Commissioning
Handbook
2013/14
Contents
Introduction ......................................................................................................................................................................... 3
QIPP ...................................................................................................................................................................................... 4
Who Commissions What? .......................................................................................................................................... 5
Turning a new idea into reality.................................................................................................................................. 6
Commissioning ................................................................................................................................................................. 7
Commissioning timeline ............................................................................................................................................... 8
Service costs ..................................................................................................................................................................... 9
Guidance on service redesign ............................................................................................................................... 14
Differentiating research, service evaluation and clinical audit ............................................................... 15
Procurement guidance .............................................................................................................................................. 16
Restricted procedure flowchart.............................................................................................................................. 18
Any Qualified Provider ............................................................................................................................................... 19
Contracting ...................................................................................................................................................................... 20
Decommissioning process....................................................................................................................................... 22
2
Introduction
This guide is intended to assist health care professionals and CCG staff in Tower Hamlets in the
development of new ideas into proposals that can be considered for future commissioning, by
providing information on:





Commissioning and commissioning processes including those internal to the CCG,
service and staff costs,
service redesign and engagement guidance,
procurement guidance, and
contracting information.
The information contained in this document is not exhaustive and is designed to give an overview.
Where to find further information and guidance is signposted throughout the document.
If you would like to contact Tower Hamlets CCG about any of the information presented in this
document please contact Honey Saatchi at Honey.Saatchi@towerhamletsccg.nhs.uk
3
QIPP
Quality, Innovation, Productivity and Prevention
What is QIPP?
QIPP articulates the kinds of changes the NHS should look to make in order to improve services.
The four QIPP areas can stand alone, but most of the time, an improvement in one, causes or
creates the opportunity for improvements in another. For example:
A GP surgery introduces a text message reminder system for appointments:
 This improves QUALITY as it makes sure patients are seen at the right time and that their
condition is appraised as soon as possible
 It is an INNOVATION, using existing technology
 It improves PRODUCTIVITY by ensuring appointments aren‟t wasted
 It PREVENTS the need for additional appointments and any problems created by delays in
care
What does a QIPP Gap, or QIPP savings mean?
One of the things a commissioner has to do is balance the costs of the healthcare system with the
available budget. As healthcare costs rise through an ageing population, new technology, inflation
etc., the NHS budget does not always cover this. When the commissioner does not have enough
money to pay for the current system it is known as a QIPP gap.
QIPP Savings is the term used to describe projects which focus on one or more of the QIPP areas
that seek to close the gap between the cost of the system, and the available budget.
"QIPP Gap"
Available Resources
Cost of the Current
System
Time
4
Post Health and Social Care Bill (Apr 2013)
Pre
H&SC
Bill
Who Commissions What?
Tower Hamlets PCT
Responsible for commissioning all
health and public health for Tower
Hamlets residents
Tower Hamlets CCG
Planned Hospital Care
Maternity
Community Service and Rehab
Urgent and Emergency Care
Continuing Healthcare
Fertility Services
Children‟s Services (except Health
Visiting)
Mental Health and Learning Disabilities
Treatment of Infectious Diseases
National Commissioning Board
GP Services
Specialist Commissioning e.g.
neurosurgery, complex stroke care
Prison Health
Immunisation and Screening
Health Visiting (until 2014)
Also responsible for the performance of
Clinical Commissioning Groups
London Borough of Tower Hamlets
Public Health Commissioning:
 Health promotion and
prevention (physical and mental
health)
 Sexual health services
 Drugs and alcohol
 NHS Health Checks
 Health Visiting (from 2014)
5
Turning a new idea into reality
Questions to address:
New idea sourced from
e.g. JSNA, GP practice,
clinician, CVS
 Does it fit with current commissioning plans?
 Is there a conflict of interest e.g. with governing body or your day
job?
 Who are the stakeholders?
 What time and money will need to be invested?
