healthcare update - issue 11
Challenging times - how a commercial approach can help
The delivery of high quality care for all, whilst maintaining
and improving standards of equity and access to that care, is one
of the core aims of the NHS. The pressure upon the NHS, in common
with other sectors, to achieve this aim whilst achieving
efficiencies and maximising its use of available resources has
increased significantly.
The focus for development, with a view to helping NHS
organisations navigate these challenging times, has shifted towards
commerciality and the need for the NHS to take a more commercial
approach to its responsibilities.
The Department of Health has recently published a range of
related guidance on the development of commercial skills across the
NHS which includes “Commercial Skills for the NHS”, “Procurement
guide for health services” and “Principles for co-operation and
competition”.
These publications identify a number of key themes which PCT
boards will be expected to apply as part of a wider commissioning
governance toolkit in relation to services going forward.
Effective commissioning
The expectation that PCTs will commission those providers who
are best placed to provide the services being procured so as to
meet the needs of the PCT’s patients and population whilst enabling
the PCT to achieve value for money as custodians of the public
purse.
Whilst at first glance this may seem obvious, the guidance makes
clear that PCTs are now under a duty to ensure that they can
justify their approach and demonstrate, by reference to supporting
documentation, an audit trail and an effective decision-making
process which illustrates that they have secured the best value and
quality available for each service. This goes to the heart of PCT
accountability as a public body and is applicable to all of its
commissioning activities.
PCT boards are expected to be able to publicly account for any
expenditure related to both contracts and the selection of a
preferred provider through a procurement process where appropriate,
in terms of the services commissioned and the quality provided at
any stage of that process.
In order to be successful in achieving effective commissioning,
PCTs will need to develop a clear and transparent commissioning
process; an auditable rationale for all decision making; a
needs-driven approach and a proportionate response to the size and
seriousness of any problems which may be envisaged or encountered
for every tender process undertaken.
There are significant benefits for PCTs who achieve the steps
suggested above, for example, in terms of achieving much needed
efficiencies, but also working towards the elimination of risk in
terms of challenges to procurement processes (which in themselves
incur unnecessary costs).
Commissioner and Provider engagement – section 75
re-invented
The guidance recognises that contract management is most
effective when both contracting parties are engaged in the process
of monitoring the quality of the services being provided, and play
an equal and active role in initiating processes to improve the
service or rectify any shortcomings where applicable. However, it
is of note that the Audit Commission has highlighted the importance
of a robust legal agreement and an overarching governance structure
to manage the services procured and/or delivered under the
partnership.
Service reviews will be key to achieving effective contract
management. Both commissioners and providers will need to work in
partnership on an ongoing basis to identify concerns regarding the
performance of services; any required service improvements and the
identification of any opportunities to improve services for
patients and utilise existing resources more effectively.
Joint ventures and other partnership models
The need to consider where joint ventures and other partnership
models might be appropriate has already been recognised in relation
to NHS Continuing Healthcare and the management of long term
conditions.
These alternative service models allow providers to combine
their respective talents and offer services which are more
productive and of a higher quality. The guidance endorses this
approach making clear that PCTs will be expected to both encourage
and facilitate partnership working as part of their commissioning
activities.
PCTs may achieve this through a variety of methods including
inviting joint bids; tailoring their service specifications and
tender evaluation criteria; creating innovative funding and risk
sharing mechanisms and the specification of process which encourage
shared use of facilities and/or resources.
Joint commissioning and cooperation between primary,
secondary and social care services
NHS bodies are already under a statutory duty to cooperate with
each other but the guidance seeks to expand this obligation to all
primary, secondary and social care services. This is in line with
the government’s Total Place initiative which seeks to encourage
collaboration and the pooling of resources between organisations.
It is envisaged that this will ultimately provide access to
knowledge and infrastructure at both regional and national levels
in order to deliver better, more cost effective outcomes for
patients.
Invoking effective joint commissioning and cooperation with
other organisations will require PCTs to actively identify
opportunities where:
- These arrangements are achievable
- They will improve skills and knowledge sharing
- Enhance support for local commissioners and providers
- Make services more accountable and responsive to local
needs
Conclusion
The overarching aim of this guidance is to bring clarity to the
role of PCTs when procuring services, which will guarantee the
delivery of high quality, effective care for all, whilst
achieving efficiencies and appropriate use of existing
resources.
The responsibility is clear: PCTs are expected to ensure that
their activities comply with this guidance and these aims, and the
process suggested within the guidance, inform their decisions going
forward. PCTs will therefore need to review their existing service
arrangements as well as any intended or proposed actions
immediately.
Our experienced team would be happy to assist with any queries
or issues that may arise as part of the review process. If you
would like to discuss any aspect of this update, or any related
issues further, please do not hesitate to contact us.
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The content of this update is provided for the purposes of general
interest and information. It contains only brief summaries of
aspects of the subject matter and does not provide comprehensive
statements of the law. It does not constitute legal advice and does
not provide a substitute for it.