A Business Perspective
On this page, we share our thoughts and comments on current issues in the health, care and social business market place, including any general learning from our work, when we think that might be useful. We also include links to any articles or blogs we have been involved with.
January 2024
The Health Care Services (Provider Selection Regime) Regulations 2023
The Provider Selection Regime (PSR) is a new set of rules for procuring health care services in England by certain public bodies, and they came into force on 1st January 2024. They apply to NHS England, Integrated Care Boards (ICBs), NHS Trusts, NHS Foundation Trusts, local authorities and combined authorities.
When procuring health care services (including permitted mixed services and which incorporate health care services), relevant authorities need to act in accordance with certain principles: with a view to securing the needs of people who use the services; to improve the quality and efficiency of the services; and to act transparently, fairly and proportionately.
The PSR has introduced three provider selection processes:
1. Direct award processes: There are three options here; where the existing provider is the only provider that can deliver the health care services (process A); where patients have a choice of providers and the number of providers is not restricted by the relevant authority (process B); and where the existing provider is satisfying its existing contract, will likely satisfy the new contract to a sufficient standard, and the proposed contracting arrangements are not changing considerably (process C).
2. Most suitable provider process: This involves awarding a contract to providers without running a competitive process, because the relevant authority can identify the most suitable provider.
3. Competitive process: This involves running a competitive process to award a contract.
For all the above processes, relevant authorities need to comply with several defined procedures to evidence their decision-making, including record keeping and the publication of transparency notices. Chris@resolvingtogether.com and cendrine@resolvingtogether.com would be pleased to advise further any relevant authorities, or any voluntary organisations (such as community interest companies), charities and private sector organisations wishing to provide health care services and who may be involved with any such processes.
November 2023
Health and Care Act 2022
The Health and Care Act 2022 introduced important changes to the way in which health and care services are commissioned and provided in England. These changes were predominantly effected by means of amendments to the NHS Act 2006, which is the main piece of legislation consolidating NHS law. Some of the key changes were as follows:
a. The NHS Commissioning Board was officially renamed NHS England after some years of using NHS England as a trading name. NHS England’s role is to lead the NHS in England to deliver high-quality services for all. It is a statutory body established by Parliament in 2012. In 2021/22 NHS England received £150 billion to commission healthcare services for the people in England, directly or via Clinical Commissioning Groups (CCGs), before their abolition from 1st July 2022. NHS England allocated £108 billions of this funding to the 106 CCGs to commission services for their local populations. NHS England is governed by a board, consisting of executive and non-executive members.
b. NHS England has a new duty to have regard to the wider effect of its decisions in relation to the health and wellbeing of people, the quality of services provided to individuals and efficiency and sustainability. It must also have regard to climate change and environmental targets.
c. NHS England may by direction provide for any of its functions to be exercised by one or more of the new Integrated Care Boards (ICBs). ICBs were created pursuant to the 2022 Act, replacing CCGs which were abolished, and their role is to arrange services for the purposes of the health service in England pursuant to the NHS Act 2006. Various duties are imposed on ICBs, such as promote the NHS Constitution, to act effectively, efficiently and economically, to improve the quality of services and to promote integration etc. ICBs also have certain powers, such as to raise additional income in certain circumstances, and to make grants to NHS Trusts, NHS Foundation Trusts and voluntary organisations. NHS England may give ICBs directions about their management or use of financial or other resources, and the Secretary of State can give NHS England directions about its own functions.
d. Integrated Care Partnerships (ICPs) are also created by the 2022 Act in each ICB area, and they are a joint committee of the ICB and local authorities in their area. Each ICP has one member appointed by the ICB, one member by each of the relevant local authorities and other members appointed by the ICP. Each ICP will need to produce an integrated care strategy setting out how the assessed needs are to be met by the ICB, NHS England and local authorities.
e. Monitor and the NHS Trust Development Authority were abolished by the 2022 Act, and their functions transferred to NHS England.
f. NHS trusts and foundation trusts: exemption from merger legislation. For the purposes of the Enterprise Act 2002, a relevant merger situation is not to be treated as having been created where two or more relevant NHS enterprises cease to be distinct enterprises. This exemption does not apply if a non-NHS enterprise is involved.
October 2021
Integration and the proposed new Health and Social Care Bill
Everyone has been discussing for some time the issue of better cooperation and integration between all the various organisations that play a role in health and care, and nobody is about to stop that debate any time soon! This is not only because patients and organisations have begun to reap the benefit of early work on integration projects but also because the current version of the Health and Care Bill, which is expected to become Law by 1st April 2022, has a lot to say in this area. This Bill is currently going through the Committee Stage in the House of Commons and so there is still some time to go yet before all the ground-rules are set, but the overall picture is becoming clearer.
