Health Strategy Management Contracting and Commissioning 5th February 2015 Pam Kaur Group Finance Manager University Hospitals Coventry & Warwickshire NHS Trust

Some things to consider…. Commissioners and Providers NHS structure and ongoing reforms Shaping healthcare services Contracting Pricing e.g. Payment by Results Quality and best practice incentives Conundrum between costs and quality

Commissioners and Providers Commissioners ‘buy’ healthcare on behalf of patients such as :- Primary Care – e.g. GP, Dental, Pharmacy services Secondary and Specialist Care – typically hospital care Community Care – e.g. Care Homes Mental Health Providers can be any organisation that provides care to patients (see the interactive structure chart)

Interactive NHS Structure dh.gov.uk/system/ dh.gov.uk/system/

NHS Structure TDA

Another View…

Key actors in the system – roles & responsibilities NHS England Executive Non Departmental Public Body which has a mandate from the DH to improve outcomes through the total £96bn commissioning budget (80% of total allocation); Oversight and development of the commissioning system; and Directly commission Specialised Services from providers.

Key actors in the system – roles & responsibilities Clinical Commissioning Groups Commission general acute and community services from providers. A clinically led commissioning construct - membership organisations made up of constituent GP practices;

Regulation, Accountability and Funding

Funding flow from NHSE / CCGs to Secondary Care Providers Secondary care is commissioned to provide services; The commissioning of these services is captured in a legally binding Contract that acts as the main lever for ensuring that Providers work in line with prescribed service standards; All aspects of service delivery – clinical, financial and operational – are negotiated on an annual basis between Commissioners and Providers; A large majority of funding is transacted through the Payment by Results tariff.

Shaping Healthcare Services Priorities for healthcare are shaped by things like :- National Policies and Government reforms – attempting to address health inequalities Quality of care - e.g. 18 week targets NHS Frameworks – e.g. Renal Services Public health priorities - Coronary Heart Disease, Cancer Demographics and local health needs of patients Research and best practice – e.g. Diabetes Collaborative working between healthcare organisations (!!!) National Policy indicates a drive towards providing integrated health and social care packages

The Commissioning Cycle

Contracting and Pricing Commissioners agree ‘volumes’ and ‘budgets’ for patient care activity with Providers as part of an annual planning process. The process uses historic trends or latest actual as a baseline adjusted for any agreed local or national service changes. Contracts for delivery of patient care are agreed by both parties – can be a lengthy process for agreeing new service developments.

Payment by Results Money follows the patient Hospital Services are paid for under a ‘national tariff’ system Prices and payments are based on the type of procedure or care received, and appointment type (HRG’s and points of delivery) This is uplifted depending on the complexity of care or procedure and length of stay in hospital Further incentives for meeting best practice and quality indicators (CQUIN and QIPP)

Payment by results examples

Payment by results – useful links Walkthrough National Tariff Structure – see link below tariff-payment-system a-consultation-notice tariff-payment-system a-consultation-notice Chapters / HRGs / Diagnoses and Procedure Coding Basic Income Calculation Complexities, penalties, incentives

Useful links and references Strategic and Operational Planning Process 2014 to UK NHS National Tariffs Guidance and proposals for HFMA – Introduction to NHS Finance (History and reforms etc) guidance/publicationitem.htm?publicationid=62&catid=2 Five Year Forward View Published 2014 NHS Constitution