In December, HSJran the PCT Futures conference in London, bringing together a wide range of speakers from government, primary care and the independent sector. In this special report we examine some of the main themes to emerge, from the complex arguments around splitting commissioning and provision, to the role of independent providers and writing a new chapter in the troubled history of public engagement.

In December, HSJran the PCT Futures conference in London, bringing together a wide range of speakers from government, primary care and the independent sector. In this special report we examine some of the main themes to emerge, from the complex arguments around splitting commissioning and provision, to the role of independent providers and writing a new chapter in the troubled history of public engagement.

Commissioning: faster, stronger, better

Primary care trusts will evolve into lean, mean, commissioning machines. At least that was one view put to delegates at HSJ's PCT Futures conference in December.

When it comes to hitting targets and tackling worsening health inequalities, PCTs can no longer blunder about like muscle-bound heavy-weights.

Instead they must get fitter, become more agile and be quicker to respond to the punches thrown by local circumstances.

'We need commissioners who are fleet of foot and can see changes in demand and circumstances and react,' says Gary Belfield, the Department of Health's director of programmes.

Commissioning has got to improve across the whole system, he explains and that means doing it differently. Responding quickly and actively to change is all part of 'intelligent commissioning', which is what all PCTs should be doing, according to the DoH.

But what does this actually mean? Intelligent commissioning is all about planning further ahead and taking a much broader view.

That means thinking about the wellbeing of the whole population as far as ten years into the future, says Mr Belfield.

It's also about managing performance, and demand on services - for example by redirecting cases from acute to primary care.

Learning from best practice is important. So far the DoH's fitness for purpose reviews show 'every SHA has some superb PCTs', points out Mr Belfield.

And at the heart of intelligent commissioning is good information and good analysis of that information. 'It's about turning data into intelligence,' says Helen Bellairs, chief executive of Western Cheshire PCT.

She recently appointed a 'director of knowledge' at her PCT. 'His sole job it to make sure my organisation gets the information it needs to make intelligent decisions and gets it in a way that is useful and sensible,' she explains.

Intelligent commissioning is not only about making services better, but also ensuring they are affordable, says Ms Bellairs.

So when it comes to strategic planning, PCTs cannot afford to ignore financial planning, she adds.

This was brought home in her former role running the fitness for purpose reviews programme in the north west.

'Many PCTs aren't scoring well on finances because they just roll on year to year without any particular financial strategy,' she says. 'They've got service developments and commissioning completely separate from finances.'

That can lead to conflict 'whereas in successful PCTs you couldn't see the join', says Ms Bellairs. She believes it is possible to have a financial strategy that looks up to 10 years ahead, even if it does need tweaking.

It is also important to be ambitious when it comes to managing demand. Western Cheshire is one of only a fewPCTs to have looked at predictive modelling. Information from most of the GP practices in the area is being analysed for indicators of 'chaotic use' of health services.

'We're spending lots of money on matrons dealing with patients who are currently chaotic users of the health service. What we need to do is prevent people becoming chaotic users,' says Ms Bellairs.

GPs will be given a list of patients at risk of becoming chaotic users and the chance to address that before they become 'revolving door patients' that eat into health service budgets. That could be through education or a review of treatment, says Ms Bellairs.

Commissioning capability

So what are some of things that get in the way of intelligent commissioning?

The NHS has not followed a logical route towards better commissioning, contends Mike Sobanja, chief officer of the NHS Alliance. 'The sequencing was badly wrong,' he says, with developments like foundation trusts, payments by results and Choose and Book brought in before good commissioning practice had been established.

'If we'd have been doing this logically we'd have done the commissioning capability first and then allowed the other things to follow on behind,' he says.

Commissioning is not simply the preserve of PCTs and will take place across the health spectrum. 'The PCT has to be in a pivotal position in all of this,' says Mr Sobanja. This means both national and specialist commissioning need to fit in with PCTs' requirements.

At the same time commissioners must be supported by strategic health authorities and the DoH, especially when they make tough decisions like decommissioning.

Up until now Mr Sobanja believes there has been a bias towards preserving the status quo on the provider side.

