Health commissioning – I know, let’s hand it over to the bankers, they’re good with public money

Yesterday we covered some of the issues around health commissioning from a competition law point of view. But there is another potential issue brewing.

When the new health commissioning structure was put in place, an important element – but not very visible to the person in the street – was the Commercial Support Units. These were formed of staff from the old Primary Care Trusts (PCTs), who previously had managed the commissioning of health  services, and were designed to provide support services to the Clinical Commissioning Groups (CCGs).

The CCGs were supposed to be made up of clinicians, doctors, nurses, a few local dignitaries and so on. Now the thinking was that they wouldn’t have all the resources themselves to do the commissioning (planning, procurement, financial management, contract management etc), so the CCGs would buy in those services from the CSUs, using the skills of staff who previously had done that sort of thing in the PCTs. That would also avoid some PCT redundancies.

Everyone following me so far?

However, there is an ongoing tension here.  NHS England is accused by some CCGs of “pushing” the use of CSUs and putting pressure on CCGs to engage them, even though CCGs are supposed to be independent. Meanwhile, some CSUs are struggling, and indeed we’re beginning to see mergers and even CSUs disappearing. The CSUs have been told they must become self-standing by next year, which is an issue as well.

So perhaps in response to that challenge over funding and independence, last week the Financial Times reported that NHS England were talking to private equity businesses to see if they might like to buy or invest in the CSUs.

“The NHS has approached private equity companies about taking over organisations that help buy billions of pounds of services for hospitals and GPs.The talks focus on the 19 commissioning support units (CSUs) set up last year to provide services to the new doctor-led commissioning groups that spend more than two-thirds of the NHS budget.

Aatif Hassan, partner at August Equity, which already has a number of healthcare investments, said: “The NHS has approached us and a number of private equity groups.” Bob Ricketts, director of commissioning support strategy at NHS England, said there was a “lot of interest from commercial providers” in CSUs. “We’ve been talking to the investment community to sound out their interest in partnering and joint ventures,” he said”.

This is another potential public procurement outsourcing to the private sector really, just like the MOD and Highways Agency potential GoCos. If the CCGs need external help in their commissioning activities, then that’s up to them, although one might hope they would make a structured and strategic make / buy decision in terms of these activities, which seem pretty core to me. But if the CSUs move into the private sector, then we have a new challenge – the CCGs will really need to get smart at managing the procurement and contract management of the CSU services.

And if the CSUs are private equity backed – a sector known of course for its gentle approach and relaxed attitude to returns on investment...  Apparently the big consulting firms and the outsourcers (like Capita and Serco) might also be interested.

But what about the potential for conflicts of interest in commissioning decisions?  How will the CSUs be rewarded – and how much NHS cash will be sucked out by these private equity firms?  Management consultants with £3000 a day fees running local health tenders? And who in the CCGs has the skills to manage them?

And it would of course be wholly inappropriate for NHS England to push CCGs into the use of CSUs who were in the private sector. In fact, I assume any CCG would have to run an open procurement competition in order to choose a privatised CSU to support their activities? (Unless NHS England set up some dubious “framework” of course).

I hope Mr Ricketts has thought these issues through. Because at first sight, it looks like a truly dreadful idea.

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Voices (5)

  1. Bill Atthetill:

    This might explain it….

  2. Dan:

    Hang on, let me see if i’ve got this straight.

    We created Clinical Commissioning Groups, whose role is to procure/commission services from providers.

    These CCGs then turn out not to have the skills required to carry out commissioning.

    Leaving aside the obvious concerns there, they then have to procure a separate organisation to do this for them. The fatal flaw in this being that they don’t have the skills to do this effectively. If they did, they wouldn’t need to do it.

    Or have I just been a bit thick and misunderstood? Because frankly, I can’t see why anyone would think the above is a good idea.

  3. Sam Unkim:

    Let’s also not get away from the fact that (in CCG land), every single person, every single building & every single system is a completely unnecessary and artificial expense, created to give the Private sector access to the NHS “market”.

  4. Dave Orr:

    Care with profit at the point of need…..that’ll work – Just look at America!

  5. Dave Sheldon:

    There are a number of difficulties with the operation of NHS Commissioning:

    Firstly as the PCTs were being wound down many staff were being let go and not being replaced and although the CCGs in the main mirrored the out going PCTs the resources they had varied greatly.

    Also there was no standard model for the structure of CCGs so some retained the Procurement and Contracts staff that remained whilst others passed them over to the CSUs.

    As bigger risk as commercial CSUs is that CCGs will set up their own procurement teams (on the cheap?) and all chances of improved procurement processes lost.

    The CSUs should be able to survive in their current form if given some time to develop their skills and markets but like football managers time is not generally available in the public sector.

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