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Partnership working in NHS procurement reform – the way forward
- March 24, 2014 posted by Dorothy Chen
There is a clear financial crisis looming over the NHS. 65 out of the 245 hospital trusts are predicting a deficit for 2013/14, the highest proportion observed in NHS history. 34 of these are Foundation Trusts, whose very license with Monitor stipulates financial sustainability.
The Department of Health (DH) has attributed much of the financial crisis to inefficiencies in NHS procurement. Data on NHS expenditure for the last three years shows that non-pay spend in the NHS has been increasing at about £2billion (or 10%) a year. No doubt, some of this can be attributed to the reorganisation and increasing demand for NHS services. However, with total activity over the same period only reporting a 2.9% growth per year, the Department is certainly right to be concerned.
To those familiar with NHS procurement, these figures may hardly seem surprising. Procurement practices have been variable ever since hospital trusts were set up as stand-alone entities, each looking after its own purchasing and supply chains. This has led to providers paying vastly different sums for the same supplies. Without bulk buying, the NHS as a whole is failing to negotiate best prices and get the best value for money.
DH’s solution to this problem is the “key supplier programme”. The programme aims to engage with the NHS’s top suppliers (those that have the most business) to see what can be done to reduce costs. The idea is for the NHS to act as a “single customer” rather than having each provider negotiate their own prices and setting up multiple small contracts with the same suppliers.
As part of this programme, DH is seeking data from key clinical suppliers on how medical technology is currently procured and used across the NHS. This is difficult for a variety of reasons, including confidentiality agreements and logistical issues around the release of pricing data from individual companies. Industry has also expressed concerns around the impact of such schemes on innovation, particularly in relation to the government’s commitments set out in “Innovation, Health and Wealth”. Comparing apples with apples can be more challenging than first appears in healthcare.
Meanwhile, DH and Monitor have written to individual providers, advising them to stop signing confidentiality agreements with suppliers in line with transparency guidance which is due to be introduced in April 2014. The guidance will include an additional clause in the Standard Contract which mandates trusts to make their procurement information publicly available, including the prices they pay for goods and services. DH’s message to industry is clear – we will sort out NHS procurement, with or without your help.
Realistically, however, DH is unlikely to make its target of £2billion savings in NHS procurement by 2015/16 on its own. Even if all providers stop signing confidentiality agreements with suppliers today, the multi-year terms of industry-standard agreements mean that pricing information on some products will not become available until after 2015/16. Further complicating matters, medical products are often sold as part of different services bundles, leading to wide price discrepancies. These cannot be properly accounted for unless DH knows how much service level support is included in each price – information that industry is best placed to provide.
Regardless of its good intentions, the Department’s approach risks alienating key industry players at a time when their data and expertise are indispensable to achieving targeted savings. It also seems out of kilter with the NHS’s role as commissioner and the emphasis in policy on procuring for outcomes rather than by price alone. A better approach may be to recognise mutual benefits, jointly identifying waste, with the possibility of sharing potential savings. As is often the case in partnership working, this will require as much of a commitment from industry as from DH, working closely with the NHS itself.
Getting the balance right: self-management for long-term conditions in the new NHS
- March 17, 2014 posted by Tessa Hughes
Long-term conditions affect 15.4 million people, more than a quarter of the population, and NHS England expects this to rise by almost a third by 2018. In a recent blog post Martin McShane, NHS England’s Director for long-term conditions, set out his three part plan for meeting the increasing demands on NHS services: understanding the needs of the population and tailoring services accordingly, person-centred care planning and team work.
Most importantly, McShane states that “people want and need to be involved in planning their own care. They want to have support and care that gives them as much control as they want”. This is in line with the current trend for patient-centred care, rather than paternalistic approaches. Central to this is ensuring that patients have the information and support to self-manage their condition. The benefits of self-management are significant – it has been found to improve health outcomes, patient experience and improve adherence to treatment and medication.
Self-management was a key theme during my time at Diabetes UK and remains a priority for them today. Diabetes, like many other long-term conditions, is with people every day. Small and large adjustments will be required to keep diabetes under control and avoid both short-term and long-term complications of the condition. It is therefore not surprising that it was a Diabetes UK expert patient programme that outgoing NHS England Chief Executive, Sir David Nicholson, chose to attend undercover recently, trying to get a better understanding of the needs of people with long-term conditions.
