New wave of APMS tenders announced

Posted on January 22, 2010. Filed under: News stories | Tags: , |

Pulse | By Yvette Martyn | NHS South West Essex | 22 January 2010

A PCT has announced plans to farm out 10 GP practices under a new wave of APMS tenders, in a move raising questions over the Government’s new-found commitment to ensure the NHS is the ‘preferred provider’.

NHS South West Essex will tender the contracts for the practices, which it currently runs, over the next 18 months as part of the process of splitting commissioning and providing roles.

Private companies and social enterprises will be allowed to bid for the contracts, even though health secretary Andy Burnham recently said alternative providers should only be sought to run services as a last resort.

In a sign of the confusion within Government policy, the PCT said the tenders were going ahead to satisfy a parallel drive to ensure PCTs only managed practices directly for short periods or in emergencies.

The first phase of tenders will see three practices transferring management with contracts to be awarded in Autumn 2010 and the remaining seven tenders to follow.

The trust insisted the move would not affect the services available or put the jobs of staff at risk. It said patients would be involved in the process and invited to give feedback on the plans, with a representative having input in the selection process.

Marc Davis, director of primary care for NHS South West Essex, says: ‘There are no plans to close or move any of the 10 GP surgeries, or reduce the range of NHS services available. The practices will still be NHS services, but like most other practices they’ll be managed by an independent contractor appointed by us.’

Dr Brian Balmer, chief executive of Essex LMCs, said: ‘The PCT has encouraged the GPs to bid for them and we are hopeful current employees will have a fair chance of getting a contract. We have organised training for GPs and practice managers in tendering and winning tenders.’

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Focus on… becoming a provider

Posted on December 8, 2009. Filed under: News stories | Tags: , |

Pulse | Practical Commissioning | 8 December 2009

Michelle Webster and Beverley Slater of the Improvement Foundation set the context for those looking to provide their own services

Providing health services to patients within a small business model is what GP practices do all the time. So becoming a provider may seem a natural progression for enterprising GPs, keen to take advantage of additional service needs that have been identified.

But, as the articles in this section make clear, setting up a provider company is not for the fainthearted; it is riskier and as complex as setting up a PBC consortium. Establishing good governance processes, securing the NHS pension status of staff, identifying and raising an appropriate amount of start-up capital, learning how to respond to a tender and deciding what legal form of company to adopt are just some of the time-consuming obstacles described.

But what the articles also provide is valuable advice from those who have successfully negotiated this minefield of potential difficulties and emerged with their enthusiasm intact. The progress of Vale Health, from running pulmonary rehabilitation services in 2006 to being a partner in a successful £30m urgent care contract in 2009 and Horizon Health Choices’ progress from £70,000 turnover in 2007/8 to an estimated £1m in 2009/10 are testament to the talent and persistence of those involved.

Although the issue of conflict of interest is repeatedly cited when GPs operate as both commissioners and providers, as these case studies demonstrate, providing that there are clear processes in place to ensure fairness and equity when PCTs procure services and award contracts, all parties can be assured that there is an effective commissioning process through which the right provider can be chosen. Establishing a relationship with the PCT that works for both parties and ensures openness and transparency is therefore an important task for GP-led provider companies.

The range of services described in the case studies goes beyond the early Care Closer to Home initiatives identified by PBC. In addition to community gynaecology clinics, pulmonary rehabilitation and musculoskeletal services, the companies have extended to deliver psychological therapies, chronic pain services, an extensive urgent care service and health checks for hard-to-reach groups. New service models and patient population groups are being addressed by these two pioneering provider companies as they seek to develop services in response to patient need, while making their businesses more efficient by using existing infrastructure to deliver a wider range of services.

Those who set up as providers may do so for a range of motivations, as discussed in the interviews with leaders in this area (page 28). But it is also important to remember that PCT commissioners will have their own reasons for encouraging, and helping, new providers to enter the market. World-Class Commissioning competency 7 demands that ‘world-class commissioners effectively stimulate the market to meet demand and secure required clinical, and health and wellbeing outcomes’.

In order to do this, PCT commissioners have to work with potential providers from all sectors, including primary care, the third sector and the private sector, to enable a greater choice of providers able to respond to the changing needs of the local population. However, cutting across this requirement has been the recent statement by health secretary Andy Burnham that the NHS is the ‘preferred provider’. It remains to be clarified whether PBC provider organisations are seen as part of NHS ‘preferred provider’ family – or indeed what the wider implications of this new policy emphasis will be.

Provider companies will need to keep a close eye on the promised policy updates in this developing area.

Michelle Webster is national commissioning lead and Beverley Slater is national knowledge management lead for the Improvement Foundation

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How our passion for innovation has made us a quality care provider

Posted on December 7, 2009. Filed under: News stories | Tags: , |

Pulse | Practical Commissioning | Focus on…..Becoming a provider | 7 December 2009

John Rooke, chief executive of Horizon Health Choices, explains how this GP-owned private provider company has developed innovative ways to offer patient care.

When the Department of Health launched practice-based commissioning in March 2005, GPs in the 26 practices in North Bedfordshire were particularly passionate about working together as commissioners. At the same time we realised that the local providers might not be able to give us all we required. The solution lay in actually providing the local services needed ourselves.

We considered several models for how we might go about this – for example, setting up a limited liability partnership. But we decided on a limited company principally because of speed. It was going to be quick and straightforward to set up as a company and we wanted to get up and running as soon as we could.

So in May 2006, Horizon Health Commissioning and Horizon Health Choices Ltd were launched simultaneously – the former for commissioning, the latter for provision, covering a combined patient list size of more than 160,000. On the commissioning side, we are lucky enough to enjoy excellent working relations with local NHS organisations such as Bedford Hospital Trust and Bedfordshire PCT, which creates an atmosphere in which improvement flourishes. We also operate cohesively with our neighbouring practice-based commissioning groups to share ideas and strategy for patient services that transcend our own boundaries.

Setting up the company

Horizon Health Choices Ltd – the provider company – is owned equally by all the practices, which together represent about 40-45% of the PCT (now NHS Bedfordshire). To get started, we needed a business plan. This set out the articles of association, including that the company would be owned equally by the practices and that all practices would be represented on the board by a director. In practice, that director is the shareholder on behalf of the practice. We also mapped out in detail our safety processes, clinical governance and so on. The company is overseen by a six-strong executive team – half of them GPs.

The share issue generated hundreds of thousands of pounds from the practices, giving us enough capital for initial investment and the various administration and other costs involved in starting up.

At present, we do not have NHS pensions status, which means NHS clinicians working for us can’t pay into their pensions – which is a drawback in terms of our ability to attract people. But we have submitted an application to the DH so they can see we are part of the NHS family and we are hopeful that it will soon be sorted out.

A key difficulty we faced at the start was the focus you have to place on quality. It’s great for patients but very time-consuming getting all the governance processes in place. Other GPs thinking of starting up an enterprise similar to ours should be aware of that – it’s the really onerous part.

Conflict of interest

We have been aware from the start that in providing care for profit as well as commissioning, we could be seen as having a conflict of interest. However, this is taken care of by the PCT because if we write a specification from the commissioning point of view and say we want a specific service, they will scrutinise the need for that service before any discussion takes place about who provides it. Also, there are clear GMC guidelines about conflicts of interest.

Our PCT is very sensible about the fact that our commissioning body and provider company are ‘coterminous’. We all want the best for patients. In fact, if we bid for a service and don’t get it, we’re glad because it means someone better than us will do it.


Financially, we have made surpluses but the shareholders haven’t yet taken dividends. All the profits have so far been ploughed back into the business. There are people within the NHS who are uncomfortable with taking profit from providing care but we feel that the model sits comfortably alongside general practice because GP practices themselves make profits.

It is difficult to put a figure on our annual running costs, but our turnover for 2007/8 was about £70,000, for 2008/9 it was about £600,000. In 2009/10 it will be about £1m.


Back in October 2006, it was just me. Now we employ more than 40 people, including the clinicians working for our services. We have seven or eight administrative staff including operational managers. We are also recruiting a quality and patient safety manager who can take on the quality control work. This person will also help prepare our application to register with the Care Quality Commission.

Our services

We launched our first service – a community gynaecology service – in April 2007. We learned a lot from this, getting the right processes in place. We used an APMS contract, which took a while to get sorted out. This service is still running, based in the Wooten Vale Healthy Living Centre, a GP practice near Bedford. We employ a consultant gynaecologist who works at Milton Keynes Hospital.

The service covers pelvic pain, vulval problems, fertility and preconception advice, and recurrent miscarriage advice. The decision to launch it was opportunistic. It needed doing, the right consultant was available and we happened to know a nurse specialist who was perfect for the role.

Then in January 2008 we launched our musculoskeletal triage and treatment service. Our local hospital department was extremely busy and needed help so we went for it. Patients are referred by their GPs and then assessed by a multidisciplinary team, including musculoskeletal medicine GPSIs and extended scope physiotherapists, and are directed to the most appropriate treatment. Our guesstimate is that this has saved the NHS £250,000 so far.

In May 2008 we added our community chronic pain service. Our consultant is an anaesthetist and pain specialist with expertise in managing chronic pain and offers a one-stop assessment of patients’ needs at our treatment centre at Bedford Hospital. There was basically no chronic pain service before and patients had to travel long distances for care. In addition we were able to offer care on Saturdays and in the evenings, rather than just nine to five.

GP referrals to these services are by proforma which are available on our website The community gynaecology service has just been launched on Choose and Book.

We try to ensure patients are ‘worked up’ before they are referred to keep within 18 weeks. For example, GPs will order X-rays at the time of referral.

Taking services further

In September 2008 we were asked to pilot an Improving Access to Psychological Therapies (IAPT) service as part of a national pilot in collaboration with Bedfordshire Community Health Services and the Bedfordshire and Luton branch of mental health charity Mind. IAPT is not normally covered by practice-based commissioning as there is no tariff for it, but in this case there was a combination of national and PCT funding available. It is part of the scheme launched nationally by the DH in October 2007 with £170m nationwide funding and the aim of training 3,600 therapists, treating 900,000 patients and allowing open access to GP referral.

