Is strategic commissioning the future for the NHS?

The current system of commissioning and providing health care in England is evolving in response to growing financial and operational pressures, and the new care models being implemented in the wake of the NHS five year forward view. Of particular importance is the requirement on NHS organisations to work together to develop sustainability and transformation plans (STPs) in the 44 areas of England designated for this purpose.

The work being done to develop STPs is a practical example of the interest now being shown in place-based systems of care. The Fund has argued that place-based systems offer promise by enabling commissioners and providers to collaborate in responding to the pressures they are faced with, and agreeing on how services should be transformed to better meet the changing needs of the population. We have also argued that within these systems commissioning should be seen primarily as a strategic function that brings together scarce expertise with much greater integration of commissioning, both within the NHS and between the NHS and local government.

Strategic commissioning will require thoughtful evolution towards a system in which the clinical expertise and knowledge of clinical commissioning groups (CCGs) are retained, and where NHS commissioning is based on footprints much bigger than those typically covered by CCGs today. This has been happening for some time in areas such as north-west London, Staffordshire and Greater Manchester, and is being extended to other areas as the STP process gathers momentum. In the Fund’s view, strategic commissioning encompasses the funding and planning of services in addition to holding providers to account for the delivery of agreed outcomes.

Strategic commissioning is quite different to how commissioning is currently understood and practised in the NHS. It will no longer entail detailed contract specification, negotiation and monitoring or the routine use of tendering. Instead, the focus will be on defining and measuring outcomes, putting in place capitated budgets with appropriate incentives for providers to deliver these outcomes, and using longer-term contracts extending over five to ten years. This will reduce transaction costs and free up resources to invest in improving health and care.

New care models being implemented in different parts of England are beginning to blur the distinction between commissioning and provision. More integrated models of care, such as primary and acute care systems and multi-specialty community providers, are taking on some commissioning functions, as when lead providers subcontract with other providers to deliver the requirements specified in their contracts with NHS and local government commissioners. This is simultaneously reducing and extending the role of CCGs as they delegate some of their functions and assume new ones in partnership with other CCGs, NHS England and local authorities.

This is one of the reasons why integrated commissioning between CCGs and local authorities through health and wellbeing boards and other means is likely to become more important in future. The shifting sands on which CCGs rest point to a future in which some forms of commissioning will remain local, others will become more strategic and yet others will migrate to emerging integrated care models.

Our forthcoming report, based on a four-year research project carried out with the Nuffield Trust, will set out in more detail how clinical commissioning has evolved up to now and what it will need to do to adapt and change in the future.