stand-alone commercial and procurement functions.”

The Purchasing and Supply Agency’s sourcing activities will be merged into the Office of Government Commerce’s Buying Solutions agency – including setting up an NHS-facing buying arm.

Other activities will move into the new regional units and local procurement hubs will be expected to realign with the regional units to boost the NHS supply chain’s efficiency.

The DH will have a new procurement, investment and commercial division to strengthen its commercial and procurement support, and a strategic market development unit, to provide leadership and support for commissioners in market analysis and market-making.

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