Patients are offered an initial assessment and are recommended a course of treatment based on their needs and pre-determined pathways defined by NICE guidance. Mind offers telephone-based advice and support including computerised cognitive behaviour therapy to people with lower levels of need.

Working with Mind has been excellent. The scheme is due to end in March 2010, but it currently looks as though that might be extended while the PCT tenders to take it on permanently.

Other things we have been doing include offering health checks for hard-to-reach groups – for example, in sheltered housing for Bangladeshi people.


It is very important to keep track of what we are achieving so we can continue to improve. We survey every single patient to try and glean as much feedback as possible. We also seek feedback from referrers and routinely audit incidents and complaints.

Headline outcomes include:

• waiting times are now only two weeks for both our musculoskeletal service and community gynaecology service

• our IAPT service has halved levels of anxiety and depression among our patients, helping them back to work in the process.

Future plans

Since taking on the IAPT work, we have been consolidating our other services.

We’re also looking to get involved in new services where we can add value, working with a variety of different partners. We certainly wouldn’t rule out offering our services further afield too.

These are tough economic times, so where we can use our existing infrastructure to expand, it makes sense to do so. Among a number of other possibilities, we are looking at launching an out-of-area musculoskeletal triage and treatment service down the road in Luton. We have also been thinking about launching an obesity service offering personal plans and dietary support – not exercise on prescription but more of a multidisciplinary approach.

We have been and continue to be innovative. I’m not aware of any other provider body that has gone as far as we have in terms of what we offer. The basis for this is that the PBC side of what we do is as good as it gets. We have some extremely dedicated and passionate practices and that has engendered an atmosphere that makes things happen.

John Rooke is chief executive officer of Horizons Health Choices Ltd

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Creating an NHS family of shareholders

Posted on December 7, 2009. Filed under: News stories, Social enterprise | Tags: , |

Pulse | Practical Commissioning | Focus on…..Becoming a provider | 7 December 2009

A GP-owned private company is coming into its stride with provision and has just secured a £30m urgent care contract with two other providers. Vale Health’s commercial director John Butler explains

When the Department of Health launched practice-based commissioning in March 2005, the 21 GP practices that made up the Vale of Aylesbury PCT in Buckinghamshire were among the first in the country to embrace the concept. We were also early adopters of the potential of combining commissioning with providing.

The initial move was that the practices set up the United Commissioning Collaborative as the local commissioning body – a not-for-profit limited liability partnership. Once that was achieved, a small group of us began to look in depth at the providing side.

We had two reasons for wanting to provide services. First, we knew GPs were the best people to know what’s needed locally. Second, we realised that if we set up our own provider company, we would not only be able to design the services but actually deliver them as well, which had to be an enormous advantage in terms of ensuring the quality of care.

We started out with a social enterprise ethos, so setting up as a standard for-profit company was a secondary consideration. But it made sense that those involved should be able to profit from their efforts.

In May 2006, Vale Health Limited was registered as an independent legal entity.

To get started we needed seed funding, but realised that whatever investment was put into the company was ‘at risk’ money.

If the venture was a flop, there were no guarantees there would be a return.

With this in mind, we offered shares to the GPs and their staff, just to see if they wanted to invest. About 110 GPs and practice staff did so, buying between one and 10 shares at £100 each. The amount any one person could buy was capped so that one individual would not have undue influence.

Limiting the shareholders to members of the NHS family also facilitated the transfer of staff from the NHS to us. It meant we could employ NHS clinicians part-time without them losing their NHS pensions. When they’re working for us they’re still paying into their pensions, which removes a major barrier.

In the initial tranche we raised about £40,000, which enabled us to get started, then with a second share issue we raised more money. A board of directors including local GPs was set up to oversee the company and embarked on tendering for work.

Conflicts of interest

The issue of conflict of interest that profit introduces is real. Conceivably, to make extra money, we could divert people to our services who don’t need them. But we work very closely with the PCT as a partnership and are audited by them, which introduces stringent checks and balances. In addition, the clinicians we employ make their own professional clinical judgments that we can’t influence.

At the time, the DH was actively encouraging ‘a plethora of providers’ with the idea of promoting competition to raise quality and lower costs, so the PCT was fine with the private company idea. But it was keen that we clearly differentiated between commissioning and providing.

When we started off, Wendover GP Dr Johnny Marshall (see box, page 35) was chair of both arms but it became necessary for him to withdraw from chairing Vale Health to make the distinction clear. We haven’t gone back to the overlap we started with, but there is now a greater understanding with the PCT that the two sides working closely together is no bad thing.


Although we had the cash to get going, we initially found it difficult to work as cost-effectively as established organisations such as Community Health Bucks, the provider arm of the PCT. Our cost per service was high because we didn’t have the infrastructure behind us. We struggled with issues like this, which took an inordinate amount of time to surmount.

It has been a real saga to get the whole thing onto a contractual basis but the introduction of the Standard Community Health Service Contract simplified matters and we are just in the process of signing that off.

The delay has meant that, until now, we haven’t been able to offer contracts to clinicians working for us. The lack of contracts has also made it difficult for us to grow as a company because NHS contracts count for a great deal with banks and other funding sources.

However, we were fortunate on another level. Because PCTs weren’t commercially experienced when we started, the tendering process was easier then than it is now.

After an initial struggle, we eventually got a couple of services up and running.

Our pulmonary rehabilitation services began with nine programmes within the Vale of Aylesbury PCT in 2006. Further programmes have been rolled out across the rest of Buckinghamshire. Each programme was for eight weeks with a maximum of 10 patients.

In April 2008, our musculoskeletal community assessment and treatment service was launched across the whole of Buckinghamshire.

Both services were set up on a shoestring staff-wise – the day-to-day running of the company is carried out by two people including me and we subcontract most of the clinical administration work to the provider arm of the PCT.

In our musculoskeletal service, six specialist clinicians work for us part-time on a self-employed basis and we use specialist physiotherapists and podiatrists who are subcontracted from Community Health Buckinghamshire.

As we were given short notice to launch the musculoskeletal service it was a difficult start. However, we’re now up and running at 10 sites the length and breadth of the county with patient convenience in mind.

Annual running costs are hard to estimate at present because the business is constantly developing. The company has yet to meet its target profit for shareholders.

Growing the business

Having survived the initial difficulties, we knew we had to get more business to spread our overheads. At that point, the urgent care contract for Buckinghamshire came along to cover out-of-hours as well as attendance and admissions avoidance, which on its own involves coordinating many different services. It’s a complex single contract – possibly the most complex one ever put together.

It was far too big for us to do independently so we collaborated with providers in the south of the county, independent healthcare provider Harmoni and Chiltern Health, another GP practice-funded provider. This was partly because the costs and risks in tendering are high.

Completing the pre-qualification questionnaire, just to get on the tender list, can cost several thousand pounds. And the tender itself costs many tens of thousands of pounds.

Another thing that has become clear is the need for people who are skilled in tender work. GPs who are thinking of forming provider companies should be aware of this and not be afraid of collaboration.

Although competition was stiff, we won the tender on quality and value for money and started work on the contract in late summer last year. It was signed in early November and will come into play in March next year for an initial five years, worth more than £30m in total.


There are no clear figures yet for the outcomes of our musculoskeletal service but we are diverting significant numbers of patients out of secondary care and into community-based care. This is more accessible for patients, it benefits the local health economy and patient feedback shows that car parking is usually easy.

An evaluation of the pulmonary rehabilitation pilot carried out in 2005/6 showed the following (we would expect results to decline over the full 18-24 months):

• number of chest infections reduced by 65%

• number of hospital admissions cut by 53%

• number of GP visits for exacerbations of COPD reduced by 80%

• increased exercise tolerance

• 21% average increase in distance walked

• 88% of patients were still exercising

• course was a positive experience for 94% of patients

• 95% of patients had increased confidence in managing their condition.

Since then the service has extended and we are currently collating results that look encouraging.

The future

Among our future plans are extending services beyond the geographical confines of the Vale of Aylesbury, still using our in-house skills.

We are convinced our for-profit model is the way forward. Public services do not organise things cost-effectively, but the private company will be more efficient.

If they were in the hands of the NHS the services we provide would cost more than we charge.

Ultimately, if the ethos is to provide free care at the point of delivery, it doesn’t really matter who provides that care as long as it’s of the highest possible quality.

John Butler is commercial director and company secretary of Vale Health Ltd

The GP’s view

Dr Johnny Marshall is a GP in Wendover, Buckinghamshire, chair of the NAPC and a founder of Vale Health. Here he shares the lessons learned during the challenging process of setting up Vale Health’s services
‘Our services – particularly the community musculoskeletal service – have been a real success, but it’s been a difficult process. The PCT has been learning as it’s gone along and we are now heading towards a much faster service procurement.
We’re now looking at expanding our current services. It’s still very expensive to tender for new ones but with the urgent care contract under our belt we can work on expanding what we have.
Once you start looking at much bigger contracts, you realise you need to work in partnership. But you can still accelerate service design while keeping local ownership, which is very important.The reality is commissioning and providing are not separate. There is clear blue water between the organisations (Vale Health and United Commissioning). But you need to be careful that separation is not for separation’s sake. The two sides have much to learn from each other.The message to other GPs wanting to try a similar arrangement is that this is not without risk. You need to make sure you go in with your eyes open and plan very carefully. You need a sense of forward planning and make sure you think beyond step one.

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How to become a provider?

Posted on December 7, 2009. Filed under: News stories | Tags: |

Pulse | Practical Commissioning | Focus on…..Becoming a provider | 7 December 2009

Emma Wilkinson presents a guide to setting up your PBC group as a provider and the pitfalls to avoid

Why be a provider?

Dr Shane Gordon, national co-lead for the NHS Alliance’s PBC Federation, believes the future of primary care rests on how well GPs set up as providers of services.

