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Blog
A new dawn for the commissioning of health and social care in England
Vishal Manro, Market Access Consultant UK & Ireland, IQVIA
Jan 06, 2021

Why is a change to commissioning for health and social care required?

The move towards an integrated model of delivering health and social care has profound implications for commissioning. A variety of different commissioning models concurrently exist, including the national tariff, capitation or block contracting and NHS England specialised commissioning. Having different payment models within the same system is widely recognised as a barrier to implementing an integrated model of health and social care.

What are the commissioning changes happening?

Under the Integrated Care System (ICS) framework, commissioning is becoming more strategic. The NHS Long-Term Plan has set an expectation that Systems would streamline commissioning arrangements so that a single Clinical Commissioning Groups (CCG) operates within each System. To achieve this, we are seeing CCGs across a single System slowly begin to formally merge or adopt joint management structures. Not all Systems are adopting the same approach, with some CCGs opting to form closer working arrangements with local authorities at a Place level, which reinforces the concept of autonomy of Systems as discussed during the first blog in this series. An amendment in the Health Act 2012 is needed to develop ICSs into the responsible legal entity, with CCGs remaining in place until this can happen.

A new payment model has been created, which can be considered as a hybrid that combines a capitated population budget, an improvement payment scheme and a gain/loss share arrangement. NHS England and NHS Improvement (NHSE/I) have made it clear that they want ICSs to have financial accountability, with a ‘single-pot’ which provide the funding for health and social care services which are commissioned at a System level.

  • Capitated payments are lump-sum and not linked to how much care is provided. Providers have the flexibility to spend money on services they think will secure the best outcomes for their respective patient population. Commissioners will set the outcome measure and tender to select the best provider to deliver services.
  • The improved payment scheme will provide incentives to improve quality and mitigate against the risk that providers will deliver as little care as possible to minimise costs, given that they are not reimbursed based on the quantity of care delivered.
  • Savings (i.e., gains) and overspends (i.e., losses) will be shared across commissioners and providers, which should help align financial incentives across the System.

NHSE/I are working closely with ICSs to give local Systems a greater say in how the specialised commissioning budget is spent within their respective area. Where possible, commissioning of certain specialised services will occur at an ICS level. Funding of drugs for specialised services currently remain the responsibility of NHSE/I, however the budget will likely be determined by population-based estimates rather than provider-based allocations. Given the high cost and relative low volume, highly specialised services will continue to be commissioned and funded by NHSE/I.

What does this mean for the pharmaceutical and life sciences industries?

The direction of travel for improvements in health and social care has been laid out in the aforementioned NHS Long-Term Plan. An opportunity exists to work with providers and commissioners alike to reach these ambitions in an accelerated and efficient manner. Given the ambitions of the LTP, it seems prudent to expect that value will be placed on interventions that drive improvements in population health, are preventive, reduce health inequalities and reduce inequity of access.

Forming close working relationships with individual Systems will help Places and Neighbourhoods reach pre-defined outcomes to obtain financial incentives as part of the improvement payment scheme. Under the improved payment scheme, incentives will initially be aligned to the existing CQUIN scheme, and so largely process based, the metrics are intended to evolve to become more sophisticated and outcomes based over time. Performance monitoring will increasingly focus on the performance of the local system rather than individual organisations.

Working together

There is an apparent disconnect between the national tariff and improving patient outcomes. Furthermore, unaccountable block contracts do not always provide a transparent understanding of the services delivered and lack the incentive to improve clinical care or efficiency. Could now be the right time to overhaul the tariff and block contracting commissioning framework?

A new commissioning framework will help achieve the ambitions of the NHS LTP and aid integration of care across all providers. However, there are no simple solutions to funding an efficient and patient-focused health and social care system. We can expect some challenges ahead. Understanding the changes to commissioning will better prepare the pharmaceutical industry to help the NHS meet these challenges.

Opportunities exist for the pharmaceutical and life sciences industries to form closer working relationships with stakeholders and Systems to drive improvements in population health, reduce health inequalities and reduce inequity of access. This mutually beneficial relationship will ultimately benefit patients with improvements in both the quality of care provided and outcomes.

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