Are you squeezing the supplier or nurturing the provider? Are you appointing contract compliance officers or investing in relationship building? Is there a shared vision of what services will look like in the future or is it all still to play for? Is it an exploitative relationship or one of mutual benefit?
We could be talking about the big supermarkets and their relationship with dairy farmers, the government outsourcing prison management to a private security firm or social services buying residential and home care services for older people but the topic is NHS commissioning. While commissioning is the new big thing in the NHS it has been around other parts of the public sector for some time. What experiences are transferable?
‘We could be talking about the big supermarkets and their relationship with dairy farmers, the government outsourcing prison management to a private security firm or social services buying residential and home care services for older people’
A decade or more ago most local authority social service departments recognised that to meet the challenge of an increasingly elderly population they would need to commission a different type of services. Home care would need to be seven days a week and up to four visits a day to provide intensive support to older people who would no longer go into residential care. Residential care would no longer be for frail elderly people but be specialist care for the increasing number of older people suffering from dementia.
The majority of these services would need to be commissioned from the private sector, as in-house services could not compete on cost and seemed unable to adapt quickly enough.
What happened next varied from one part of the country to another. Local politics played its part, the cost and availability of labour was a significant factor as was the historic level of residential care, the size and type of homes and whether the local market was made up of many small providers or dominated by a few large providers.
The vision presented by the commissioners was not universally welcomed, small providers feared commissioners would use their financial muscle and an over provision to force down contacts prices and that large providers would use economies of scale to squeeze them out.
In-house providers in some places disappeared completely, unable to compete because of higher staffing costs. Relations between commissioners and providers became severely strained as smaller providers claimed they were being forced out of business by commissioners’ obsession with getting the best price and imposing over prescriptive contract specifications. Commissioning costs rose steeply as more contract monitoring officers were employed to ensure commissioners were getting “what they paid for”.
‘Commissioners began to appreciate that to improve the quality of services they needed to offer incentives’
Commissioners began to appreciate that to improve the quality of services they needed to offer incentives, they needed to support and encourage new providers in localities where there were service provision gaps and that in-house providers offered an alternative to private sector monopolies. That commissioning costs could be reduced if they could trust providers. Some commissioners were prepared to fund staff training for providers as a way of improving quality and changing the relationship.
Home Care service commissioning provided examples of this approach. Service users have defined quality for this service as trained and experienced carers providing personal care and a low turnover of staff so that the individual is not dressed,washed and tilted by a succession of “strangers”. Commissioners changed contracts to reward providers with a high percentage of qualified or trained staff, stipulated that staff must not be employed on zero contract hours and offered longer contracts with more security.
Hopefully NHS commissioners will look beyond the supermarket model in developing a health and social care model of commissioning.