‘The future of the GMS practice doesn’t look very good, with a diminished stock of resources for doing standard GMS work. Plus if there is a change of government in the new year, as looks likely, there will be renewed focus on testing the market.’

He adds: ‘When new services are proposed, inevitably there is overlap with something we do already. So if you don’t win that contract you effectively lose that bit of your work.’

PBC consultant Scott McKenzie agrees.

‘In the current climate, it’s entirely possible to argue that future income may depend on GPs’ ability to become providers.

Where else are they going to find new income?’

What needs to be considered before taking that first step?

Mr McKenzie says GPs need first to work out why they want to become a provider.

‘You have to be clear in your mind why you are starting up. Is it to protect current services, stop others getting in, or to get more income? You have to have a rationale, because that will determine how you proceed and the advice you are given.

‘And you need to find like-minded individuals because this is your own money at stake and there are very real consequences if you get it wrong.’

Dr James Kingsland, national PBC clinical network lead, warns GPs to be clear about what additional benefits they expect from setting up a company. It may be they can achieve their goals by extending what they do under their existing contracts.

‘Look at your current skills. A lot of GPs set up companies because they are frustrated. But in, for example, dermatology, a massive amount of relatively routine outpatient work can be done in the community at a lower cost.

‘But you can assess what you can do yourselves and upskill to repatriate the work that shouldn’t be done in hospitals.’

What sort of company?

Mark Johnson, managing director of TPP Law, says choosing the right legal format for the company is key and GPs will need to get legal and financial advice early on.

‘You could be a company limited by shares, or by guarantee, a limited liability partnership or a social enterprise.

‘A lot will depend on whether you and your partners want to develop value and sell your enterprise on, or reinvest profits for community benefit.

‘The choice of company format can affect your ability to source certain types of funding and your access to the NHS pension scheme. It may also affect your ability to recruit and incentivise high-quality senior staff as the organisation develops.’

What does setting up a company involve?

Anyone setting up a company has to jump through a host of regulatory hoops (see box below). This can take weeks and there are severe consequences if any of it is wrong.

‘You can do the set-up within a couple of days but you need to register the share certificates, and then there are processes to demonstrate you’re not laundering money,’ says Mr McKenzie. ‘I would advise getting a company lawyer to take you through it.’

Next, you have to establish the structure of the company. Mr McKenzie says: ‘The shareholders need to appoint directors – there is a huge difference between shareholders and directors. The directors have to sign guarantees for money borrowed and they need to understand the consequences of that, hence the need for legal advice. And they will have to make decisions for the good of the company.’

How about financing?

It may be tempting to limit the amount that shareholders are investing in the company because then there is little to lose. But Mr McKenzie warns that that is setting the company up to fail. ‘There is no point in everybody saying we’ll ask £1 a share and issue 20 shares – as then you only have £20 worth of capital. The PCT will want to see a financially stable and viable company.

‘If you go in having raised 100k or more you are in a far better place to start. If you try to do it on the cheap, it doesn’t make you look attractive and you may have problems with cash flow and so on.’

The company will need working capital to pay salaries and overheads, and possibly loans for premises and equipment. Consider the usual sources, such as banks and venture capital, and also social enterprise investment funds and private investment.

Mr Johnson says: ‘Remember that funders will need to see strong evidence that a contract is secured before they will release funds.’

Any other legal issues to consider?

Companies will need to establish a clear understanding of how profits will be shared.

Mr Johnson says: ‘In the early stages, a start-up venture may need to retain profits for reinvestment in services and infrastructure.

‘A shareholders’ agreement should set out the dividend policy – it might, for example, set a profit threshold that must be reached before dividends can be paid out.’

Also it is important to lay down an exit strategy from the start, outlining what everyone expects to achieve from the company in the medium to long term – for example, whether the intention is eventually to sell or merge the venture.

‘Think about succession planning issues,’ says Mr Johnson. ‘If the founders want to retire, who will take over the management?’ How might you incentivise younger participants to stay for the longer term?

‘Be clear, too, about the consequences of winding up the venture, either by agreement or following a dispute. What would happen to the company’s valuable assets, intellectual property, name and employees?’

How do I make the first tender?

The company itself does not have to be set up before the tender process begins, says Mr Johnson, ‘as long as it is made clear that the company will be established in time for contract signature and the name of the contracting entity is clearly identified. Funders will normally only release monies to a properly constituted project company, or in some cases may allow the sponsoring PCT to hold budget (and be accountable for it) on behalf of the participants.’

But Mr McKenzie advises setting up the company first, after seeing GPs trying to put a tender together and set up a company at the same time. ‘GPs have tied themselves in knots trying to do both,’ he says.

The first step is to fill in the expression of interest. Do not assume that because the PCT knows you have set up a company for a specific purpose that you will be included in the process automatically.

Your company will then be sent a pre-qualification questionnaire (PQQ), which can be a very large document, and covers legal, financial and regulatory details. To find out more about PQQs, go to the NHS Purchasing and Supply website

Mr McKenzie predicts this step can take one person two weeks, working full time. Some providers use external consultants to help complete the PQQ but Mike Orozco, a business manager at a Nottingham practice, argues it is possible to do a it in-house, if prepared to put in the hours. ‘No one person should do it all. When I came to the clinical sections of the PQQ I asked the GPs to complete those. I didn’t see we needed consultants as they would only be telling us to put in what we already knew we had to.’

Only if it meets the PQQ requirements will the company receive an invitation to tender. This should be treated as a stand-alone document, as though the PQQ was never filled in.

‘This could take one person six weeks working full time,’ says Mr McKenzie.

Dr Gordon agrees: ‘The tenders I have been involved in that have been successful have taken an enormous amount of input from the GPs to make them robust.

‘It’s not something to be undertaken lightly, as even for small companies the paperwork can be fiendishly complicated.’

GPs should avoid falling into the trap of pricing themselves too low when putting together a tender. They may win the contract but then find themselves operating a business that isn’t making a profit.

Dr Gordon adds: ‘I would get support from people who are used to drawing up tenders because it’s very complicated and the requirements can be very detailed.’

There may then be a shortlist and a series of interviews before the preferred provider is selected and contracts drawn up.

How do I avoid conflict of interest?

This is an area where GPs could get themselves in serious trouble. There are two possible conflicts:

• if a PBC cluster has both a commissioning arm and a provider arm

• if a GP stands to make a financial gain from referring patients to a service.

But both these situations are avoidable. ‘To avoid conflict of interest, you need to ensure the commissioning process is robust and work with the PCT to demonstrate the commissioning intention is based on need and not just because you can provide that service,’ says Mr McKenzie.

‘There are clear Department of Health rules on conflict of interest and I would advise erring on the side of caution.’

Dr Gordon adds: ‘You need to keep commissioning and provision separate.

So you need parallel structures at arm’s length from each other and clear water between the two.’

Dr Kingsland says you have to be very clear with patients about the service.

‘You must declare an interest when advising patients to use any service in which you have a pecuniary interest or you will be breaking GMC rules.’

What are the pitfalls?

‘The biggest mistake is to think one or two people can do this and to not set up a proper team,’ says Mr McKenzie.

‘This is very different from running general practice. You are running

a corporate organisation and it needs to be staffed as such. I’m not talking about a cast of thousands but you will need a team covering all aspects of the company.

‘Not raising enough money is the second most common pitfall. If you limit yourselves to a few hundred pounds you send out the message that you are not willing to take the risk – so why would anyone else take a risk with you?’

He adds that GPs who starting out as providers tend to fail to stick to the proper procedures when they are undertaking the tender process. ‘Do not assume the PCT knows you and make sure you answer the question that is being asked.’

Dr Gordon adds that GPs are at a disadvantage and may have to work harder than they expected to prove their worth.

‘You will be treated like any other provider and you have to assume no prior knowledge. When you’re not used to doing this, it takes a while to gather the information you need.’

Anyone expecting an easy ride will fail, he adds. ‘It takes commitment. You are starting a new business and you have to look at the big picture, do monthly reports and accounts. It takes a huge amount of effort and time.’

Emma Wilkinson is a freelance journalist

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NHS services will be a social enterprise

Posted on November 17, 2009. Filed under: News stories, Providers, Social enterprise | Tags: , |

Third Sector | By David Ainsworth | Kingston PCT | 17 November 2009

Kingston Primary Care Trust to launch separate provider

A major social enterprise will be created before the end of the year out of a south-west London NHS trust, as part of a drive to change how the NHS is structured.

Kingston Primary Care Trust said it expected to launch a separate provider arm called Your Healthcare, with a turnover of £25m and a staff of 500 nurses, therapists and support staff. These will be transferred from the PCT as soon as it receives permission from NHS London, the capital’s strategic health authority.

Your Healthcare will become an independent social enterprise providing a wide range of services, said a spokeswoman for Kingston PCT.

The PCT’s remaining 100 employees will continue to work for the trust on more strategic functions.

“The organisation is already operating with a shadow board, awaiting formal confirmation of the new structure,” she said. “We’ve been working towards this since last July and we’re expecting final sign-off this year.”

Hull PCT has also announced plans to make its provider arm into a community interest company, known as Hull City Health Care Partnership, but it has been delayed by a legal challenge from a patient, who is seeking a judicial review of the decision.

Both decisions were taken in response to a Department of Health decision that PCTs should separate their commissioning and provider arms.

Mark Johnson, managing director of TPP Law, which specialises in social enterprise development, said progress had been less positive in other PCTs. “Many people who would like to develop social enterprises feel they lack support from PCT boards,” he said.

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The nuts and bolts of setting up a social enterprise

Posted on November 16, 2009. Filed under: News stories, Social enterprise | Tags: , , , , , , |

Pulse | 16 November 2009

Emma Wilkinson takes a look at what social enterprises can do for PBC

What is a social enterprise?

Social enterprises are businesses, but unlike limited companies that make profits to line the pockets of shareholders, they are driven by environmental or social principles, and surplus funds are reinvested to further those goals. So the community benefits from any profits made.

