Helen Mooney asks the early adopters of FESC and their private sector partners what they hope to achieve from the framework

Commissioning is the name of the game. It's important - and the government wants 'world-class commissioning' that will foster a leaner, meaner health service for the 21st century which provides top-quality care at the best price.

Whose job is it carry out this commissioning vision? Well, it's down to primary care trusts, guardians of the public purse, who are charged with spending that money as wisely as possible for the benefit of the health of the populations they serve. It's a tall order and something which has not been achieved successfully and uniformly across the country.

Until now that is. Last month, the Department of Health introduced the Framework for procuring External Support for Commissioners (FESC) which it hopes will enable PCTs to access the expertise of the private sector in order to learn how to commission more effectively.

Fourteen private sector companies have been added to FESC and seven organisations have so far signalled the possibility of using the FESC to help better support their commissioning function. The potential pilots are: Ashton, Leigh and Wigan PCT; Cambridgeshire PCT; East of England strategic health authority; Hampshire PCT; Hillingdon PCT; North East Lincolnshire PCT and the West Midlands commissioning business support agency.

The DoH says that FESC is comprised of organisations that have undergone a 'robust pre-qualification process' and will offer services such as data analysis and contract management expertise to PCTs. It hopes that the framework will provide 'easy access to a bank of specialist expertise'.

The DoH says that FESC suppliers have been appointed on the basis of their technical and commercial ability to deliver a range of services. According to health minister Ivan Lewis, a typical example of the kind of service that could be provided by one of the private companies would be in the 'delivery of data analysis services to help PCTs assess the specific community needs of the local population, analyse trends and pinpoint areas of particular need'.

'As well as providing a panel of expert suppliers, the framework is expected to help PCTs obtain the best value for money by minimising resource and cost implications associated with conducting procurement activities, which some PCTs face when trying to obtain external support,' he says.

Hillingdon PCT has moved fastest on using FESC, gaining special permission from the DoH to tender to the private sector companies on the list before any official announcement had been made. It is clear that the PCT feels it can gain a lot from private sector expertise. A£50m deficit means that the organisation had already been singled out by NHS London's new monitoring regime as one of 10 organisations at high risk and it has been given a 'red light' because of the financial situation it has found itself in.

At the start of 2007, the PCT's then interim turnaround chief executive Anthony Sumara proposed a radical programme to rescue the ailing PCT, which would have seen three of four commissioning support services run by the PCT put out to tender. Under the proposals, the PCT would have retained only core functions such as governance and emergency planning, as well as patient and public involvement.

Indecent proposal

The Proposal to Procure commissioning strategic outline case published by the PCT in January argued that 'outsourcing the majority of the PCT commissioning functions' would give the 'greatest benefit and the greatest probability of success' when compared with the other three options: doing nothing; build internal capability; or develop synergies with other organisations.

At the time, Mr Sumara said that the chances of the PCT board agreeing to the plan were 50:50. The PCT did not agree to such a move but it did not rule it out entirely and the board has decided to use FESC to outsource a small part of the organisation's commissioning function.

Current PCT chief executive Professor Yi Mien Koh is pragmatic. She says that the PCT desperately needs to deliver what she calls 'real commissioning'.

'It is about good procurement and contract management which, at the moment, we don't do well,' she says. 'It is also about proper needs assessment which we also need to improve on.'

In September, the PCT named BUPA Commissioning as its preferred bidder and plans to use the company to help it commission services more efficiently. BUPA will be tasked with working to analyse and help performance manage the activity data of local acute trusts. It will also come up with ways to commission more efficiently and save the PCT money.

The PCT's service specification for the 'provision of external support services' states that BUPA will have to 'interrogate and validate activity data from acute service providers and identify queries within the data sets'. It will also be required to 'benchmark commissioned acute sector activity to resolve areas of over-commissioning'.

The performance management of commissioned activity from acute trusts will be shared by both BUPA and the PCT. Professor Koh says that proper data validation under a payment by results system is one of the keys to successful commissioning. She adds that the vision of 'real commissioning' is about delivering excellent healthcare and real patient and public engagement. 'We are a long, long way off that kind of best practice at the moment,' she adds.

