What is commissioning and how is it changing?

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Commissioning is the process by which health and care services are planned, purchased and monitored. Here we look at the commissioning process in more detail, the organisations involved and how it is changing.

What is commissioning?

Commissioning comprises a range of activities, including:

  • assessing needs
  • planning services
  • procuring services
  • monitoring quality. 

The process, which is repeated typically on an annual basis, is often shown as a cycle:

Diagram of NHS commissioning cycle
Image courtesy of NHS England

The concept of commissioning was introduced into the NHS in the early 1990s, when reforms separated the purchasing of services from their delivery, creating an ‘internal market’. It was argued that making providers compete for resources would encourage greater efficiency, responsiveness, and innovation.

Who is responsible for commissioning?

Clinical commissioning groups

Approximately two-thirds of the NHS commissioning budget (£73.6 billion in 2017/18) is allocated to local clinical commissioning groups (CCGs).  When they were first established in 2013, there were 211 CCGs, but over time the number has changed and is continuing to change, as described in the section on joint commissioning below.

CCGs have a statutory responsibility for commissioning most NHS services including urgent and emergency care, acute care, mental health and community services. Increasingly they are also involved in commissioning primary care and some specialised services.

CCGs are groups of local GP practices whose governing bodies include GPs, others clinicians such as nurses and secondary care consultants, patient representatives, general managers and – in some cases – practice managers and  local authority representatives. 

NHS England

As well as providing strategic oversight for the NHS, NHS England is responsible for directly commissioning some services. This includes specialised services, such as renal dialysis, neonatal services and treatments for rare cancers, and primary care, including GPs, pharmacists and dentists – although increasingly this responsibility is being shared with CCGs (see below). NHS England also commissions some public health services, such as immunisation and screening programmes, as well as health care for people in prisons and secure units and some services for the armed forces. NHS England’s total spending on direct commissioning in 2016/17 was £25.4 billion.

NHS England currently delivers its commissioning function through four regional teams, supported by ten local commissioning hubs. 

NHS England is also responsible for assuring the quality of CCGs through an annual assessment process.

Local authorities

Local authorities are responsible for commissioning publicly funded social care services. This includes services provided to people in their own homes as well as residential care services. In 2016/17, local authorities spent approximately £15 billion on adult social care.

Since 2013, local authorities have also been responsible for commissioning many public health services including sexual health services, health visitors, school nursing and addiction services (as mentioned above, some public health services are commissioned by NHS England). Since 2013 funding allocated to local authorities for public health services has been ring-fenced, and this is set to continue until 2019. In 2017/18, the public health grant to local authorities was £3.3 billion.

In addition, health and wellbeing boards, formal committees of local authorities that bring together local authority and NHS representatives, are responsible for carrying out a joint needs assessment  with CCGs and developing a joint health and wellbeing strategy for their local population. 

Commissioning support organisations

Support for commissioning activities is available to CCGs and NHS England through commissioning support units (CSUs) and from a range of private and voluntary sector organisations.

These organisations provide support with service redesign, helping commissioners to plan and manage change. They also offer transactional support, including procurement, information analysis, contract management and finance and payroll. 

Following a number of mergers, there are now six CSUs in England; they are currently governed by NHS England, but the intention is for them to become autonomous organisations. 

How is commissioning changing?

The current system is based on arrangements set out in the Health and Social Care Act 2012, which aimed to put GPs at the forefront of the commissioning process. Although the structures established by the Act have remained in place since it came into force in 2013, the way that commissioning is delivered in practice has evolved since then – and is continuing to do so.

Key changes include the delegation of some commissioning responsibilities from national to local organisations, greater joint working at a local level, and an increasingly population or ‘place-based’ approach to commissioning. All these changes are intended to support the development of more integrated systems of care, including between health and social care.

Some of the key changes that have taken place – and that are likely to characterise the development of commissioning over the next few years – are set out below. 