The Social Enterprise Coalition ( says there are some 62,000 social enterprises in the UK with a combined turnover of at least £27bn.

Mo Girach, social enterprise lead for the NHS Alliance, says: ‘There are three elements to social enterprises. They are designed to tackle social objectives, such as health inequalities. Any profits made are reinvested in the local community. And local people and staff have the ownership of their services.’

If you generate the bulk of your income from trading and use most of your profits to further social or environmental goals, your organisation might be classed as a social enterprise.

Models for a social enterprise include:

• A community interest company (CIC) – a legal form created specifically for a social objective, overseen by the CIC regulator to ensure it does not deviate from its mission and that its assets are protected (

• Industrial and provident society (IPS) – this is the usual form for co-operatives and community benefit societies, and is democratically controlled by members.

• Companies limited by guarantee or shares – these can have a social mission written into their memorandum and articles of association, but are not regulated.

• Group structures and charitable status – in these cases the tax breaks associated with charitable status can be an important factor.

How do they differ from a limited company?

The key difference is that a social enterprise is set up to fulfil a social goal rather than a financial goal. But social enterprises are businesses and need to make a profit to be competitive, remain afloat and to keep investing in their social vision. They are not an easy option for someone wanting to avoid the legal technicalities and governance arrangements of a limited company.

Dr Mike Dixon, chair of the NHS Alliance, says: ‘It’s a way of setting out business principles but making sure the business is there for the patients and not for shareholders.

‘The steps to setting one up are similar to those for a limited company – you need a lot of advice, you need to decide your basic vision and what sort of partnership it’s going to be, and who is going to be a part of it.’

Mr Girach adds: ‘A true social enterprise has in its constitution that profits are reinvested and there are no shareholders. That is a key point. There might be shareholders but that is in terms of ownership rather than profit so they are more social enterprise members.’

What are the advantages for PBC?

Setting up a commissioning group under a social enterprise model means GPs are less likely to be accused of lining their own pockets – a suggestion that has surfaced repeatedly in the past few years. It may also be an easier route for organisations wanting to work as both provider and commissioner.

Dr Dixon explains: ‘It shows that the profit motive is not an issue but at the same time gives a businesslike approach.

‘There’s another element that’s quite important if you are a commissioner.

I think it allows a certain blurring of boundaries when it comes to also having a provider role.

‘Social enterprises are becoming more common in PBC – not rapidly but PBC has been a slow process – and they are very logical.’

Richard Oliver is business manager at Nene Commissioning, a not-for-profit community interest company of 76 practices in Northamptonshire that started life as a limited company.

‘Trying to get 76 practices under one umbrella is a challenge and there was a huge amount of discussion about the structure that might be suitable. We started off as a limited company because it was a known legal entity but we decided that didn’t reflect why the organisation got together. So we looked around to see how we could demonstrate it wasn’t just a money-making exercise for doctors but that it was about patients.

‘The model that most clearly suited what we already had but that could move us into the social enterprise arena was a community interest company. We retained nominal shares and there is limited liability but at the same time the money is retained for use in the business.’

Any disadvantages?

Disadvantages to being a social enterprise may have more to do with misconceptions surrounding their function rather than a problem with the business model itself.

‘I think people don’t understand the calibre of credibility and true benefits they bring and think they’re small businesses,’ says Mr Girache.

‘The other problem is commissioners don’t embrace social enterprises and tend to go with what they know, for example the foundation trust, which are mutuals.

‘There is a lot of work to be done between commissioners and providers in raising awareness of social enterprises. This is something the Department of Health’s social enterprise unit is working on.’

Dr Dixon agrees: ‘A lot of people see social enterprises as rather woolly and something done by people in socks and sandals rather than business suits, but that’s not true and there are lots of examples of successful social enterprises. Look at John Lewis.

‘The other thing is that there are people in social enterprises who are not as they seem. It is easy to be a wolf in sheep’s clothing. If it does take off we will have to look very closely at social enterprises and check people are who they say they are – not one thing masquerading as another.’

Why has the government been so keen on social enterprises?

It is not just the current government that is keen on PBC groups setting up social enterprises, with the announcement of a £100m pot for health and social enterprises in 2007. The Conservatives have also hinted they may be the way forward, with talk about social responsibilities as well as a focus on the ownership agenda.

‘I think there are a number of reasons the Government is keen on social enterprises,’ says Mr Girache. ‘The ownership factor is a big reason. Being able to say to people “over to you – deal with it”. There is an incentive for people to get a little bit back and also a feeling that in some policy areas, such as health inequalities, things haven’t moved. PCTs have been working on these for 20 years and sufficient progress just hasn’t been made. Social enterprises are an alternative.’

So what are the first steps in setting one up?

Nene commissioning’s Richard Oliver says the first thing to do if you are interested in setting up a social enterprise is to make sure the PCT is on board with the proposed change. Then you need to decide what kind of organisation you want to be.

‘Do a lot of preliminary work before you see a solicitor as there is a lot of information out there, for example on the Social Enterprise Coalition website, to inform your decision. Then you need to get legal advice, and I would recommend choosing a solicitor with national experience.’

Dr Mike Dixon adds: ‘You need to form the right relationship first before you do anything else. There is no point hoping to gel with practices that don’t talk to each other.’

Are there any pitfalls?

With the appropriate business and legal advice and a clear plan of what the company wants to achieve, the process should be fairly straightforward, but there are potential problems to consider before taking that leap.

‘People often think social enterprises are not businesses but a form of charity that doesn’t have to make a profit – this is nonsense,’ says Mr Girache.

‘You need to think who your competitors are and what you have over them. Social enterprises focus on quality rather than feeding shareholders’ pockets.

‘The other thing is to do proper market research. You will have to deal with some aggressive providers and if you don’t understand the market and what your niche is, you will fail.’

Dr Dixon advises: ‘Don’t expect organisational form to be the solution to everything and don’t be too optimistic about what you can achieve; be realistic.’

Mr Oliver adds: ‘When it comes to legal advice, make sure you only fund what you need to as you can incur a lot of costs.’

What about funding?

To get off the ground, in addition to PCT resources, there are various sources of funds for social enterprises, including patient capital, grants and favourable loans, details of which can be found in the Good Deals 2009 Social Investment Almanack.

In June 2009, Social Investment Business took over the management of the DH’s social enterprise investment fund, and along with Partnerships UK is responsible for the £100m fund (£70m is now left) for start-up and existing social enterprises in the health sector over the next three years.

But the NHS Alliance would like to see more incentives to catalyse the social enterprise model.

Dr Dixon explains: ‘There are sources of funding available, for example from the social enterprise unit at the DH, but we produced a report three or four months ago pointing out there should be preferential treatment for people funding social enterprises in the form of tax advantages, the ability to get capital and VAT relief, in order to make social enterprises build a bit faster. It needs to be pushed further.’

Richard Oliver says: ‘Our funding comes through the PCT like any other PBC cluster and is based on population size – which for us is 650,000.

‘The advantage of being so big is that our money is pooled so we can fund a team working on our behalf rather than having to do it ourselves in house.

‘We looked at it and realised there was no way we were going to be able to do that and the day job of looking after patients, but by pooling the resources we can have a much bigger team – there are 10 people here – running the PBC side of things.’

Emma Wilkinson is a freelance journalist

More information

The Third Sector has published The Social Investment Almanack to showcase the different types of social investment.

It includes a comprehensive directory of social investors, finance providers and support organisations as well as many examples of different models.

Good Deals 2009: The Social Investment Almanack Deals 2009: The Social Investment Almanack


Focus on… social enterprise

Pulse | 13 November 2009

This month’s Focus on… looks at social enterprise models and what they can do for PBC. Here, Rebecca Chaloner outlines the Department of Health’s commitment to the concept.

Social enterprise models are about connecting with and investing in communities, empowering staff and working in partnership to deliver innovative services.

The social enterprise sector is diverse, with more than 6,000 schemes estimated to be delivering health and social care in the UK. This figure continues to rise as growing numbers of health and social care professionals investigate social enterprise as a viable option to tackle unmet needs and address health inequalities.

Sharing the same public-sector ethos as the NHS, social enterprises reinvest surpluses into services and the community and run on business principles that improve quality and efficiency.

Clinicians are committed to delivering high-quality patient care, and some may feel frustrated by a system and processes that restrict their ability to achieve the change they desire. Social enterprise, with its scope to innovate and be flexible to local need, is one way to empower clinicians to deliver care that is truly responsive to patients’ needs.

Social enterprise is not for everyone, nor is it for all services. However, it is an important option for those looking for a way to deliver a wide range of health and social care services as we move towards a more responsive, modern and targeted healthcare system.

Social enterprise is a way for PBC groups not only to support the commissioning of services but also to provide services in a way that enables them to address unmet local needs. It also offers the potential to forge a new partnership between professionals, users and the local community.

The Department of Health wants to ensure that social enterprises are in a position to add value to current services and that commissioners, through a range of providers, can offer choice and quality to patients, as well as value for money.

In line with its commitment in the NHS Next Stage Review, the department is encouraging the creation of new social enterprises to deliver primary and community services. To facilitate this, PCT staff have been granted the ‘right to request’ to set up a social enterprise from their PCT. This allows staff to explore setting up a social enterprise to deliver services if they believe that gaining the independence and flexibility will enable them to improve services and outcomes for users. The department is now working with a number of ‘right to request’ proposals and supporting them in developing their ideas to transform services.

The journey towards establishing a social enterprise requires determination and vision but there is support available through the £100m social enterprise investment fund (SEIF). The SEIF provides business advice as well as seed funding for start-up social enterprises and development loans for existing businesses. The fund is available to anyone in England operating, or wishing to start up, a social enterprise in health and social care.

The department is committed to supporting social enterprise as a way to increase social cohesion in communities, improve health and wellbeing and reach beyond traditional means of delivering care.

