Welcome

1
Welcome IntroductionAnnette Laban Director
of Commissioning Yorkshire Humber SHA
2
Yorkshire Humber SHA Commissioners workshop
1Tuesday 30th October 2007
3
New NHS Contract For 2008 and beyond

• Operating Framework
• 13.55-14.20

4
Context

• CSR07 average 4 real terms growth over three
  years, compared to 1.9 for total public
  expenditure
• Three Departmental Strategic Objectives
  Promoting Better Health Well-Being For All
  (PSA) Ensuring Better Care For All (PSA) Better
  Value For All
• Contribution on six PSAs led by other Departments
• Assumption of 3 annual cashable efficiency
  savings to be reflected in tariff

5
Key Areas to Address

• Allocations
• Efficiency
• Strategy for surplus
• Contingencies and risk
• Loans regime
• Capital

6
Four Strands

• Priorities Freeing up the front line while
  maintaining a focus on the issues of most concern
  to the public.
• Enablers Developing world class commissioning
  and using reform levers to help transform
  services.
• Financial regime A framework that fully
  supports reform goals and incentivises
  improvements in services and choice.
• Business processes for 2008/09 A business-like
  and transparent approach to planning and
  management of risk

7
Process and Stakeholders

• DH process up and running, led by David Flory and
  overseen by the NHS Management Board
• Stakeholders will be fully engaged Monitor,
  Healthcare Commission, NHS Confederation etc
• Important links with Department of Communities
  and Local Government (LAAs)
• Planned publication December 2007

8
Priorities

• Will need to take account of
• PSAs
• Existing commitments
• LAAs
• Direction of travel

9
Priorities

• Aim is to create greater local freedom for PCTs
  to respond to local need and expectations,
  coupled with clear accountability and continued
  focus on national priorities.
• Increasing focus on outcomes
• Better Health For All Life expectancy,
  inequalities, smoking, mental health, independent
  living
• Better Care For All 18 weeks, HAIs, access,
  LTCs, maternity choice, patient satisfaction

10
Enablers

• System management levers
• Incentives and levers
• Compliance and assurance programme
• Public and patient empowerment
• Workforce
• New models of care/NHS Next Stage Review
• IMT

11
Financial Regime

• Confirmation of PCT allocations
• PbR guidance and tariff for 2008/09
• Expectations on efficiency drivers Better Value
  Strategic Objective
• Clarification of other planning assumptions

12
Business Processes

• Need for more business-like and transparent
  approach to planning.
• Better alignment of NHS and LA planning
  processes.
• Clarification of the roles and responsibilities
  of each part of the system.
• Timetable for local plans to be agreed and
  confirmed.

13
New NHS Contract For 2008 and beyond

• Roles responsibilities of SHAs and PCTs
• 1420 1450

14
Stakeholders

• Practice based commissioners
• PCTs - Co-ordinating
• PCTs Associate
• Specialised Commissioning Groups
• Strategic Health Authorities
• Commissioning service groups / agencies

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Why Co-ordinated Commissioning?

• To support more effective commissioning
• To strengthen performance management of providers
• To clarify roles and responsibilities
• To provide robust governance and accountability
• To ensure consistency in the application of
  controls and levers

16
GPs / Practice Based Commissioners

• To advise PCTs of commissioning priorities and
  agree plans for service redesign, which will
  shape PCT contracts
• To agree care pathways, treatment protocols and
  demand management mechanisms with PCT
• To manage demand for secondary care services in
  line with agreed protocols
• To commit resources through referrals
• To advise PCT of any breaches of standards, eg on
  discharge obligations

17
Co-ordinating PCT

• Collate and aggregate activity plans
• Ensure associates sign consortium agreement
• Agree contract with provider AND associates
• Set thresholds for performance consequences
  with associates
• Agree with the provider the appropriate range of
  standards and care pathways which must be catered
  for to meet associates needs
• Lead negotiations and solutions
• Contract Monitoring and review
• Manage contract control mechanisms and
  communicate with associates on required actions
• Manage information flows between provider and
  associates

18
Specialised Commissioning Group

• Set activity plans
• Ensure associates sign consortium agreement
• Agree contract with provider
• Set thresholds for performance consequences
• Negotiate contract and find solutions
• Contract Monitoring and review
• Manage contract control mechanisms
• Manage information flows between provider and
  associates