Diabetes UK is always clear that effective diabetes management should be in partnership with the healthcare team. People need access to appropriate training and support to even start to understand about self-management and will still have questions along the way that require the input of healthcare professionals. There is still a long way to go until NHS commissioners fully understand what is required to support effective self-management. Access to structured education programmes for newly diagnosed people with diabetes is just 50% in some of the best performing areas of the country. In the worst areas, no one is offered this support.
Last week, Arthritis Care and NRAS chose to withdraw from a winning bid with Circle Health to provide supportive self-management services in Bedfordshire because they did not believe that sufficient resources had been made available for them to provide the necessary support.
Effective self-management requires investment. Empowering people to understand and manage their conditions may lead to happier patients with better health outcomes but it won’t necessarily save the NHS lots of money in the short term. Perhaps most acutely aware of this is Sir David himself who spoke last week of the billions of extra funding that will be required to support much needed NHS reforms.
Bringing lobbying into the open
- February 11, 2014 posted by John Murray
JMC Partners has recently been the subject of press interest in relation to the ethics of lobbying. This is something we welcome, providing it is accurate and informed. Indeed, the ethics of lobbying formed the subject of a blog in March 2012. This reflects our consistent interest in the subject and is reproduced below. In particular, we stand by the importance of well informed lobbying, transparently declared, as an essential contribution to good government.
Lobbying – is the government proposing a solution to the wrong problem?
Sadly lobbying has become a pejorative word which we usually apply to those putting a case with which we disagree. A prominent public figure and journalist regularly sounds off about the iniquities of lobbying and lobbyists, conveniently forgetting that he himself constantly lobbies through that most privileged of channels – a weekly column in a national newspaper.
JMC Partners has an interest to declare – lobbying is a significant part of what we do – but far from being ashamed we take great pride in our ability to help inform policy development, believing that it is better as a result. In particular, our focus is on supporting clients who have an interest which coincides with the public interest. Conversely, the role of politicians and civil servants is to distinguish between that which is genuinely in the public interest, while giving short shrift to special pleading.
This competition of ideas at the heart of lobbying is important to good government and happily recognised as such in Westminster. It must however be supported by free access and complete transparency. In other words, anyone must have the opportunity to raise legitimate issues of public interest with policy-makers regardless of party affiliation and, crucially, without the exchange of money. In doing so, they must be clear about who they represent and such transparency should be a precondition of engagement on the part of politicians and civil servants.
Over the years, there have been examples of professional lobbyists behaving unethically, for example by offering cash for parliamentary questions in the 1980s. Any such behaviour is anathema to the majority of lobbyists and explicitly forbidden by the likes of the Association of Professional Political Consultants. The majority of problems tend to arise on the side of the lobbied rather than those lobbying, often when the dividing line between personal relationships and political access becomes blurred, with the proximity of money making for a more toxic mix.
The government’s current proposal to introduce a statutory register of lobbyists is in many ways a response to these other problems. Lobbyists seem unlikely to object on business grounds but without insupportable bureaucracy a register seems unlikely to capture the kind of contacts which have attracted most criticism in recent years. Only ministers and civil servants can ultimately ensure an ethical approach to access and transparency, mindful of the need to put themselves above suspicion.
Will research prove a winner for the NHS reforms?
- January 27, 2014 posted by Andrew Wilkinson
Nine months in to the new NHS arrangements, it is becoming easier to identify the attributes which might come to characterise the reformed health service.
Since the 2010 White Paper, Liberating the NHS, there has been a proliferation of new organisations, policy initiatives and strategy documents, not all of which are likely to endure as a core part of the new system.
A good example of organisations which have, to date, failed to meet their potential, are the Commissioning Support Units. Initially intended to support Clinical Commissioning Groups with ‘transactional’ business – the administrative work made unaffordable for CCGs to undertake themselves given slender management resource – there were big plans for CSUs.