Rebecca Chaloner is head of the Department of Health’s Social Enterprise Unit

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Andy Burnham extends preferred provider vow

Posted on October 22, 2009. Filed under: Journals, Providers | Tags: |

Health Service Journal | By Steve Ford | 22 October 2009

Non-NHS providers of services will only be contracted as a last resort, the health secretary has assured the general secretary of the TUC.

Following his announcement in September that the NHS would be the “preferred provider” of services, Andy Burnham has written to Brendan Barber promising that where NHS service providers underperform, the primary care trust will work with the provider, giving them “at least two formal chances” to improve.

Even after this point, the health secretary has assured Mr Barber, the PCT will give the NHS provider every opportunity to continue to provide the service if it can demonstrate improvement.

The letter says: “Only if there was insufficient improvement within a reasonable timescale, and the scale of underperformance was significant, would the PCT consider engaging with other potential providers or other solutions (eg franchising).

“If market testing was subsequently pursued, the PCT would be expected to continue to engage the provider and its staff, and give them the opportunity to compete on a fair and equal basis.”

Andy Burnham assures Mr Barber an almost identical scenario would occur if NHS providers needed to improve services or their capacity; where there was a risk of clinical or financial uncertainty; or where patient choice needed to be increased. Tendering for alternative providers would be a last resort and the original NHS provider “would be able to bid on a full and fair basis”.

In contrast, it says where an independent or third sector contract expires, the PCT would tender openly from the outset, giving NHS providers a chance to bid.

Mr Burnham’s letter was included as an appendix to one sent by NHS chief executive David Nicholson to all PCT and strategic health authority chief executives last week.

Mr Nicholson said the letter was to clarify how the commissioning process will change in light of the shift in policy.

There will be new guidance to replace Necessity – Not Nicety, which was published just five months ago, and the Department of Health will issue a revised procurement guide and “refined” rules for cooperation and competition.

Mr Nicholson wrote: “In addition to the revised guidance, there will be implications for assurance processes, including for world class commissioning and transforming community services.”

But he said: “It is too early to tell what these are likely to be”.

He added the DH “remained committed” to the establishment of regional commercial support units and the national strategic market development unit and to the participation of independent and third sector providers “where this is the right model for patients”.

Primary Care Trust Network director David Stout warned against “inventing new barriers” to commissioning high quality services in the current financial climate.

NHS Partners Network director David Worskett described the policy shift as a “great pity”, which risked slowing procurement. He said Mr Nicholson’s letter still failed to address whether the “any willing provider” policy had been dropped.

“It doesn’t clarify anything at all – it’s a thoroughly incoherent bit of policy. I find it hard to see how it helps anyone,” he said.

HSJ’s Intelligent Information for World Class Commissioning conference is on 8 December, for details

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Managers accused of failing to consult on social enterprise plan

Posted on October 14, 2009. Filed under: News stories, Social enterprise | Tags: |

Healthcare Republic | By Jonn Elledge | NHS Kent | 14 October 2009

NHS managers in Kent have been accused by Unite/CPHVA of pushing through a radical reorganisation of services ‘by stealth’.

Unite accuses Medway Community Healthcare of trying to make itself a social enterprise without consulting its 1,350 staff properly.

Unite believes that such a move would lead to a fragmentation of services provided by health visitors, speech and language therapists, school nurses and nursery nurses for Chatham, Gillingham and Rochester.

The union argues that these moves go against government policy, which is that outside providers can only be asked to tender if a trust is deemed to be failing and has not taken remedial measures.

Sarah Carpenter, Unite’s lead officer for health in the south east region, said: ‘The management is flying in the face of government policy and Unite is now challenging managers to say whether their organisation is failing, as that is the only criteria for bringing in external non-NHS providers.’

Marion Dinwoodie, chief executive of NHS Medway, which includes Medway Community Healthcare, said: ‘In line with national guidance on Transforming Community Services, NHS Medway – along with every other PCT that provides services directly – has been preparing for some time for a future in which commissioning and provision are separate.

‘As part of this, at its public meeting held in September, the board of NHS Medway considered the advantages and disadvantages of different types of organisational structure for Medway Community Healthcare.

‘The board concurred with the view of the commissioning and the providing senior management teams that, on the information currently available, a form of social enterprise, which involves strong links with the community, looks like it is best suited to deliver the high quality care that we want for people in Medway.

‘The board therefore approved Medway Community Healthcare’s right to request the opportunity to explore this further – which means carrying out a planned formal consultation with staff, a full feasibility study and an analysis of risks.

‘The NHS Medway board made it clear that the organisation retains the flexibility to change its preferred model to another one if it appears this would better meet the needs of patients in Medway.

‘You can see that it is absolute nonsense to suggest that Medway Community Healthcare is trying to make itself into a social enterprise without consulting its staff properly.

‘Incidentally, Medway Community Healthcare has invited the unions to a meeting this week to talk about the changes. All have accepted apart from Unite which have currently declined to attend.’

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The NHS as preferred provider

Posted on October 13, 2009. Filed under: Reports/papers | Tags: , |

Department of Health | Dear Colleague Letter | 13 October 2009 

The Secretary of State’s recent speech at the King’s Fund focused on putting quality at the core of the NHS. He assured ‘the NHS is our preferred provider’. The attached letter shares with NHS Chief Executives how we propose to move this policy forward through the development of future guidance.

SHA Chief Executives
PCT Chief Executives

Gateway Reference Number: 12774
On the 17th September, the Secretary of State made a speech at the King’s Fund which focused on putting quality at the core of the NHS. He stated: With quality at its core, I think the NHS can finally move beyond the polarising debates of the last decade over private or public sector provision. Let me begin with where I stand on this debate, and that is that the NHS is our preferred provider. But it is the important job of the commissioner to test whether these services provide best value and real quality.

Where a provider is not delivering quality – and the new accountability information will more readily demonstrate that – we will set out a clearer process that will provide an opportunity for existing providers to improve before opening up to new potential providers. This is fair to all as it means everyone knows where they stand and services stand or fall on the quality they provide.”

The purpose of this letter is to share with you how we propose to take this policy forward and highlight the potential implications for commissioners.

“The NHS as the preferred provider” is about getting the best care for patients and looking after the NHS staff who care for them. Our aim is to ensure that NHS staff are treated fairly and engaged in decisions, so that they know what is happening and when, what changes are being sought and why, and have a full opportunity to contribute to improving and re-designing the services that
they provide. Service improvement and re-design should not be something which is imposed on NHS staff but something which they own and lead.

We propose to do this – as the Secretary of State announced at the King’s Fund – “by setting out a clearer process that will provide an opportunity for existing providers to improve before opening up to new potential providers”. This will ensure “everyone knows where they stand and services stand or fall on the quality they provide”. In practical terms, we will provide guidance to PCTs on the processes we expect them to follow, which includes engaging with NHS organisations and their staff and trade union representatives, coupled with strengthened assurance processes.

“The NHS as the preferred provider” does not have implications for current or future ‘Right to Request’ proposals to set up social enterprises. We remain committed to supporting those PCT staff who wish to set up social enterprises, and neither Secretary of State’s letter, nor future guidance, should preclude the establishment of successful ‘Right to Request’ schemes. Application and assurance processes remain unchanged.

The Secretary of State has written to Brendan Barber, the General Secretary of the TUC, outlining the core principles he expects commissioners to follow from now when engaging with NHS providers. To illustrate these principles and how they might be developed in practice, we have developed six draft scenarios which set out the processes we expect PCTs to follow henceforth as commissioning needs arise (these are shown as an annex to the letter). These scenarios will inform the development of further guidance.

We will approach the development of guidance in two stages. Firstly we will publish guidance which will supersede Necessity – Not Nicety. Secondly, we will issue a revised PCT Procurement Guide and refined Principles and Rules of Co-operation and Competition. All key stakeholders will be invited to help shape these documents. Whilst we are preparing and publishing new guidance that will supersede Necessity – Not Nicety, we remain committed to the establishment of regional Commercial Support Units and the national Strategic Market Development Unit, which have important roles to play in supporting the development of World Class Commissioning (WCC).

In addition to the revised guidance, there will be implications for assurance processes, including for WCC and Transforming Community Services. It is too early to tell what these are likely to be but the WCC and TCS teams will work closely with the service, the SPF and stakeholders to identify and develop appropriate proposals that are robust and aligned existing assurance mechanisms. Our over-riding principle is to provide high quality care for patients delivered by providers who offer the best care. We remain committed to the participation of independent and third sector providers where this is the right model for patients – for example, where we need new services/service models, or substantial increases in capacity, or to offer increased choice to patients or to stimulate innovation.

We are committed to treating NHS staff fairly; giving NHS providers the opportunity to meet commissioner’s needs and thereby doing the best thing for NHS patients. For new or substantially redesigned services, PCTs would be expected to engage fully with the existing provider(s) and staff at an early stage, as well as other potential providers, enabling them to contribute to service specifications. Only after this would a decision on whether or not to openly tender take place. When competition is used it should be transparent, equal, fair and proportionate to deliver the best care to meet the needs of the local population.

I hope this helps to explain the concept of “the NHS as the preferred provider”, in advance of the proposed revised guidance. If you would like any further information, or clarification of the above, please do not hesitate to contact your SHA system management or commissioning director, or Claire Whittington (0113 254 5619), Sebastian Habibi (0207 633 7458) or Bob Ricketts (0207 633 4209/4210) at the Department.

David Nicholson CBE
NHS Chief Executive

1. Letter from SofS to Brendan Barber, General Secretary of the TUC

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The Private Sector and the NHS

Posted on September 4, 2009. Filed under: Arm's length providers, GP-led health centres, News stories | Tags: , , |

Pharmaceutical Field | 4 September 2009

The demands of world-class commissioning will mean increased collaboration between the NHS and the private sector. To stay ahead of the game, pharma companies need to be engaging with the private sector on a local level, argue Duncan Alexander and Mike Sobanja.cover


Despite many initiatives and government policies, the private sector has yet to play any major role within the NHS – especially outside England. Yet with escalating cost pressures and the very real prospect of a new government in 2010, there is little doubt that Strategic Health Authorities (SHA) and Primary Care Trusts (PCT) will begin to look more closely at opportunities for commercial partnership.

