Social care procurement – why might personalisation save money?

How can an 86 year old disabled man buying a service purely for his own use do a better commercial deal than a council with a professional procurement function and considerable aggregated demand / buying power?

The UK Government (but note - this issue has implications I suggest for the public sector in each and every country) announced this week a major increase in the use of personal  budgets for people who receive social care.  There is much to discuss around this initiative, but I'll focus on an immediate procurement issue.

I spoke at the ePayments and Purchasing Card conference last week as a follow up to the White Paper I wrote for American Express (still available from Ben.E.McKee@aexp.com).  But aside from my suggestions as to how public procurement staff can meet the demands of higher expectations combined with less resource to achieve them, there was a very interesting presentation from Wynn Spencer of East Cheshire council, who talked about using payment cards as part of their social care 'personalisation' programme, which is already well advanced even before this week's announcement.

In East Cheshire, as in other councils, social care recipients receive money (in cash or card format) to spend as they wish– within reason – in order to receive the care they need rather than getting the services determined and provided by the council.

Now as a procurement person, I immediately think of the loss of aggregation issue.  Instead of the council using its total volume to buy domiciliary care (such as 'home helps', as my Grandmother would have called them), each individual is on their own in the market.  How could that possibly lead to commercial benefits? You would be surprised, said Spencer. Here's three reasons she gave me.

  1. In the case of our 86 year old above, he refused to pay the monthly bill from the provider. “They didn't turn up on four days during the month” he said. “I'm not paying for those days.” Now it was his money, he kept diligent records. The council may never even have been aware of this; or even if they were, that may not have been linked back to an invoicing 'error'.
  2. The council requires all sorts of 'management' services to be provided by their suppliers over and above the core service – which is in many cases, an individual spending time with the recipient of care. Under personalisation, the overhead is not required; the rate might be £10 an hour (the basic cost of the individual carer) rather then the £15 or £20 that gets charged by the time the overhead and corporate profit has been added.
  3. Care recipients may find more innovative ways of getting what they need; Spencer quoted an elderly Asian lady, whose English was poor, and who paid a fee to her local Indian restaurant for delivery of a meal a day to her home (the council doesn't pay for the actual food, we should note).  This was more to her taste, allowed her to have a pleasant daily chat to someone who spoke her language (and could pick up any problems she might be having), and cost the council a third of the previous cost of sending staff or 'usual' suppliers in to cook for her.

Now that's not to say that there won't be some problems as this develops. You can envisage the potential for “shocked” Daily Mail headlines as recipients come up with different ways of spending 'their' money.  But it looks like a very worthwhile field to explore further; and there are interesting card and payment solutions being developed around this that can help with both control and management information.

But it is also an example of where UK government initiatives apparently pull in different directions. This idea will see dis-aggregation of spend, fewer big deals; while the drive in Whitehall for central procurement, and encouragement for councils and Police Forces to collaborate, seems to go in the other direction. I think there probably is a logical argument to be put forward to explain why this apparent dichotomy does make sense; but no-one is really articulating that at the moment.

First Voice

  1. Rob:

    The personalisation agenda has been around since 2006 Peter. Here’s another true story… One older person used to receive 20 hours of home care per week which was ‘pushed’ at her via a known regional/national care services provider. She would have at least 3 different people in her home each week, bathing and dressing her. She received this same service for three years without any improvement to her outcomes. The contracts were well procured and negotiated, and collaboration was achieved between 3/4 councils in selecting the same supplier – to provide a service the end user didn’t want, didn’t ask for and didn’t improve over time. When that same user says that she only need 50% of the current supply cost to pay the ex-nurse across the road from where she lives, and whom she’s known for years, to deliver better outcomes (such as enabling her to bathe and dress herself within, say, a three month period), it’s easy to see why there’s such a strong case for the creation of individual ‘commissioners’ buying – what they actually need – from a ‘universal service market’. The major implications would include, for example, financial risk (making sure they can’t spend it on things they shouldn’t do – hence card/payment solutions) and personal risk (‘accreditation’ of quality and individuals’ backgrounds ie criminal records, in environments where there are vulnerable people.) (But look how successful ‘Checkatrade’ has become – based upon developing a virtual network of ‘trusted’ suppliers.)
    Procurement can enable and deliver much in this space (£16 billion expenditure in England alone) but the number of procurement who have actually met service users to determine what they actually need could be counted on one hand. There are many instances of excellent procurement practice in this space – though often it’s like finding a piece of hay in a needlestack when trying to get folk to capture it for wider sharing – but personalisation is estimated to deliver much more (despite the high risks…). Happy to explore further…

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