The Bill actually creates a new type of integrated
body itself, the “Integrated Care Board” (ICB) which, amongst other roles, is
going to absorb the business and staff of the current Clinical Commissioning
Groups (which will cease to exist). It is a type of integrated body itself
because, as well as inheriting commissioner functions from CCGs, its members
will include representatives from provider organisations (the FTs, Trusts and
GPs) as well as from relevant local authorities.
Pursuant to the Bill, ICBs will be required to make
sure health services are provided in an integrated way, and also importantly
that health services are integrated with health related services (such as
housing) and social care services where this would improve the quality of
the services provided or reduce inequalities in access or outcomes in respect
of those services. This will be an important duty. In addition to the
provisions in the Bill, there have been a number of pieces of Guidance in
relation to integration recently including in August 2021 on the concept of
“Provider Collaboratives”. I look at what this Guidance says below after first
considering some key models of integration below.
Integration Models
Over the last 5 to 10 years organisations commissioning and providing health care services have pushed forward with a number of integration projects and many have followed particular models supported by the Department of Health and Social Care. These models have had a focus on primary and acute care systems, multi-speciality community providers, acute care collaborations, urgent and emergency care and enhanced health in care homes. One of the interesting questions around such projects (and which remains relevant to future integration projects) has been what is the best legal or governance structure to help these projects be successful and the main types can perhaps be summarised as follows:
1. Lead-provider model: This model involves one party acting as the lead contracting entity which enters into the prime contract with the commissioner, and where money and services can be passed down to other organisations through a series of sub-contracts. Commissioners are increasingly unlikely to be comfortable with passing the whole budget and the responsibility for outcomes to a small NHS body or a non-NHS body and so larger NHS Trusts and Foundation Trusts are most likely to take on such a role.
2. Alliance model: The model we have developed a liking for over the years, for smaller providers in particular, is the “alliance” model. This involves all the key providers having their own service contracts with the commissioner plus all the providers and the commissioner being parties to an over-arching “alliance” agreement where they agree outcomes and how they incentivise the providers to achieve the outcomes through gain-share (and pain-share !) provisions. This type of model is only value for money if the separate service agreements are aligned too, and are not just the historic ones with a light “dusting-down”. The alliance agreement model could really stimulate excellent place-based working it seems to me while providing more stability for providers with a track-record of performing.
3. Partnership model: Although people like to focus on lead providing and alliance models there are some more mixed models which combine elements of both, and I am here thinking about more partnership or hosting agreements where quite often one provider party may play a more prominent role than others, perhaps acting as the key legal body to take the initial funds, but where governance mechanisms ensure that all the parties have a say in how that money is distributed or what objectives are focussed on and how decisions are made. These more mixed models can be useful where you cannot persuade the powers that be that, say, Alliance is the best way to go and you want to avoid a “classic” lead-provider scenario. These sorts of arrangements are often called “contractual” joint ventures and can be compared with “corporate” joint ventures which I mention in the next point.
4. New corporate body: In the past different organisations working together in a partnership way or a joint venture might often decide to set up a new company which they would jointly own and this new JV company would act as the contracting body with the commissioner. The Articles of Association of the new company and a JV Agreement would set out how the different partners would run and govern the JV company. Although this kind of approach has been used in health integration projects before it would seem that it is not currently thought to be ideal for these sorts of arrangements by NHS England. As the case of Cambridgeshire and Peterborough showed, where a new corporate body set up by two Trusts became insolvent almost immediately the contract commenced, there are issues around responsibility, accountability and VAT with this model, to name just a few of the problems, and so it is unlikely this will be a viable option in the immediate future.
Provider Collaboratives
5. The NHS England Guidance on “provider collaboratives” in August stated that all Trusts providing acute and mental health services needed to be part of at least one provider collaborative, and community Trusts and non-NHS providers should be included where it makes sense for them to be included. A number of examples of different kinds of collaborations between providers (without commissioners) are detailed in the Guidance and they include making use of forums, clinical networks, group working, shared pathways, coordinated recruitment, more efficient procurement and shared policies and procedures, all of which have the potential to help organisations achieve better outcomes. At the end of the day, provider collaboratives will need to fit into the overall local Integrated Care System (ICS) plan if they are to be most effective.
6. The classic integration models mentioned in paragraphs 1 to 4 above can also all work, with some adaptions, for provider collaboratives and where no commissioner is involved. Other options to document pure provider collaboratives include using more simple “Collaboration Agreements” or “Memorandum of Agreements” which could document any form of integration working. Whenever different provider organisations work together and no matter how simply, it is always important to document the arrangement as this helps to ensure clarity and certainty and it tends to keep the auditors, insurers and regulatory bodies happy too.