Co-commissioning in the NHS

Co-commissioning primary care

The NHS Five Year Forward View (2014) set out the government’s aim to give CCGs more influence over the NHS budget. This was intended to support the development of integrated services that were designed to meet the needs of the local population. In line with this, most CCGs now have a role in commissioning general practice (GP) services through a co-commissioning agreement with NHS England. 

The form of this arrangement varies depending on the level of responsibility transferred, but in most areas GP commissioning has been fully delegated to the CCG (this is NHS England’s preferred model).

Collaborative commissioning of specialised services 

Over time CCGs have also taken on a role in commissioning some specialised services. As with primary care commissioning, a range of models exist, but in some services, such as renal dialysis, commissioning responsibility has been fully devolved.

More recently, NHS England has set out plans to devolve commissioning responsibility and budgets in some areas direct to provider organisations for specialist mental health services, for example, some child and adolescent mental health services.

Joint or integrated commissioning at a local level

CCGs 

CCGs are increasingly working together to commission services across their local populations and deliver economies of scale. 

In many areas CCGs are sharing staff or have shared management structures; most now share chief officers.

Some CCGs have established new governance arrangements to support joint commissioning, such as joint committees or boards. These arrangements are often accompanied by the pooling of commissioning budgets. In a small number of places, two or more CCGs have merged formally or are planning to do so. 

CCGs and local authorities 

Many CCGs and local authorities are also working together to support more integrated health and social care. Arrangements vary, ranging from joint working to the establishment of new governance arrangements, including integrated commissioning boards. Some local authorities have transferred commissioning responsibilities to CCGs, and vice versa. 

The Better Care Fund, a national programme designed to support integrated care, also requires CCGs and local authorities to work together by pooling budgets. 

Sustainability and transformation partnerships

Sustainability and transformation partnerships (STPs) are responsible for implementing five-year plans for health and care services in 44 areas of the country. STPs bring together CCGs, local authorities, NHS England, and a range of providers and other organisations to take a place-based approach to planning services across a local area. Delivery of these plans may require different approaches to commissioning, such as the joint working described above. 

Although STPs are not statutory bodies, and accountability remains with the individual organisations, Next steps on the five year forward view (March 2017) encouraged areas to introduce more formal governance and implementation arrangements to support joint working.

New care models and accountable care systems

Since 2014, commissioners and providers have been working together to develop new care models including multi-specialty community providers (MCPs) and primary and acute care systems (PACS). These models bring together local NHS organisations to provide a range of services and deliver more integrated care for patients. 

Some areas are now developing accountable care systems (ACSs) and accountable care organisations (ACOs) which may involve providers and commissioners working together in a different way. These models are still being developed, but it’s likely that in most cases commissioners will contract with a single organisation or partnership of organisations to manage a single budget and deliver a range of services for the local population, focusing on the population’s health and wellbeing.

This may lead to commissioners taking a more strategic role in overseeing the local health system, focusing more on overall performance and less on individual services. Within these systems, providers may also take on some activities currently carried out by commissioners, such as sub-contracting for and monitoring the performance of individual services. 

Devolution

Devolution can also support a place-based approach to commissioning. 

In Greater Manchester, CCGs, local authorities and other local bodies have come together to take responsibility for the entire local health and care budget. These arrangements are supported by new governance structures including a Greater Manchester Health and Social Care Strategic Partnership Board and a joint commissioning board. In Cornwall, local organisations are taking forward the devolution deal agreed in 2015, covering a range of public services, although plans for health and social care are taking time to implement.

The Surrey Heartlands area has also agreed a devolution deal, due to be implemented early next year, which will be similar to that agreed for Greater Manchester.

Summary

Since the 2012 Act came into force, there have been a number of changes to the way that commissioning is delivered in practice.  There is a trend towards commissioning over larger areas, with local NHS organisations increasingly working together and many examples of CCGs and local authorities working closely to support the integration of services across health and social care.  

