The creation of new integrated provider models and capitated budgets are fundamental to the visions of the national “challenged health economies”, as well as the centralisation and closure of acute services, HSJ has been told.

New models of integrated care were part of the proposals of all seven of the areas HSJ spoke to. Northern, Eastern and Western Devon Clinical Commissioning Group chief officer Rebecca Harriott said the most significant thing to come out of Devon’s challenged health economy work “was an agreement… to look at outcome based commissioning and capitation funding”.

“In drawing together a capitation budget with a set of outcomes you would expect to be able to align the resources of the CCG to the needs of the population more coherently than the current payment systems,” she added.

This type of approach, in which a provider or group of providers would be given a budget to look after the care of a population, probably adjusted based on improvement measures, was endorsed in last month’s NHS Five Year Forward View.

St George’s Hospital

Hospital services could be reconfigured to save money in south west London

Ms Harriott told HSJ it would help tackle challenges such as Devon’s higher than average spending on elective care and continuing healthcare.

Cumbria CCG chair Hugh Reeve said his area was looking at capitated budgets. “In somewhere like Cumbria where there’s relatively little competition between providers… we think the model of an alliance [of providers] around a capitated budget has a lot going for it,” he said.

Sam Everington, chair of Tower Hamlets CCG, said unifying the currently fragmented commissioning process would promote integrated care in north east London. This would entail the CCG taking on responsibility for primary care and specialised services.

“To create sustainability you’ve got to be able to manage the whole of the clinical pathway of the patient, you can’t just manage a bit of it,” he said.

While care integration was highlighted by all interviewees, several also pointed to the need for major reconfigurations of hospital services. Such plans are likely to be unpopular, and come despite comments by NHS England chief executive Simon Stevens in recent months suggesting local hospital services can be protected more than previously thought.

St George’s Healthcare Trust chief executive Miles Scott said it would be impossible to achieve necessary savings without reconfiguring hospital services in south west London, although there are not yet detailed plans to do this.

“If acute providers are going to be treating fewer patients then that’s great, but simply having fewer patients admitted to hospital will only remove the variable costs,” he said.

To remove “much more stubborn… fixed costs out of the system you [need] to look at key issues such as how many rotas have we got for particular specialities in a geography, how many sites are providing different services… all of the things that lead to questions of service configuration.”

University Hospitals of Leicester Trust chief executive John Adler said “three full blown acute sites” meant his area suffered from “duplication and even triplication of services”. A key part of Leicestershire’s strategy would be centralising its acute services on to two sites, he told HSJ.

Nene CCG chief executive Ben Gowland said reducing duplication between Northampton General Hospital Trust and Kettering General Hospital Foundation Trust was in Northamptonshire’s plans.

The county had “two relatively small district general hospitals” and was therefore looking at whether “we need to provide everything twice”, he said.

What the distressed areas’ leaders said

Hugh Reeve, Cumbria CCG: “If you put the world’s best obstetricians in Barrow, in five years’ time
they’ll become deskilled because there isn’t enough work for them. But if you put the world’s best obstetricians in Barrow for a month and then three months elsewhere, they retain their skills.”

Rebecca Harriott, NEW Devon CCG: “We have parts of our patch with a significant ageing population… we’re experiencing now what many health economies won’t experience for another 20 years’ time in terms of the demographics.”

Sam Everington, Tower Hamlets CCG: “In the next 20 years we expect the equivalent of one extra borough’s worth of population.”

Ben Gowland, Nene CCG, on competition regulations: “If you’re in a collaborative approach [with other providers] you need to be able to navigate what essentially feels like a procurement minefield.”

Miles Scott, St George’s Healthcare Trust: “In the run-up to the election, now is not the time for people to be launching service reconfiguration proposals. But
we do need to be clear with politicians and I guess the public that current resourcing plans over the next five years will not work without significant fixed cost being taken out.”

Jerry Hawker, Eastern Cheshire CCG: “We cannot go from where we are now to where we need to be in the future without financial support to manage the double running of a transforming care system.”

Toby Sanders, West Leicestershire CCG: “Challenged health economy status has genuinely been very useful… It’s helped to mobilise and galvanise a health community.”

Analysis: Distressed health economies' leaders doubt books will balance