New approaches to the design and operation of NHS bodies following the five year forward view

Part 3: challenges in introducing a new system/population approach in the NHS

In the first and second articles in this series we noted that the NHS has and will continue to seek to reinvent itself through wider planning under STPs, developing new models of population based healthcare – redefining the roles of providers and commissioners within accountable care organisations/systems and new forms of collaboration such as alliances within the terms of the current legal framework.

Some of the practical and legal issues which this gives rise to have already been covered in the second article around how the governance system works and how the contractual collaboration can be effected. This article will now focus on the impact of narrowing the divide between providers and purchasers, funding models and how the new approach fits within the procurement and competition framework:

Managing closer working between providers and commissioners - what does the future hold for commissioners?

Commissioners and providers could sit together on an STP and work together on regional plans but the commissioners would still need to deliver their statutory role without the providers and you would not see a merger of the commissioner and provider organisations.

Some of the early plans for ACOs have suggested that (similar to the lead provider example above) there could be more of a CCG ‘light’ approach taken where the ACO takes on the management of elements of the system but is overseen by and contractually accountable to the CCG (which remains responsible for the delivery of its functions). This would be a lighter touch approach to commissioning where it oversees and contract manages the ACO which is owned/managed by the providers and would require a revised approach to contracting and finance.

Funding the changes for a new model of care

Many new care models are seeking to increase the proportion of care delivered in primary and community settings and to develop more preventative approaches. This should involve the movement of funding, assets and staff into the correct position across the system as well as new financial investment into primary, community and preventative care measures. Given that the system remains under intense financial pressures this shift will put pressure on organisations to find sources of additional funding to enable them to develop an appropriate system-wide infrastructure to deliver the new care model. It will also bring into sharp focus those organisations in the system which are at risk of destabilisation through the shift in investment from hospital to community.

Meeting competition and procurement requirements

In terms of procurement and competition, working to a system footprint will still require the award of service contracts (though this could be for a wider selection of care services and potentially for a longer term to a prime provider or collection of providers). This should then still be considered against the continuing obligations of each organisation under procurement and competition law.

The structure and approach to the new care model should be considered in terms of the potential enforcement of these rules (and their guidance – CCGs will be aware of the integrated support and assurance process), the process to be followed and the impact on support and timelines. There is also a risk of possible challenge from third parties (such as independent providers who may have been excluded from the new care model development).

Inherently there remains a difficult equation to solve in the position for commissioners and providers complying with procurement and competition legislation set against the greater drive towards cooperation and collaboration across regions. For example, the involvement of providers in specification design and/or in taking a commissioning or procurement decision is likely to raise a number of procurement and competition concerns, due to the inherent conflict of the interests of providers making decisions on their own position or even submission. It may also in such circumstances be hard to demonstrate that such a procurement decision will lead to improvement in the quality or efficiency of the service, that commissioners have acted transparently and fairly, achieved value for money, or that the decision making process has not undermined competition between providers.

Competition law concerns would remain in awarding an accountable care contract for a population to a single ‘prime’ provider or even a new entity, which then subcontracts services to other providers in the local health economy. If the effect is a merger of local clinical services, this may give rise to merger control considerations, depending on whether the merged services are competing. It is also possible that providers ‘merging’ into an accountable care structure could result in a ‘substantial lessening of competition’. This might be offset by any ‘relevant patient benefits’ which can be demonstrated by the parties but there remains a potential hurdle to be overcome.

Conclusion

To meet the challenges around limited financial resources against a growing population with increasing care needs, the FYFV called for better integration of primary care, community health, mental health and hospital services, as well as more joined up working with social care and public health. This represented a shift in approach and has redirected the NHS onto a fundamentally different path from that which was originally envisaged under the Health and Social Care Act.

The FYFV has precipitated the emergence of new system delivery models and contracting forms (such as multispecialty community providers (MCP), primary and acute care systems (PACS) and accountable care organisations (ACO)) to achieve the aims set out in the FYFV. Some of these models are starting to redefine the role of commissioning bodies and are effectively reshaping the approach to the commissioner/provider split outside of the legislative framework.

The emergence of the recently established sustainability and transformation partnerships (STPs) is further building upon the system wide approach and challenging multiple organisations to develop an effective governance infrastructure. This needs to accommodate the existing legislative framework but as set out above there are potential approaches to collaborate and develop different commercial and risk-based relationships.

The risks remain in the gap between policy and legislation and the threat of legal challenges/judicial review is increasingly present for healthcare bodies. The risk of successful challenge is likely to increase where collaborative arrangements are overly complex in their design. It is crucial to find a way bridge the legislative gap as simply (and lawfully) as possible to enable healthcare bodies to deliver the wider collaborative ask across commissioners and providers.