UnitingCare, NHS Provider Consortium, Folds and Walks Away from Cambridge Contract

It is only a year since the contract for older people’s healthcare for Cambridgeshire’s was awarded to the UnitingCare Partnership, which is a limited liability partnership (consortium) of Cambridgeshire and Peterborough NHS Foundation Trust and Cambridge University Hospitals NHS Foundation Trust. So note, that is two public sector bodies delivering the service – this was not “privatisation” as some are reporting.

Anyway, just eight months since the service went live, the consortium has collapsed and services are being handed back to the commissioners, who have agreed that the service is “not financially sustainable”.

A joint statement issued by the commissioner, Cambridgeshire and Peterborough Clinical Commissioning Group, and UnitingCare said: “Patients and frontline staff will see services remain despite a contractual arrangement between Cambridgeshire and Peterborough Clinical Commissioning Group and UnitingCare Partnership LLP ending. Unfortunately both parties have concluded that the current arrangement is no longer financially sustainable.

“We are clear that the innovative model of care for older people and people with long term conditions brings benefits for patients and the whole health and care system and we are all agreed that we wish to keep this model of integrated service delivery. The CCG will be working with providers of services in the coming days to ensure that there is a smooth transition for all concerned.”

The procurement and contracting process was estimated to have cost some £1 million, and besides that waste of money, this raises so many questions for health commissioning, it’s hard to know where to start.

It seems to have been very easy for the consortium to walk away from this – if it had been a private provider, might they have been held to the terms of the contract, or at least be hit be penalties for termination? Setting it up as an LLP presumably protected the "parent" organizations from liability. But hard to be too tough on the "supplier" maybe when it is public bodies delivering the services. So commentators who are crowing about the “end of privatisation” might want to be a bit careful – this may actually strengthen the hand of the private sector, who might accept more in the way of risk and liability.

However, the worrying point more generally is that a very lengthy and expensive tendering process has ended up in what is a disaster really, with a provider organisation lasting less than a year. That might question the whole basis for a competitive and market-led approach to selecting the right suppliers for complex health services. It also raises questions about the payment by outcomes / results approach which seems to have been taken here and has been a key principle of many of the recent health reforms.

That is linked to the wider issues around NHS finances versus the demand for services. Maybe the consortium accepted too much demand risk, or were too optimistic about the outcomes they could achieve and which would define their income. But one way or another it looks like there was just not enough money available to be commercially viable and do what the commissioners contracted for. That is a worrying outcome that may be replicated elsewhere in the system before too long.

 

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