Commissioning - Health Committee Contents


Memorandum by MEND (COM 120)

COMMISSIONING

EXECUTIVE SUMMARY

  MEND has provided evidence based primarily on our direct experience of child weight management commissioning by PCTs and DH. We believe that these observations have resonance in other areas. We would also like to emphasise that this evidence is not intended to be an exercise in blame. PCT management and staff have had much organisational, cultural and process change foisted upon them in an uncoordinated, inconsistent and unclear manner. They have received insufficient instruction, guidance, training and support in many fundamental areas. The consequences of implementing several changes of such significance across the complex PCT landscape have not been well thought through. Thus there are questions over both the desirability of several recent changes and how to remedy their poor implementation. This evidence is submitted in the hope that it can shed some light on areas that currently face challenges—as well as identify some potential recommendations for improvement.

  Current commissioning arrangements in the field of child weight management are inefficient, ineffective and characterised by limited accountability. The result is that theoretically allocated public expenditure is having limited impact against intended targets. In 2008-09 the unringfenced Healthy Weight, Healthy Lives budget for PCTs was £65.9 million, with a stated policy focus on child weight management. However, we estimate that only a maximum of £6-10 million worth of child weight management services were commissioned in that period, clearly illustrating a failure of commissioning and offering lessons for improvement.

  Some relatively simple steps can begin to address some of the issues and make some rapid improvements in commissioning. Reversing some of the structural changes should be considered—balancing this against the capacity and morale for yet another organisational change. Finally, we believe that there is the opportunity to trial new light-touch methods of commissioning at low risk in the field of child weight management—with significant implications across many areas of chronic disease management if successful. It appears possible to cut the Gordian knot of PCT commissioning whilst improving value for money and service provision and avoiding yet another fundamental restructuring.

INTRODUCTION

  Evidence is submitted to inform the Committee's Inquiry on the following points:

    1. World Class Commissioning—what does this initiative tell us about how effective commissioning by PCTs is?

    2. Has the purchaser/provider spilt been a success and is it needed?

    3. Commissioning for the quality and safety of services.

  No comment is made on commissioning; commissioning and "system reform", or specialist commissioning.

CONTEXT

  MEND is a social enterprise which grew from research at the Institute of Child Health, University College London and Great Ormond Street Hospital NHS Trust to provide clinically-effective, scalable, responses to childhood obesity.

  MEND's family-based behaviour-change programmes are delivered from leisure centres, schools, football clubs and other community venues. Services are delivered in partnership with local organisations from over 300 locations across the UK as well as in the United States of America, Australia, New Zealand and Denmark. Currently, MEND is the world's largest provider of community-based child weight management services.

  The public health services provided by MEND are commissioned by Primary Care Trusts and Local Authorities. They are also sponsored by charitable and corporate donors.

  The following evidence is informed by our experience of providing child weight management services since 2004. If required, specific examples can be provided to substantiate all the following evidence.

EVIDENCE

1.  World Class Commissioning—what does this initiative tell us about how effective commissioning by PCTs is?

  1.1  In our experience within the child weight management commissioning field, World Class Commissioning offers very little to demonstrate the effectiveness of PCT commissioning. Elements of the World Class Commissioning competencies are frequently cited in conversation and service specifications. However, our impression is that they are used as buzzwords rather than being a means of driving improvements in commissioning and service provision.

  1.2  Some of the 11 World Class Commissioning competencies are encouraging ineffective and inefficient commissioning practices. Consequently, performing well against the competencies does not necessarily provide an indication of efficient commissioning. For example:

    1.2.1 Competency 6—"prioritise investment of all spend": in its current form, this competency does not sufficiently hold PCTs to account for the timing or quality of their prioritisation. In the last year there have been several examples of PCTs running full and costly tendering processes which have then been annulled (at various stages but often at the end of the process) due to financial constraints or reprioritisation. Whilst prioritisation is occurring, its timing is sometimes detrimental to commissioning effectiveness and is costing the PCTs and providers excessive amounts of time, money and goodwill. This is particularly problematic for small and medium sized providers who have a valuable role to play in providing services to the NHS.

    1.2.2 Competency 7—"stimulate the market": formal tendering is commonly used as a response to this competency even when the value/scale of the service does not warrant this approach. This means that some PCTs (and any bidders) spend disproportionate amounts of staff time and other costs on tendering for services that could have been (and used to be) commissioned more efficiently through other means. Full tender processes over several months have been followed for contracts worth less than £50,000. This competency is also intended to encourage dialogue and engagement with providers yet it is still common for PCTs to launch formal tender processes without offering any opportunity for discussion that could aid development of the service specification. In the child weight management field this is exacerbated by a DH Framework Contract that does not allow for any provider dialogue during the tender process. Since the advent of World Class Commissioning and the DH Framework Contract we believe that the market for child weight management services has shrunk. This is a complex issue. If the process is too complex or burdensome then busy commissioners without appropriate resources, support or training will not prioritise the area.