By March 2016, CSUs were to have been sold into the private sector, with a full commissioning support market established to secure competition on offers of ‘transformational’ change to commissioners. Instead, NHS England has now announced that no such sell-off will occur and that competition between CSUs will continue largely outside the private sector, perhaps using a social enterprise model.
Yet for all the initiatives that have been changed or discarded since the blue sky thinking of the White Paper, some more permanent themes have begun to coalesce.
One particularly exciting theme is the growing prominence being given to health research. NHS England is currently consulting on a draft research and development strategy, which is fairly comprehensive in its consideration of how the NHS can link more closely with academic and other research. If robust monitoring and evaluation of progress made in implementing the strategy can be achieved, there seem to be reasons to be positive about the role of research in the future.
The strategy follows other signs of the NHS’s renewed commitment to research. NHS England’s planning guidance for the next five years, Everyone Counts, provides a good example. In particular, the role of Academic Health Science Networks is recognised and the alignment of these with hospitals providing specialist services is envisaged to improve the linkage between research and healthcare. This also complements the provisions on research in the UK Strategy for Rare Diseases, England’s response to which should be published by the end of February.
It therefore appears that, while some ideas have fallen by the wayside, others, such as linking research and healthcare more closely, could yet succeed. The key question will be whether policymakers will be patient enough for the benefits of this alignment to be realised, given the inherently steady pace of many research projects. Perhaps in a further nine months, this will be clearer still.
Dodgy data mustn’t threaten specialised care
- December 10, 2013 posted by John Murray
There’s a lot of mud flying at the moment in relation to specialised commissioning and NHS England’s budget for the same. It was inevitable that the greatly increased scope of specialised services would create problems given the poor historical understanding of spending on specialised services, often stemming from a lack of coding in the field. It’s vitally important that these, admittedly difficult, birth pangs don’t bring a fundamentally promising system into disrepute.
The specialised commissioning budget held by NHS England should be a national risk share not a simple aggregation of local spending prior to the reforms. The 10 Area Teams given the task of managing specialised contracts for NHS England do so on behalf of the population of England as a whole. At the extreme, this means that the London Area Team is meeting the treatment costs of many patients from the rest of the country. Consequently, there will be a significant gap between the historical spend of London PCTs, now CCGs, on specialised services and the spend of the Area Team under the new arrangements. The apparent gap is amplified by the broader scope of prescribed specialised services under the Health and Social Care Act 2012 as compared to the old Specialised Services National Definitions Set eg including HIV outpatients and all chemotherapy drugs.
There has been a broad consensus that it made sense to rationalise the commissioning of specialised services through NHS England in place of 152 PCTs previously. Carter recommended in 2006 that all specialised services should have been defined and costed by 2008/09 but PCTs failed to do so. NHS England must be given the chance to put this right but needs to do so urgently. In the meantime, reported overspends by some Area Teams of nearly 10 per cent are more likely a reflection of inaccurate allocations than rampant activity levels. It’s important that patient care isn’t harmed on the back of dodgy financial data.
Much more than a Mandate
- November 4, 2013 posted by Andrew Wilkinson
The announcement of Simon Stevens’ appointment as the next Chief Executive of NHS England has ended a period of uncertainty over the future leadership of the health service in England. While much commentary in the days since his appointment has focused on his likely leadership style, a more fundamental issue remains at stake – the question of how independently he will be able to chart a course for the NHS.
Away from the publicity around the new Chief Executive, a power struggle has been playing out between the Department of Health and the organisation that Mr Stevens is soon to lead. Back in July, the Department opened a consultation on proposed changes to the Mandate to NHS England. The final version of the Mandate will be due for publication imminently.
Despite its technocratic-sounding title, this consultation is of far greater strategic importance than most. Having created NHS England as an autonomous body charged with the day-to-day management of the health service through the Health and Social Care Act 2012, the Mandate represents the Department’s main lever of control over English health services. It stipulates objectives for NHS England to achieve through its stewardship of £110 billion of public money.
The first Mandate to NHS England was a relatively uncontroversial matter. In the spirit of the Act, it set overarching, multi-year objectives for NHS England. A more interventionist Ministerial team at the Department has, however, shown its propensity to exert closer control of the health service in this year’s proposed Mandate refresh, which included a number of more detailed measures, reminiscent of the planning frameworks of old. Some, such as the emphasis on the vulnerable older peoples’ plan, bear decidedly political fingerprints.
