Providers need to get their act together while commissioners look the other way

Even before the Health and Social Care Bill has passed through parliament, the NHS is implementing radical changes to the organisation of commissioning. Primary care trusts (PCTs) have had to downsize and restructure while at the same time supporting the development of GP consortia.

This leaves little time for them to focus on commissioning services. GPs themselves, when they are not busy seeing patients, are focused on establishing consortia and drawing up new governance arrangements. So what should providers do while commissioners are busy looking the other way?

Providers have been under significant financial pressure in recent years; if they simply try to do more for the same, this will eventually have an adverse impact on quality. Our analysis of the productivity challenge suggests the real opportunities lie in shifting care between sectors and organisations, and in the clinical redesign of services. Some PCTs have tried to lead this process, convening clinicians to redesign care pathways and then using these new pathways as the basis for commissioning.

In the absence of any strategic leadership from commissioners, providers themselves will need to come together to agree a common approach to improving the value delivered by the system. In future, market management and the specification of services will be less influenced by local commissioners. GP consortia will not be in a position to specify services; first, they will not have the capacity to do so, and second the transaction costs in the system would simply be too high. Even if they try to do so, large providers receiving patients from many different GP consortia may offer a standard package and manage the risks and costs internally as many large providers in the United States do faced with multiple payers.

In future, although the NHS Commissioning Board will directly commission relatively few services, it will have a significant role in drawing up national service specifications – in line with NICE standards. The contracting model which allows 'any willing provider' suggests that as long as a provider (working alone or in partnership with other providers) is able to meet these standards they will be reimbursed at a fixed price. Although there has been discussion about the reintroduction of price competition, in fact the Bill allows Monitor to set a fixed or a maximum price.

It is clear that the tariff will be able to cover two or more services, opening up the possibility of creating payments for pathways of care and even risk-adjusted capitation payments for a 'year of care' for a diabetic, for example. If the Commissioning Board and Monitor are creative in how they manage this process, there is a real opportunity to stimulate innovation on the provider side and encourage integrated care. Lead providers could take financial responsibility and then, working with others through joint ventures and subcontracts, manage the care and financial risks across the pathway.

This will require NHS providers to enter into new types of risk-sharing contracts. Some academic health science centres are already developing plans to create broader partnerships that will evolve into integrated delivery systems. Commissioning needs to move away from commissioning institutions to commissioning services and care, specifying the outcomes to be achieved not how the service should be provided.

There is a danger that providers misunderstand the implications of competition law for the NHS and therefore resist the idea of forming partnerships or integrating services. In the private sector, providers have long-term relationships with suppliers, enter into joint ventures and form consortia to bid for contracts. NHS providers may need to break up their current configuration of services – for example, creating franchises of specialist services in local hospitals which are owned and run by other trusts.

The coalition government's reforms have implications for providers, but the most immediate disruption will be felt by commissioners. Providers must not wait around until the commissioning intentions of GP consortia are clear. They need to be proactive, working with others in the voluntary and private sectors to design high-value services which no commissioner could refuse to buy.