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Editor’s blog Tuesday 30 March 2010: Assessing commissioning, and funding the National Care Service

Commissioning has worked so brilliantly that the top management of the DH couldn’t even tell you what it costs.

Yes, really. Or if they could, they certainly didn’t tell the Health Select Committee. It is the sort of question you just might be able to anticipate, no?

The Committee has just issued its report into commissioning.

It is instructive and sobering reading. And early responses have focused on the eye-catching finding that “Research commissioned by the DH but not published by it estimated these to be as high as 14% of total NHS costs”.

The Committee notes being “appalled that four of the most senior civil servants in the Department of Health were unable to give us accurate figures for staffing levels and costs dedicated to commissioning and billing in PCTs and provider NHS trusts. We recommend that this deficiency be addressed immediately. The Department must agree definitions of staff, such as management and administrative overheads, and stick to them so that comparisons can be made over time”.

NHS Confed chief exec Steve Barnett told the Guardian that the 2005 research (by Karen Bloor of the University of York) with the 14% figure was "out of date and has no relevance to the commissioner-provider split. This is both unhelpful and misleading."

The Barnett formula – “unhelpful and misleading”
Curiouser and curiouser. Out-of-date is certainly true of 2005. Management costs have, if anything, risen since then with the advent of World-Class Commissioning, the FESC, WCC assurance, management consultancy, Old Uncle Tom Cobbley and all …

Barnett’s points also fail to engage with the fact that a study on commissioning staffing and transaction costs has everything to do with the purchaser-provider split. You might as well say that the Comprehensive Spending Review has nothing to do with public sector funding.

“Unhelpful” is one of those cracking words about NHS managerial politics. It suggests that there are matters too important for discussion and debate in public, like whether commissioning is delivering better healthcare.

How could discussing that possible be helpful, eh?

Less done than should be expected
The report repeatedly makes clear that a few localities have made real progress with commissioning, but its overall picture is downbeat.

It states that “Commissioners continue to be passive, when to do their work efficiently they must insist on quality and challenge the inefficiencies of providers, particularly unevidenced variations in clinical practice.

“Weaknesses are due in large part to PCTs’ lack of skills, notably poor analysis of data, lack of clinical knowledge and the poor quality of much PCT management. The situation has been made worse by the constant re-organisations and high turnover of staff.

“Commissioners do not have adequate levers to enable them to motivate providers of hospital and other services. We recommend the Department commission a quantitative study of what levers should be introduced to enable PCTs to motivate providers of services better and a review of contracts to ensure that rigid, enforceable quality and efficiency measures are written into all contracts with providers of health care”.

PCTs are spared little: “there are serious concerns about the capability of PCTs to make the huge step changes required” for World Class Commissioning; and “PCTs might be too complacent to make the necessary improvements. A survey we commissioned from the NAO revealed a remarkable degree of misplaced confidence on the part of PCTs about how well think they are doing.

“It is not clear to us that WCC is going to address the lack of capacity and skills at PCT level and weak clinical knowledge. Furthermore there are concerns that WCC will be no more than a “box ticking” exercise whereby people expend a lot of energy merely demonstrating they have the right policies in place, rather than actually transforming patient outcomes and cost effectiveness”.

Policy incoherence
The report also notes the discontinuity between such policies as Payment by Results and the Integrated Care Pilots – to say nothing of the “preferred provider” intervention.

The end of the report’s summary is worth quoting in full:

“The Government has announced a 30% reduction in management costs in PCTs and SHAs from 2010 to 2013. While some PCTs do a good job with low overheads, we are not convinced that taking money away from weaker PCTs will automatically encourage them to improve their performance. At a time when we are expecting so much of PCTs, it seems risky to be cutting their management costs by 30% when they need better skills and more talent. We note that the Minister indicated the potential to make savings from SHAs; we agree that they should bear the brunt of any cuts.

“If we are to keep PCTs they need to strengthened. In particular, they require a more capable workforce, with people able to analyse and use data better to commission services.

“They also need to improve the quality of management, attracting and developing talent. As we have argued in previous reports, the NHS Graduate Management Training Scheme could play a major role in achieving this. However, commissioning cannot be improved in isolation from the rest of the health service. PCTs will need to have more power in dealing with providers. It needs to be able to offer more evidence-based financial incentives to providers to improve its relationship with providers. We trust our successors will follow the CQUIN initiative carefully. It must, however, be properly evaluated. If successful it should be expanded significantly. At the moment the Government has proposed some sort of qualitative analysis, which amounts to little more than asking participants how they feel about it. We recommend the Government institute a rigorous quantitative assessment.

“In conclusion, a number of witnesses argued that we have had the disadvantages of an adversarial system without as yet seeing many benefits from the purchaser/provider split. If reliable figures for the costs of commissioning prove that it is uneconomic and if it does not begin to improve soon, after 20 years of costly failure, the purchaser/provider split may need to be abolished”.

National Care Service plans not announced
Elsewhere, the Health Secretary announces that he will make an announcement abut the National Care Service. He even writes an article about it. Doesn't actually say how to fund it, mind, but you can't have everything - as the eligibility thresholds will definitely show.

What we get is a guarantee of no legislation in the next parliament to impose a death tax to pay for social care for the elderly. There is an assurance that laws will cap the cost of residential costs after two years in a home.

St Elsewhere
An interesting NPSA-supported story about NHS cover-ups, and we're not talking dignity gowns.