Innovative commissioning for integrated out-of-hospital care: emerging approaches

1. Innovative commissioning for integrated out-of-hospital care: emerging approaches Bob Ricketts Director of Commissioning Support Services Strategy Community Health Services Forum 20 February 2014

2. Innovative commissioning for integrated out-of-hospital care: emerging approaches Topics: • Context • Commissioning for better outcomes & value: - capitation-based - ‘accountable lead provider’ v. ‘alliance’ - value-based • Currencies & payment mechanisms • TCS contract expiry?

3. 1. Context: The NHS is facing unprecedented challenges to its sustainability – Call to Action: • Demographic pressures – an ageing population • Demand – incidence of LTCs (diabetes, dementia) • Rising expectations – patients, public, politicians • Quality – failures & gross variation • Outcomes – still often poor comparatively • Failure to deliver integrated care at-scale • Resource constraints - £30bn gap opening up • Outdated & over-stretched delivery systems – including primary care & ‘community services’ = clear ‘burning platform’ for transformation

4. 1. Policy context: The new commissioning architecture provides unprecedented opportunities for innovative commissioning & provision: • Clinically-led commissioning • Strengthened partnerships with local government • Renewed focus on integration (Better Care Fund = 3% of total health & social care £ plus wider pooled funds ) • Opportunity to re-design primary care • Growing support for ‘innovative commissioning & contracting’ – outcome-based contracts for populations, ‘lead provider’ models, risk-sharing, much longer contract durations to support investment & disinvestment to transform, review & alignment of incentives …

5. 1. Context: Community services key to a sustainable NHS: • Scale: 100m contacts pa; £9.7bn, 10.6% of NHS expenditure • Vehicle for at-scale service transformation & major shifts in care settings (if alternative services are available) • Offer wide range of opportunities for prevention, early intervention & co-production • Ability to engage patients, carers, communities & other agencies • Unmet potential – Transforming Community Services

6. 1. Context: Community Services: How they can transform care Nigel Edwards, King’s Fund, Feb. 2014 • Long-standing ambition to move care closer to home: - some reduction in hospital LoS, but much more to be done - patchy adoption of service models & limited progress to integration • Transforming Community Services (2008-), but “mostly concerned with structural change rather than how services could be changed. It is now time to correct this.”

7. 1. Context: Community Services: How they can transform care: • Develop a simple pattern of services based around primary care & natural geographies, offering 24/7 services as standard. MDTs need to work differently with specialist services, offering patients a more complete & integrated service. • New models should include both health (and mental health) & social care, managing the health & social care budgets for their patients • Services must be capable of very rapid response , to sustain independence & speed up discharges from hospital

8. 1. Context: Community Services: How they can transform care: • “New ways to contract & pay for these services are needed. This will also require changes in primary care & hospital contractual arrangements and in the infrastructure to support the model”: • “Eliminating obstacles in contractual and payment arrangements”: - block contracts - poor specifications - replicating historic commissioning patterns

9. 2. Commissioning for better outcomes & value: the case • Our ambition is to deliver great outcomes, and reduce inequalities. But the current shape of the health and care delivery system is not sustainable in the medium-term given the challenges if faces. • Service transformation at scale and pace will be essential to secure a successful, sustainable NHS. • We still have a big gap in delivering the best outcomes – internationally & within England • We need to support & develop the NHS commissioning sector to lead the transformation of services: • Transformation is a key leadershiprole for CCGs & direct commissioners • Outcome-based population commissioning is a key vehicle to drive transformation & secure better outcomes and value

10. 2. Commissioning for better outcomes & value: OBC & VBC • Outcome-based population commissioning: a key vehicle to drive transformation & secure better outcomes and value for specific populations or groups (e.g. frail older people with multiple, complex problems; EoLC), or re-balance incentives by paying for outcomes • Value-based commissioning: emerging approach from U.S. Potentially useful for: - assessing priorities - comparing disparate service offers - re-directing/re-focusing incentives to driving-up value within services commissioned on Tariff

11. 2. Commissioning for better outcomes & value: OBC Key components of fully-developed OBC: • Population-based (frail older people, multiple complex problems; EoLC) or major pathway(s)(MSK) • Outcome-focused capitation payment • ‘Lead provider’ • Provider co-ordinates care planning & delivery • Provider takes on much of the demand risk Still emerging, but examples: Bedfordshire (MSK), Cambridgeshire (older people services), Staffordshire (cancer & EoLCfor 1m+), Oxfordshire & Milton Keynes (sexual health; substance abuse), Oxfordshire (adult mental health, maternity & older people – on hold)