Committees
7. Sub-committees/committees in common: Within the different key integration legal models mentioned above for ICSs or provider collaboratives there are a number of governance tools that can be used to enhance integrated working, and the Provider Collaborative Guidance refers to some examples of these tools. They include using sub-committees, or committees in common (with directors on the committee having delegated authority from their Boards to make decisions) or different organisations both engaging the same person or persons in their leadership teams. Another mechanism I have seen in the past is the of use of an independent and non-voting chair to help manage meetings and avoid “deadlocks”.
8. Joint committees: The Government’s desire for greater collaborative working and particularly between public bodies will be seen in increased powers under the proposed new Health and Care Bill for NHS bodies and local authorities to delegate more easily to “joint committees”, which have been difficult to form in the past under existing legislation. Under the new Bill ICBs, NHS England, NHS Trusts, FTs and local authorities are being given powers to delegate certain functions to each other and, importantly, to exercise functions jointly. Where functions are exercised jointly, they will be able to be exercised through the use of joint committees.
So, integration will continue to be a much thought about theme and a must-have agenda item on any health and social care organisation’s action plan moving forward and it is clear from the new Bill that the Government considers it to be an extremely important building-block for a successful NHS going forward.
April 2021
White Paper on “Integration and Innovation: working together to improve
health and social care for all"
Significant NHS reform is on the way as set out in the Department of Health and Social Care’s White Paper on “Integration and Innovation: working together to improve health and social care for all” and which was published on the 11th February 2021. The intention is to bring in the new proposals through a new Health and Care Bill to become effective in 2022. The White Paper is the result of a number of factors, including the need to bring the Law up to date to capture developments that have taken place operationally as the NHS has got to grips with providing a more integrated service for patients, and to start implementing some of the lessons of Covid-19.
A key proposal is to create new statutory “Integrated Care Systems” or ICSs. These will be new legal bodies which will contain commissioning skills as well as provider experience with, for example, NHS Foundation Trust and NHS Trust representatives on the board of the ICS. These new bodies, whilst having a commissioning function, actually start to rub away the very sharp “commissioner/provider” split that currently exists because provider bodies which will receive funding from the ICS will also have representation on the board of the ICS.
As well as having a core “ICS NHS Body” role, each ICS will also be required to establish as part of their structure an “ICS Health and Care Partnership”. This partnership body will be responsible for developing a plan that addresses the wider health, public health and social care needs of the system and the ICS NHS Body and Local Authorities will have to have regard to that plan in decision-making.
The ICS NHS Bodies will have a Board with a Chair and a CEO and representatives from NHS Trusts, General Practices, local authorities, and others determined locally, such as from community and mental health services, and they will also have Non-Executive directors. Members of the ICS Health and Care Partnership could be drawn from a number of sources such as Health & Wellbeing Boards, Healthwatch, voluntary and independent sector providers and social care and housing providers. The ICS NHS Body will be responsible for the day to day running of the ICS, NHS planning and allocation decisions, including a plan to address the health needs and strategic direction of the system and explaining the capital and revenue spending of NHS bodies.
Other key aspects of the White Paper include the right of Government to set Capital Departmental Expenditure Limits for named Foundation Trusts (to ensure sustainable use of NHS resources), new powers to create joint committees between organisations, increased powers of collaborative commissioning across ICS areas and the ability to make joint appointments across NHS bodies. There will also be increased data sharing to aid health and wellbeing, enhanced patient choice measures and removing the application of some of the competition and procurement laws on the health service. In relation to the latter for example, the Competition and Markets Authority will not have its current remit to review hospital mergers and the current tendering rules will not apply to healthcare services.
As the White Paper states, it is not just new legislation that is important, but “having the right workplace in force; good leadership at all levels” is also needed. This is an issue which is perceptively highlighted in a book called “The Story of Your Healthcare” by Bob Phillips published by Bloomfield Press, a book which describes and explains the journey of Your Healthcare Community Interest Company, a social business provider of NHS community services, to commemorate Your Healthcare’s first ten years in business. Bob Phillips refers to the fact that sometimes the concept of “fully integrated” is seen by the top of the NHS as something integrated across the whole of the landscape, but Your Healthcare CIC’s concept of “fully integrated” is something experienced on the ground in the community. Patient orientated integrated care is really a function of how the front-line staff think about and practise their work. As one of the patient’s said “…But I didn’t mind asking the YH District nurses because I know them and they know me. I knew also that it would take them only a couple of minutes to look. I know they wouldn’t mind advising me whether I needed to go to the GP or what I needed to do. One thing I know about YH staff, they wouldn’t say: “feet isn’t my thing”- they wouldn’t just say that and leave you to wonder “What do I do now ?” they’d say : look, this is what I suggest you do.” …..