Perhaps the biggest challenge for PCTs striving to commission intelligently will actually be letting go of some of that power as practice-based commissioning takes off.

'There is still a certain reticence to that happening within PCTs,' says Charles Alessi, medical director of the Kingston Co-operative Initiative.

This is not surprising, he says, as it means handing over the purse strings to people who have been seen as less accountable for spending.

'Directors of finance are being held to account very clearly as to their spending limits and allowing someone else to hold the cheque book is very difficult.'

And this nervousness is not helped with reports of GPs gaming the system.

However, Ms Bellairs agrees practices should be encouraged to 'think big. Practice based commissioning is the only way my PCT can get into control of both the services it provides and commissions and the way in which we utilise resources,' she says.

'It's about getting practices to think big. Don't think half a practice nurse on a Wednesday afternoon, think brand new primary care resource centres, brand new out-of-hospital provision.'

This is with the proviso that GPs will have to generate the resources for these initiatives by working differently.

Dr Alessi believes PCTs will actually be in a strong position. 'I'm not quite sure PCTs have grasped the fact that this means they can really start to performance manage practices and really talk about value for money,' he says.

'If the amount of money that is generated by a practice is£100 a patient every year and another practice manages on£75, you start to ask &Quot;is the difference actually reflected in the healthcare and if not, why not?&Quot;'

Provison: what direction for community services?

The argument for separating the two functions of primary care belies simple solutions

If PCTs are to embrace their role as commissioners can they really continue to provide services?

There is nothing to say they cannot, stresses Una O'Brien, director of provider reform for the Department of Health, addressing HSJ's PCT Futures conference.

'PCTs can continue to be direct providers of community services,' she asserts. 'It is also true to say that PCTs and their providers are at very different stages in deciding where and how they want to continue in this way.'

However, with some reconfigured PCTs now covering populations of more than a million, it is inevitable there will be some streamlining.

And as all PCTs increasingly focus on commissioning, they will have think carefully about what they can realistically do.

The DoH expects a range of models for community service provision will emerge once the dust has settled.

'We do expect there will be continuing NHS provision of some or many sorts,' says Ms O'Brien.

Acute foundation trusts can bid to take on community work. Other models include care trusts, increased joint commissioning between local government and PCTs, and contracting services out to non-public sector organisations.

'We already know a number of PCTs are bringing alternative providers into primary care where there are significant issues with under-capacity and poor performance,' says Ms O'Brien.

One of the newer concepts being explored by government is the community foundation trust.

Over the past few months the DH has worked with Monitor and South Birmingham, Liverpool, and Ashton, Leigh and Wigan PCTs to test the idea.

The feedback has been encouraging, says Ms O'Brien.

A community foundation trust could act as an umbrella organisation, subcontracting private and third sector organisations and social enterprise.

'Community FTs could support integrated delivery, they could certainly include acute services in community settings,' adds Ms O'Brien.

However, the model is probably not suitable for smaller organisations.

And there are risks. 'We certainly don't want to create the same services at higher costs because of bureaucratic overheads,' says Ms O'Brien.

The plan is to road test the concept in 2007 with a small number of volunteer PCTs.

Risk-based reviews

In the meantime the department wants all PCTs to review their community services. Some have already started.

The DH will not lay down the law about which services must be reviewed and in what order, says Ms O'Brien.

But commissioners will be encouraged to undertake reviews on a 'risk-based basis' and bear in mind factors like the development of the market, capacity, value for money and governance.

'It will be for commissioners to come to a view about whether existing provider arms are fully fit for purpose,' says Ms O'Brien.

In the light of these reviews, PCTs may decide to divest some of their provision.

Those that do not will have to work out how to square the potentially conflicting roles of provider and commissioner.

Janet Soo-Chung, chief executive North Yorkshire and York PCT, is among those grappling with that conundrum. The newly reconfigured PCT has a significant provider role. It employs 5,000 staff, 4,800 of which are clinical staff

Three of the four former PCTs that merged to make the new organisation were direct providers of mental health services employing 1,200 staff. The PCT also runs 10 community hospitals.

'There is a real challenge in separating out the commissioning role from the provider role for PCTs,' says Ms Soo-Chung.