NHS England was, naturally, displeased at the Department’s attempt to turn back the political clock, not least because it ignores the clear intentions of the Act. At its July Board meeting, serious concerns were raised about the financial implications of the new Mandate targets, and fears have been expressed on the ability of NHS England to undertake longer-term planning when changes to Mandate imperatives could occur in line with the electoral cycle. Such interference defeats the point of creating an autonomous body to manage the health service – and does so after only a few months of its existence.
The publication of the refreshed Mandate will therefore reveal the victor in this very public test of strength between NHS England and the Department, with the cards stacked in favour of the latter. As he takes up his role in April, Mr Stevens might well find that he leads a substantially less autonomous organisation than the one that appointed him in October, though it seems unlikely this will come as a surprise to such a seasoned operator.
Great appointment, big challenge
- October 24, 2013 posted by John Murray
The news that Simon Stevens has been appointed to succeed Sir David Nicholson as Chief Executive of NHS England will be greeted by a mixture of jubilation and relief.
Speculation had been growing that the government and NHS England were aligned on Simon’s appointment and when Mark Britnell announced last week that he was not a candidate the die seemed cast.
The jubilation surrounding the news flows in large part from his exceptional qualifications for the job. Simon Stevens’ career began in the NHS and he has strong first-hand experience of NHS management. His time treading the corridors of power will also be invaluable in such a highly political job. Finally, and by no means least, NHS England is a commissioning body pure and simple, working with largely independent providers, primarily by virtue of their foundation trust status. Simon’s experience in United Health should help him and NHS England mediate this new kind of relationship in a way which older hands familiar with the days of command and control have perhaps struggled to address.
The relief relating to the appointment reflects the fact that the cupboard otherwise looked frighteningly bare, with most of the obvious candidates having ruled themselves out long ago. Simon Stevens’ willingness to take what must be a substantial pay cut is also striking, while his decision to dock himself an additional 10% in year one reflects an unusually political mindset.
So a very welcome appointment but a massive challenge on several fronts. Public discourse tends to concentrate on the steadily growing financial pressures facing the NHS as stable funding meets rising demand. Simon Stevens may, however, find that his first task is to sort out the internal workings of NHS England, with often great staff variously exhausted, demotivated and demoralised and a matrix structure still struggling to work.
Fashion that flatters to deceive
- October 9, 2013 posted by John Murray
I have written in the past about the malign influence of confectionery pricing, which makes it very difficult to buy one chocolate bar when the unit price of three is so much cheaper.
The clothing industry has been guilty of a matching misdemeanour in surreptitiously reducing clothing sizes for garments of a given dimension. I have had a 34 waist throughout my adult life. Some years ago, a shop assistant taking my details for a made-to-measure suit made the suggestion (rejected) that we quietly build in an extra inch for the arrival of middle age spread. Today, off-the-peg clothing does the job for us, no questions asked. As a consequence, I am miraculously back in “32” inch jeans, last encountered in student days. My wife, a life-long size 12 has done even better and can contemplate buying size 10 in some shops – only suitable for people of almost Twiggy-like proportions in her youth.
It might be said that all of this does no harm but the mind is very good at registering the evidence it likes while dismissing the rest. Consequently, ignoring the evidence of the scales becomes a little easier when your clothing size remains the same. Furthermore, using reliable sizes as a check on weight is in many ways far preferable to neurotic scale-watching, as daily fluctuations of a pound or two shouldn’t worry us if the clothes still fit.
The only potential benchmark I can find as to how far this process has gone relates to a shop called Evans. In earlier times, the store was called Evans Outsize and, if memory serves me correctly, was specifically intended to provide elegant clothing for women of slightly more ample proportions starting at size 18. Today, Evans starts at 14 and goes up to 32.
I doubt the world of high street fashion will ever confess the magnitude of the deception they’ve perpetrated and it seems unlikely the clock can be turned back – too depressing – but it would be good to know that this particular kind of inflationary deflation has run its course.
A litmus test for Jeremy Hunt
- September 17, 2013 posted by John Murray
When Mark Carney was appointed Governor of the Bank of England, George Osborne went out of his way to claim credit for landing the best candidate for the job, bar none.