 Who do I need to speak to in the CCG before drafting proposal?
o
o
o
o
Programme Lead
Clinical Lead
Chief Officer or Deputy Chief Officer
Head of Transformation and Integration
FEEDBACK
All questions addressed
Use handbook to work up idea
Email your proposal to the CCG Transformation Team:
Honey.Saatchi@towerhamletsccg.nhs.uk
If proposal aligned to current commissioning plans:
 Proposal discussed at relevant working group
PROPOSAL
REJECTED
If proposal not aligned to current commissioning plans:
 Proposal discussed at Transformation and
Innovation Committee
FURTHER DEVELOPMENT OF
PROPOSAL AGREED
Add into work plan
Develop commissioning plan
Enter commissioning cycle
6
Commissioning
The commissioning cycle
The commissioning cycle process can be seen as six, interconnected stages with patients, public
and clinicians at the centre.
The six stages are:
1. Understand: create a detailed profile of the local health economy and population
2. Involve: ensure transparency and trust through engagement
3. Plan: turn detailed knowledge of population needs into an achievable plan
4. Contract, procure and negotiate: achieve quality outcomes, effectiveness and patient
satisfaction at the best price
5. Monitor and manage: maintain quality and performance, within budget, throughout the life of
the contract
6. Review and improve: benchmarking and support for continued improvement
7
Commissioning timeline
A typical annual commissioning and contracting cycle will involve the following processes and
timeline:
NOTE: The Commissioning Support Unit (CSU) provides the CCG with technical commissioning
support such as contract monitoring and procurement advice
CSU
priority
CCG
priority
December
Declare
commissioning
intentions to
providers
November
Agree
investment/disinvestment
decisions
October
Finalise
decisions on
strategic
commissioning
priorities for
following year
January –
February
Renegotiate
contracts with
provider
Strategic
planning
Oct-Dec
Agreeing
contracts
Mid
February
Finalise
contracts
Jan-Mar
September
First draft of
plans for
following year’s
priorities
Evaluation&
monitoring
Apr-Sept
March
Contracts
signed
April
Begin developing
plans for the
following year’s
priorities
8
Service costs
The following sections provide some key information about the costs of certain health services.
This can help build cases for investment, and also help to quantify the impact an improvement can
have on the healthcare system.
Costs in primary care
Cost per patient per year for basic
appt with GP, nurse or HCA
Cost of per GP surgery consultation
lasting 11.7 min1
Cost of practice nurse‟s time2
National average value per QOF
point
Enhanced services portfolio
 Phlebotomy
 BCG Immunisation (TB)
 Learning Disabilities
£65
 HPV 14-18 yo
 MMR immunisation
 Hep B Immunisation
 £7.51 per vaccination
 £7.51 per vaccination
 £116 for each completed primary imms course of an
index child
 £7.51 per vaccination
 Influenza for over 65‟s and those
on „at risk‟ register
 Pneumococcal for over 65‟s and
those on „at risk‟ register
 Childhood immunisations
 Patient participation
 Extended hours
£36
£35 per hour; £45 per hour of face to face contact
£133.76
 £3.55 per patient
 £7.51 per immunisation
 £50.75 per annual health check per patient per
annum and also £50 for each Health Action Plan
completed
 £7.51 per vaccination
 Up to £10,430 per practice
 £1.10 per patient
 £76 per 6 appointments (1 hour of GP time and 1.5
hours of nurse time)
Costs in secondary care
Cost of first outpatient appt
(54 different mandatory tariffs for
both single and multi-professional
services)
Cost of follow up appt
(53 different mandatory tariffs for
both single and multi-professional
services)
Single*:
- Mean average: £186
- Interquartile range: £135-£219
Multi^:
- Mean average: £214
- Interquartile range: £149-£252
Single:
- Mean average: £106
- Interquartile range: £81-£125
Multi:
- Mean average: £137
1
Unit Costs of Health and Social Care 2011, Personal Social Services Research Unit.
Accessed at: http://www.pssru.ac.uk/archive/pdf/uc/uc2011/section2.pdf
2
Unit Costs of Health and Social Care 2011, Personal Social Services Research Unit.