19
Associate PCT

• Provide Activity Plans
• Sign Consortium Agreement (if agreed)
• Participate in consortium governance as required
• Help CC to have a contract that can be agreed
• Identify any specific care pathway or standards
  requirements which they wish to be accommodated
  by the provider
• Pay the provider
• Participate in monitoring and review mechanisms
  as agreed with CC

20
Strategic Health Authority

• Define local CC / Associate arrangements
• Mediate on disputes (with Monitor for FTs)
• Adjudicate on disputes involving NHS Trusts
• Resolve disagreements between PCTs
• Ensure contracts are signed within the required
  timescale
• Ensure contracts meet national and local
  requirements before PCT signature
• Give permission for variations in contract
  duration
• Providing SUI schedule
• Ensure consistency of local agreements across SHA
  i.e. thresholds and consequences
• Receive Exceptions Report

21
Commissioning Service Agencies

• To support PCTs in whatever commissioning /
  contracting functions they have agreed
• To act on behalf of PCTs, not instead of them
• NOT to be signatories to contracts

22
Process for contract agreement

• In addition to compiling and monitoring an
  aggregate activity profile, the co-ordinating PCT
  also needs to liaise with associate PCTs to
  establish agreement on the content of the
  contract with regard to
• Local quality standards
• Prior approval agreements
• Timings for the stages of 18w pathways
• For these elements of the contract, we expect the
  following type of process to be followed

1.Co-ordinating PCT drafts proposed contract
content
2.Co-ordinating PCT invites Associate PCTs for
suggested changes
3.Co-ordinating PCT drafts revised contract
content
4.Associate PCTs agree proposed contract content
5.Co-ordinating PCT and Provider review contract
content and identify issues for resolution
6. Co-ordinating PCT liaises with associate PCTs
on issue resolution as necessary
7.Co-ordinating PCT revises contract content as
necessary
8.Associate PCTs sign off revised contract content
9. Co-ordinating PCT and Provider sign contract
23
Timescales for contract agreement
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Co-ordination of LDPs and contracts

• Robust and realistic activity planning by
  commissioners is key to contracts
• being agreed and 18 weeks being delivered.
• The following mechanisms will be established to
  ensure this happens
• SHAs will robustly assess PCT 18 week LDPs in
  terms of whether the activity levels will be
  sufficient to deliver 18 weeks.
• SHAs will ensure that PCT LDPs reconcile with the
  activity profiles across different providers
• SHA level LDPs will in turn be robustly reviewed
  and signed off by DH
• For the 2008/09 planning round a single group
  will be established within the DH to oversee LDP
  analysis, FIMS, workforce returns and the
  implementation of the new contract to ensure
  these are reconciled.

25
Yorkshire and the HumberContracting so far.

• Embryonic contracting consortia developed for
  07-08 contracts (some already established and
  functioning)-1 per trust
• Some exceptions agreed based on risk/ Existing FT
  contracts/ local circumstances
• All contracts agreed and signed in time
• Region wide review, learning from experience- by
  June sign up to Consortia Model across PCTs

26
Lessons learnt around the region

• Pragmatic approaches had be taken to get to sign
  off process- some feeling at the expense of
  strong commissioning
• Need to support commissioning capability to
  enable strong contracting
• Contracting needs to be driven by robust outcomes
  based commissioning, and service models/care
  pathways
• Need consistency across consortia which also
  allows for some local determination of process
• Need to closely align to specialised
  commissioning processes
• Need to develop assurance processes for PCTs
• Need to support contract consortia as an ongoing
  process

27
Establishing the next stage contract consortia

• Aims of the consortia
• To enable each PCT to undertake effective joint
  planning, coordination and contract management
  with other PCTs
• To develop and improve contracting relations with
  providers without losing autonomy or control, and
  without accepting liability for the actions of
  others
• To ensure the effective integration of
  specialised services commissioning with the
  contract arrangements for each provider
• To be consistent with national requirements