'There will be some who argue that to be an effective commissioner it's not possible to a be a provider of services.

'But there's another school of thought that says if you are going to be an effective commissioner it is probably right to have some provider responsibilities.'

By providing services PCTs can gain insight into that role, which in turn sharpens up their commissioning skills, she adds.

In her own organisation she has to think about where to draw the dividing line. For example, senior directors in charge of mental health services had a commissioning and a provider role.

'That won't be sustainable in the future,' says Ms Soo-Chung.

There are other challenges for PCTs thinking about the future of provider arms.

As PCTs focus on their commissioning role, there is a risk provider arms will be stripped of the expertise they need to survive, believes Charles Alessi, medical director of Kingston Co-operative Initiative.

'This is a tension which PCTs are going to have to manage. The change in emphasis has meant a pull of managerial expertise when that is needed most by provider arms.'

In North Yorkshire and York, they're strengthening capacity by setting up a 'provider business unit'.

In the past provider services hosted by PCTs have not had the full benefit of dedicated finance, contracting, and marketing teams.

Neither has there been support for clinical staff in writing business cases and 'really planning for the future,' says Ms Soo-Chung.

There are clear benefits of embedded provision, as demonstrated by GP practices, concedes Una O'Brien.

But she agrees achieving clear separation between provider and commissioner role is hard. 'We struggle with this and it's a very tough one if you're inside a PCT.'

Some PCTs have tackled this by establishing clear professional boundaries between staff involved in different activities.

'They adopt the mantle of provider and commissioner but in a positive and constructive way,' says Ms O'Brien. This means that the provider side is taken seriously and asked to account for performance.

This delineation also means it is not 'treated as a pot of money that can be dipped when things are going wrong with the budget more generally'.

'We don't want to get too caught up in ideology around separating commissioning and provision,' says Ms O'Brien. 'We are searching for what works best in terms of outcomes, quality and value for money.'

Case study: North East Lincolnshire Care trust

With both the NHS and local government in the midst of widespread reform, some see an ideal opportunity to bring the two closer together. North East Lincolnshire has gone further than most towards integration, developing new structures and governance dubbed a Care Trust Plus.

As well as a range of joint appointments across the PCT and North East Lincolnshire Council, the two organisations are exploring ways of sharing back office functions such as HR and finance.

One element is the creation of a children's trust with health staff transferring to the local authority.

Meanwhile the PCT is taking on commissioning adult health and social care on the basis of four 'commissioning localities'.

Crucially, the project has seen the PCT formally delegate responsibility for improving public health and wellbeing to the council.

This sprang from recognition that health inequalities could not be tackled in isolation to issues like crime, housing, education and employment, says project director Geoff Lake.

The move ties in with the local government white p aper, which strengthens councils' role in promoting wellbeing.

It allows greater alignment with regeneration and renewal goals and means health and wellbeing are 'integral to all decisions made by the local authority'.

This is backed by the appointment of an executive director of public health and wellbeing and an equivalent lead member.

Public health funds will shift across, explains Alex Whittaker, the PCT's director of integrated governance.

And the new arrangements will be underpinned by legal agreements setting out roles and responsibilities, and driven by the local strategic partnership.

Independent sector: face up to a public-private future

Private sector involvement in the NHS means both parties have to re-examine how they work together

It's time for the NHS to stop moaning about the private sector encroaching on its turf and 'grow up', say senior health managers.

Government is clear the independent sector does have a continuing role in the reform of the NHS' but where exactly will private healthcare fit in? And how can PCTs develop successful partnerships with the independent sector?

The relationship will work on a number of levels, according to speakers at the conference.

First, the NHS can learn from the example of business. In particular the way companies listen and respond to their customers, says Gary Belfield, head of programmes at the Department of Health.

The NHS also needs to replicate the rapid way in which best practice is spread in industry, where it can take just a few months for an innovation to be copied by all.

Second, the NHS should harness independent expertise in areas where it is weak. 'We will need specialist skills that we've not really had in the past and this is where we will look to other providers,' says Mr Belfield.

For example, the independent sector has practical experience in needs assessment, involving patients, procurement and contracting.