Accessed at: http://www. pssru.ac.uk/project-pages/unit-costs/2012/#sections
9
Cost of emergency admission (Nonelective spell tariff)
(1228 different tariffs)
Cost of A&E attendance (11 tariffs)
Diagnostics costs:
 MRI (7 tariffs)
 CT (8 tariffs)
Cost of bed day3
Pathology lab costs:
 Blood test
 Urine sample
- Interquartile range: £100-£162
Mean average: £3,200
Interquartile range: £1,057-£4,207
Mean average: £128
Interquartile range: £90-£152
Mean average: £214
Interquartile range: £168-£235
Mean average: £121
Interquartile range: £88-£119
Approx. £200
£6.43
£6.43
Consultant costs4
 Average annual salary
£85,000 excl. on costs and on call supplement
On costs = £23,630 (pension = £11,900; NI = £11,730)
£108,630 incl. on costs and excl. on call supplement
 One 4 Hour Programmed Activity
(PA – similar to a GP session)
£1885 excl. on costs and on call supplement
On costs = £52.38 (pension = £26.32; NI = £26.06)
£240 incl. on costs and excl. on call supplement
1 bed = 365 bed days
20 Bed Ward = 7300 bed days
Bed Days
Top 10 most frequent first outpatient appointments in the period Jan 2012 to Jan 20136
(Excl. Obstetrics, Genito-urinary Medicine, Midwife Episode)
1. Trauma & Orthopaedics
Tariff
Single: £137; Multi: £137
No. of attendances
3,826
2. Gynaecology
Single: £138; Multi: £142
2,769
3. Cardiology
Single: £210; Multi: £251
2,559
4. Dermatology
Single: £112; Multi: £168
2,266
5. Oral Surgery
Single: £130: Multi: £185
2,126
6. ENT
Single: £114; Multi: £141
2,022
7. Urology
Single: £177; Multi: £196
1,842
8. Breast Surgery
Single: £154: Multi: £154
1,587
9. Paediatric Trauma & Orthopaedics
Single: £154; Multi: £163
1,411
10. Colorectal Surgery
Single: £131; Multi: £157
1,373
3
http://e3intelligence.com/2012/03/can-the-consultant-contract-help-the-nhs-achieve-better-value-for-money/
http://e3intelligence.com/2012/03/can-the-consultant-contract-help-the-nhs-achieve-better-value-for-money/
5
Working hours in a year are based on 1,573 hours per annum: 225 working days minus sickness absence and training/study days as reported for all NHS
staff groups. Contracted hours are taken from NHS Careers (2012) Pay and Benefits, National Health Service, London. http://www.nhscareers.nhs.uk/.
Training days as recommended by professional bodies. Working days and sickness absence rates as reported in The Information Centre (2012) Sickness
Absence Rates in the NHS: January‐March 2012 and Annual Summary 2009‐10 to 2011‐12, The Information Centre, Leeds.
6
NEL CSU
4
10
Top 10 most frequent follow-up outpatient appt in the period Jan 2012 to Jan 20137
(Excl. Obstetrics, Genito-urinary Medicine, Midwife Episode)
1. Anticoagulant Service
Tariff
Single: £76; Multi: £76
No. of attendances
10,993
2. Trauma & Orthopaedics
Single: £83; Multi: £83
7,342
3. Rheumatology
Single: £102; Multi: £102
5,811
4. Cardiology
Single: £105; Multi: £121
4,279
5. Gynaecology
Single: £81; Multi: £99
3,732
6. Respiratory Medicine
Single: £105; Multi: £128
3,586
7. Dermatology
Single: £69; Multi: £108
3,571
8. Urology
Single: £96; Multi: £99
3,429
9. Ophthalmology
Single: £67; Multi: £65
3,375
10. ENT
Single: £63; Multi: £73
3,256
Top 20 most frequent diagnoses
(ICD10) for emergency admissions
12/13
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
Top 20 most frequent treatments for
A&E attendances
19.
20.
1.
2.
3.