As part of this shift, and an increasingly place-based approach to commissioning, new models for commissioning and delivery of health care are emerging. Local areas are being encouraged to develop integrated arrangements that suit their local circumstances, rather than these being directed centrally. It is likely that as these models develop, more CCGs merge and the shift towards ACSs in particular gathers pace, the role of CCGs will continue to evolve. 

Comments

Michael byatt

Comment date
21 September 2017
Integrate accountability governance budget management
Board that overseas contracts and scrutiny of performance provision
It is not gps they are providers,not health scrutiny its toothless its not health wellbeing and defintely not public health
Current organisational structures dont work

Patricia Carey

Position
Registered Manager/Lead RN,
Organisation
Mrs.
Comment date
25 September 2017
The current organisational structure does not fully recognise any partnership working other than NHS bodies, health and wellbeing is a fey function of delivery of care,so not involving key partners such as charities is shortsighted.
There would be a great deal of benefit gained form working with those voluntary and registered charity organisations who work to support local communities and also deliver services to local communities.
None of the commissioning involves working collaboratively with these groups,apart form the occasional spot purchasing of services when the NHS finds itself is under pressure.
Some recognition by way of partnership working would go a long way to giving these organisations some recognition.
If they are good enough when the pressure is on, then surely they should be a preferred partner in the grand scheme of things

Guy Patterson

Position
Health & Social Care Coordinator,
Organisation
Dorset HealthCare
Comment date
25 September 2017
Completely agree with Patricia. Statutory organisations could and should do more to promote the work done by charities, given the crucial contribution they make. This would mean, i suspect, some sort of 'paradigm shift' in the way we perceive and attribute value to non-paid activity, particularly in crisis situations that reveal the paucity of statutory resources and the extraordinary resourcefulness of people when they must rely on themselves.

Biman Ghosh

Position
Retired Project Manager,
Organisation
None
Comment date
25 September 2017
I would have thought "Demand Analysis" should be done before designing of service delivery and procurement . However, I am yet to see any detailed analysis of patient demand except often it is reported that the demand has increased due to increase in elderly population increasing. While this may happen but not been ever produced in real data.

Benjamin Taylor

Position
Chief Executive, Public Service Transformation Academy,
Organisation
& Managing Partner, RedQuadrant
Comment date
27 September 2017
A very clear, lucid, and accurate account of the current structure of 'formal' commissioning within the NHS.
I think it is worth adding to this, though, that the thinking about commissioning that has developed through the Cabinet Office Commissioning Academy (http://commissioning.academy), now run through the Public Service Transformation Academy (www.publicservicetransformation.org) has developed in different ways to think about commissioning as an approach to real public service transformation. I appreciate that much commissioning with the NHS is still deeply constrained - for both good and bad reasons - but the 'commissioning cycle' which illustrates the start of this article is, to me, a useful staging point, but talks about managing (reducing) budget to meet (increasing) need through procuring services. Some commissioning practice, across sectors, now focuses far more on achieving (individual and group) outcomes by marshalling resources (conceived widely, including community, voluntarism, individual strengths and actions etc etc) to test and learn from interventions - an outcome not a service focus.
I would hate readers to think that the excellent definition in this article represents the full breadth of developments in commissioning.
Readers who are interested in more might like:
- my presentation: https://www.youtube.com/watch?v=8WymIJ84ISM&lc=z12rwntyhniay3l5v04ci5cq3tr5xdxjao00k&utm_content=bufferdaa06&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer
- and these articles: http://www.publicfinance.co.uk/opinion/2017/04/focus-outcomes-achieve-better-social-care-results-less-money and http://www.publicsectorexecutive.com/Public-sector-focus/commissioning-for-the-future
as tasters.

You can also see our events (mostly free) at http://publicservicetransformation.org/events/year.listevents/2017/09/27/-

Cheers
Benjamin

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