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Editor’s blog Friday 16 July 2010: Competing for business - part one

Who is going to be competing with whom in the new NHS?

1. The new management
GP commissioning consortia are going to need managers and lead clinicians (who will of course be "going over to the dark side").

Some consortia may decide to outsource large amounts of the commissioning function - perhaps to independent sector FESC providers, perhaps to other consortia - but even these minimalist consortia will require contract managers and an accounting officer. Others will want to staff themselves and do it themselves, subject to the limitations of the yet-to-be-announced management allowance. Others will be between the former two poles.

So broadly, we get three categories of consortia: minimalists, DIYers and pick-and-mixers.

Which means that competing for jobs or contracts in this field will be extant PCT and SHA managers; and external independent sector management consultants and data specialists, small and large.

Some PCT managers have skills at commissioning locally. They're not necessarily very great, but neither are those of the independent sector. They understand somewhat how to deal with extant healthcare suppliers, and know 'where the bodies are buried' locally, which is invaluable.

Some SHA managers understand performance management and stakeholder calibration across a wide area. You can argue that they're not great at these things, but it can be hard to disaggregate criticisms about competence with the inevitable resentment that the intermediate tier of management will generate.

Some independent sector firms and folk can add real value with specialist skills. The NHS and DH have been using them for years, with markedly varying degrees of effectiveness and success.

To blame the independent sector for this is naive: they exist to provide services they can sell. The DH and NHS have repeatedly placed blind faith in private sector solutions to management problems, without being sure they were asking the right questions, setting the right tasks or meaningfully evaluating performance or value added.

Auction of promises
So these three groups will be competing in an auction of promises. All have track records, and could plausibly make a case.

- PCT managers that they understand localities and commission (a bit)
- SHA managers that they can monitor performance.
- Private providers that they can think outside the public sector management box and manage the new system.

GP commissioning consortia will have to evaluate the accuracy of the claims they will hear. They will need to get and compare meaningful metrics of past performance.

They will have to achieve a balance of the skills to create a new system and to run commissioning that is clinically led but economically minded, in a new world driven by information transparency, choice and competition.

Then they will have to choose.

Conpetition without and within the new management
There is more competition, of course:

Private sector providers with one another - this could get very interesting. We could see significant market consolidation to achieve scale and buy up so much expertise that the DIYers get little choice of staff.

If competition is meaningful, private sector providers could all start trying to attack one another's records.

If competition is gentlemanly in an after-you-Claude manner, there should be concerns.

PCTs and SHAs with GP commissioning consortia - in the short term, PCTs and SHAs have to keep limping along, like a fox that has been shot but not killed. Instead of losing blood, they are likely to haemorrhage experienced staff who see opportunities in the new system.

Such exit-ready people might see the opportunities in private providers, in new GP commissioning consortia or in working for themseleves, selling their skills back into the new system. None of these three options comes with a gurarantee, of course. That is "the new politics".

For existing PCT and SHA staff, it is therefore about balancing risk appetite. The first risk is that of staying with organisations whose cull is guaranteed by a fixed date (should all go to the White Paper's ambitious plan). The second risk is that they will not have a secure future in the new world.

But then, nobody in the management of the new world will have a secure future - apart from the independent commissioning board and Monitor.