And then there are skills like business analysis and health economics - skills the health insurance market is good at.

The government is supporting partnership work between the NHS and independent sector and early in 2007 will publish a framework to help PCTs broker deals and commission services from private organisations. A DoH roll-out team will help PCTs with the new framework.

And it's not just civil servants making the case for better public-private partnerships.

There does need to be a change in attitude, says Helen Bellairs, chief executive of Western Cheshire PCT.

'We need to grow up and learn that independent support isn't a bad thing,' she adds.

Her PCT recently admitted to spending£1.1m on turnaround consultancy. 'It makes sense to have external support to do bits of business we're not skilled at. We have to be mature enough to do that and have to stop thinking we know best.'

Finally, the independent sector will be among a range of providers of services. As PCTs start reviewing services and looking to contract some of them out there will be room for private providers to step in.

'In a number of areas there will be openings and opportunities for non-public sector providers to bid for work depending on the direction the commissioner wants to go in,' says Una O'Brien, the DoH's director of provider reform.

But what of the independent sector itself? It wants to be more than just an adviser or somewhere the NHS can turn for spot-purchasing.

Julia Eadie is director of corporate affairs for Netcare UK, a branch of a South African private healthcare firm, which came to Britain in 2001.

It now runs a range of services including independent treatment centres and a successful mobile cataract surgery unit.

Ms Eadie does not attempt to hide her company's frustration at the ongoing debate about private sector involvement.

'We need to get down to what works,' she says. 'For four years we've been in and around the debate about whether we should or shouldn't be in this market. Everybody has a view.

'Our view is that we're here to stay and it's a market we want to play in and so do many other independent sector providers.'

'Earning our stripes'

It's a myth that the independent sector can't deliver public services, as proved by GPs, optometrists, pharmacists, and dentists who do just that, she says.

The independent sector is more than willing to work within parameters set by the NHS. It is in its interest to stick to contracts.

But this has led to a perception that the private sector is only good at mopping up simple jobs.

'It doesn't mean that we can't actually do more complex things or that we don't want to. But that we accept that in a new market we have to earn our stripes,' says Ms Eadie.

She continues: 'If we are going to work with commissioners and work in partnership we must be very aligned to the strategic objectives of the PCTs who sponsor the programmes we run but also work in partnership with local hospitals and GPs.'

But it is a two-way process. 'Some of the tenders have asked us to provide gold standard services but at rock bottom prices,' says Ms Eadie. 'That model just doesn't work. It's a waste of everyone's time.' What's needed is 'honest and open conversations with commissioners'.

And PCTs must learn that the more scope the independent sector has in terms of longer contracts then the more it will invest, she says. They must also start to work with other PCTs to come up with bigger opportunities. For example, Netcare UK developed its cataract unit in response to up to 30 small tenders for opthalmology services. In return the independent sector will share its skills.

In the second wave of independent treatment centres, Netcare UK is putting in millions with no guarantee of getting it back, she says. 'This means we have to do some very detailed business modelling and to understand clearly how we think this market is going to work for us in terms of managing our own investment and risk. Maybe those are some of the skills we can work with commissioners on and show them what we do.'

In the future she envisages a raft of services going over wholly or in part to the independent sector, including varicose veins, weight loss surgery, infertility treatment, laser eye surgery, vasectomy and treatment for sports injuries.

'By 2015 decommissioning will be here,' she says. 'There will be some services the NHS stops doing and that means independent providers can come in and fill those gaps.'

Case study: Kingston co-operative initiative

GPs across England are trying to work out what practice-based commissioning will mean for them. Rather than struggle on alone, GPs in Kingston, south London, united to tackle some of the challenges head on, forming an umbrella organisation to support and develop PBC.

Kingston Co-operative Initiative is a not-for-profit company owned and funded by local GP practices. Its role includes overseeing referrals to secondary care.

'All referrals that go to hospitals within the area covered by the co-op go through a common source where they are clinically triaged,' explains medical director Charles Alessi.

If referrals are incomplete or inappropriate, they are bounced back.

This not only applies to GP referrals. The majority of the co-op's work deals with secondary care referrals, re-directing follow-up and outpatients appointments to primary care.

