Further questions for the Department of
Health
PAYMENT BY
RESULTS
1. During the evidence session on 10 November,
Mr Bacon suggested that Payment by Results was being implemented
in different ways for different services. Could you please supply
some more detailed information on how implementation will differ
by service type?
At this stage, the Department of Health has
no firm proposals as to how Payment by Results will operate outside
of acute hospital services. The possibility therefore remains
open that Payment by Results may be implemented in different ways
for different services.
Starting with Mental Health services, the Health
and Social Care Information Centre ("The Information Centre")
is leading development of new casemix classification tools (ie
"currencies") that, in time, could underpin an extension
of Payment by Results in to "out of hospital" care.
Further information on the casemix classification programme is
available on the Information Centre's website (www.ic.nhs.uk).
At this stage, 14 Mental Health Trusts are participating
in the work by providing data based on local activity definitions.
The Information Centre will then analyse this data for its suitability
to form a contracting currency that could underpin a National
Tariff. Any firm proposals will be tested further across the NHS
during 2006-07.
As we are testing more than one approach, we are
very open-minded about the outcome, and with close NHS engagement
and ownership throughout the whole project, any proposals will
fit their needs as well as the Department's.
If the testing proves successful, our aspiration
is to have some elements of mental health included within the
scope of Payment by Results by April 2008.
In the longer term, the Department would be keen
to explore how clinically appropriate, standard currencies could
be developed for other services in order to facilitate further
extension of Payment by Results into "out of hospital"
care.
PRACTICE-BASED
COMMISSIONING
2. Could you please supply the Committee with
an estimate of the current total number and proportion of GP practices
which are currently involved in Practice-based Commissioning?
Could you please specify the level of involvement—eg how
many are currently fully controlling their own indicative budgets,
and how many are at an earlier stage in the process
The Department does not currently collect data
on take-up of practice based commissioning. A survey conducted
in 30 PCTs in June 2005 indicated that at the time 85% of practices
felt engaged in practice based commissioning, with around 20%
participating. The same survey estimated that in June 2006, over
95% of practices expected to be engaged in practice based commissioning,
with around 70% participating. The level of involvement was not
explored further that this.
In view of the accelerated timescale for delivering
universal coverage of practice based commissioning—by December
2006—we are considering whether a central data collection
is required.
3. Could you confirm that practice based commissioning
is a voluntary initiative for general practitioners? If this is
the case, how can you ensure that all practices will take part?
Practice based commissioning remains voluntary
for Practices. However, PCTs should be providing the same level
of management information to non-participating practices. This
would include making practices aware of their indicative budget
and providing regular updates on referral rates, spend against
budget, etc.
Commissioning a Patient-led NHS requires all primary
care trusts to have arrangements in place by December 2006 for
universal coverage of practice based commissioning. PCTs will
therefore be keen to encourage their Practices to participate.
Furthermore, we are currently considering other incentives to
encourage participation from Practices.
4. Are you considering offering additional
financial incentives to general practitioners to take part in
this initiative? If so, could you please give us details
Yes, however, these form part of current GMS
Contract negotiations. To reveal details at this point may jeopardise
the success of these negotiations.
5. Could you give some detail about the level
of management costs will practices be able to claim?
The Department has so far not been prescriptive
about the amount of management allowance that PCTs should pay
Practices to support PBC. However, the management allowance should
cover the costs of clinical time needed to review management information
and consider service and care pathway redesign. We are aware of
a range of payments by PCTs from 50p-£2 for each patient
on their list.
Practice based commissioning is not intended to introduce
a new level of bureaucracy at practice level. We therefore expect
PCTs to review their commissioning teams to consider how best
to support Practices and minimise the administrative burden of
the scheme.
6. To what uses will practices be able to
put any "savings"?
Resources freed up from effective commissioning
may only be used for patient services (with the exception of covering
management allowance). This does not preclude the use of resources
for developments where such a development would enable a wider
range of services to be provided than is currently the case, and
to a wider than practice population.
