How should GPs commission?

by Rob Findlay

No wonder GPs up and down the country are looking at commissioning with unease, if not dread. The current system wouldn’t suit them at all. But commissioning doesn’t need to be this way, and the door is standing open for a much more human and collaborative approach that plays to GPs’ skills as doctors.

So what’s wrong with the current system? In short, the adversarial contract-driven approach doesn’t work.

Every year the PCT and the local hospital sit down with a copy of the standard (and compulsory) NHS contract, and negotiate the activity and the Key Performance Indicators (KPIs). The contract is only signed after they have reached agreement on all the terms (or after the SHA arbitrator has imposed agreement on the warring parties). After the financial year begins, the PCT holds the hospital to account for any failures against the KPIs by applying the contractual sanctions. If the hospital is doing more activity than specified in the contract (called “overperforming”), complex terms are applied to work out how the excess should be paid for.

What effect does all this have on the delivery of healthcare?

When it comes to quality, all eyes are focused on the KPIs (and only the KPIs). Remember that these have to be agreed in advance by both parties, and the hospital has no interest in creating a rod for its own back. So, even though the KPIs make a very long list, they are only a tiny subset of everything that means “quality” in healthcare. Even when something is specified, the standard is pitched at acceptable rather than aspirational. The usual response to these shortcomings is to define more KPIs, to make them tougher, and to raise the sanctions. But that doesn’t fix the essential problem.

Activity is a problem too. Neither the PCT nor the hospital can predict the demand for healthcare accurately, so the activity specified in the contract always misses the mark. The complex clauses that deal with “overperformance” serve to weaken the link between activity and money. PCTs can berate hospitals for overperforming or having excessive waiting times, and hospitals can berate PCTs for failing to manage demand, but what can either party actually do about it? And even when they can do something, do they want to? Hospitals make good money from uncontrolled demand, and can even generate income by referring work to themselves and other hospitals without prior approval.

And that’s just the incumbent providers. Tendering for new providers is long and complicated, with lots of pitfalls that can scupper the entire process. When a commissioner eventually makes it to the end of the process, the moment has probably passed anyway, and even if it hasn’t you are still in the unhelpful world of adversarial contract-management.

How could things be better?

GPs are small-business owners, and the world of the small business is quite different from this. Firstly, you pay for everything you order, and you don’t pay for anything you don’t order; so everybody knows where they stand when it comes to money.

Secondly, if a supplier does anything to displease you with regard to quality, anything at all, you have a grown-up discussion after which the supplier either puts things right or risks losing future business; the relationship works best when it is co-operative not adversarial, and quality is driven up relentlessly by customer expectations.

Thirdly, you can switch suppliers any time you like, although it takes effort to do this; so suppliers are keen to retain your business, and you are reasonably keen to avoid having to switch.

Healthcare can be like this too, and the Any Willing Provider (AWP) model provides most of the framework. The biggest thing missing from the official process is some way for GPs unilaterally to stop paying for anything they don’t refer, and it would be helpful if the Department of Health could put this right.

Even if this isn’t fixed officially, once GPs are established with co-operative relationships in a competitive (or potentially competitive) environment, then local providers should quickly learn that their interests lie in going along with GPs’ aspirations; because if they don’t, then it won’t be long before their local GPs are looking for alternatives right across their service range. They won’t be slow to do so either; not just because they know their patients and want the best for them, but also because they are scientifically trained and more than capable of generating and analysing relevant information about the service they are receiving.

Ah, defenders of the status quo say, but this is just a race to the bottom: AWP providers will only have to pass the minimum CQC standards, drive down their prices, and all the GPs will start herding patients their way.

This view is mistaken.

From the provider side, we have already seen how it is the existing contractual process that drives down standards. And from the GP side, the argument is frankly insulting: it accuses GPs of being completely uninterested in quality.

What GPs are actually interested in, just like customers in any market, is value: quality and cost considered together. So GPs will happily pay for a significantly better service, even if it costs a little more, just as consumers in the high street are willing to pay extra for better food and more advanced personal stereos. (In fact the history of machines for playing music shows how the result can be vastly higher quality and vastly lower cost.)

GPs needn’t fear commissioning; they just need to find a way of doing it in a way that suits them. It will come naturally, once they realise it’s possible. The people who may struggle are the ex-PCT staff who are hoping to support the commissioning consortia; will they be able to switch mindset to the GPs’ way of thinking, or will the contract-driven habits prove too deep to unlearn?

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