7
Other joint disorders, not elsewhere classified
Dorsalgia (back pain)
Other soft tissue disorders, not elsewhere
classified
Pain in throat and chest
Abdominal and pelvic pain
Other disorders of urinary system
Fracture of lower leg, including ankle
Spontaneous abortion
Viral infection of unspecified site
Pneumonia, organism unspecified
Intracranial injury
Fracture of femur
Fracture of forearm
Mental and behavioural disorders due to use of
alcohol
Fracture of skull and facial bones
Abnormalities of breathing
Other chronic obstructive pulmonary disease
Complications of procedures, not elsewhere
classified
Fracture of shoulder and upper arm
Epilepsy
Observation/electrocardiogram, pulse
oximetry/head injury/trends
Guidance/advice only
Recording vital signs
NEL CSU
11
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Medication administered
Intravenous cannula
Prescription/medicines prepared to take away
Recall/x-ray review
Wound cleaning
Dressing
Plaster of Paris
Splint
Other Parenteral drugs
Wound closure (excluding sutures)
Sutures
Infusion fluids
Other (consider alternatives)
Sling/collar cuff/broad arm sling
Nebuliser/spacer
Removal foreign body
Dressing/wound review
* Single professional appointment
^ Multi professional appointment (these appointments are rare)
Notes on the National Tariff
1. Market Forces Factor (MFF) needs to be applied to the above tariffs.
MFFs for the locality are: BLT=1.2274 | MEH=1.2646 | HOM=1.2052 | NUH= 1.1955 | WX: 1.1997.
As an example, the average national tariff for a first outpatient appointment is currently £186 for a single
professional appointment. When applying MFF, a single professional appointment at BLT would cost
£228 (£186 x 1.2274). NB. The final tariff should be rounded to the nearest pound.
2. All tariff information is from either the 12/13 DH PbR tariff guidance or locally agreed prices.
Costs in the community8
Cost of Community nurse face to face
contact
Cost of health visitor one face to face
contact
Cost of community nurse specialist
Cost of Community OT face to face contact
Community pharmacist
Mean average: £39
Interquartile range: £33 - £43
Mean average: £44
Interquartile range: £33-£54
£43 per hour
Mean average: £69
Interquartile range: £44 - £78
£50 per hour; £125 per hour of direct
clinical activities; £63 per hour of patient‐
related activities.
8
Unit Costs of Health and Social Care 2011, Personal Social Services Research Unit.
Accessed at:http://www.pssru.ac.uk/project-pages/unit-costs/2012/#sections
12
Costs in mental health
Average cost per face to face mental health
contact9
Average cost of mental health bed day10
Mental health nurse11
Adult <65: £109.62
Elderly >65: £142.72
(based on 2010/11 ELFT ref costs)
£475 weighted for activity type
(based on 2010/11 ELFT ref costs)
£35 per hour; £67 per hour of face‐to‐face
contact; £47 per hour of patient‐related
work
Agenda for change pay scales
Annual AfC salaries including on costs (HCAS, 14% employer pension contributions, 13.8%
employer NI contributions) from 1 April 2012
Band
1st spine point Mid spine point
Highest spine point
2
3
4
5
6
7
8a
8b
8c
8d
9
23,596
26,135
29,433
32,967
39,741
47,419
58,468
65,780
77,537
91,360
106,452
25,596
28,093
31,809
38,224
45,868
53,710
64,354
74,040
86,116
101,688
121,371
26,858
29,698
33,934
43,006
52,420
60,162
68,547
79,443
93,742
111,220
132,522
9
McKinsey WELC work p. 37
McKinsey WELC work p. 37
Unit Costs of Health and Social Care 2011, Personal Social Services Research Unit.
Accessed at:http://www.pssru.ac.uk/project-pages/unit-costs/2012/#sections
10
11
13
Guidance on service redesign
The following section outlines things to consider when proposing a change to a commissioned
service.
Four tests for reconfiguration
The NHS must ensure that „the four tests‟ published by the Secretary of State in 2010 in relation to
service change are satisfied.
GP
Commissioning
Support
Patient and
public
engagement
Clinical evidence
base
Choice and
competition
Demonstrate the
level of support
from clinical
commissioning
groups and GP
practices.
Demonstrate
robust and
meaningful
patient and public
engagement in
planning service
change.
Demonstrate a clear
evidence base
including an
understanding of the
views of relevant
experts and the views
of clinicians directly
affected by the
proposed change.
Demonstrate that
changes are in line
with national
guidance regarding
patient choice;
consider impact on
competition.
