Provider procurement models


The NHS Standard Contract 2014/15  allows greater flexibility for longer-term contracts and more innovative contracting models, than previously available. (see Draft NHS Standard Contract 2014/15 Technical Guidance).

See also: Clinical contracting considerations, Grafton Group 2013 – An outline of the main contracting mechanisms for use when procuring clinical services and to provide a “road map” as to when the differing contracting mechanisms may be best applied.

(Note – the Grafton Group is a group of nine CCGs comprising Cumbria, North East Lincolnshire, Leeds South and East, Principia Rushcliffe, Nene, Bedfordshire, Tower Hamlets, Somerset and South Devon and Torbay, “who have come together to share knowledge and ambition to be amongst the best CCGs nationally in delivering the commissioning agenda: ensuring excellent patient care for their populations.”)

Key Reports

The Commissioning and contracting for integrated care paper from the Kings Fund (Nov 2014) focuses on the contractual vehicles being used by commissioners to deliver integrated services  (prime contractor, prime provider and alliance contract models). Link here for the report and summaries of the three frameworks.

Commissioning and contracting for integrated care – presentations from an event held at Kings Fund March 2014 including case studies, a discussion of payment systems and a presentation by  Bob Ricketts on the risks and benefits of various contracting methods.

NHS contracting in England and Wales: changing contexts and relationships, NIHR Service Delivery and Organisation programme; 2011.
This study examines the extent of divergence in contracting arrangements in England and Wales since 1991. It concentrates on contracting for secondary care services. The research examines contractual governance, in terms of the use of contracts to manage relationships and the purchase of NHS services, its practice and its limitations in the two systems.

Definitions and case studies of current and developing provider models identified from the NHS Standard contract and the published literature are outlined below.

Accountable care

Can CCGs become accountable care organisations? – Read the blog from Rachael Addicott,Senior Research Fellow at the Kings Fund (14 August 2014).

Accountable care organisations in the United States and England, Kings Fund, March 2014 – a description of the different types of ACOs emerging in the United States; some early evidence on their performance; assessment the future for ACOs; and discussion of the implication of these developments for integrated care initiatives in England.

Analysis of Early Accountable Care Organizations Defines Patient, Structural, Cost, and Quality-of-Care Characteristics – Health Affairs, Jan. 2014 33(1):95–102.
This US study identified ACOs that had joined the Medicare programs as of fall 2012 to collect baseline information about their patient populations, quality, hospitals, and costs.

Focusing Accountability on the Outcomes that Matter – Report of the Accountable Care Working Group 2013

“In this population-based accountable care model a group of providers are held jointly accountable for achieving a set of outcomes for a prospectively defined population over a period of time and for an agreed cost.” p2

Can US health models fit the NHS? What would the arrival of US-style accountable care organisations mean for GPs? GP Online, 30 August 2013

“An ACO is a loosely-defined healthcare model that aims to promote integration, reduce costs and improve healthcare outcomes.
ACOs are led by a group of providers with a pooled budget, meaning primary and secondary care work together and share objectives.”

The Right Care website has a range of articles and a reading list about ACOs here. Also  description and presentation of Accountable Integrated Care Systems.

Case studies

Alliance contracting

“Key characteristics of alliance contracting are said to be alignment of objectives and incentives amongst providers; sharing of risks; success being judged on the performance of all, with collective accountability; contracting for outcomes; and an expectation of innovation.” (NHS Standard Contract 2014/15 Technical Guidance)

Team effort: Commissioning through alliance contracts, HSJ 22 November 2013. (Subscription required)
“Alliance contracts are usually an arrangement where a number of parties enter into an agreement to work cooperatively and to share risk and reward, measured against set performance indicators − often pre-agreed outcomes indicators.”

 What is an alliance contract? – and “History of alliance contracting” – LH Alliances
“An alliance contract is one contract between the owner/financier/commissioner and an alliance of parties who deliver the project or service.”

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AQP – Any Qualified Provider

Under AQP patients can choose from a range of providers all of whom meet NHS standards and price established by the commissioners. The commissioner holds the contract held with qualified providers.

Includes resources for Commissioners/providers and patients, implementation packs (including service specifications), a map of existing AQP contracts and a searchable database of AQP tenders.

Note: There will be significant changes to support for AQP procurements from March 2014. Read here.

Integrated pathway hub (IPH)

“the commissioners enter into separate contracts with a number of providers, all of whom contribute towards the delivery of an integrated service.” (NHS Standard Contract 2014/15 Technical Guidance)

Introducing intergrating pathway hubs – Strategic Projects Team

“A pathway hub is an intermediary organisation that works for GPs and commissioners to best manage the patient pathway, undertaking some health services itself and referring the patient on to secondary and specialist care, including third and independent sector providers as required. An IPH will ensure each patient receives the appropriate treatment, rather than a one size fits all approach applied by the traditional acute outpatient appointment system.”

