Fitness for purpose: current PCT models

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Fitness for purpose current PCT models

• Judith Smith
• HSMC, University of Birmingham
• 5 July 2005

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Agenda

• Policy context
• What do we know about mergers?
• What PCT models have emerged?
• Where does this take us?

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Policy context

• Expansion in PCT roles and functions
• Tendency towards mergers/larger PCTs average
  size of 180,000 and rising
• Evidence of increasing inter-dependence between
  PCTs
• A response to perception (widespread but largely
  unsubstantiated) that PCTs are struggling to
  fulfil functions
• Alleged failure to have significant impact via
  acute commissioning drives this perception

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Policy context (2)

• Arguments re PCT size and configuration tend to
  focus on the local-ness vs critical mass issue
• In relation to purchasing, PCTs caught between
  being too small to commission for populations and
  too big to contract for individuals (Smith et al,
  2004 Gershon, 2004 NERA, 2005)
• But evidence tells us that there is no ideal size
  (Bojke et al, 2001 Smith et al, 2004)
• Support for matrix approaches - organisational
  design and interdependence

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This is not a purely NHS issue

• Others struggle with the size and configuration
  tension
• New Zealand primary healthcare organisations vary
  from 4,000 to 300,000 in size
• Desire to reflect communities and to have local
  governance is a key driver
• A range of different support and organisational
  solutions management services organisations,
  contracted out support, use of GP companies, etc.

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What do we know about mergers?

• No evidence that increases in size beyond 100,000
  generate significant cost savings or performance
  improvements (Bojke et al, 2001)
• Numerous studies point to tendency of mergers not
  to make promised savings
• Many other costs in terms of loss of morale and
  productivity (Fulop et al, 2002)
• Structural change of itself will not alter
  behaviours sound relationships an essential
  prerequisite

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What PCT models have emerged?

• Managed practitioner networks
• Co-ordination of services around needs of
  individuals
• Creation of linkages between providers
• Focus on multi-disciplinary working
• Usually leave service management where it is
• Formal and resources collaborations to achieve
  outcomes not possible through individual action
• A functional (not structural) solution
• Examples child protection, cancer networks, CHD,
  mental health care for older people

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PCT models (2)

• Lead commissioning arrangements
• A single agency commissions on behalf of others
• Authority, plus perhaps money and staff,
  delegated to lead agency
• Often a response to capacity and capability
  limitations (and a desire for leverage)
• Require new governance and consultation
  arrangements between PCTs
• Often part of wider federal approach
• Examples mental health commissioning, urgent
  care planning

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PCT models (3)

• Joint commissioning
• Long history, enabled further by 1999 Health Act
• Integrated commissioning for a care group whose
  needs span health and social care
• Focus on common standards and performance
  measurement
• Focus on better resource use
• Calls for new governance arrangements
• Examples older people, mental health

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PCT models (4)

• Integrated commissioning (care trusts)
• Not been taken up much to date
• Evidence suggests CTs will only work where there
  are pre-existing good relations
• Involves all the risks of mergers
• Could stick to using Section 31 flexibilities
  without going to care trust
• Examples mental health, older people

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PCT models (5)

• Childrens trusts
• Encouraged in policy
• Little prescription re structure
• To be hosted within local authorities
• Local models favoured
• Commissioning only, commissioning and provision,
  provision only
• Examples 35 three-year pilots

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PCT models (6)

• Joint management arrangements
• Closer to merger
• Integration of some management and provider
  services
• Single joint management/executive team across two
  PCTs
• PCTs remain as statutory entities
• Challenge is to relate to two constituencies
• Balance of the local and critical mass
• Examples Trafford, Sandwell, Cambridgeshire

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PCT models (7)

• Acute/PCT mergers
• Management partnerships across acute and PCT
• Merger of functions across the two
• Will this lead to integrated organisations?
• Challenges in terms of governance
• Risk of provider capture of commissioner
• Or an integrated HMO model?
• Examples Isle of Wight, Winchester, Cheshire

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PCT models (8)

• PCT associations or networks
• Unitary a single overarching body
• Confederation unanimous decision-making with
  each member having a veto
• Federation power remains with organisations,
  but they cede some to centre, for benefit of all
• Exist to maximise opportunities for joint work,
  and to be by, of and for PCTs
• Develop networks and work programmes
• Examples Cheshire and Merseyside, Greater
  Manchester Association of PCTs, Hampshire and
  Isle of Wight, NE Yorks and N Lincolnshire

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Where does this take us?

• Still working with the tension between
  localness and critical mass
• Determining the relationship between form and
  function (function first)
• All leads us to consider applying principle of
  subsidiarity
• Need for some form of assessment to decide on
  appropriate local configuration or matrix

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Three key questions

• What are the primary functions of PCTs?
• Which of the emerging options re models might
  support which functions?
• Which PCT functions might be appropriately
  tackled at practice, PCT, or association level?
• see Peck and Freeman 2005 for worked examples

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And for the future?

• There is to be national assessment of fitness
  for purpose of PCTs
• So criteria to be applied from above
• Context of systems reform and forthcoming white
  paper and a more plural provider market
• PCT functions may change and/or diverge
• Likely that PCTs will increasingly govern and
  performance manage
• Less clear that they will provide

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To conclude

• For once in the NHS, we seem to be learning from
  organisational practice, testing out models at
  local level
• Really does seem as though a wholesale
  reorganisation is off the cards
• This is a new behaviour
• And it is to be welcomed, even if it does feel a
  little strange!

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Key source

• Reconfiguring PCTs influences and options
• Edward Peck and Tim Freeman, HSMC and NHS
  Alliance, 2005
• www.bham.ac.uk/hsmc
• www.nhsalliance.org