12. 2. Commissioning for better outcomes & value: OBC To be transformational, OBC should … • be genuinely patient-centred & outcome-led ; aim high • focus on local priorities for improving outcomes & quality more widely AND reducing inequalities • build on sound analysis & prioritisation – RightCare & STAR • address prevention, not just treatment & care • span primary, community & secondary health care – see King’s Fund Top 10 Priorities for Commissioners • consider & involve other relevant services – social care but also other agencies influencing outcomes

13. 2. Commissioning for better outcomes & value: OBC Staffordshire - at the leading-edge … • Collaborative: 5 CCGs + Macmillan Cancer Support (strategic partner) + NHS England + CSU • Outcome-focused & integrated services: • At scale: key services for 1m people across the footprints of people3 acute provider trusts. Will be the biggest contracts yet tendered for integrated NHS care • Transformational: patient-centred re-design; joined-up care • Innovative contracting: lead provider; 10 year duration

14. 2. Commissioning for better outcomes & value: OBC Upside: • Potential to deliver sustainable whole-system service transformation • Better care co-ordination & planning> more ‘joined-up’ care, better outcomes & value • Strong synergy with integration • Can catalyse & incentivise providers to work differently ‘Urban myths’: • Doesn’t preclude personalisation or choice – embed in requirement for ‘lead provider’ • Shouldn’t freeze-out SME & SE participation - enable through sub-contracting

15. 2. Commissioning for better outcomes & value: OBC Downside: • Resource-intensive • Long lead times • Clarity re desired outcomes & behaviours crucial • Requires commissioner collaboration at-scale • Effective user engagement from the outset crucial • May require substantial (and challenging) market development – will be difficult if existing relationships are immature/tense • For most commissioners, probably one OBC project at a time Is it the right approach for the problem? Value-based?

16. 2. Commissioning for better outcomes & value: Value Based Commissioning:

17. 2. Commissioning for better outcomes & value: Value Based Commissioning: Assessing priorities: 1. Patient Value – value from the perspective of an individual patient 2. Public Value – value from the perspective of the public considering health care as a whole 3. Allocation Value – economic benefits within a fixed annual commissioning allocation 4. Economic Value – economic benefit across the whole of the health and social care system Select service proposals

18. 3. Currencies & payment mechanisms: • Still very difficult for commissioners to compare providers, performance & value • Information systems & measurement = key barriers • Limited progress from block contracts • Compounded by often unsophisticated approaches to commissioning & prioritisation But … • Increasing support commissioners to prioritise & assess value systematically – Right Care & STAR • CFTTN work on indicators Indicators > Currencies > Fairer Payment Systems • Wheelchair tariff?

19. 3. Currencies & payment mechanisms: Indicators: • Foundations laid in Initial work led by the CFTN to develop indicators of performance & value • Indicators based around 3 domains: performance; quality; social value, equity & inclusion • Signalled support from Monitor, NHS England, CQC, NHS TDA, HSCIC & Commissioning Assembly • Long lead time (2 years for indicators?), but great start • Should enable value-based commissioning for those services not included in capitation OBC

20. 3. Currencies & payment mechanisms: Deferred payment – Social Impact Bonds? • Need for upfront investment prior to social impact & financial return • Applications? Frail older people – admission avoidance & promoting independence; reducing use of anti-psychotic drugs in residential care; challenged families • Examples? GLA & St. Mungo’s – homelessness; Essex County Council & Action for Children – children at the edge of care; Sandwell & West Midlands CCG with Marie Curie – EoLC; Age UK in Cornwall – admission avoidance (under development)

21. 3. Currencies & payment mechanisms: SIBs SOCIAL INVESTOR (Investment contract for financial return) ↕ COMMISSIONER ↔ SPECIAL PURPOSE (OBC contract for VEHICLE cashable savings & (Sub-contract for activity) better outcomes) ↕ SERVICE PROVIDERS (Acknowledgement to Bevan Brittan)

22. 4. TCS contract expiry? Poses real dilemmas for commissioners & regulators … • PCT divestment of community services under ‘TCS’ 2011 • Contracts 2-3-5 years • Uncontested contracts to social enterprise spin-outs, on condition open competition on expiry • Decisions subject to procurement law, public law (Gloucs. TCS judicial review) & s.75 regulations – caveat emptor! • We now have a diverse non-NHS market (SEs & corporates

23. 4. TCS contract expiry? What to do? • Roll-over for another full term (but not for TCS Social Enterprises) • Extend pending disaggregation and/or OBC • Re-procure for service transformation and/or better value(Bath & NE Somerset CCG; Hambleton, Richmondshire & Whitby – terminating contract with York Teaching FT & re-procuring)