Indeed, while there is limited national consensus today, private sector initiatives continue to succeed at a local level. Given the current economic climate, pharma companies cannot afford to ignore these pockets of opportunity. It is only by understanding the very real differences in private sector/NHS collaboration at a local level that organisations will be able to respond effectively to the implications of strategic change, from world-class commissioning onwards.


Increasing competition

Since the Labour government came to power in 1997, there have been many grand statements and initiatives designed to increase performance and productivity across the NHS by introducing private sector competition.

Indeed, in January 2002, Alan Milburn, former Secretary of State for the NHS heralded the introduction of the private sector into the NHS, saying: “Our reforms are about redefining what we mean by the NHS. Changing it from a monolithic, centrally-run monopoly provider to a values-based system where different health care providers – in the public, private and voluntary sectors – provide comprehensive services to NHS patients.”

However, fears that such a strategy could lead to back door privatisation of the NHS certainly appear to be unfounded, with a number of initiatives failing to deliver real change or private sector involvement. And certainly across Wales, Scotland and Northern Ireland there is a clear move away from any private sector co-operation or collaboration.

But the changing economic environment will undoubtedly have a significant impact on NHS strategy over the next few years, especially in England, where the sheer volume of demand places huge cost pressures on PCTs and SHAs. Combined with an expected change of government in 2010, it is very likely that the NHS will be tasked with meeting clear targets for the use of private sector organisations to deliver services in a more competitive and cost effective manner.


Poised for change

Indeed, while the Virgin Group announced it had effectively put on hold its ambitious plans to take over and run GP surgeries in 2008, the company remains ‘very committed’ to entering the sector and will review the situation when the economy improves. 

Furthermore, the Department of Health remains bullish about the private sector’s role within the NHS, a spokesman recently asserting: “PCTs are expected to stimulate and shape the market, including a number of providers from voluntary, NHS, private, local government sectors and others.”

And private sector involvement with the NHS is occurring – albeit on a fragmented basis and at a local, not national level. Some 25% of contracts for the ‘Darzi centres’, for example, the GP-led health centres required to be introduced by all PCTs across the country, have been awarded to the private sector so far – although these include NHS hybrids that are simply relabelled organisations.

The Department for Health has also let a contract for the support of the development of practice-based commissioning, with five companies/consortia vying for contracts to give PBC a shot in the arm.


Defining opportunity

It is this highly fragmented response that is creating huge challenges for pharma companies today. And a fundamental issue to address is the speed with which PCTs respond to the demands of world-class commissioning, under which PCTs must become two separate organisations – the Commissioner and the Provider – by April 2010.

While the PCT’s commissioning side will not require many changes, it will be the establishment of the provider unit that will be of most interest, becoming as much as 80% of the PCT as it currently stands. The Department of Health has set a clear timetable for PCTs to undertake this huge change, with three stages – Arms Length Status (April 2009), Direct Provider Organisation (October 2009) and complete independence (the externalisation of the provider arm) by April 2010.

However, every SHA and PCT is progressing at its own pace – with early adopters and clear laggards. According to the latest figures from Cegedim Dendrite, 6% have achieved Arms Length Status by April 2009, 13% are significantly ahead of target and are already Direct Provider Organisations (DPO), with 66% on target to achieve DPO by October 2009.

Furthermore, different regions have adopted different strategies, with London splitting into five Commissioning Collaboratives (specialist commissioning groups) and six PCTs currently taking part in a national Community Foundation Trust Pilot Programme, under which they will be no longer be assessed by the SHA after a year’s operation and assuming the required level of governance and financial expertise.

The challenge for pharma companies is to assess and understand the progress of these individual NHS organisations in embracing world-class commissioning and understanding the implications for new business development.


Building for the future

While the private sector involvement in the NHS will undoubtedly remain small – at least until the next election, pharma companies cannot afford to ignore the opportunity. Indeed, the continued perception that both the NHS and, by association, pharma companies will be unaffected by the current economy is, quite frankly, ridiculous. With the escalating levels of public debt any government will be forced to claw back funding over the next few years. Should a Conservative government take over in 2010, the NHS is likely to experience a massive policy shift that will force SHAs and PCTs to work far more closely with the private sector.

Pharma companies cannot operate in an information vacuum. This private sector/NHS co-operation will continue to be introduced on a piecemeal, local basis. In this climate it is essential to maximise opportunities, operate efficiently and, furthermore, build relationships with key individuals who will be increasingly involved in defining the NHS/private sector model.

Without up to date information on changes in attitude and adoption at a highly granular – preferably PCT – level, pharma companies simply will not be able to respond effectively to any new commercial opportunity.



Duncan Alexander is OneKey Director at Cegedim Dendrite, where he is responsible for managing the existing client base and the co-ordination of all UK commercial activities. Cegedim Dendrite has over 35 years experience in providing value added information and CRM solutions to the pharmaceutical industry and healthcare professionals.

Mike Sobanja is Chief Executive of the NHS Alliance – the independent body that represents NHS primary care. Values-based, the NHS Alliance is the only organisation that brings together PCTs with GP practices, clinicians with managers and board members, and NHS primary care with its patients. The NHS Alliance membership and its national executive are fully multi-professional.

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‘Organic’ reduction in PCTs under Tories

Posted on August 27, 2009. Filed under: News stories | Tags: |

Health Service Journal | BY SALLY GAINSBURY | 27 August 2009

The number of primary care trusts in England could be significantly reduced under Conservative health plans, HSJ has learnt.

If they win the next election, HSJ understands the Conservatives are likely to require all GP practices to become practice based commissioners. Most of their commissioning functions would be performed through federations of GP practices operating as consortiums. This would result in a reduction in the commissioning role of PCTs in some areas, potentially leading to a raft of mergers.

The Conservatives would welcome such mergers as part of an organic process but stress they would be voluntary. They hope to encourage more GPs to take up commissioning by turning the currently indicative budgets into real cash budgets.

Shadow health secretary Andrew Lansley told HSJ this would give practices “real opportunities to save and reinvest, and real control over contracts”. However, he was clear that any underspends would remain ringfenced for patient care, not practice profits.

Mr Lansley said this would combine “the decision-taking responsibility for where and how patients are treated with the finances which are necessary to support it”.

David Furness, health project leader at the Social Market Foundation think tank, said the implications of an enhanced role for practice based commissioning were “much more significant than has been [previously] discussed”.

If consortiums took on more responsibility for commissioning health services there could be less rationale – and management funds – for all 152 PCTs.

In some areas, such as north London and the East Midlands, PCTs have already merged some of their commissioning responsibilities to reduce costs and potentially increase their relative strength over acute providers.

Asked if the Conservatives would want to see more such mergers, a spokesman said: “It would be perfectly reasonable to aggregate, but it will be up to them [PCTs] to decide. It would be done on an organic bottom-up way if [they] choose to do so.”

Sources within the NHS, who have been asked to advise the Conservatives on the development of their health policy, said they thought the party would ideally like to see strategic health authorities and PCTs merged to create maybe 40 strategic commissioning bodies, organised around city regions.

That would resolve the perceived problem of PCTs being “too small” to negotiate good value from large acute hospitals.

However, a spokesman for the Conservatives denied they were planning to merge SHAs and PCTs. He said it was “very clear that’s not what we are planning”. However they do foresee SHAs moving their focus away from providers as more become foundation trusts.

Both Tory leader David Cameron and Mr Lansley have pledged they will not subject the NHS to another round of structural reorganisation.

Mr Lansley said PCTs would play an important role organising contracts between commissioning consortiums and acute providers.

The Conservatives will also expect PCTs to negotiate prices for acute care at a rate under the payment by results price – a plan that will only work if PCTs can get acute trusts to compete for their custom.

Management consultants advising the party have said it should allow private contractors to take over SHA functions on a “franchised” basis.

Organisations smaller than SHAs, charged with a mixture of current SHA and PCT roles, would be attractive to private sector commissioning organisations that have been disappointed by the opportunities and size of contracts available to them under the framework for procuring external support for commissioners (FESC). These could resemble US-style health management organisations if GPs were allowed to choose which they contracted with.

Nick Bosanquet, consultant director of the think tank Reform, said work at the Nuffield Trust to develop an NHS funding formula more sensitive to individual health needs would make it possible for patients to choose their commissioner.

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DoH drops October deadline for PCT provider arm plans

Posted on August 27, 2009. Filed under: News stories | Tags: |

Healthcare Republic | GP | 21 August 2009

PCTs are no longer facing an October deadline to decide what to do with their provider arms, a DoH letter reveals.

The move represents a softening of the DoH line on the need to separate PCTs’ provider and commissioning functions.

But it does mean that GPs directly employed by trusts will be waiting longer to find out whether they are to be farmed out to private companies or social enterprises.

PCTs were originally told to come up with plans for how to spin off their community service provision by October 2009. The options on the table include creating a social enterprise and integrating them with other NHS organisations.

But in a letter sent to PCT and SHA bosses, NHS chief executive David Nicholson said that ‘we will take a more flexible approach to the timetable’.

SHAs will now be in charge of deciding a timetable for developing and testing the plans, he said.

‘This does not represent a change in policy,’ he added. ‘It is about keeping PCT decisions safe while moving faster, not slower, to deliver transformation.’

The DoH previously expected all PCTs to spin off their pro-vider arms into entirely new bodies.

But it has recently softened its stance. PCTs are now able to retain their provider functions, where there is ‘strong leadership’ and ‘proper and sufficient separation from commissioning’.

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Unite warns NHS staff face social enterprise transfer

Posted on July 13, 2009. Filed under: Arm's length providers, News stories, Social enterprise | Tags: |

Healthcare Republic | 13 July 2009

Union Unite/CPHVA is warning that NHS services for children and older people in Bedfordshire face being hived off into a social enterprise.  Unite the Union

Plans to be outlined to staff on Wednesday could see 1,100 staff, and services for more than 100,000 children and 420,000 older people, come under the social enterprise banner.