28
Principles

• Contract consortia should add value through the
  PCTs working together
• Consortia should be simple, incur minimum
  transactional costs.
• Consortia should have a fair and equitable method
  attributing costs across the PCTs
• No control or accountability is ceded to a third
  party
• All PCTs entitled/ need to have/ own a good
  understanding of their component, performance,
  and financial consequence, of the contract
• Independent commissioning intentions are
  translated into contract terms through the
  consortia
• Consortia are the vehicle for integration of
  specialised commissioning with the rest of the
  contracting arrangements for the trust

29
Multi- commissioner- Individual Purchase Agreement

• Within each contract each commissioner has
• Own contract activity and resource by individual
  schedule
• Decisions relating to clinical activity volumes,
  baselines ,cost per case etc remain
  responsibility of individual PCT
• Ability to pursue contract remedies
• Signature on contract
• Ability to suspend all or part of services
• BUT the norm will be to maximize benefits form
  consortia coordinated arrangements
• To enable the above to take place Inter- PCT
  arrangements and structures have been agreed by
  all the PCTs

30
Governance

• PCT Boards have signed up to Establishment
  Agreement for Trust Contracting Consortia
• Roles and responsibilities of Coordinating and
  Associate PCTs
• Consortia Leadership and support- CEs chair
• Consistent approach which also allows for local
  approaches
• For 4 key contracts SCG Director in attendance
• Boards delegate day to day business to a sub
  contracting committee which acts as contract
  manager
• Contract consortia currently limited to
  procurement and contracting- could choose to
  expand their roles in time- future opportunities

31

• Questions

32
Refreshments14.50 15.05
33
Yorkshire Humber SHA Commissioners workshop
1Tuesday 30th October 2007
34
New NHS Contract For 2008 and beyond

• Principles of the NHS Contracts
• 1505 1550

35
New NHS Contract For 2008 and beyond

• Key Contract Clauses

36
Key Principles

• Legally Binding
• Fair and equitable
• Encourage a partnership
• Practical Future-proof
• Embrace policy
• Provide for remedy before penalty
• Mandate in order to maintain NHS principles
• Allow as much local agreement as is practical
• Keep as simple as possible
• The Co-ordinating Commissioner is the appointed
  representative of the Commissioners

37
Key Clauses

• Clause 2
• Commencement, Duration, Transition
• Sets the contract term
• 3 years is default
• DH will provide guidance where longer or shorter
  contracts may be appropriate
• SHA will approve all contract lengths that are
  not 3 years
• Requires conditions precedent to be satisfied
• Schedule 4 Part 1 which can be added to
• A CP is a contractual obligation that requires
  one party to the contract to fulfill its
  obligation before another party to the contract
  is required to fulfill its contractual
  obligation

38
Key Clauses

• Clause 4 Schedule 2
• Services
• Obliges the Provider to supply Services
• Service Specifications (Sch2,Pt1 for local
  definition)
• Activity Plans (Sch3,Pt1, annex1 standard
  format, locally completed)
• Patient Booking Patient Choice (Sch3,Pt2
  mandated)
• Quality Standards (Sch3,Pt4A Pt4B some
  mandated, some local)
• The Law
• Details Providers right to refuse services to a
  Patient and the consequences.
• Obliges the Provider to ensure it can always
  offer Mandated Goods and Services (FT terms of
  Authorisation) and Essential Services (Sch2,Pt5
  for local definition)

39
Key Clauses

• Clause 7
• Prices Payment
• Obliges the Commissioners to pay for the Services
  provided
• At tariff
• At the agreed price for non-tariff items
• Keeping within the PBR Code of Conduct
• Details payment terms
• 1/12th of the Annual Contract Value on 15th each
  month
• (This is only obligatory if the Provider has
  issued a valid statement of account)
• Within 30 calendar days of receipt of invoice for
  NCA
• Reconciliation rules.
• What to do in the event of a dispute

40
Key Clauses

• Clause 8
• Review
• Obliges the Co-ordinating Commissioner and
  Provider to meet each month to review the
  contract including
• The Activity Plan
• The Annual Contract Value
• The locally agreed Schedules
• Performance (including notices)
• Compliance with Quality, Clinical Governance
  Demand Management
• Complaints, incidents and SUIs
• Information
• Sets out the requirement to plan the following
  years activity together

