Commissioning

Since the internal market was introduced into the NHS in 1991, the terms ‘contracting’, ‘purchasing’ and ‘commissioning’ have been variously used to describe the process whereby funders allocate resources to health care providers and specify the levels of activity and quality they expect in return for this investment.

Contracting refers to the narrow process of negotiating, writing and monitoring contracts with providers, while purchasing might be described as buying the best value-for-money services to achieve maximum health gain for those most in need. Commissioning, however, is a more far-reaching process designed to maximise the health of a population and minimse illness, by purchasing health services and by influencing other organisations to create conditions which enhance people’s health.’ (Övretveit J – 1995)

Commissioning seeks to move away from directly contracting for services from institutions such as NHS trusts (although this remains a key part of the role) towards an approach that commissions for the delivery of ‘care packages’ or across ‘care pathways’ for defined client groups. Commissioners are often therefore redesigning of the delivery of care in a way that better meets the needs and expectations of patients.

Commissioning is the primary function of primary care trusts (PCTs) in England. PCTs commission services from a range of NHS, private and voluntary sector providers, including primary and community health services, secondary and specialist tertiary care. The process of commissioning is often seen as a cycle of activity that incorporates:

• needs assessment
• reviews of services provided
• priority setting and planning
• contracting
• service development
• performance management.

PCTs are currently responsible for just over 80 per cent of the total NHS budget – approximately £85 billion. The amount allocated to each PCT varies according to a complex ‘weighted capitation’ formula designed to link budgets to local needs (for example, Manchester gets more than twice as much per head of population than Oxford).

Internal market

The 1989 White Paper Working for Patients (Department of Health –1989) set out the building blocks for the ‘internal market’ and separated the purchasing function from the provider. The logic was that if purchasers’ money did not automatically go to a single provider, providers would have to compete for business, encouraging them to be more efficient and responsive and to offer better quality of care.

The reforms contained two purchasing models: first, purchasing by health authorities that centred on the health needs of the population; and second, GP fundholding where GPs in individual practices or consortia could directly purchase elective care for their patients. Commissioning models evolved rapidly and by the end of the Conservative government’s term in 1997 there were more than 20 separate models of commissioning in health care.  (Smith J, Goodwin N – 2006)

Primary care groups and trusts

In 1997, the new Labour government abolished GP fundholding and its variants in favour of primary care groups and trusts (PCGs and PCTs). The approach retained the purchaser–provider split but embedded within it the principles of population-based purchasing and collaboration. Since 1997, commissioning in the NHS in England has been subject to extensive change of both policy and organisation. By April 2002 health authorities had been abolished, and 303 PCTs created as the key statutory agencies responsible for commissioning services. A series of further reforms, most notably in 2006, has reduced the number of PCTs in England to 152.

Partly as a consequence of this continual restructuring in the NHS, commissioning by PCTs remains weak. A common view, in both research and policy circles, is that commissioners have yet to ‘deliver the goods’ for the NHS. For example, an evaluation of their ‘fitness for purpose’ by the Department of Health in 2006 found that PCTs were not strong and had not developed the managerial capacity to challenge the powerful hospital sector.

Practice-based commissioning

In 2005, a policy of practice-based commissioning (PBC) was introduced, encouraging ‘virtual’ budgets to be placed in the hands of GP practices, allowing them to make commissioning decisions in partnership with PCTs to the benefit of local patients. However, as a 2008 report by The King’s Fund showed, only very modest progress had been achieved.

World class commissioning

In 2007, world class commissioning (WCC) was introduced as a way of bringing a ‘step change’ in the commissioning capacity and capability of PCTs and practice-based commissioners. The WCC programme set out a range of core competencies that PCTs need to achieve, alongside an assurance framework that measures, supports and holds PCTs to account for achieving them. In 2009, the first results of the assurance process showed that PCTs have some way to go before achieving ‘world class’ status. Research by The King’s Fund shows that the use of the private sector to help support the development of the commissioning function is growing.

Future policy: Clinical commissioning

In 2010, the coalition government set out a three year reform programme of commissioning to replace PCTs with a network of clinical commissioning groups (ccgs). These ccgs will be clinically-led statutory organisations tasked with managing NHS resources and commissioning care on behalf of their patients.

The ‘listening exercise’ enacted by the Department of Health in April 2011, in response to public and professional concerns with elements of the Health and Social Care Bill, and taking on board comments from the group of professionals who formed the NHS Future Forum, has bought about a number of significant policy changes for commissioning. These include:

• Clinical commissioning groups (previously GP consortia) will now be required to obtain a wide range of clinical advice and consult a number of bodies in developing their commissioning plans.
• Existing clinical networks (groups of experts working in specialist areas such as cancer) will be strengthened and new clinical senates established to bring together a wide range of health and social care professionals, although little detail has been published about their role
• Clinical commissioning groups will also be required to include a nurse and a hospital specialist on their governing body. The Bill now makes it clear that they will be responsible for commissioning services for unregistered people in their area, not just for registered patients, although there is no duty to promote population-wide health
• Clinical commissioning groups will now be required to have governing bodies, which must include two lay members (one to champion patient and public involvement and one to lead on governance)
• Governing bodies must adhere to Nolan principles, meet in public and publish the minutes of meetings
• The April 2013 deadline for establishing GP consortia has been relaxed – clinical commissioning groups will be established either in full or in shadow form by this date, but take on their new responsibilities only when they are ready and willing to do so
• The government’s response to the Future Forum made clear that their boundaries must not now cross those of local authorities unless this can be justified in terms of benefits to patients and integration of health and social care services
• The quality premium paid to high-performing clinical commissioning groups will now focus on quality and outcomes, rather than financial performance, and may take account of progress in reducing health inequalities.