When Sir David Nicholson announced that he was stepping down as the Chief Executive of NHS England, Sir Malcolm Grant, its Chair, lost no time in claiming that the job was even more important than that of the Bank’s Governor, emphasising the need to cast the net worldwide in the same way.
The conundrum at the heart of the appointment is the desire to combine fresh leadership with the knowledge and skills needed to navigate the complexities of the NHS, often portrayed as whale-like in shape but made of myriad small fish. This conundrum may have been simplified by the speed with which most of the obvious candidates then ruled themselves out of the running. In consequence, candidates practised in the NHS arts are now thin on the ground, perhaps opening the way for a more radical appointment better fitting the world post-Francis.
The big fly in the ointment is money. It seems likely that several senior departures preceding Sir David’s announcement were at least in part precipitated by the lure of better pay and less political exposure. Andrew Lansley’s Health and Social Care Act was intended in part to ensure that the boss of NHS England rather than the Secretary of State should feel the heat for failings over which he or she in truth has little or no control. Combined with an annual salary in line with Wayne Rooney’s weekly earnings, this makes for a less than seductive proposition, with global appeal probably close to zero. The only countervailing factor might be personal ego but while a strong ego is indispensable for a job of this kind, too much tends to prove a fatal mix for individuals who must from time to time bend the knee to their political masters.
As time goes by, the rule that public servants should earn little or no more than the Prime Minister becomes steadily more corrosive of their quality. It doesn’t seem to have deterred George Osborne from finding what was necessary to secure his preferred candidate. Malcolm Grant doesn’t have that latitude in health but Jeremy Hunt should show his mettle and secure the right package for one of the most important jobs in public life. The alternative could be a re-tread in Sir David’s mould but maybe without quite the same grip!
Has the NHS become unaffordable?
- August 6, 2013 posted by John Murray
The NHS spending freeze is set to continue beyond the next General Election and, bearing in mind that even a freeze is seen as preferential treatment by other government departments, the vultures are circling predicting the demise of taxpayer-funded care free at the point of delivery.
The received wisdom in quarters sceptical towards the NHS is that we are at the top end of what taxpayers are prepared to pay and that the inevitability of increased expenditure will need to be accommodated by, as a minimum, the introduction of more charges for NHS services (eg for GP appointments) and a diminution in those services (eg for more cosmetic procedures) with the private sector stepping in to pick up the slack. More radically, many would like to see the replacement of the NHS by insurance schemes, probably with state support for the most vulnerable.
This kind of outcome is perfectly possible given the essentially political nature of the decision. Whether it would make sense is, however, highly debatable. We know that even after the massive injection of cash under the last government the NHS remains one of the cheapest health systems by percentage of GDP in the developed world and one of the very few to offer universal coverage. We also have good reason to believe that the NHS should be capable of delivering those services much more efficiently given its strategic reach and buying power.
The main reason for doubt concerns the NHS’s ability to convert that potential into the scale of savings required, which dwarf anything better procurement alone could deliver. In particular, the NHS struggles to re-configure services as a result of an unholy and mutually reinforcing alliance between elected politicians and their constituents, which portrays any proposals for change as a direct attack on the NHS rather than a means of securing its future.
The BBC and the NHS were both products of an enlightened but paternalistic age. The BBC remains a major institution but no longer retains the dominance in broadcasting that the NHS possesses in healthcare. As a result we have seen much more choice in broadcasting but have we necessarily seen better value? Certainly there is a cornucopia of sport available nowadays on Sky but the related subscription is more than three times as expensive as the much berated BBC licence fee, which still delivers an astonishing range of viewing for all but the most dedicated couch potato.
Healthcare is not broadcasting – it’s much more important than that. But there are comparisons to be drawn between the funding models for the BBC and the NHS. If nothing else, we should look very carefully before we jump out of the NHS frying pan. One way or another, we will have to pay for the healthcare we want as a country. A well-managed NHS may well continue to provide the least worst model, especially if politicians can be persuaded to desist from knee-jerk reactions to necessary change in the way services are delivered.
Views expressed are those of the author, not JMC Partners.