Commissioning and 'Darzi blight'
87. Weakness in PCTs' commissioning was cited
by witnesses as the cause of many perceived problems relating
to FT status, including FTs not investing their surpluses, FTs
not being able to innovate, and the lack of shift to primary care.
Bill Moyes was emphatic on this point:
I think the Committee has to recognise that foundation
trusts need their commissioners to be clear about what investment
they want to see made: investment in buildings, investment in
equipment, investing in some new staff to deliver new services.
As commissioning becomes a stronger function with a greater degree
of clarity about what they want to seeLord Darzi's report
obviously [gives] them a platform to do thatthen we will
see foundation trusts respond to that. My sense of foundation
trusts is that they are anxious to make investments; they recognise
the issue that you are putting to me and they are anxious to respond.
However, what they do not want to do is to make investments that
do not meet the needs of their commissioners.
88. Richard Gregory agreed:
At the moment our innovative capability and capacity
from where I sit is constrained by the quality of the contract
and by the quality of the dialogue between the commissioner and
89. Several of our witnesses described what has
been termed elsewhere as 'Darzi blight'organisations delaying
their forward planning and investment pending the publication
of the Darzi report, which was published on 30 June 2008:
My hope and my expectation is that when the operating
framework is published in the autumn, after Lord Darzi, we will
start to see in that a clearer description of what the Department
of Health is looking to commissioners to create and that will
flow into their own local commissioning plans.
I think we are now at the point in time after the
Darzi report and the discussions about how Foundation Trusts can
engage with their commissioners not simply in terms of negotiating
the traditional bones of the activity and payment structure, but
in actual fact trying to reshape services to improve them for
the benefit of the patients in the local community. Those challenges
that were laid out a few days ago will enable Foundation Trusts
and commissioners, hopefully, to engage in some innovation.
90. It appears that even now the final report
has been published uncertainty still persists:
At the moment we are still in this position where
we have a lack of clarity around how Darzi will actually play
out in the way that services are delivered in local areas and
it will be different in local areas.
91. While some degree of delay may be attributable
to 'Darzi blight', it seems that PCTs themselves must be held
responsible for not providing sufficient strategic planning. The
recent report on system reform by the Healthcare Commission and
Audit Commission is clear that "despite the intention to
move care out of hospitals and into a primary or community care
setting, limited progress appears to have been made." They
argue that the reason for this lies with commissioning organisations:
Commissioning and contracting skills are not yet
strong enough to drive this agenda, although some PCTs can point
to successes. PbR also needs further refinement to facilitate
care transfers more effectively.
Improving commissioning capacity and capability is
critical to the success of the reform programme. Given the 2006
reorganisation, PCTs need time to progress this agenda. More work
is needed to strengthen commissioning and without this, the reform
programme will not provide the necessary balance of power between
primary and secondary care.
92. Alan Maynard gave a stark description of
the scale of the challenge faced by PCTs in managing demand when
commissioning from FTs:
To stay in balance PCTs should introduce demand management
that diverts patients from hospitals in primary and community
care. Whilst the theory of this is intuitively attractive (e.g.
anticipatory care maintaining the chronically ill in their homes),
PCTs have had limited impact with such policies. This is unsurprising
as they have insufficient leverage to moderate hospital activity
and switch care into the community. Consequently they have great
pressure on their finances.
FTs have an incentive to attract patients as increased
activity creates increased income and their status requires payment
at tariff rates for work done. It has been alleged that hospitals
allow erosion of conversion criteria to increase patient flow
e.g. reducing treatment thresholds and converting more out-patients
into in-patients. The original rhetoric of "payment for services
delivered" has now been watered down by strong DH advice
that FTs and their PCTs should collaborate on agreeing volume
levels so as to cap by mutual agreement the open ended nature
of the PCT liability. DH rhetoric about "world class commissioning"
is supposed to assist this process but PCTs, generally with weak
management and poor use of comparative quantitative data, continue
to find difficult the tasks of capping hospital activity and switching
resources to a "primary care led" approach.
93. Professor Maynard suggested that one way
to encourage commissioners and providers to develop alternatives
to hospital care would be to adjust the two part tariff for emergency
94. Weakness in PCTs' commissioning
was cited by witnesses to this inquiry as the cause of many perceived
problems relating to FT status, including FTs not investing their
surpluses, FTs not being able to innovate, and the lack of shift
to primary care. We note that the Government is now developing
a specific support package to enable PCTs to become 'world class'
commissioning organisations; however in our view focusing on provider
side reforms, including payment by results and the introduction
of FTs, before PCTs were ready to meet the challenges set before
them was ill-judged.
95. As part of its 'World Class
Commissioning' initiative, we recommend that the Government sharpens
incentives for acute trusts to ensure they are fully engaged in
keeping people who could be treated in the community out of hospitals.
One option would be further adjustment of the two part tariff
for emergency care, thereby increasing incentives to commissioners
and providers to develop more rapidly alternatives to hospital