The proposed use of savings will be agreed with the
Professional Executive Committee at the start of each financial
period and this is ratified by the PCT Board.
7. How much will practice based commissioning
cost to implement (including management costs, PCT monitoring
and any financial incentives for GPs) and can you estimate the
expected efficiency savings that you expect to reap?
Any implementation costs of practice based commissioning
should be covered through savings made through more effective
commissioning. However, the Department expects that the payment
of a management allowance through an incentive scheme would require
some investment upfront.
PCT support and monitoring will be cost neutral as
we expect PCTs to reorganise existing commissioning resources
to support the implementation of practice based commissioning.
8. How will PCTs deal with practices that
fail to keep expenditure within their allocated budgets?
PCTs and practices will work together to ensure
that practices manage their expenditure responsibly. Where a practice
is deemed to be irresponsible whilst holding an indicative budget,
for example by allowing avoidable overspends to persist in-year,
the right to hold an indicative budget will be removed by the
PCT.
9. Could you confirm whether or not any provider
of primary medical services from the private sector would also
be able to take part in practice based commissioning? If so, would
it be acceptable for such commissioners to request a real, rather
than an indicative, budget if they were prepared to accept the
financial risks associated with any overspend?
Indicative budgets are currently available to
all providers of primary care services who have a patient list.
There is currently not the legal framework in place to allow primary
care providers to be responsible for "real" budgets.
10. It has been argued that there is a risk
that practice based commissioning will give rise to a multi-tiered
service, as some practices will be better than others at using
their limited commissioning resources and their patients will
experience a better service as a result. How will this risk be
managed? Will patients be able to choose to register with a better
practice? What will happen if there is effectively no choice of
GP practice in an area?
PCTs have an important role to play in ensuring
that all patients within their local population have equal access
to high quality primary care services. Where a practice or practices
in an area are working well as effective commissioners, we would
expect a PCT to ensure this good practice is spread to other practices
within the area. PCTs also have a role to performance manage poorly
performing practices.
We are already seeing practices working well together
as locality commissioning groups in a number of areas. This is
another development that will ensure a better, and more equitable,
service for patients.
Patients may choose to register with an alternative
Practice, but the aim of practice based commissioning to drive
up the quality of all locally commissioned services.
11. Has the Government considered the risk
that GPs who commission as well as provide services may have perverse
incentives that may encourage them not to offer a full range of
provider options to patients under the patient choice initiative?
How will this risk be managed by PCTs?
Making Practice Based Commissioning a Reality—Technical
Guidance (February 2005) stated if a practice is both a provider
and commissioner of services, it is very important that there
are no actual or perceived conflicts of interest. They should
involve patients and local communities in planning commissioning
and ensure that patients should be given a choice of other providers
and not feel pressured to choose the practice as provider.
PCTs retain overall accountability for commissioning
decisions taken within their area and need to ensure that patients
are receiving a high quality local services. Through holding the
responsibility for agreeing and managing contracts with providers,
PCTs should make clear that choice should be offered to patients
where appropriate.
12. Is it the Government's intention that
PCTs will set health improvement targets on the basis of a single
practice population? If so, how feasible will it be for practices
to meet such targets?
PCTs will remain accountable for the delivery
of local health targets. However, PCTs should expect practices
to deliver their share of any local health improvement target.
13. How do you intend to hold practice based
commissioners to account for their performance as commissioners
beyond looking at their expenditure against their budget allocation?
Could you give us some examples of the sort of performance indicators
with which you would measure whether performance is acceptable
or not?
"Commissioning" is a very broad term
covering a range of activities, from analysing the needs of patients
through to contracting for the provision of services. PCTs will
continue to be responsible for the commissioning framework for
responding to the needs of their local population. Part of this
will involve putting in place appropriate indicators of performance
to ensure that practices fulfil their role in the overall commissioning
framework.
14. Are you concerned that practice based
commissioners will seek to select healthier patients onto their
lists, a process known as "cream skimming"? If so, how
could this be prevented?
