Commissioner and Provider Separation

Commissioner and Provider Separation

Newham Primary Care Trust

Board workshop on Tuesday 28th April 2009

Background paper

Introduction

1.1. Board members will be aware of the various drivers and imperatives on PCT Commissioner and Provider separation. Good progress has been made to date, certainly so with the technical aspects of separation. This allowed NHS London to approve Newham PCT’s Provider Services as ‘APO’ ready prior to 1 April 2009 – as was required.

1.2. PCT Provider Services are now required to achieve final ‘Business Readiness’ by October 2009. Essentially, this means completing and embedding a body of work on separation. One key part of this, and perhaps most significantly for the Board, is the need for the PCT as a whole to conduct an Options Appraisal on the future organisation form/s for the PCT Provider Services, comprising 43 ‘service lines’ in Adults and Children’s & Young People services.

To assist the Board, Grant Thornton has been commissioned to lead the Option Appraisal work, with the objective of allowing a decision to be reached by July 2009. It is important that the work is seen to be undertaken objectively; there are a number of key stakeholders and the decision to be taken will have notable or significant implications for certain of these stakeholders and stakeholder groups.

1.3. The purpose of the Board session on Tuesday 28th April is to allow the Board to ensure:

that its earlier / previous thinking on provider separation is fully up to date within the current context of the local health and social care economy
that the criteria to be used in the options appraisal are the correct ones to inform a sound decision
that the means by which the options are to be measured and assessed is discussed and agreed
that the Board is aware of and influences the process of the Options Appraisal at the outset, such that it has confidence in the information which will be gathered and presented back for consideration
that the Board is able to be clear and positive about the process and objectives in its dealings with stakeholders and its staff. There is a lot of awareness that Newham PCT has not simply adopted an expedient route in Commissioner and Provider separation – as has been the case elsewhere – and that there is a real determination to ensure that the future delivery of services is enhanced, not jeopardised by separation.

Consideration to date

2.1Board members have had 2 significant discussions to date on Commissioner and Provider separation. Firstly at a Board meeting on 16th September 2008 and secondly at a ‘Chairs Task Group’ on 30th September 2008.

2.2In summary, from an original 6 criteria that had been proposed to the Board on 16th September, the Chairs Task Group decided on 30th September 2009 that there should be only 3 criteria for the Options Appraisal:

Economic/Financial viability
Sustainability
Improved patient experience and outcomes

All of these 3 criteria should be of equal importance as it was felt that artificial weighting would inevitably be subjective and best avoided.

2.3It was also felt that there should ideally be a short list of 4 options for consideration - though at present there is a longer list of possible avenues than that, and a view needs to be taken about the stage and process by which any reduction in options is managed.

2.4It was agreed on the 30th September that there was a need for ‘no monopoly provider in Newham’ and that ‘a clear, transparent and inclusive and engaging process for option appraisal’ was required, with an emphasis on improving clinical pathways as a means of improving patient experience and outcomes.

2.5At the time of that meeting, the view was that the options appraisal should be progressed by the Provider Committee (Shadow Provider Board). While Provider Services clearly has a key role to play and views about different organisation solutions, perhaps the Provider Committee’s (Shadow Provider Board’s) locus needs to be re-affirmed, given the need for a whole PCT optimum solution.

2.6During the Autumn of 2008, a great deal of work was undertaken by Provider Services, with the support of an organisation called PUK (which is supporting a considerable number of PCTs and PCT Provider services in different ways) to look critically at each of the 43 ‘Service Lines’ that make up Newham PCT Provider Services. This involved completion and interrogation of information on the services, market analysis, benchmarking, risk analysis and other assessments to allow the provider to reach views on strengths and weaknesses and ‘overall attractiveness’ of each of the 43 ‘Service Lines’. The assessment work concluded with ‘confirm and challenge’ sessions with each service, involving a panel of peers, business expertise, PUK and PCT Commissioners. Provider Services now have a better understanding about the current and relative positions of each of its services and the extent to which they inter-relate, their development needs and potential (or otherwise), and whether they are an essential core part of Provider Services going forward, or potentially services that we could/should modify or withdraw from providing.

2.7It is a good place to note that PUK, on the basis of their detailed work across numbers of PCTs, has commented very favourably on the overall quality of Newham’s Provider Services. We all acknowledge need and scope for improvement, but overall the services compare very well to those found elsewhere (with a prevailing theme that staff tend to take for granted some of the excellent and well joined-up work that they do routinely).