Find active Supply2health IPH tenders here.

Case studies

Pennine MSK Partnership – A case study of an Integrating Pathway Hub (IPH) Prime Contractor –  A Right Care Case study April 2012.

Musculoskeletal Integrated Pathway Hub (MSK IPH) Castle Point and Rochford CCG, Briefing paper, April 2013

Diabetes pathway – NE Essex CCG

Diabetes pathway tender NHS Southern Derbyshire CCG

Diabetes pathway PQQ – NE Essex CCG

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Prime contractor/provider/lead provider/prime vendor

“Under this model, the commissioners enter into a contract with a provider (the prime contractor or lead provider). That contract allocates risk and reward as between the commissioner and the prime contractor. The prime contractor then sub-contracts specific roles and responsibilities (and allocates risk associated with their performance) to other providers. The prime contractor remains responsible to the commissioners for the delivery of the entire service, and for the co-ordination of its ‘supply chain’ (ie its sub-contractor providers) in order to ensure that it can and does deliver that entire service. The prime contractor is likely to be a provider of clinical services itself, but it could sub-contract all but the co-ordination role.” (NHS Standard Contract 2014/15 Technical Guidance)

Prime providers and capitated budgets: will they enable new models of care? a presentation by Professor Chris Ham, Kings Fund, 17 January 2013

Integrating pathway hub prime contractor – NHS Right Care, May 2013
This case study identifies those elements that made a “prime contractor” approach work in Oldham, and has lessons for others One of the ways that Right Care will enable sharing of good practice is through compiling local examples of commissioning work, which demonstrate the philosophy behind Right Care or showcases the tools available through the programme.
Other presentation describing MSK Oldham service – Whole System approach

Beds CCG prime contractor based MSK service Supply2health tender and outcome (HSJ 12 August 2013 Circle named preferred bidder for musculoskeletal £120m contract.) Read the

Delivering integrated care: a prime contractor model (Practical Diabetes 2011, V28(7) p314-5)

Case studies

Coastal West Sussex Clinical Commissioning Group musculoskeletal services

  • A five year “prime provider” contract was awarded to a BupaCSH Ltd – a partnership between CSH Surrey and Bupa UK.

Cambridgeshire & Peterborough CCG integrated older peoples services:

  • “Provision of integrated older people’s pathway and community services for adults, principally (but not exclusively) older people (65 years of age and over; population of c.126,600) the pathway includes but is not limited to the provision of acute hospital unplanned care, community services, older people’s mental health services, end of life services, and, possibly, NHS Continuing care, occupational therapy, and intermediate care and re-ablement services.”
  • UnitingCare Partnership. (Cambridgeshire and Peterborough CCG) – Case study in outcomes based contracting:Read about the model here.
  • Read the  Outcome Framework document July 2014.
  • News (HSJ 27 November 2013) Cambridgeshire & Peterborough CCG have confirmed four out of the initial ten bidders have now dropped out of the race to be “lead provider” of a new contract to provide integrated older people’s services. (Subscription required) .
  • Cambridge and Peterborough – Procurement and change  Press release, Strategic Projects Team, October 2013
  • Follow news on HSJ here (Subscription required).

Oxford CCG COBIC contract problems (HSJ 13 November 2013 subscription required)

  • Oxfordshire CCG is working on capitated outcomes based contracts for adult mental health, older people’s services and maternity services.
  • Under outcomes based contracts, financial risk is shared with providers based on if their services deliver specified service improvements for patients.
  • The approach can be combined with a “lead provider” model, in which the main contract is awarded to one organisation that could then subcontract elements of the work to other providers.Read the Oxford CCG business case for its COBIC for adult mental health, older people’s services and maternity services. If implemented as currently set out, the contracts would account for 30-40 per cent of Oxfordshire CCG’s £612m commissioning budget. (Read about issues with the contract in HSJ 13 November 2013)
  • Read the DH strategic gateway review into Oxfordshire CCGs proposals for a series of “outcomes based” contracts . (DH January 2014)
  • Read the latest on their OBC programme here.

Staffordshire – Transforming Cancer Care

  • Tender for cancer services for 4 CCGs using a two-stage, ten-year contract to transform the provision of cancer care in Staffordshire and Stoke on Trent. Stage 1 (up to two years) requires a prime provider/service integrator to manage the contracts for all the services along existing cancer care pathways. Stage 2 the provider will assume responsibility for managing the provision of cancer care. See the TED tender and supply2health tender.
  • Find tenders for Prime provider services by searching free text in the Official Journal of the European Union (OJEU) (no password required)

Spot Purchasing

“Usually no guarantees of income, unlike grants or fixed contracts.”

Read the explanation here.

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