UK Health Procurement / Commissioning – it’s complicated

To be honest, I'm struggling here. Help me out, kind readers in the UK Health sector. Comments and clarifications most welcome.

The Department of Health has issued regulations and guidance that purport to clarify how new legislation will affect the way that commissioning of health services will work under the new regime of Clinical Commissioning Groups (CCGs). And although I thought I had a reasonable understanding of health commercial issues... I'm struggling.

It seems to be emphasising a continuation of many of the regulations and ways of working we saw under the previous PCT set-up. But others - probably better informed than me, like the Health Service Journal - see it as emphasizing that CCGs will have to follow broadly EU procurement regulations. So, for instance, if they don't want to run competitive processes for health services, they better have a jolly good reason. that should increase the chance of private heath providers winning business within the system.

I'm both a big supporter of the public sector and (most of ) the people within it - but I'm also a firm believer in the power of competition. And whilst we've had brilliant service and treatment when we have needed it from our local hospital (Frimley Park, rated one of the best in the country), you do wonder why it is so much easier to get my cat in to see the vet than to book an appointment with a GP. Ad when our last cat very sadly came to the end of her life, the care shown by the veterinary staff was exemplary - and by all accounts, a lot better than many people got in North Staffs and elsewhere.

So.. it's a tricky one. But it's clear that procurement and commissioning staff are going to have a vital role to play if the future of UK health provision is to keep the best aspects of a public system, whilst driving improvements to service and value for money - and of course avoiding the US disaster, which appears to deliver the amazing combination of very high cost and pretty poor results (at a macro level, I should emphasise).

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Voices (5)

  1. Mark:

    The section 75 regs at a first glance seem similar to the previous PRCC that PCTs had to follow, however there are some significant differences when you get into the detail. One of the main ones is the default position in the new regs that everything should be put out to competitive tender and that the only basis for doing a single tender award (i.e. not tendering) is for “technical reasons” (which are unhelpfully not defined) or “extreme urgency”. This is definitely significantly more restrictive than the PRCC which gave more scope for PCTs to award contracts without tendering (e.g. to other NHS bodies) where it could be shown to be in patients’ interest. This test has been removed and no provision for “in-house” awards seems to be allowed. As Pauline says, this suggests that even the main acute contracts that PCTs agree with major hospitals would be required to be tendered – something which seems almost inconceivable at the moment. There are other references in the new regs to CCGs having to ensure that commissioning decisions don’t adversely impact competition within a particular market – again something which wasn’t required previously. The government made numerous promises that neither of these things would be in the regulations when they were published but seems to have gone back on them quite clearly. There are other problems with the regs such as Monitor’s role which also seems to have been expanded beyond anything that’s been discussed previously. Monitor themselves have just published a report recently saying they don’t believe providers currently have enough opportunities to challenge procurements and are looking for ways to expand this!

  2. Pauline:

    There is enough confusion in the system already and these new regulations add further complexity at a time of turmoil. As a statutory instrument coming into force from the 1 April (if they actually get through the Lords with out significant change!) they will be subject to wide interpretation at local level which will ultimately lead to significant increased legal and procurement costs. The Lansley mantra of Commissioners will be free to determine when competition is appropriate to use – seems to be just that.

    As a procurement practioner in this area CCG’s I have spoken to are confused, frustrated and angry by some of the areas included incorporating what was previously guidance and policy into domestic law and giving Monitor powers far in excess of those currently afforded under the Public Contract Regulations Part B services or the Remedies Directive. See regulation 14

    On a very practical basis the EU Public Contract Regulations 2006 – have clear guidance on thresholds for tendering and associated timescales relating to complaints and challenges – the National Health Service (Procurement, Patient Choice and Competition) Regulations 2013 don’t – what was policy/guidance ie advertise on Supply2Health everything over £100k and now captures every contract with no associated timeline of when a complaint/challenge can be closed down. It will be interesting to see whether a disgruntled provider be that NHS or private seek to challenge under these Regulations or the Public Contract Regulations 2006 (but not both!) as they now have a choice!

    It would appear that Jeremy Hunt has just woken up to the fact that these Regulations will create a legal mindful……the mad March season will be very interesting to watch but with only 31 days until these come into force if changes are to be made lets hope that comes out sooner rather than later.

    PS if anyone can answer the question does this mean that the one year contract (current maximum that you can award with out SHA or commissioning Board approval) with the local hospital for £100M needs to be competitively tendered each year – would be great to know.

    Pandora’s box is open and will be very difficult to close.

  3. Dave Orr:

    It was always about opening up the spend to private companies. That is why lobbyists lobby and MPs take non-Exec posts etc.

    Look “across the pond”: The US health system is the most expensive per capita in the world and fails to cover 30% of the population.

    How can you predict over a 10-year contract where medical technology & pharmacy will take you?

    Blanket privatisation in Councils has serially failed in Bucks, Beds, Liverpool, Birmingham and Somerset, so your touching faith in fusing the best of public & private Peter is not backed up by any serious evidence is it?

    I predict another cartel-like & dysfunctional market developing like energy, water, rail etc.

  4. Sam Unkim:

    Basically it’s another large step in the plan to shift the NHS across into being an “insurance” provider.

    GPs are going to have to commission all services as “frameworks” to provide patient choice. Private providers will have huge sales team producing wonderful bids full of improvement opportunities. Patients will take the Private choice to avoid a “Mid-Staffs” experience, regardless of cost. Hospitals will have to move out of providing anything but “Blue Light” and critical care as economies of scale dwindle.

    Job Done

  5. bitter and twisted:

    The problem with public sector ‘competition’ is: due to capacity limits, some poor bastards have to go to the shit hospitals and shit schools.

    And healthcare demand is fundamentally a special case – its infinite

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