2.8The relevance of the ‘Service Line Review’ work to the Options Appraisal is that we should be careful not to assume that a single solution for all of the services as an entirety or single entity is necessarily appropriate. There could well be different optimal future organisation solutions for each service – though obviously some service groupings are evident.

2.9It will be important through the Options Appraisal to be conscious of these different possible solutions for individual services or sub-sets. Also, to be aware that some partner organisations will find it attractive to ‘pick off’ (or embrace) particular services, but not others, to complement their existing service portfolios or pursue particular strategic aspirations.

3.Transforming Community Services: enabling new patterns of provision

3.1All of our thinking, indeed the Options Appraisal now needs to be set in the context of a policy document produced by DH in January 2009 – ‘Transforming Community Services: enabling new patterns of provision’ (TCS).

3.2There is no need to rehearse in this paper too much about that policy context because an excellent outline presentation and paper on TCS has been prepared by the interim Director of Strategic Development, which accompanies these papers and sets the latest on policy context.

3.3Suffice to say that the whole agenda on TCS is a demanding, parallel one for Commissioner and Provider – separately and together. Because this so obviously represents a key part of the future commissioning and delivery of ‘out of hospital’ services and health improvement, and the basis for successful delivery of the Healthcare for London Strategy, the PCT needs to increase its focus and its capacity on this area. A former PCT Chief Executive from out of London is currently assisting the PCT to scope and programme the requirements for provider and commissioner alike.

3.4The Options Appraisal is a key requirement of TCS in order to re-position existing PCT Provider Services.

4.Resources available to support the Board session

4.1As well as Non-Executive Directors and Directors at the seminar on 28th April, the following guests / participants will be attending as a resource to the Board discussion:

Grant Thornton, which has been engaged to lead the process in an objective way for the PCT as a whole (Giles Newman and colleague/s)
PUK, which has been working with Provider Services and has a lot of experience of work in Provider separation. PUK has a role to ensure that the views of Provider Services are marshalled and made clear through and within the Options Appraisal and that the differing interests of 43 services are not overlooked (Danielle Procter). Of note, PUK is leading the Commissioner Provider separation Options Appraisal work in Hackney PCT.
Paul Mullin, who is working with the PCT on developing the ‘Transforming Community Services’ Programme for Newham PCT Commissioner and Provider
John Devereux, working with PCT Provider Services at interim finance director level will be involved in supporting the finance and information inputs from the PCT to the Options Appraisal

5.Stakeholders

5.1As indicated earlier there a number of key stakeholders to the Options Appraisal and Commissioner : Provider separation work ahead. These include: Patients and Users/Service User groups, Staff and Staff representatives, LBN, NUHT, local Primary Care Practitioners, PBCs and GP representatives, neighbouring PCTs notably TH and C&H, East London Foundation NHS Trust, NHS London and potentially many others especially around particular services.

5.2There is a degree of anxiety amongst different stakeholders, some of which have a vested interest in particular outcomes from the Options Appraisal, and these interests need to be informed and managed – also conducted to the proper time and place where their interests and views can be considered and incorporated. A communications plan needs to support the Options Appraisal process so that all stakeholders are suitably engaged in the process, to good effect.

5.3As far as the PCT’s staff are concerned, there are of course obligations on the PCT as their employer and a good (and better) level of engagement and information needs to be secured, as a precursor to the required future consultation with staff if their employment is to transfer. Ultimately, one course which TCS allows is the right for staff groups or the staff as a whole to formally request that a social enterprise solution/s is given full consideration as a possible future organisation model. We know that attracting and retaining the very best staff to deliver services is a key vehicle in securing the improved and sustainable health outcomes that is the key part of the PCT’s vision. It will therefore be essential that the Options Appraisal is seen to value those very staff and the things which motivate them, not least because it may well be possible for Newham to attract in Community Health Services staff who are less satisfied with arrangements for provider services in their own localities/PCTs.

6.Conclusion

6.1This paper is offered as a means of setting the scene for the discussions which are scheduled for Board members on 28th April, to initiate the Options Appraisal process. Clearly, although there are some burdens and not inconsiderable cost in undertaking an objective Options Appraisal for the PCT and Board, it is hoped that the Board will be able to see and to shape things which can be valued by-products of the appraisal process, to ensure that maximum advantage is taken from it.

Paul Gocke 23 April 2009