The system has worked well not least because GPs feel it belongs to them.

'You'd expect the requests for re-referral would be enormous. But we've had three over the last six months out of thousands,' says Dr Alessi.

The move has improved GPs' engagement in commissioning and their relationship with the PCT and local hospitals.

Plus it has led to better services for those with long-term conditions, and GP involvement in pain management and urgent care initiatives.

Practitioners with a special interest are now being taken over by the co-op and their services reviewed. However, this kind of stepping stone organisation should not be needed in the future, believes Dr Alessi.

Patient involvement: a LINk to real engagement

Many PCTs are making an effort to engage patients but the message from on high is they need to do more. And there will be increased pressure from government and regulators to make that happen.

However, the key driver has to be that genuine patient involvement leads to better services and better health, says Anna Coote, head of engaging patients and the public at the Healthcare Commission.

NHS managers should watch out for a new catchphrase, says Gary Belfield, director of programmes at the Department of Health.

The term 'population voice' will soon be on everybody's lips, from politicians to civil servants, he predicts. 'It wouldn't surprise me if we start talking about customers again soon, in terms of reminding ourselves we're in a service industry and therefore we should be listening to people.'

A recent survey of NHS boards by the Appointments Commission found only 17 per cent regularly discuss patient views or outcomes.

'At Tesco they talk about them at every single board meeting guaranteed. We need to do better,' says Mr Belfield.

It's easier said than done. And the challenge is even greater when you're talking about involving people in organisations, such as PCTs, that they don't really understand.

'PCTs are invisible to the population,' says Helen Bellairs, chief executive of Western Cheshire PCT. 'The public know about hospital beds, A&E departments, maternity units they want to save, paediatrics, and doctors and nurses.

'But neither knows or cares much about PCTs and what they do.'

There could also be downsides to letting local people set the agenda, points out Ms Bellairs.

Some things they want may not be feasible or even desirable.

'You will get some people who come along and say they don't want you to pay for HIV,' she says.
'The biggest one in our patch at the moment is gender re-assignment. People say &Quot;You've got no money, how can you pay for that?&Quot;'

Reasonable demands

However, the benefits far outweigh any difficulties, believes Anna Coote. Advantages include a better understanding of local health needs and direct insight into patients' experiences.

Giving people a real opportunity to influence decision-making can also be the best way of reducing conflict and avoiding the kind of public outcry many NHS managers are familiar with. 'You will find people don't always want to take to the streets with placards protesting about this or that proposal.'

'But they're very reasonable and extremely helpful in helping you to reach the right decisions.'

The need to involve in planning, delivering and providing services is already enshrined in policy and legislation. There is a strong emphasis on engaging patients, carers and communities in the commissioning framework published in July 2006.

Ms Coote says the Healthcare Commission will place more emphasis on making sure PCTs 'do the right thing'. It will help by identifying best practice and setting new and clearer standards.

But there are already some key messages from the commission's work, including the fact that public involvement work has to be properly funded. 'It doesn't always have to be terribly expensive but it does need to be resourced,' says Ms Coote.

It also has to be inclusive, with involvement from 'seldom heard groups' usually bypassed by conventional ways of getting to patients and the public.

These can include people with disabilities, ethnic minorities, travellers and asylum seekers. Developing partnerships with local charities can be a good way of reaching these groups, the commission found.

Perhaps the strongest message is this: 'People don't really like to be asked their views if there isn't a chance that what they say will lead to action and change. You need to plan engagement around issues where there really is room for manoeuvre.'

There are many ways of reaching people from traditional consultation documents and public meetings to workshops and focus groups.

There is also a raft of local statutory organisations. These include patient and public involvement forums, overview and scrutiny committees, and foundation trust governors.

But change is on the way. Local involvement networks will replace forums as one of the main vehicles for patient and public engagement. These will sit within local government and be funded through the DoH. They are not bodies that will speak for patients but will build bridges to them, says Ms Coote.

'They are supposed to help bodies such as local government and PCTs find out where everybody is.'

With the move towards LINks, there will be a need to strengthen the role of overview and scrutiny. It's a complicated job often done by councillors with little experience, says Ms Coote.