Under their primary care contracts, practices
are not allowed to refuse patients access to their lists on the
grounds of race, gender, social class, age, religion, sexual orientation,
appearance, disability or medical condition. We therefore do not
consider this to be an issue.
DIVESTMENT OF
PROVIDER SERVICES—QUESTIONS
15-18 ANSWERED TOGETHER
15. How likely do you think it is that a range
of alternative providers will enter the market place to provide
community services? Do you have any evidence to date that there
are many potential providers waiting in the wings?
16. Can you outline
what sort of organisations you would welcome into the market for
community services and what sort you would resist?
17. Do you think that it may be more difficult
to attract additional providers of community services in deprived
areas, just as it has proved more difficult to attract GPs?
18. How will you ensure
that professional training and development are not compromised
if PCT community services are delivered in future by a wider range
of providers?
We will address these issues in a White Paper
on improving community health and care services, which we will
publish around the turn of the year.
The public have told us through the Your Health,
Your Care, Your Say consultation that they are not concerned
who provides community health services—whether it's the
NHS, or the voluntary or independent sector. They want services
that work, delivered quickly and effectively, and in the right
place. We are considering all the responses to the consultation
and we will bring forward proposals that give strategic direction
for improving community health services, including the plurality
of providers, in the White Paper. The fundamental principle will
remains the same—community health care will continue to
be free at the point of use, no matter who provides that care.
RECONFIGURATION OF
PCTS
19. Could you provide us with an estimate
of projected redundancy costs arising from the reconfiguration
of PCTs?
An initial costing exercise has been undertaken.
There are a number of factors which could influence this estimate
and there is little influence over many of these factors, for
example the ultimate cost depends on which staff are made redundant
and their severance terms. We have therefore already instigated
a more detailed pilot financial modelling exercise with one SHA.
We will then ask each SHA to complete the same modelling. The
modelling will demonstrate the timescale within which the redundancy
payments can be recouped and the level of savings possible in
2007-08. We would be content to share this work once it is at
an appropriate stage.
20. Could you provide us with an estimate
of the costs of setting up local structures below PCT level to
ensure good clinical engagement?
Practice based commissioning will ensure good
clinical engagement at below-PCT level. Question 7 deals with
how much we expect practice based commissioning will cost to implement.
21. Could you point to the evidence that large
PCTs will be more successful at commissioning than the ones they
replace?
There have been a number of separate pieces
of research work undertaken on commissioning; these are as follows:
— McKinsey's—Best Practice
in Commissioning (this was commissioned by the NHSFT team).
— Norwich Union/NERA—Commissioning
in the NHS (this was NOT commissioned by DH).
— Matrix—Using Practice Based
Commissioning to implement new clinical pathways (again not commissioned
by DH).
— McKinsey—System Architecture
and Drivers for Quality (this was commissioned by DH).
— PA Consulting—Strategic Assessment
of NHS Contracting and Commissioning (done for DH).
— PA Consulting—International
Literature Review of Healthcare Commissioning/Contracting Models
(done for DH).
— PWC—preliminary thoughts on
commissioning (internal piece of work PWC shared with us).
— Health Foundation—A review
of the effectiveness of primary-care led commissioning and its
place in the NHS (NOT commissioned by DH).
Each touches (directly or indirectly) on population
sizes for commissioning organisations. While there are many common
themes within these reports about commissioning functions there
is no clear consensus about ideal population size.
In addition, the DH recently commissioned a study
(undertaken by PA Consulting) to look at optimum population size
of PCTs. Evidence from this work suggested that post-PBC, commissioning
can work effectively scaled to populations of at least one million
and possibly more. On balance the department concluded that whilst
the general theme of larger more strategic commissioning organisations
was sound, there was not a strong enough case for a single national
blueprint. Ultimately this should be a matter for local determination,
and be dependent upon the needs of the population and nature of
he commissioning organisation. The department has however been
clear that where SHAs propose fewer, larger PCTs, they demonstrate
how they will retain a locality presence, and where smaller PCTs
are proposed they demonstrate how the economies of scale and improvements
in commissioning services can be delivered.
14 December 2005
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