41
Key Clauses

• Clause 16
• Quality
• Specifies the standards to which Services must be
  performed
• The Law
• Good Clinical Practice
• Good Healthcare Practice
• And the standards and recommendations of other
  bodies and reports (Standards for Health, SUI
  reports, NICE)
• Obliges the Provider to have regard for any DH
  guidance
• Requires an annual clinical quality review is
  undertaken and published

42
Key Clauses

• Clause 20 Schedule 3 Part 1
• Managing Activity Referral
• The clause obliges the Provider to comply with
  Schedule 3 Part 1 which is a central schedule
• The Activity Plan (What it is, contents,
  thresholds) (annex 1)
• Care and Resource Utilisation
• Prior Approval
• Utilisation Management
• Monitoring and reporting of Activity
• Capacity Review (and criteria)
• Activity management following variations and
  financial adjustments
• 18 Week RTT and consequences of failure

43
Key Clauses

• Clause 28
• Dispute Resolution
• Describes the Parties rights and obligations
  when in dispute
• The obligation to try and resolve internally
• Escalation to the SHA / Monitor if agreed
• Escalation to CEDR
• CEDR mediates the dispute in line with Schedule 9
  Dispute Resolution Procedure
• If after 20 operational days agreement is not
  reached, agreement will be by Independent Binding
  Pendulum Adjudication
• The Parties still retain their rights to
  terminate the contract with 12 months notice
  (subject to Mandated and Essential Service
  obligations)
• NOTE Disputes between PCTs and NHS Trusts will
  be arbitrated by the SHA, not CEDR

44
Key Clauses

• Clause 29
• Information Requirements
• Describes the Providers Obligations to supply
  information
• To comply with SUS
• To supply information directly to the
  Commissioner in the event of SUS failure
• Links to Schedule 5 Information
• Sets rules for new datasets and coding changes
• Sets out the consequences of not supplying
  information
• The commissioner must demand the information
  formally, in writing and stating that retention
  will occur if information is not supplied
• The Provider will have 5 days to comply
• If the Commissioner(s) actions have caused the
  failure the Provider cannot be held accountable

45
Key Clauses

• Clause 32
• Performance
• Describes the performance management system for
  non-clinical, non-information and non-18 week
  breaches of
• The contract
• Schedule 3 Part 4B - Performance Indicators sets
  out
• The indicators (some mandated, some for local
  agreement)
• Thresholds
• Consequences and
• measurement methodology
• e.g. cancellations, AE waiting targets
• Provides for remedy before penalty
• Exception Report (to Board, Regulators, SHA) may
  be the biggest consequence
• Provides for local agreement of incentive schemes

46
Key Clauses

• Clause 33
• Clinical Quality Review
• Describes the clinical review methodology
• Links to Schedule 3 Part 4A
• Clinical Quality Performance Indicators sets out
• The indicators (some mandated, some for local
  agreement)
• Thresholds
• Consequences and
• measurement methodology
• e.g. MRSA, C.Difficile..
• Aims to expose, investigate and rectify
• Penalties are only for failure to implement a
  rectification plan (regardless of whether it
  rectifies the breach)
• Is a closed-loop control system for continuous
  improvement

47
Key Clauses

• Clauses 34 35
• Suspension Termination
• Allow the Co-ordinating Commissioner to suspend,
  terminate or partially suspend of terminate.
• Set out the criteria for these events
• The partial element is of a Service or a part
  of a Service
• Allows for restoration of suspended services
• Allows for parties to terminate just because they
  want to (only after year one and with 12 months
  notice)
• Note if a Provider is in breach of contract it
  has 60 days from notification to remedy before it
  is a termination event
• The Provider will be obliged to continue
  Mandatory Goods and Services and Essential
  Services

48
New NHS Contract For 2008 and beyond

• Boundaries for Negotiation
• Mandated terms vs locally negotiable terms

49
Mandated Terms

• Cannot be changed unilaterally
• Any requests for change must come via SHA to DH
  and will be considered in the overall context of
  the contract and the NHS
• Will have been subject to consultation with FTN,
  NHS Partners, PCT Network, Monitor, 3rd Sector.
• Guidance notes will make it clear what is
  mandated or otherwise
• No point in negotiating these with the Provider
• Some elements may fall away if they are taken up
  by a new regulator