Levels of engagement
Level of change
Level 1
Small scale, locally-led
non-contentious change
e.g. new care pathway
such as change to assisted
contraception guidelines
Involvement required
Levels of service changes can be shown as a spectrum of change:
Bespoke, local
engagement process
agreed with Overview and
Scrutiny Committee
Healthwatch (does not
necessarily require formal,
written process)
Level 2
Medium scale change
e.g. consolidation of
services onto fewer sites
such as decommissioning
a walk-in centre
Bespoke engagement
agreed with OSC and local
stakeholders, usually
involving formal, written
consultation document and
formal period for comments,
but does not require full,
formal „statutory‟ 12 week
consultation
Level 3
Substantial development
or variation e.g. closure of a
service affecting a high
number of people such as
an A&E unit.
Full, formal
consultation (S44),
triggers OGC gateway
review and DH/NCB
reconfiguration rules
Future planning and engagement as part
of commissioning cycle
14
Differentiating research, service evaluation and clinical audit
The below table is to help decide if a project is research, which normally requires review by a Research Ethics Committee (REC), or whether it
is some other activity such as service evaluation or clinical audit. Projects undertaken by the CCG usually tend to be service evaluation or
clinical audit. However if a piece of work is constituted as research you may need ethics approval for the work you need to do. Even some
elements of service evaluation may require ethical review and advice should be sought on a case by case basis from the National Research
Ethics Service (NRES). Guidance on whether ethical review is required under either the law or the policy of the UK Health Departments‟ can
be found on the NRES website at http://www.nres.nhs.uk/.12
RESEARCH
The attempt to derive generalizable new knowledge including
studies that aim to generate hypotheses as well as studies that aim
to test them.
Quantitative research – designed to test a hypothesis.
Qualitative research – identifies/explores themes following
established methodology.
SERVICE EVALUATION
CLINICAL AUDIT
Designed and conducted solely to define
or judge current care.
Designed and conducted to produce
information to inform delivery of best
care.
Designed to answer: “What standard does
this service achieve?”
Designed to answer: “Does this service
reach a predetermined standard?”
Addresses clearly defined questions, aims and objectives.
Measures current service without
reference to a standard.
Measures against a standard.
Quantitative research – may involve evaluating or comparing
interventions, particularly new ones.
Qualitative research – usually involves studying how interventions
and relationships are experienced.
Involves an intervention in use only. The
choice of treatment is that of the clinician
and patient according to guidance,
professional standards and/or patient
preference.
Usually involves collecting data that are additional to those for
routine care but may include data collected routinely. May involve
treatments, samples or investigations additional to routine care.
Quantitative research – study design may involve allocation
patients to intervention groups.
Qualitative research – uses a clearly defined sampling framework
underpinned by conceptual or theoretical justifications.
May involve randomisation.
Normally requires REC review.
Usually involves analysis of existing data
but may include administration of
interview or questionnaire.
Usually involves analysis of existing
data but may include administration of
interview or questionnaire.
No allocation to intervention: the health
professional and patient have chosen
intervention before service evaluation.
No allocation to intervention: the health
professional and patient have chosen
intervention before audit.
No randomisation.
Does not require REC review.
No randomisation.
Does not require REC review.
12
Involves an intervention in use only. The
choice of treatment is that of the
clinician and patient according to
guidance, professional standards and/or
patient preference
Defining Research. National Research Ethics Service, NPSA. NHS 2009
15
Procurement guidance
For current DH policy and guidance on procurement and cooperation and competition please
see the following documents:
Procurement guide for commissioners of NHS-funded services
http://www.dh.gov.uk/prod_consum_dh/groups/dh_digitalassets/@dh/@en/@ps/documents/
digitalasset/dh_118219.pdf
Principles and rules for cooperation and competition
http://www.dh.gov.uk/prod_consum_dh/groups/dh_digitalassets/@dh/@en/@ps/documents/
digitalasset/dh_118220.pdf
Financial limits for tender, quotations and contracts
Note: the values below refer to the value of the entire contract term. For example, a £15k
per year contract that runs for three years must be dealt with as a £45k contract in any
procurement.