    1.2.3 Competency 9—"secure procurement skills": as procurement resource remains in short supply, some PCTs are sourcing this support from staff working in other NHS or public sector organisations (eg acute Trust, local council). Whilst this approach may satisfy some of the competency requirements, it does not necessarily improve commissioning efficiency or performance. In many cases, these procurement staff do not understand PCT commissioning requirements and do not have the right knowledge to properly advise their PCT clients. Examples include the provision of bidder response templates that do not allow like for like comparison of bidders, service specifications that illustrate a lack of understanding of appropriate solutions and the withholding of the likely budget range for a new service. The lack of budgetary information is one reason why tender processes are annulled following bid submission. PCTs have been unrealistic about the cost of meeting their service specifications and provider offers are above their budget so they abandon the whole process. This puts the quality of services at risk and increases both the costs of commissioning and the risk of annulling the process. This is despite the costs of such services being in the public domain through the Cross Government Obesity Unit ("CGOU") Framework Contract. A minority of PCTs disclose their budget and this impacts positively on the duration of the tender process and the likelihood of a contract award.

  1.3  Recommendations:

    1.3.1 Provide guidance to PCTs on minimum contract size/value required for the tendering route to be viable and cost-effective.

    1.3.2 Provide guidance to PCTs and/or mandate increased joint commissioning between PCTs to ensure that tenders are of sufficient size to be viable for both PCTs and providers.

    1.3.3 Issue further guidance on disclosing the budget that a PCT has available for a particular service in a formal tender situation in order to minimise the risk that PCTs receive offers that are completely unaffordable and beyond the scope for negotiation.

    1.3.4 Provide guidance on the benefits of and how to engage effectively with providers prior to and during a tender process (for example, through greater use of the "Invitation to Participate in Dialogue" phase).

    1.3.5 If deemed necessary as a stop-gap identify ways that PCTs can commission such services without resorting to the full tender process.

2.  Has the purchaser/provider spilt been a success and is it needed?

  2.1  In our view the purchaser/provider split has not been a success, particularly at smaller PCTs. We believe that not only is it not required but in many cases the split is detrimental to value for money, efficient procurement and rapid implementation. In our area of expertise the split is rarely needed. If the split is to become efficient a significant organisational change and training programme is required at PCT level—nationally.

  2.2    The provider/purchaser split appears to be both theoretically flawed and poorly executed:

    2.2.1 Theoretical flaws: The primary rationale appears to be based on the principle of "creating a market" and competition with all the supposed benefits that follow from such constructs eg transparency of information, efficient commissioning, competition, reduced prices and product/service innovation. The secondary justification was the observation that some PCTs were abusing their combined role to either exclude third party providers or to provide a poor level of service at an above market cost. The first is a theoretical construct that has been shown to be invalid (to a disastrous degree) even in financial markets. It is also optimistic at best to assume that a structural change, with little associated cultural change or training programme, personnel change or central support will facilitate a market and competition. In fact, when replicated in principle (but with different forms) 150 times around the country with no such clear guidance and control the result is an expensive mess with no standardisation and very low levels of transparency of information. The most widespread training seems to have been around the principles and process of World Class Commissioning, resulting in an at-best translucent market with imperfect information flows further constrained by cumbersome bureaucratic processes for even small contracts. We believe that despite the provision of significantly more funds the value of commissioned child weight management services has shrunk since 2007-08. Finally, a whole new management and overhead structure is required to lead and support new provider organisations. We do not dispute the second observation—namely that some PCTs may have abused their combined position,—but neither do we agree that the chosen solution is either justified or optimal.

    2.2.2 Poor execution: Whatever the conclusion about the theoretical need for such a split it has clearly been poorly managed and supported. PCT procurement has long had a poor reputation. To take the competence which is largely held in low regard internally and externally and make a fundamental structural adjustment to ensure that it is THE key function of PCTs going forward is a strange management decision. Hard pressed PCT staff have not been given appropriate central guidance or training with the result that there are a large number of different models with varying levels of competence across functions.

  2.3  The split has not been implemented consistently—geographically or by function.

  2.4  Smaller PCTs in particular have struggled to manage the split effectively due to small numbers of staff in relevant teams. Consequences include poor commissioning practices, significant delays due to double commissioning (in the case of child weight management services this means first buying the training and programme resources and then separately buying a delivery team), increased costs (as the process is more bureaucratic so informal networks cannot be leveraged as effectively as previously) and poor value for money (VFM).

  2.5  To ensure the continued existence of the provider arm—or parts that are spun off—the commissioning body will often have to pay more for service delivery—especially in the early stages. As a result VFM is impacted.