A letter by Andrew Harrington, chief operating officer of Bedfordshire Community Health Services (BCHS), says: ‘As an NHS staff member working for BCHS you would transfer in to the new organisation under TUPE rules. All of your terms and conditions will transfer, including your pension.’

However, Unite says that TUPE regulations do not protect pensions in this way. Instead staff may not be allowed to stay in the NHS pension scheme and if the social enterprise asks them to take on any new ‘private’ work, they will not be allowed to remain in the NHS scheme. Unite adds that new staff will not be allowed in the NHS scheme.

In a statement to Healthcare Republic, Mr Harrington said: ‘As with PCTs across the country, NHS Bedfordshire is working towards separating its commissioning and provider-arm operations.

‘Under DoH guidance, staff currently working in Bedfordshire Community Health Services are being offered the right to request the establishment of a social enterprise for children and adult services.

‘We are therefore working with our staff, at this very early stage in the process, to gauge their support, views and interest in moving these proposals to the next stage.

‘Staff are being provided with appropriate information to support them in making their own judgement on whether creating a social enterprise is in the best interests of themselves and the services. Plans will only be taken forward with their full support.

‘No decision has yet been made and developing a social enterprise is just one of the options we will be considering.’

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The ‘patchwork privatisation’ of our health service: a users’ guide

Posted on June 10, 2009. Filed under: GP-led health centres, ISTC, LIFT, Reports/papers, Social enterprise | Tags: , , |

NHS Support Federation

Executive summary

• The government is carrying out the ‘patchwork privatisation’ of the NHS. For the first time, this report presents a comprehensive picture of the many kinds of privatisation occurring in the health service. It provides indisputable evidence that a process of privatisation is in train.

• This is happening on such a scale and in so coordinated a way as to make it a unique phenomenon – the ‘patchwork privatisation’ of a major public concern.

• Unlike the Thatcher privatisations of the 1980s, the entire NHS is not being put up for auction – but historically this is only one manifestation of privatisation. The deregulation of state monopolies, the outsourcing of state responsibilities and the cessation of services are the forms of privatisation we see in the NHS today.

• The government is transforming the NHS from a comprehensive, equitable provider of healthcare into a tax-funded insurer, paying for care provided by others. What emerges will still be called the NHS, but it will take the form of a kite-mark attached to selected services.

• The government argues that while the health service remains free at the point of need, funded from taxation, it is still public. However, access does not determine whether a service is public. ITV is free for all to watch, but is clearly different from the BBC. Neither does public funding automatically translate into public service status. There are examples of private ventures that are publicly funded.

• The ‘patchwork privatisation’ of the NHS is deeply worrying because privatised healthcare tends to cost more; accountability suffers; the fog of ‘commercial confidentiality’ makes scrutinising public spending impossible; the profit motive encourages ‘cherry-picking’ of the lucrative work, ultimately leading to NHS services being cut.

• The report presents an anatomy of NHS privatisation:

Creating a market
o ‘Patchwork privatisation’ is only possible because of the creation of a market. This process began with the purchaser/provider split introduced by the Conservatives, but has been greatly accelerated under Labour with the introduction of ‘choose and book’ and a new financial system – ‘payment by results’. The latter has been rolled out faster and further than in any comparable country, creating powerful incentives that will have unpredictable consequences.

Privatisation in primary care
o Privatising GP services – Huge multinational corporations are taking over GP surgeries. This process will have profound implications. There are already examples of continuity of care suffering where companies are unable to retain doctors.

o Privatising the commissioning function of Primary Care Trusts – Takes privatisation into the heart of the NHS by giving the private sector a role in the decisions on what care patients can receive, determining to some extent how the NHS budget should be spent.

o Practice-based commissioning – Transfers the buying power for purchasing many treatments from a public body with responsibility for the whole local population to practices accountable only for their registered patients. Increasingly these will be run by corporations that could dominate the market in any region and gain huge power over what kind of care patients receive and who provides it.

o Outsourcing PCT care – The government wishes to see PCTs stop providing health care directly, instead contracting the private sector and social enterprises to provide services. This will increase administration costs and reduce flexibility.

o Unbundling of primary care services – Primary care services are being broken up into saleable commodities in a process known as unbundling. The most high profile instance is out-of-hours GP care, where the private sector has performed poorly.

Privatisation in secondary care
o Independent Sector Treatment Centres (ISTCs) – ISTCs (private sector clinics usually specialising in straightforward procedures like cataract surgery) have not provided value for money, have made only a very modest contribution to cutting waiting lists and in many areas have seriously destabilised NHS hospitals causing service closures.

o Privately run NHS hospitals – The fullest extension of the ISTC policy is the handing over of an entire hospital to the private sector as has happened at the Lymington New Forest Hospital. This is the first time a whole NHS hospital, including urgent care, is to be run by a private company, meaning local patients will have little choice but to use the private facility.

o Off-shoring medical secretaries – NHS trusts are cutting trained medical secretaries in favour of cheaper services abroad, raising fears for safety.

o Private ambulance services – Non-emergency ambulance services are being put out to tender. There are examples of serious problems where contracts have been awarded to the private sector.

Privatisation in diagnostics
o ICATS and CATS – Diagnostic and treatment centres that raise the prospect of conflicts of interest because of their ability to refer patients on for further care. One company, Netcare UK, has contracts for an ICATS and an ISTC in Manchester meaning it could refer patients to its own facilities.

o Privatisation of pathology services – The government has signed large contracts with private sector companies for pathology and diagnostic tests, despite warnings of the dangers involved in fragmenting pathology services through privatisation

Privatisation of NHS facilities
o PFI – A vastly expensive way of building hospitals that is taking money away from frontline care. PFI has a direct effect on patient services, as the fixed costs are borne by the local NHS trust and have first call on the available money.

o LIFT – Often referred to as the primary care version of PFI, LIFT projects are costing up to eight times more than traditional ways of building.

o Subsidising private sector infrastructure – Department of Health guidance advises that the NHS could pay a “supplement… to cover the set-up or development costs faced by a new provider,” to “reduce the capital investment required” – i.e., supply the buildings.

Privatisation in NHS supplies
o Privatisation of NHS Logistics – The government outsourced NHS supplies to delivery firm DHL and its sub-contractor Novation, which will control over £4 billion of NHS money. Novation is being investigated in the US over bribery and defrauding American public health schemes.

o Privatisation of oxygen supplies – The service supplying oxygen to patients with breathing difficulties was privatised in February 2006, resulting in chaos. One woman, Alice Broderick, died while waiting for an emergency delivery of oxygen that took nine hours to arrive.

For full report click here

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Unite to campaign against latest privatisation plan for the NHS

Posted on June 10, 2009. Filed under: Press/News Releases | Tags: , , |

Unite | 2 June 2009

Unite is launching a campaign against the latest ‘patchwork privatisation’ of the NHS entitled Transforming Community Services (TCS).

TCS requires every primary care trust (PCT) in England to draw up plans by October this year to establish ‘provider’ organisations separate from their current commissioner roles.

Writing in the June edition of Community Practitioner, Unite’s lead officer for nursing, Barrie Brown, said that “the TCS mantra promotes the myth that any provider will be better than a PCT provider”, whether they are social enterprises, or third sector and private sector options.

“The TCS agenda does not recognise what NHS staff have achieved or the future risks of having a plethora of different primary care provider organisations.

“NHS productivity has improved when measured by the growth in quality and volume of the treatment and care. Quality and volume have exceeded the increase in funding.’

Barrie Brown said that figures published by the Office for National Statistics last month (May) demonstrate that productivity has grown by up to 1.6 per cent a year.

“Why should PCTs in England look outside the NHS to provide services that are delivered so effectively by themselves and their staff? I think we should be told.” 


For further information, please ring:

Barrie Brown, 07798 531 022; Karen Reay, national officer, health 07798 531 004; David Fleming, national officer, health 07798 531 013 or Shaun Noble, communications officer (health sector) 020 7420 8951 or 07768 693 940

Unite campaigns for end of privatisation of the NHS

Healthcare Republic | 9 June 2009

Unite/CPHVA has launched a campaign calling for the end of the privatisation of the NHS.A545C0E1-9919-FA31-D5B11DBAF1BB2CA8

Health B4 Profit appears to chime with the BMA’s anti-marketisation drive launched earlier this month.

Unite has published a report titled ‘The Patchwork Privatisation of Our Health Service’ which highlights how private companies with government encouragement are taking over swathes of the health service with adverse knock-on effects for patients and staff employment conditions.

Karen Reay, Unite’s national officer for health, said: ‘Reading this document should make anyone concerned about the future of the NHS very angry indeed.

‘The myth that private companies can provide better services than the NHS is a giant experiment based on a flawed ideology that is failing on a daily basis, while costing the taxpayer dearly.’

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Unite demands end to purchaser/provider ‘split’

Posted on June 3, 2009. Filed under: News stories, Social enterprise | Tags: , |

Healthcare Republic | 03 June 09

A trade union has called for a halt to government plans to force all PCTs to offload their community services. A545C0E1-9919-FA31-D5B11DBAF1BB2CA8

The DoH’s Transforming Community Services policy requires PCTs to have plans in place by October to establish provider organisations, which are separate from their commissioning roles. The government wants most of these services to become social enterprises or to be taken on by the private sector.

But writing in the June edition of Community Practitioner, Unite’s lead nursing officer Barrie Brown argued that it was a ‘myth that any provider will be better than a PCT provider’.

He pointed to figures from the Office for National Statistics, which showed that NHS productivity had grown by up to 1.6% a year.

‘Why should PCTs in England look outside the NHS to provide services that are delivered so effectively by themselves and their staff? I think we should be told,’ Mr Brown wrote.

Unite has launched a campaign, Health B4 Profit, to oppose further attempts to fragment and privatise the NHS in England.