Contract Value
£ 0 – £4,999
£5,000 - £19,999
£20,000 - £100,000
£100,000 – current EU
thresholds
Guidance
Tendering or competitive quotations are not required, but a
minimum of two verbal quotations should be obtained (except for
purchases through petty cash) for the goods/services. Records to
be maintained.
Two written quotations are required for goods/services. Records to
be maintained.
Three written quotations are required for goods/services. Records
to be maintained.
Three written competitive tenders are to be invited.
Where expenditure or income is expected to equal or exceed current EU thresholds, the
agreement must be executed following the applicable EU ruling.
Competitive tendering13
Competitive tendering refers to a procurement process which promotes the use of
competition between bidders and, in order that the commissioner can seek the best bid and
ideally select the provider who best meets their commissioning need.
There are four main procurement procedures:
1) Restricted procedure
2) Open procedure
3) Competitive dialogue
4) Competitive negotiated procedure
13
Procurement Guide for Commissioners of NHS-Funded Services
Accessed at: http://www.ccpanel.org.uk/content/DH.pdf
16
Restricted and Open Procedures are the most widely used procedures. Further information
can be found on page 30 of the Procurement Guide for Commissioners of NHS-Funded
Services.
Restricted procedure
There are two main stages in the restricted process:
1) Pre-Qualification Questionnaire (PQQ) stage; and
2) Invitation to Tender (ITT) stage.
Bidders will be required to complete a PQQ and will be shortlisted using an objective
evaluation criteria and weighting. Those shortlisted will then be invited to tender. The
number of bidders shortlisted must be sufficient for maintaining adequate competition.
Open procedure
An open procedure does not require a PQQ stage. There are two parts to the ITT document
– Part A and Part B. Part A will include pre-qualification questions to access bidders‟
eligibility, financial standing and technical capability. Part B will be questions regarding the
service and service delivery. Although everyone interested can submit bids, a bidder who
fails Part A will be out of the process i.e. only the Part B submission of bidders who pass
Part A will be evaluated further.
Competitive dialogue
A competitive dialogue is only used in exceptional circumstances where the commissioning
organisation is unable to define the specifications of the service they require to meet their
need, or the commissioning organisation is unable to specify the legal/financial make-up of
the project. Under competitive dialogue, shortlisted parties will be invited to participate in
dialogue in order to develop service specifications. Following this, providers will be invited to
submit a final tender.
Competitive negotiated procedure
There are two types of negotiated procedures: 1) with publication of a contract advert/notice
and 2) without a contract advert/notice. Like the competitive dialogue process, the
negotiated procedure is used in very exceptional circumstances, for example:
1) When the award under open, restricted or competitive dialogue was discontinued due to
irregular or unacceptable tenders and the terms used for these tenders have not been
significantly altered.
2) Where prior overall pricing is not possible or where the service cannot be specified with
precision or where works are for research.
3) Where the contract is for a genuinely unique solution where the funding model is untested
or the commissioner is not aware of contracts using a similar model.
Negotiated procedure allows you to negotiate all aspects of the proposal (except price) until
you sign the contract i.e. there is no formal end to negotiation.
17
Restricted procedure flowchart
*
18
Any Qualified Provider
The Any Qualified Provider (AQP) scheme means that for some services or conditions,
patients will have a choice from a range of approved providers they wish to be treated by.
This could include hospitals, community based services or high street service providers.
Patients and GPs can choose a service that‟s right for them based on a provider that is
closer to home, has a shorter waiting list or better outcomes. The funding of these services
as a result will follow patient choice enabling competition and innovation focused on service
quality rather than price.
These services will remain free for patients to use and access to them will be based on
clinical need, in line with the NHS Constitution.
To become a provider, a standard qualification process will ensure that quality requirements
will be met. Providers will need to be registered with the Care Quality Commission (CQC)
where they are delivering a service that is already regulated. For services that do not need
CQC registration, the provider will need to meet other assurance requirements.
The service specification, qualification of providers and contract/performance management
of AQP services will sit with Commissioners.
