Formerly Director of an acute trust Ben was CEO of Nene CCG for 8 yrs. He is a founding director of Ockham Healthcare and programme director of the Practical Steps development programme


The end of the road for commissioning?

For years outcomes based commissioning has been lauded as the solution to the seemingly intractable problems surrounding commissioning. However recent events suggest that it is in fact a house built on sand, and call into question the role of commissioners in the post, five-year-forward-view, NHS.


The failure of the largest NHS contract ever awarded, a £800M outcomes-based contract to provide older people’s and adult community services in Cambridge and Peterborough, was announced recently after those involved decided it was not ‘financially sustainable’.

This comes pretty close on the heels of Circle being awarded a £120M ‘whole population’ MSK contract to provide musculoskeletal (MSK) services in Bedfordshire, the first of its kind in the country. Following the award Bedford Hospital refused to sign a contract to become a sub-contractor to Circle, and declared doubts about the continuation of their own trauma service as a result.

In Oxfordshire bold plans to introduce outcomes based contracts for older people’s services and maternity services were derailed following significant opposition from the acute trust and the mental health trust before they had even got off the ground.

So what is outcomes based commissioning and why is it not working? The NHS Confederation describes it as ‘a way of paying for health and care services based on rewarding the outcomes that are important to the people using them’. The commissioner (the CCG) determines the outcomes that it requires and leaves it to the providers to work together to deliver these outcomes within the funding available. The idea is that the commissioner does not specify the level of activity that is required or how the providers should deliver the outcomes, and if the providers can innovate sufficiently and deliver the outcomes for less money then they can ‘keep the change’. In this way the providers are incentivised (in theory) to shift resources to prevention, to (cheaper) community services and to co-ordinating care across settings.

Outcomes based commissioning has been heralded for some time as a way that the NHS could deliver ‘better for less’. But there is no fairy dust. Savings have to come from somewhere, and they primarily come from the acute trust. Oxford University Hospital saw this coming and their pre-emptive strike prevented the contract happening. It has taken approximately three weeks from the arrival of the new management team at Cambridge University Hospitals, tasked with removing the hospital from special measures and tackling the reported losses of over £1m per week, to the decision to end the Cambridgeshire contract. Bedford Hospital did what they could to thwart the local MSK contract.

The evidence is growing that contracting, however it is packaged, will not create integration. Commissioners are never going to be able to ‘make’ providers integrate. Providers (and their regulators) have to choose this for themselves, because if they don’t they have sufficient power to ensure commissioner plans fail.

In the last year we have seen the rise of the Accountable Care Organisation (ACO), the centrepiece of the five year forward view. In these models providers are in charge. These integrated organisations directly receive a capitated budget. The same incentives as outcomes based commissioning are achieved, and providers are in control and are not working against the process. And intentionally or not, the existence of ACOs further erodes the ability of commissioners to drive local change, because with this option why would providers let commissioners decide their future?

The national messages have been of two methods of system change, either commissioner led through outcomes based commissioning and strong commissioning leadership, or through providers and ACOs. But the failure of the Cambridgeshire contract potentially signifies more than the end of a local commissioning initiative. It calls into question whether commissioner-led system change is actually a possibility in the current NHS system.

The NHS is quickly moving away from the purchaser provider split that was first established 25 years ago, and there will come a point where the commissioner role becomes so undermined that it is no longer tenable. We may have just reached it.


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