Health Committee's 2010 report into commissioning

The House of Commons Health Committee published its Fourth report of session 2009-10 - commissioning in March 2010.

The report was published as a result of the committee's decision to undertake an in-depth investigation into commissioning, prompted by concerns raised over the system's ability to effectively commission services.

The committee's report was highly critical of the impact and effectiveness of commissioning, as well as the role of Primary Care Trusts (PCTs). It suggested that weaknesses in commissioning were a legacy from the introduction of the purchaser-provider split in 1991.

The report pointed out the high transaction costs of commissioning and noted that:
'There are examples of good work being undertaken by PCTs. However, many PCTs believe they are working effectively, although the evidence would suggest otherwise. As the government recognises, weaknesses remain 20 years after the introduction of the purchaser-provider split... Weaknesses are due in large part to PCTs' lack of skills, notably poor analysis of data, lack of clinical knowledge and the poor quality of much PCT management. The situation has been made worse by the constant reorganisations and high turnover of staff. We have had the disadvantages of an adversarial system without as yet seeing many benefits from the purchaser-provider split. If reliable figures for the costs of commissioning prove that it is uneconomic and if it does not begin to improve soon, after 20 years of costly failure, the purchaser-provider split may need to be abolished.'

Conclusions

The committee concluded the following:

Quality of commissioning

• The implementation of the Carter Review had led to improvements in specialised commissioning, but greater progress was still needed and issues such as local variations needed to be addressed.
• From the evidence received, PCTs appeared disengaged from specialised commissioning and gave it a low priority. There were concerns that, as a result, PCT budgets for this area would be reduced due to underuse. It was recommended that the Department of Health should conduct a review of the issues on specialised commissioning.
• Weaknesses in commissioning were a legacy from the introduction of the purchaser-provider split in 1991.

Skills of commissioners

• Commissioners were passive and did not consistently and robustly challenge providers on quality and efficiency. The committee noted a deficiency in commissioning skills (for example, data analysts and clinical knowledge), which was made worse by frequent reorganisations and high staff turnover.
• Commissioners lacked adequate levers to challenge and stimulate providers.

World class commissioning

The committee was critical of world class commissioning (WCC), branding it as 'ridiculous' and 'unexceptional', and noted concerns about the capability of PCTs to make the significant changes required by WCC:

• WCC was unlikely to address the skills gaps in commissioning.
• There was a risk that WCC could become a 'box-ticking exercise', rather than a genuine opportunity to support capability improvement. The committee recommended that the Care Quality Commission used the 11 competencies of WCC to judge PCTs.

New initiatives

• There were concerns over the government's application of initiatives such as patient reported outcome measures (PROMs), the commissioning for quality and innovation (CQUIN) framework, quality accounts and never events, without piloting and evaluating them.

The purchaser-provider split

• The purchaser-provider split had led to an increase in management and administration costs. It was felt that if reliable data showed the costs of the purchaser-provider split was uneconomical, then the government should consider abolishing it as a 'costly failure'.

The future of commissioning structures

• Strategic health authorities should be subject to cuts to achieve savings.
• If PCTs were to be retained, they needed to be strengthened with a more skilled workforce, capable of effective commissioning. PCTs also needed to be equipped with better levers to negotiate with providers.

Government response to the Health Select Committee

The government response was published in July 2010, after the May 2010 general election and a change of administration.

The government agreed with the Health Committee's central observation that improvements in commissioning had been slow to materialise and that management costs relating to PCTs and Strategic Health Authorities (SHAs) had increased. The government suggested rising costs would be addressed by the abolition of PCTs and SHAs.

In response to the committee's concerns over variations in specialised services commissioning, the government confirmed that the new NHS Commissioning Board (which would become known as NHS England) would take over commissioning in this area.

The government pledged to adapt payment by results to support commissioners to use it as a means of incentivising suppliers and driving up the quality of their services. The government would also review the scope and value of the CQUIN framework to ensure that it supported local quality improvement objectives.

The response also committed the government to improve payment by results to shift its intended impact from reducing hospital waiting times to encouraging quality outcomes for patients and integrated care.