The PCT will pay BUPA£350,000 a year for three years and hopes that, by bringing the company in, it will save£11m in that time.

'It is a very small contract,' admits Professor Koh. 'We are bringing in consultancy to help build our internal capacity - we need to quickly inject expertise which is not widely available in PCTs and in the NHS in general,' she says.

Professor Koh says that the PCT is still working through what the contract will look like but that BUPA will be 'incentivised' to produce outcomes. She admits that the PCT is starting from a 'low diving board' in terms of the size of the contract but that if it works well the organisation may decide to use companies on the FESC for bigger projects.

However, she cautions PCTs against thinking that using the private sector will provide a 'magic bullet' solution. 'You need to know what you need before you use it,' she says.

BUPA Commissioning chief executive Dr Natalie-Jane MacDonald says that commissioning is an indefinable word but adds that BUPA wants to help the PCT become an 'informed purchaser of healthcare' and help it to obtain value for the community it is serving. She says that, in using an independent consultant, the PCT will be able to reconfigure the commissioning practices and priorities.

'We have a good track record of organising and buying healthcare services and we have the clinical intelligence, and we think we can help the PCT learn how to do this,' she says.

Understanding data and risk

In the West Midlands, 17 PCTs have pumped£3m a year into a commissioning business support agency with a staff of 43, which was launched in April this year. The West Midlands agency aims to use FESC to help it appoint a chief operating officer from the private sector. The agency's director Paul Taylor says that the organisation is seeking to recruit someone who has a 'wider understanding of data identification and risk stratification'.

'This is the pointy-head, nerdy end of things,' he says. 'We take all the hospital activity data, process it, put into a data warehouse, cleanse and validate it then feed it back to PCTs and practice-based commissioners as quickly as possible.'

He says that the agency also needs the specialist help of the private sector to help it provide contract management expertise between the PCT and the acute trusts. 'We are aiming to let a contract that will provide that kind of management and direction for the agency,' he says.

Mr Taylor cites companies like Humana and UnitedHealth as possible candidates, saying that the type of work these companies carry out in the US is what the agency would like replicated in the West Midlands where, he says, lies 12 per cent of hospital data in England.

'We offer a contract management service where we have a network of 20 account managers sitting between the PCT and the trusts trying to manage the contracts between the two. They are trust based and can answer questions from any PCT contracting with that trust,' he says. It's a model taken directly from the best in the private sector.

The agency is also considering taking on a wider role in terms of scenario planning and capacity modelling, based on disease prevalence, which it says would help to free up individual PCTs' time and enable them to become more effective at commissioning for their population's health in the longer term.

Devolution support

Further north, North East Lincolnshire PCT - the first PCT to become a 'care trust plus' under the new DoH scheme - is also interested in exploring whether to work with a private company under FESC for some of its commissioning functions.

The new organisation aims to focus on the local population and is seeking a step change in tackling health inequalities. It has also taken over the commissioning of adult social care services from the local authority. In September all the community health services and adult social care services came together into a new organisation.

At the same time, public health staff, working under a joint appointed and funded director, moved from PCT control to that of local authority as the council took on responsibility for delivery of health improvements. In turn, the PCT has taken on commissioning adult health and social care on the basis of four 'commissioning localities'.

Sue Rogerson, the trust's director of commissioning, explains: 'The commissioning groups are based on practice-based commissioning clusters and have a community governance model'. She adds that with the creation of the organisation came the opportunity to look at how the trust could devolve its commissioning responsibility to the commissioning groups.

'We want one of the FESC companies to come in and support us at a middle level between the trust and the commissioning groups and general practices,' says Ms Rogerson. 'The challenge for the trust is letting go of that commissioning function while making sure that the groups are fit for purpose'.

The trust hopes that the company it uses will also be able to help analyse data at practice population level in different localities and tailor services that are designed around local health needs. It will also look to appoint a director from the private sector to head up at least one of the commissioning groups. In future, Ms Rogerson says, the trust may also consider using the private sector to help create individual budgets for patients who are receiving direct payments to buy health services.