Personal Health Budgets
These are all fine words but a key question for patients and carers is how quickly can some of the professionals really change the way they have been working to date? How quickly, for example, can they find new ways of co-operating with patients and carers through personal health budgets (PHBs)? It is perhaps worth acknowledging, however, that not everybody seems to believe that patient views really matter when care decisions are being taken. Many people have considered this issue formally, trying to show practically and scientifically that listening to patients makes good sense. The very debate indicates that listening to patients and trusting them to be their own commissioners is not an automatic step for everybody and some hearts and minds are still to be won. This is so despite DHSC and NHS England consultations revealing strong support for PHBs and Matt Hancock’s words that “Everyone deserves the right to make decisions about their care, and health and care should be centred around each and every one of us, not a one-size-fits-all approach”.
The NHS Long Term Plan noted that the Comprehensive Model of Personalised Care is already being implemented. By September 2018 over 200,000 people had already joined the personalised care programme and over 32,000 people had received PHBs, nearly a quarter of which were jointly funded with social care. In fact, figures released from October 2019 show that the 32,000 PHBs figure had moved up to 70,000.
The Long Term Plan states that the NHS will accelerate the roll out of PHBs to give people greater choice and control over how care is planned and delivered and up to 200,000 people will benefit from a PHB by 2023/24. This will include provision of bespoke wheelchairs and community-based packages of personal and domestic support and there will be an expanded offer in mental health services, for people with a learning disability, people receiving social care support and those receiving specialist end of life care. Indeed from the 2nd December 2019, everyone eligible for an NHS wheelchair and people who require aftercare services under section 117 of the Mental Health Act have had access to a PHB. Of course adults who are eligible for NHS Continuing Healthcare funding have had a legal right to have a PHB since October 2014. For the latest NHS England and NHS Improvement guidance on PHBs please see their document “Guidance on the legal rights to have personal health budgets and personal wheelchair budgets” dated December 2019. (https://www.england.nhs.uk/wp-content/uploads/2014/09/guidance-on-the-legal-rights-to-personal-health-budgets.pdf)
Again fine words in relation to target numbers in the NHS Plan for PHBs, 200,000, but if they are to be achieved then NHS England, CCGs and councils really need to focus even more seriously and more quickly on this whole area including how they all cooperate and coordinate their actions and decisions. The legal and regulatory mechanisms are substantially in place to effect and enable the required change in pace and scale for PHB uptake. But more debate about what the most difficult barriers to the pace of change in PHBs is needed, and how those might be countered and overcome and also what we all need to do to give PHBs the best possible chance of actually improving care, including the patient experience of living and dying.
Please note that the Government has acknowledged the importance of everybody receiving the care and support they need throughout the Covid-19 pandemic and further guidance has been issued and updated on the 11th September 2020 and is called “Using Direct Payments during the coronavirus outbreak: Full Guidance for People Receiving Direct Payments and Personal Assistants.” (https://www.gov.uk/government/publications/coronavirus-covid-19-guidance-for-people-receiving-direct-payments/people-receiving-direct-payments-and-those-they-employ-quick-read)
April 2020
Metamorphosis
Metamorphosis has been said to be a dynamic principle of creation, vital to the natural process of generation and evolution, growth and decay! We often think structures that we put up will last for ever but quite often this is not correct. We see buildings change and adapt before becoming obsolete, demolished and a new building going back up when needs change. The same is true of companies or other corporate structures that organisations use to deliver their services. These business structures can change, they can adapt, they can be dissolved and new organisations created. These metamorphoses are going on all the time in the community as organisations adapt to changing finances or to community needs, or the desire amongst organisations to work more closely together or dealing with the consequences of winning or losing contracts.
Over the last few months, we have supported a client begin the process of dissolving a charitable company that was no longer able to access the necessary funding to continue its good works. But, in another case, we have supported and drafted the application to the Charity Commission for a new Charitable Incorporated Organisation as a client looks to support capacity building for its local community to improve health in its area. We have helped redraft a Community Interest Company's Articles of Association to enable it to be owned and managed in a different way, to support better voluntary organisations in its locality to improve the local care and health agenda. Finally, we have been supporting a Community Interest Company that has won a new contract to provide community health care and needed to enter into business transfer agreements with those companies whose staff and assets were transferring to it to start performing the services from April 1st, 2020.
Despite the impact of the Corona virus and the difficult financial pressures, healthcare organisations, social businesses and charities are continuing to adapt and flex and re-engineer themselves so that they are in best position to support their clients, residents and patients over the coming year.
December 2019
COIN
Please see a recent blog by Chris on the role of Community Interest Companies under the NHS Long Term Plan by clicking on the link below:
http://www.healthmatters.org.uk/coin/3681/
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