Practice Based Commissioning

For those of you who were on holiday and missed the latest policy document ‘Commissioning a Patient-led NHS’, PCTs are to revert to a pure commissioning model. Reconfigured PCTs, larger in population and more closely aligned with local government boundaries, will devolve budgets to GPs, while also buying in commissioning expertise from the private sector.

It is intended that PCTs will have merged into larger units by October 2006; by December 2006 practice-based commissioning will be universal and by December 2008 PCTs will have shed their community health provider functions altogether.

There are some sound reasons for the change.  Firstly there is the view that the NHS needs a highly sophisticated commissioning function if foundation trusts now and in the future are not to hold the balance of power and the NHS to ransom.  Part of the solution, the Department believes, lies in engaging international expertise on the purchaser side.  There is also the need to utilise good PCT managers more widely (hence mergers) and to remove the burden of managing a workforce.

The second reason is that at last the importance of demand management has been recognised, which cannot happen without GPs.  Accordingly, there is a real drive for GP commissioning budgets.

When fundholding fell by the wayside in the late 1990s there was not much extra purchasing power flowing into the NHS, so the risk of inflation was low.  Hospital waiting times started to get longer and longer, so GPs were deterred from referring.  This is no longer the case.  Extra money should buy more elective activity, but when GPs do not have budgets, their referrals increase at a similar rate, so waiting times do not improve.

Thirdly, care pathway redesign requires a radical shake-up in community and intermediate health services, as well as hospital care, which PCTs may manage better through vigorous commissioning relationships rather than loose line management arrangements. For PCTs it would then be easier to consider purchasing services from alternative providers of home-based healthcare, which would generate additional pressure on their former providers of community and intermediate health services.

This remodelled NHS will fall apart without equal sophistication on the purchaser and provider sides, so money saved in reducing management costs by 15% should be reinvested in beefing up the commissioning capacity.

As a result of the loss of the provider arm community nurses and others will be speculating about their new employers.  There is a range of options including the transfer of community staff to new community-oriented foundation trusts; to local government; general practices; voluntary organisations; acute hospitals or to private companies.

Concerns about the transfer of undertakings regulations and the NHS pension scheme would suggest that the most likely outcome would be for either a community orientated foundation trust; specialist provider medical services or an existing NHS provider to host their services.  Contestability, however, means that other charitable and commercial organisations will come onto the scene and deliver innovative and flexible forms of patient services to challenge these easier options.

Practice based commissioners are also able to commission or provide services using modern and different skill mixes and deliver more services in-house, making demand management a reality. Much more care can be delivered cost-effectively in the community, and this will happen, provided the appropriate incentives exist and adequate sophisticated commissioning support is aligned to practices.

Practices are able to use 100% of their efficiency gains, released through cost effective commissioning, which, with the exception of management costs can only be used for the development and implementation of patient services.

This reinvestment will be used to modernise and improve services in a very significant way through the redesign of patient pathways and skill mix; demand management and innovative service provision.  Improvements will focus across the spectrum – in secondary care provision, intermediate care, community and primary care services.

NAPC offers its members opportunities to inform and update themselves on PBC through publications, newsletters, and a rolling programme of dedicated events.