The care trust will present a strategic outline case for use of FESC at a board meeting on 8 November and hopes that, if the case is approved, it can start using a private company by next April.

In Hampshire, the PCT - under the leadership of Gareth Cruddace, the DoH's former director of the PCT Fitness for Purpose review - is also examining whether to use FESC.

Humana resources

The PCT has already appointed a director of commissioning from the private sector in Roger Hymas, who is on a two-year secondment from Humana, one of the companies within FESC.

'It is a substantive post and we see it as the most important job in the PCT,' says Mr Cruddace. 'It will be Mr Hymas's job to bring together in one place all the elements of the commissioning cycle. We wanted someone who can add value in this area'.

However, Mr Cruddace is keen to point out that Mr Hymas has not been brought into the PCT under FESC and that he will not be participating in the selection process when the organisation selects a company from FESC.

Mr Cruddace says that, if the organisation decides to use a private company, it will be to help them manage the PCT's job as the specialist services commissioning host for the nine PCTs in NHS South Central. In this role, the PCT commissions 59 specialist services and has numerous contracts with London teaching hospitals and elsewhere around the country.

Mr Cruddace says he wants to explore whether this job could be outsourced to free up the PCT's time to focus on local commissioning. 'In specialist commissioning, we commission things like cardiac surgery services, care for patients with HIV and neonatal intensive care from the London hospitals. The PCTs pool their budgets to do this, but we need to get a better deal,' he says.

Jaki Meekings, director of specialist commissioning for NHS South Central, heads the specialist commissioning group. She says that the group has a 'shortfall' of people who can do the commissioning job on behalf of the PCTs.

Driving force

'We are exploring the possibility that a private sector provider could fill that gap as well as leapfrogging, taking a lead and moving on our thinking in that area to push us forward on world-class commissioning,' she says.

Ms Meekings says that the specialist commissioning group, as part of Hampshire PCT, intends to use FESC to invite a private sector company to help them in FESC areas of contracting and procurement and performance management, settlement and review. 'We need that skill set and edge which we don't have within our team at the moment,' she says.

She hopes that if the work they intend to do with the private sector over the next three years goes well, other specialist commissioning groups across the NHS will look to Hampshire for best practice.

'We want to find out what the independent sector can bring to the table, whether they have got that added value that the NHS cannot bring,' she says. 'We want them to have that background information - which may be from an international perspective - in their toolkits which we can learn from.'

NHS East of England is the only strategic health authority to be part of the first wave of pilot organisations looking to use the FESC. The SHA ended last year£152m in debt and is facing staffing cuts in an attempt to claw back some cash, so it's no surprise the board has decided to look for outside help.

Andy Vowles, SHA deputy director of commissioning and lead on FESC, says he is looking for a company to help validate PCT data sets across the 14 PCTs in the region.

Mr Vowles says that, at a basic level, a private company will be tasked with error spotting in the data collected from acute trusts and then systematically investigating those inaccuracies. 'At a more advanced level, it will be about checking that providers are following different PCT protocols,' he adds. 'It's about bringing in the skills that don't exist in the NHS - the type of insurance model work and intelligence that does exist in the private sector.'

He says the SHA and the PCTs are also exploring whether to draw up one contract for all 14 PCTs with a FESC provider or whether to divide PCTs into contracting clusters. He envisages that the contract will be up and running during 2008.

If the healthcare system the government has created over the past 10 years is to succeed, then PCTs must become strong, robust commissioners. Without such skills, acute trusts will continue to dominate the NHS and the way it is operated. Healthcare and the provision of health services is moving from secondary to primary and community care so there needs to be a much stronger evaluation of local population needs.

Using companies through FESC may provide a way to, as Professor Koh says, quickly inject the skills and expertise needed for the NHS in the 21st century. But, if they are to use the FESC wisely, PCTs must make sure that they have identified why and where that expertise is needed within their organisation - and how that knowledge will be saved and kept within the organisation once the private sector leaves.