  2.6  PCT commissioners have passed commercially sensitive information from potential suppliers to PCT provider arms.

  2.7  As PCT provider arms often inform the design of service specification for tenders, they have an unfair advantage over non-PCT providers. Service specifications are sometimes designed so that they can only be implemented by local providers.

  2.8  If all PCTs were to commission child weight management services on average once every two years and current commissioning practices continue we estimate that the commissioning costs ALONE would amount to £2-6 million per annum.

  2.9  Recommendations:

    2.9.1 Training: There is an urgent need for training in the basics, such as how to commission a service not a product, how to assess value for money, basic MS Excel skills.

    2.9.2 Consider the establishment of central procurement hubs/centres of excellence which focus on specific conditions/service areas, such as child weight management, and so can understand the complexities of services, the need for localisation and also optimise value for money through bulk procurement. This mitigates the need for replicating the same capabilities, with very variable abilities, 150+ times at each PCT. Commissioning should improve, localisation should improve and costs should reduce.

    2.9.3 Strongly consider reversing the provider/purchaser split, with the associated disruption this would cause, and provide clear guidelines, training and central support for commissioning and a rigorous and transparent audit/complaint handling "watchdog" with sufficient powers to make changes and reverse poor decisions.

    2.9.4 Provide clear (binding?) guidance for newly formed PCT provider arms—for example to prevent them developing new interventions if it would be more cost and clinically effective to train their staff in the delivery of a proven programme

3.  Commissioning for the quality and safety of services

  3.1  Guidance for commissioners produced by the CGOU and the National Obesity Observatory ("NOO") that should support quality and safety standards has often not informed service procurement. Primary outcomes of tenders, and even the basis of payment on results, have included those that are contra-indicated by NOO, NICE and experts in the field—and are actually potentially harmful eg weight loss for children

  3.2  The pressure on PCT provider arms to become self-sufficient as legal entities encourages unnecessary in-house service development (precisely the poor VFM behaviour that justified the spilt) which does not necessarily take account quality and safety and published standards such as the National Obesity Observatory Standard Evaluation Framework for Weight Management Interventions.

  3.3  At considerable expense, the CGOU established a Framework Contract and associated Panel of Approved Suppliers so that PCTs could commission child weight management services efficiently at scale without the need to conduct a full OJEU process on each occasion. Although a good concept, execution of this Framework even at DH level with all associated experience and resources was fundamentally flawed:

    3.3.1 "Value for money" was the first stated objective. However, the health outcomes of each provider's service offerings were only requested after an in-principle decision on the panel had been made. At no point was financial information collected in a comparable format. Thus we do not believe it was possible to assess value for money.

    3.3.2 Another stated intent was to accelerate the PCT commissioning process, ideally allowing a call-off contract with local variations to be agreed within 4-6 weeks. A combination of the poor quality of the Framework, poor local understanding of the documents and process and the purchaser/provider split has led to an elapsed period at least 6 months from start of tender process to contract signature.

    3.3.3 Commercial Department representatives on the CGOU assessment panel showed a poor understanding of both the subject and how to commission a service—as opposed to a product.

    3.3.4 CGOU's legal counsel had a poor grasp of requirements, resulting in an inappropriate and inflexible contract causing suppliers aggravation and reflecting neither the stated needs of PCT commissioners, NOO guidance nor academic evidence.

    3.3.5 Since the Framework's inception in April 2009, uptake has been low (six PCTs, one of which annulled the tender process after appointing a preferred bidder due to financial constraints). Some PCTs chose to procure services outside this Framework.

  3.4  Services which are not clinically validated and which offer neither proven health outcomes nor value for money, are still being procured by PCTs in favour of alternatives which are evidence-based. This is partly due to the purchaser/provider split which puts pressure on the newly formed provider arms to become self-sustaining enterprises. In the child weight management field, many Providers are launching pilot programmes (which can run for an indefinite period) which receive very little scrutiny on safety and quality and do not comply with published standards.

  3.5  Despite clear evidence that poorly designed child weight management services can cause children and young people to develop eating disorders and other psycho-social problems, this has received limited, if any, attention within the commissioning process. This relates to the need for ongoing monitoring and evaluation or to any evidence that particular services have demonstrated a good safety record. Such negative consequences not only impact on service users but also the value for money of the proposed service since additional treatment costs are incurred in a percentage of cases but not costed into the tender.

  3.8  Recommendations:

    3.8.1 In response MEND and partners have developed an alternative model to procure child weight management services. This approach supports improved quality and safety standards as it encourages efficient commissioning, value for money, accountability and payment by results, as well as delivering measured health outcomes in line with NICE and NOO recommendations. It also allows for commissioning on an "industrial scale" as recommended by Lord Darzi. We would be happy to discuss this in more detail if this is of interest to the Committee. We believe that this approach has widespread application outside of child weight management.

  MEND thanks the Committee for the opportunity to respond to the Inquiry and would be happy to contribute further detail if required.

February 2010








 
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