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
Innovative commissioning for integrated out-of-hospital care:
emerging approaches
• Context
• Commissioning for better outcomes & value:
- capitation-based
- ‘accountable lead provider’ v. ‘alliance’
- value-based
• Currencies & payment mechanisms
• TCS contract expiry?
1. Context:
The NHS is facing unprecedented challenges to its sustainability – Call to
• 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• Outdated & over-stretched delivery systems – including primary care &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
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, risksharing, much longer contract durations to support investment &
disinvestment to transform, review & alignment of incentives …
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
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
• Transforming Community Services (2008-), but “mostly concerned
with structural change rather than how services could be changed. It is
now time to correct this.”
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
• Services must be capable of very rapid response , to sustain
independence & speed up discharges from hospital
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
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 mediumterm 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 leadership
role for CCGs & direct
• Outcome-based population
commissioning is a key vehicle to
drive transformation & secure
better outcomes and value
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
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 & EoLC for 1m+),
Oxfordshire & Milton Keynes (sexual health; substance abuse),
Oxfordshire (adult mental health, maternity & older people – on hold)
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
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
2. Commissioning for better outcomes & value: OBC
• 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 subcontracting
2. Commissioning for better outcomes & value: OBC
• 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?
2. Commissioning for better outcomes & value:
Value Based Commissioning:
Value based
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
Low patient
value / high
value / high
Low patient
value / high
value / high
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
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?
3. Currencies & payment mechanisms:
• 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
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)
3. Currencies & payment mechanisms: SIBs
(Investment contract
for financial return)
(OBC contract for
cashable savings &
(Sub-contract for activity)
better outcomes)
(Acknowledgement to Bevan Brittan)
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
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)

CHSF 20022014 Bob Ricketts