For Tower Hamlets, a CCG Procurement Panel will manage the procurement of appropriate
services. For 2013/14, the APMS contract, Phlebotomy services and surgical aftercare have
so far been identified for the AQP scheme.
Further information and frequently asked questions about AQPs can be found at:
www.supply2health.nhs.uk/AQPResourceCentre/Pages/FAQ
http://healthandcare.dh.gov.uk/any-qualified-provider-2/
https://www.gov.uk/government/publications/operational-guidance-to-the-nhs-extendingpatient-choice-of-provider--2
19
Contracting
NHS Standard Contract14
The NHS Standard Contract covers acute, mental health, community and ambulance
services. The standard NHS contract comes in two versions – bilateral and multilateral:
 Bilateral – for use where one commissioner commissions services from a provider,
covering that commissioner‟s requirements only
 Multilateral – for use where a lead commissioner enters into a contract with a
provider, on behalf of itself and other named commissioners, for the requirements of
all of those commissioners (note that the multilateral version is mandatory for acute
services)
Key areas of the contract include:





The services to be provided under the contract
Performance and quality requirements
Price and payment terms (determined by either payment by results tariff prices or
local negotiations)
Liability and risk
Termination provisions
The NHS Standard Contracts are usually paid for in two ways:
Payment By Results: where the amount the provider gets paid, is based on the number of
people they see. Most hospital contracts work in this way.
Block Contract: where the provider gets paid the same amount regardless of the number of
people they see, and this is reviewed annually. Currently the majority of Mental Health and
Community Health Services are paid for in this way.
Joint commissioning contracts
A joint commissioning contract is a contract that is jointly managed by health and social care.
Mainly, joint commissioning contracts are held between NHS and Local Authority
organisations.
DES (Direct Enhanced Services)
Direct Enhance Services are schemes offered nationally and form part of the annual
contractual and financial negotiation between the NHS and the General Practitioners
Committee (GPC) of the British Medical Association on behalf of all GPs. Like local services
these are reviewed annually and form part of the global sum settlement for GP services.
DES schemes are managed by the NHS Commissioning Board.
LES (Local Enhanced Services)
Local enhanced services are commissioned in primary and community care by CCGs based
on local needs and decisions. This can include services delivered by GP practices, provided
they go beyond the services provided under the GP contract.
14
http://www.commissioningportal.co.uk/contract2012/
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NIS (Network Incentive Scheme)
Similar to LES, these are commissioned based on local need, but paid to networks of
practices.
Contract termination or expiry
The service review process should commence at least nine months before the end of the
existing contract. Where a commissioner is evaluating options upon termination or expiry of
an existing contract, the decision-making process and key factors to be considered will be
broadly similar to scenarios where the commissioner is seeking to secure new service
models or significant additional capacity. The main difference is that the commissioner is
considering options and making decisions in relation to existing services.
Considerations for commissioners would include:
• Commissioning priorities for service redesign (e.g. Shifting care from hospital into
community settings)
• The performance of existing provider(s)
• The existence of viable, alternative providers
• The potential for incremental improvements/changes to existing services
• Any advantages of bundling/unbundling services
• The need for new service models
• The case for decommissioning existing services
• Sustainable Development practices and performance
Further information can be found in the Procurement Guide for Commissioners of NHSFunded Services.15
Key things to be aware of
1. Time
The time taken to decommission a service can take up to a year and potentially more.
2. Consultation
Consultation with the public may need to take place depending on the scale of the change.
Public consultation is a statutory 12 weeks minimum. Further guidance can be found on
page 14 of this guide.
3. Expense
The cost of undertaking a public consultation will need to be considered.
4. Tender
Commissioners will need to be aware of the current national guidelines for tendering if the
service in the contract being terminated will need to be commissioned elsewhere.
15
Procurement Guide for Commissioners of NHS-Funded Services.
Accessed at: http://www.ccpanel.org.uk/content/DH.pdf
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Decommissioning process
*See page 14 for guidance on levels of engagement for public consultation
^ A material objection will be defined by the Overview and Scrutiny
Committee involved with public consultation but can be broadly defined as
objections raised if the proposals do not meet any of the four tests for
reconfiguration outlined page 14.
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