Health commissioning – are the storm clouds gathering?

Worrying times for the UK’s health CCGs (clinical commissioning groups) who buy health services on behalf of their local citizens. There appear to be an increasing number of legal challenges to their approaches and procurement decisions, and some of the inherent tensions in the commissioning system seem to be bubbling up to the surface.

In Bristol, a group of campaigners has reached an out of court agreement with the CCG, after claiming that the group was not following the law in terms of patient and public involvement in the development of their strategies and plans. As the Health Service Journal said,

Bristol CCG maintains that “in substance” it has had “proper” arrangements for public involvement in place since its inception in April 2013. However, following the challenge by Protect Our NHS it has agreed to amend its procurement policy and constitution to describe the arrangements for public involvement in more detail.

And with perhaps more fundamental implications, the British Orthopaedic Association has warned that CCGs who “commission elective and trauma musculoskeletal services separately risk destabilising their local health economies”, as HSJ reports.

Tim Briggs, the association’s president and a consultant surgeon at the Royal National Orthopaedic Hospital Trust is concerned after several CCGs let contracts for elective services only, leaving NHS hospitals to pick up the trauma workload.

This was always seen as one of the potential issues with the commissioning model. Any good procurement executive will understand the benefits in structuring what is being bought in a sensible and logical way – taking a category management approach in effect. But the problem here is two-fold. Firstly, the tariffs that can be charged for different services do not always accurately reflect the cost of providing the services. So there may be some “cherry picking” going on, where providers, particularly private sector firms, look to take on the profitable and ignore the less profitable work, which has to be picked up by NHS providers.

Then we have the situation that many large hospital trusts find themselves in, with a huge and largely fixed cost base. If a hospital loses one element of work, it can’t easily say, “OK, we’ll just close down that department” or vacate part of the hospital premises - possibly PFI funded, with a large annual payment due. So losing elements of work can put the whole Trust in a financially vulnerable position.

We’re now in a situation where the current government are just hoping and praying that the NHS can stagger through to the next election in less than a year’s time without a major scandal, a winter flu epidemic, or a bunch of Trusts actually going bust. But it seems likely that these issues are going to feature regularly in the system over the next months and years.

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