50
Mandated Elements for Local Negotiation

• These elements are must haves (legally and
  commercially)
• They must be agreed locally
• Master formats will be supplied if appropriate,
  parts of which
• should not be changed
• may be changed or
• must be changed guidance will make it clear
• The DH may also set parameters for negotiation
  particularly where the parties are likely to
  polarise
• Consequences
• Thresholds
• Timescales for certain actions (e.g. reacting to
  notices)
• Many of the Schedules fall into this category
• SHAs will audit to ensure elements are in place

51
Elements Entirely for Local Negotiation

• These elements are entirely voluntary
• Guidance will indicate what should be considered
• This is where SHA / Local requirements can be
  contracted for
• In particular the following can be added to /
  added
• Performance Standards (Sch3, Pt4B)
• Clinical Quality Performance Indicators
  (Sch3,Pt4A)
• Format and frequency of Reports (Clinical or
  otherwise)
• Staffing and/or training requirements
• Prior Approval Utilisation Management Schemes
• Incentive Schemes
• Treatment protocols pathways
• Anything else you might mutually agree as long as
  it doesnt conflict with the mandated elements of
  the contract (legally the Main Body will take
  precedent over the Schedules)

52
New NHS Contract For 2008 and beyond

• Effective Activity Profiles and monitoring

53
Activity Plans

• The format for the Activity Plan will be
  centrally mandated
• It will be the form of the 2007/8 Activity Plan
  (excel spreadsheet)
• This is necessary because a consistent approach
  will help all providers and commissioners where
  there are any associates
• It is recognised that this is not always ideal
  but the overall benefits outweigh the cost
• Providers or Commissioners can request additional
  information be added to the Activity Plan to suit
  specific requirements but this should be done
  with the agreement of all parties
• Commissioners and Providers should be thinking
  about their Activity Plans now (the new contract
  will not alter the Activity Plan content)

54
The Plan and Monthly Profiles

• The Activity Plan includes a monthly forecast of
  elective and non-elective care
• This activity profile is critical in establishing
  monitoring and contract management methodologies
• The profile needs to enable 18 week and other
  targets (AE waits, cancer waits) to be achieved
• The Plan and the profile should take into account
  the effect of Utilisation Management schemes and
  seasonality.
• The Plan allows for the setting of upper limits
  for activity e.g.
• Conversion rates
• Average cost per unit of activity
• Consultant to consultant referral rates
• Where the Plan or the Ratios are exceeded the
  commissioner MAY be able to apply financial
  deductions

55
The Effective Plan

• Should be a realistic forecast of activity
  required
• It should not under-estimate
• in this case the Provider may not be accountable
  for targets being missed, and can require that
  the Plan is reviewed and commissioners may not be
  able to apply deductions where the plan or ratios
  are breached
• It should not over-estimate
• in this case more activity than required may be
  completed but any monitoring tools will not tag
  this as a breach of a target.
• The informatics required to monitor it should be
  in place
• A monthly review of performance against the plan
  should be in place with defined outputs (actions,
  timescales and responsibilities)

56
The importance of the Plan

• A well conceived Activity Plan will
• Enable providers to plan efficiently
• Provide visibility of expectation
• A good monitoring system will
• Allow the effectiveness of Prior Approval and
  Utilisation Management schemes to be measured and
  improved
• Provide advance warning of activity changes that
  may pressurise targets or provider capacity
• Necessitate that provider and commissioner work
  together to achieve provision of activity within
  budget across the whole health economy
• Together the Plan and monitoring can enable a
  health economy to drive improvements and
  efficiencies to mutual benefit.

57
Yorkshire Humber SHA Commissioners workshop
1Tuesday 30th October 2007
58
New NHS Contract For 2008 and beyond

• Overview of Second Workshop
• 1550 1600

59
Basis

• Expect the style to be more workshop than
  presentation probably mixing live QAs with
  presentations
• Expect them to be all day events
• Our ideas are set out overleaf
• We are open to ideas on content

60
Current Plan
61

• What would you like ?
• Who should come ?

62

• Questions Discussion
• Next Steps Further Support

63
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