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How CCGs can make the best use of tightening resources

CCGs will face enormous pressure to make spending decisions in a transparent and effective way. Gary Belfield looks at how they can make the most of their cash.

The Health Bill passed the final hurdle and received royal assent in March. But behind the scenes, clinical commissioning groups have been building the new reality for some time. In just under a year, CCGs will take over responsibility from primary care trusts for authorising more than £60bn of healthcare spending across the UK. To put this into context, the sum is close to the total GDP of Morocco.

Once they are at the helm, CCGs will face pressure from the NHS Commissioning Board and the public to demonstrate that decisions are being made in an effective and transparent way. The stretch of every NHS pound will be an unwavering priority.

It’s a huge responsibility and it comes with more than the usual challenges of change. CCGs are, after all, fledgling organisations with no well-trodden paths to benchmark themselves against and no certainty – yet – as to the direction they should follow.

More fundamentally, the increasing cost of drugs, an ageing population and the rise of diseases linked to obesity, for example, are all pushing demand and costs higher. This tide of pressures needs to be met full on by confident and capable commissioners.

On the other hand, the creation of CCGs is a genuine opportunity to set a new way of working for commissioning that hopefully will stop the merry-go-round of changes endured since the mid-1980s.

By my reckoning, there have been at least 11 changes during the past three decades to the way that healthcare provision has been delivered, ranging from organisational, such as the creation of primary care groups, through to policy initiatives such as GP fundholding. 

In practical terms, CCGs have two budgets that offer different opportunities for maximising value and making the best use of the resources available to them: the running allowance to cover the costs of the CCG itself; and the commissioning allocation to spend on local public services.

Budget one: the £25 per head running cost allowance

The “£25 per head of population” running cost allowance is the focus of much debate within CCGs. Most have to cope with significant gaps in their current running cost data and are still working through their priorities. Nevertheless, there are a number of key decisions that all CCGs must make:

Decide what to keep. To begin with, CCGs should decide which areas they want to retain in-house. Consideration must be given to the areas that affect care pathways and therefore have a direct link to patient care. Depending on the size of the CCG it may not be able to keep all such areas in-house for cost or capability reasons.

This means each CCG must define its own priorities for successful healthcare. I have worked with CCGs for whom the urgent and emergency care pathway redesign is so crucial to their success that they wish to keep all commissioning aspects in-house. By the same reasoning, they are happy to delegate elements of the planned care pathway to the local commissioning support service.

Decide what to delegate. Many of the concerns aired about CCGs revolve around business skills. At a minimum, CCGs should decide whether they are likely to delegate transactional activities, such as invoice payments or basic data collection, to another party such as the local CSS.

Decide what to share. Partnering with neighbouring CCGs that have similar strategies and priorities for health improvement can also offer opportunities to maximise the £25 allowance. For example, some CCGs are considering sharing services where support is needed only on a sporadic or limited basis. This might include expert mental health commissioning advice or elements of communication or
PR support to deal with major service changes. These areas will be best brought in either from a third party or CSS or from a group of CCGs.

Budget two: the commissioning allocation

The main purpose of the CCG will be to use the commissioning allocation effectively and maximise healthcare gains for the local population. For many CCGs, this budget will be in
the region of £300m. It’s no small amount and there are several areas that should be considered to deliver benefits to individuals and the local healthcare system,  if CCGs are to get the best use out of every pound.

Get better data. There is now a wealth of information to help CCGs eliminate unwarranted variation in care. This can cover secondary care clinical performance and primary care general practice. The latter has less obviously available data, but nonetheless many CCGs are now pursuing this avenue. Take time to assess whether you need to do the same.

Shift towards proactive, targeted care. Better data makes it easier to focus resources on where they are needed most, based on assessments of risk. As an example, Torbay identified fewer than 90 people in their population who were at greatest risk of hospitalisation and
were often frequently admitted for short lengths of stay. By focusing on these patients Torbay has improved the quality of care and also released resources that have been reinvested in community services. It’s an experience that could easily be replicated.

Keep people independent for longer. The medical community widely recognises the benefits of shifting from secondary to primary care for people with long term conditions. CCGs will have a great opportunity to work with secondary care to achieve this shift. Linking mental health with physical health will also create the single pathway to reduce the “gaps” through which patients can fall and where additional costs can occur.

Master procurement spending. Given the NHS is one of the largest organisations in the world, its relatively weak buying power remains inexplicable to many outsiders. Items as basic as vinyl gloves are sometimes purchased at different prices within the same hospital. The variance in the type and cost of joint replacements used by different hospitals is also significant. This may be less a reflection of clinical need than of where a particular surgeon trained.

Purchasing from a smaller group of clinically approved joints will reduce stock costs and enable greater negotiation on price. GPs working in
buying groups instinctively know this makes sense. Commissioners could drive this debate through local contract negotiations with secondary care, allowing savings to be reinvested locally.

Increase the productivity of community services. These services form a larger proportion of health spend than people imagine and yet the grip on priorities and productivity is often loose. Recent analysis of one PCT showed that the variance in the number of district nurse visits to patients was tenfold. Community services have a strong role to play in delivering the future commissioning agenda, meaning that it is vital to build clear expectations and performance measures to gauge and drive success.

Promote telehealth solutions. CCGs will need to challenge providers to improve care and reduce costs through technology such as telehealth and telecare in patients’ homes. The headline results from the Department of Health’s Whole System Demonstrator study prove that these solutions can lower costs and improve quality if adopted as part of an integrated care plan.

Some studies estimate it can improve productivity by up to 100 per cent, with a 20 per cent reduction in emergency admissions and a 25 per cent reduction in prescribed medicine costs. But the key is to focus on delivery of care, rather than the technology itself, which will require fundamental changes to the way we operate across health and social care.

For a CCG, these decisions all require a degree of insight not only into their own priorities, finances and capabilities but also into those of their network of partners and support organisations. This type of joint working is new to clinicians and so, unsurprisingly, is an area of current concern. That is why it is critical for every CCG to set clear expectations of its support organisations, such as CSSs,
and have demonstrable measures to hold them to account. This may mean something simple, such as setting response times to CCG information requests or requiring that any information reports include data that is meaningful to individual practices. 

In the longer term this relationship management task may prove to be more problematic for CSSs than CCGs as the balance of power shifts from the suppliers to the commissioners. That shift – making the power of CCGs work for patients – is the challenge at the heart of these reforms, with the potential to have the greatest impact on the health of the population. A relentless focus on priorities that maximise the effectiveness of every NHS pound is a good place to start.

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