The must-read stories and debate in health policy and leadership.

It’s been a rocky week – not the first – for integrated care provider contracts in the NHS.

Up in Staffordshire, after 18 months of hard negotiations with East Staffordshire Clinical Commissioning Group, Virgin Care has told the commissioner it intends to terminate significant parts of a prime provider contract won in 2015, worth £270m.

From next year, the private provider’s deal will be pared back, so that it is contracted only for the direct provision of certain services for the frail elderly and people with long term conditions.

Under the prime provider deal, Virgin was also responsible for subcontracting, planning, coordinating, and integrating services for these groups. These responsibilities will go back to the CCG.

It is not absolutely clear why these steps have been taken, but in October last year HSJ reported that Virgin Care had asked for an additional £5m in funding from the CCG to cover the deal.

Meanwhile, down in Surrey Downs, an integrated provider alliance has run into trouble before the contract has even begun.

An alliance of existing providers was contracted in February, led by the local acute trust, to replace current arrangements from Monday. Instead, the incumbent community health provider – Central Surrey Health – has fallen out with its partners in the deal, and taken the commissioner to court.

It appears they will end up in court, with a first date fixed for next week, while CSH has been asked to roll forward the current arrangements until the end of January. 

These stories come in the context of national support for integrated arrangements, and NHS England currently consulting on its own integrated care provider contract, which seek to shift risk and capacity from commissioners to population based providers. 

Perhaps these are just teething problems as the NHS gets its head around all this; and perhaps making an integrated omelette involves breaking some eggs.

But both the above examples, involving complex contractual and legal disputes, will surely give reason to doubt that a shift to integrated contracting will in fact save the NHS much in transaction costs, as some advocates are hoping and promising.

Hancock’s drop in the ocean

The NHS is – apparently – being weaned off winter bailout funding, which has often come too late to extract best value and make any real difference to performance.

So, any last minute funding in 2018-19 was likely to go into social care, where it’s easier to bring in additional staff at short notice.

At the Tory party conference, Matt Hancock announced an additional £240m would be put into local authority budgets. He said the money would fund packages of care to prevent older people from going into hospital unnecessarily, and getting people home quickly when medically fit to leave.

Labour described it as a “drop in the ocean” that will do little to address a “severe crisis in social care”.

Health leaders were pleased though, with Chris Hopson, chief executive of NHS Providers, saying it would be “strongly welcomed by trusts”.

In the longer term, it doesn’t sound like the Tories will be coming up with a final answer on social care funding reform any time soon (work on a green paper is ongoing).

With previous attempts to overhaul the funding mechanisms being quickly buried under “dementia tax” headlines and the like, Mr Hancock told a fringe event that a more piecemeal approach was likely, with gradual changes made over several years.