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Unite campaigns against community service reforms

Posted on June 2, 2009. Filed under: Journals | Tags: , , |

Health Service Journal | Helen Crump | 2 June 2009

Trade union Unite has launched a campaign against Department of Health plans to separate primary care trust provider arms from commissioning PCTs.

Unite said the transforming community services programme amounted to “the latest patchwork privatisation of the NHS” and “promotes the myth that any provider will be better than a PCT provider”.

PCT provider arms will be able to turn themselves into social enterprises or community foundation trusts under the scheme, which is likely to result in increased competition in the community services sector.

Unite lead officer for nursing Barrie Brown warned against having “a plethora of different primary care provider organisations”.

“Why should PCTs in England look outside the NHS to provide services that are delivered so effectively by themselves and their staff?” he asked.

But the DH rebutted the claims. A spokesman said guidance on reforming community services issued in March had “stated clearly there was no prescribed national blueprint” for the changes.

He said: “The options are for local decision involving staff. To claim this is wide scale privatisation of the NHS is wrong and misleading.”

The news came as the British Medical Association stepped up activity to publicise its concerns about the creation of a market in healthcare with its own new campaign, Look after our NHS.

It is looking for examples of where public money has been “wasted” as a result of market-driven reforms, as well as “the adverse effects this has had on patient care and doctors’ working lives”.

BMA chairman Hamish Meldrum said: “A market economy is based on winners and losers. We’re not prepared to allow parts of the NHS to fail.”

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Commissioner-provider divide

Posted on May 27, 2009. Filed under: Arm's length providers, GP-led health centres, Journals, Polyclinics, Social enterprise | Tags: |

Health Service Journal |YOUR IDEAS AND SUGGESTIONS | 26 MAY, 2009 | UPDATED: 28 MAY 2009

By Mark Johnson, managing director of specialist public services law firm TPP Law (

Primary care trusts are facing some critical issues over the integrity of local services as they separate their commissioner and provider functions.

All PCTs must have ensured their provider services arm has moved into a contractual relationship with their PCT commissioning function using the new Standard NHS Contract for Community Services by April 2009. The degree of separation must be sufficient to avoid potential conflicts of interest.

In addition, by October 2009, all PCTs must review the operations and governance of their provider services arm to ensure it is the most appropriate form to suit local needs and to declare whether or not they are interested in establishing a social enterprise or community foundation trust for any services and agree a plan with their SHAs for their future development and management.

They must also produce a detailed plan for transforming community services which reflects their future shift to becoming world class commissioners focused around the needs of the local population and the opening up of local markets to competition. This competition is seen as key to driving up standards and improving efficiency.

Undertaking separation will require considerable resources and time – but the unprecedented and detailed review of services this entails should be a very instructive exercise, which will improve customer focus.

There is no prescribed formula for separation: it is a matter for local determination. The options for externalisation range from creation of an arm’s length organisation which remains legally part of the PCT, to creating a new organisation that exists outside the PCT, such as a social enterprise or a community foundation trust; or one which exists in alliance with another organisation or through vertical or horizontal organisation with another provider, such as an acute foundation trust seeking to extend its income from payment by results, or another PCT provider arm respectively.

There are also private sector organisations interested in partnering with PCTs to provide clinical and back-office support, as well as working capital and access to technology.

Provider arms are usually very diverse business units containing a variety of services, ranging from community nursing, older people’s services, specialist therapies, as well as urgent care, to children’s services and sexual health.

There will be no ‘one size fits all’ formula for divesting services. Rural areas will require different solutions to urban areas. In the organisations we have assisted, a mixture of partnerships with other agencies, social enterprise and the voluntary sector have all been feasible options.

In deciding which way to go, avoid creating structures of Byzantine complexity: fragmentation can easily bring a loss of ethos and values and hit staff morale. Any part of the business unit wanting to go it alone must be a viable and sustainable business in its own right. This may imply a preferred supplier contract for the initial years.

Separation will bring some important challenges. There may be change fatigue if the workforce has just undergone reorganisation. New organisations need the right leadership and management skills. In many cases this will come from outside the existing PCT board. New skills such as marketing, raising finance and cashflow management are needed.

PCTs must consider how separation and the consequent loss of control will impact on their ability to implement innovation in care pathways and integrated services. Losing a large section of the workforce into the provider organisation could expose skills gaps in the commissioning arm. Will it be acceptable for some staff to straddle the divide?

Separation will also create tension. Solutions must be locally determined, taking service users along with them; form must follow function. A detailed project plan plus clear processes around information-sharing and confidentiality will be required. The scope of authority and powers delegated to the provider arm must be transparent.

The basis of charging for services will be critically important. This may be the first time that individual services have been rigorously costed.

The absence of national tariffs for community services in the short term will be problematic. Workforce issues, particularly around the transfer of NHS pensions and TUPE rights, require special care.

Successful provider organisations will need high standards of leadership and governance, strategic planning and financial control. To win patient trust and confidence, they will need to display a clear set of values and engage effectively with their local population. The challenge is there to be taken up.

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The provider-commissioner split: Getting it right

Posted on April 24, 2009. Filed under: News stories, Reports/papers | Tags: , |

Health Services Journal | BY INGRID TORJESEN | 23 April 2009

A new King’s Fund report warns the chance to improve services could be missed if PCTs do not prepare for shedding their provider role. Ingrid Torjesen explains

Primary care trusts have until the start of November to hive off their provider functions. This will enable them to focus on commissioning by removing the conflict of being both a provider and commissioner, and thereby encouraging competition and improving community services. Or so the rationale goes.

However, history has taught us that new organisational structures alone do not deliver benefits and may cause new problems if cultural and workforce issues are not addressed

Lessons from mental health

In 1990, the care Programme approach introduced a framework for caring for people with mental health needs in the community. It consisted of a systematic assessment of health and social care needs, the drafting of a care plan and the appointment of a care co-ordinator to monitor and review that care.

Experience tells us that a team needs an elevating goal and a set of core values. These fundamental ingredients were frequently overlooked in community mental health teams, resulting in staff burn-out and low morale. Failure to identify what type of patient should be the focus of attention frequently left teams struggling to cope as they tried to encompass everyone referred to specialist mental health services. They now focus on those who have a wide range of needs from a number of services, and/or are most at risk.

A King’s Fund report, Shaping PCT Provider Services,outlines how PCTs should grab this opportunity to take a comprehensive strategic overview of community services required.

Candace Imison, deputy director of policy at the King’s Fund and author of the report, says it is essential PCTs clearly define the role they envision for community services, their priority areas for expansion and any important partnerships they want, such as joint health and social care teams for older people.

There is also a consensus that greater links with GPs would improve services and the appropriateness of GP referrals to them. Although this has been difficult to achieve in the past, practice based commissioning consortiums now provide a structure to which community services could link. “PCTs need to be signalling quite strongly that they would encourage that,” Ms Imison says.

Service demand

While overall demand for community services is growing, the pattern of demand varies between PCTs. Ms Imison says: “It is a real opportunity to be clear about the rate at which those demands are likely to increase and where they will be most focused – the very elderly, or particular pockets of chronic disease, such as renal disease.”

PCTs should also examine services individually to identify which sit naturally together, for example, children’s services may benefit from being strongly aligned to children’s centres.

“PCTs have a historical legacy of services rather than a set of services that have a strategic coherence to them,” Ms Imison explains. “The thing is to really focus on the big building blocks going forward. Providers desperately need that strategic context before they can start planning sensibly.”

Once that context has been determined providers will be able to determine which type of structure would suit them best, such as a social enterprise, private sector partnership, or community foundation trust. However, a new structure will not bring about change without new ways of working.

“It will not just be a question of putting teams in place; if they create new teams they need to work hard with them to be clear about exactly who the services are for, what the referral criteria are and what are the referral routes,” Ms Imison says.

The care programme approach in mental health is a good example of a change that did not deliver what was hoped for, because there was such focus on the mechanism and staff did not understand what it was designed to deliver (see box).

“One of the reasons why some community services aren’t able to offer a proper alternative to hospitals is because they are not operating 24 hours a day,” Ms Imison explains.

PCTs need to do a workforce plan taking account of their strategic needs. If they plan to provide more care at home, this should cover issues such as how community services can attract people who have historically worked in hospitals and are used to a 24-hour culture. It should also prepare for retirement bulges. “It is important people understand what the workforce pressures are and for them to make training and workforce plans that fill the gaps,” she says.

Facilities management

The Department of Health believes PCTs should hold on to community services’ premises because it will give them more flexibility as commissioners, but Ms Imison questions whether this is the best approach.

She says PCTs do not have skills and capacities as estate managers and, as estate is a fundamental part of service provision, holding on to it might create more problems for PCTs than it solves. “While you will get the benefit of the strategic flexibility – if someone isn’t delivering a service you are not tied into them because you have the estate – there is also an issue around the providers; if they don’t own the estate then their capacity to develop and move on their service is handicapped.” 

She recommends PCTs that decide to hold on to their estate consider working with neighbouring PCTs to share expertise, perhaps linking to work around LIFT.

PCTs are under huge pressures, so there is a risk that they could simply tick the boxes and deliver a new organisational structure and arm’s-length governance without seizing the opportunity to think about the services it should deliver.

“A lot of PCTs inherited this portfolio of services and just let them carry on as they were rather than being strong commissioners of them. There is probably a strong imperative not to challenge the status quo because everyone wants an easier life,” Ms Imison says. “The opportunity of the separation is that it forces PCTs to commission the services rather than just hosting the services.”

Tips for success

  • Focus on process as much as on structure
  • Ensure a widely understood set of values underpin the new ways of working and enablers for effective team working are in place
  • Focus on the patient groups who use these services and get significant input from GPs
  • Clarify referral pathways
  • Provide a service that is needs led rather than demand led
  • Group together services with strategic coherence
  • Ensure the community estate supports the model of care
  • Ensure workforce plans take account of a growing and ageing population, and staff retirement
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