PAPER F

SOCIAL SERVICES, HOUSING AND BENEFITS SELECT COMMITTEE - 7 AUGUST 2003

JOINT COMMISSIONING AND MARKET MANAGEMENT OF THE INDEPENDENT SECTION IN 2004/05 AND BEYOND

REPORT OF THE DEPUTY DIRECTOR OF COMMISSIONING AND PARTNERSHIPS

SUMMARY AND PURPOSE

This paper sets out an outline for the role of Joint Commissioning in the Market Management of the independent sector, in 2004/05. The new Joint Commissioning Team will be taking the lead in the fee negotiations and is seeking advice and comment from the Social Services Housing and Benefits Select Committee to the contents of this document.

ACTION REQUIRED BY THE SELECT COMMITTEE

To make recommendations.

BACKGROUND

The Health Act (1999) and the Social Care & Health Act (2001) were designed to encourage closer working between social services and health agencies in the statutory sector. On the Island work to develop joint Commissioning between health (in the form of the Primary Care Trust) and the Social Services & Housing Directorate began in 2002. As a result a new Commissioning Team came into being in April 2003.

The new team is not yet fully operational and posts are still being recruited to, however the enhanced partnership working between health and social services needs to be fully extended in line with the DoH agreement, Building Capacity & Partnerships in Care (2001) to the Independent Sector.

The above agreement aims to encourage more strategic, inclusive and consistent approaches to capacity planning at a local level. This is a whole systems approach to commissioning which is based on long term relationships where there is mutual trust and agreed objectives.

MARKET MANAGEMENT

In order that we can continue to meet the needs of vulnerable people it is very important to have a strong and thriving independent sector on the Island. Equally, without the right sort of services being planned and available the Statutory Authorities, both local Authority and Health will not be able to deliver national and local targets.

The Independent Sector needs a clear steer as to what future services are required and what likely investment is going to be available, if they are to have confidence to invest in the development of their staff and services. Both require longer term planning to be fully effective.

The Joint Commissioning Team need to ensure that there is a clear understanding and mutual respect of each other’s position if strong partnerships are to be developed.

The Independent Sector needs, from us:

• A clear vision of service direction
• A proposal of how services will be commissioned to deliver our required outcomes
• Contracts which give clarity to the quality of service required and facilitate confidence and stability in the market.
• An understanding of the cost pressures and cost structure required to deliver our requirements.

Equally we need the Independent Sector to understand:

• Local social and demographic factors

• The political pressures to deliver targets and what they are
• The significant financial pressures in both the social care and health care economies to reduce costs and manage competing priorities
• The need for the statutory authorities to benchmark costs and services to ensure value for money

The three key segments within the Independent Sector are:

• Nursing Homes
• Residential Homes
• Domiciliary Care

Although the final commissioning strategy is still awaited, it is likely that:

• The Nursing Home market will increase
• The Residential Home market will stabilise and ‘Housing with Care’ options will become more prominent
• The Domiciliary market will increase and have fewer bigger providers

It is therefore important that the Nursing Home and Domiciliary market are supported to ensure that there is sufficient capacity to meet demand. Currently both areas are under-provided and steps are being taken to increase provision. Examples of current support include:

• Support with capital investment to three nursing homes via the Primary Care Trust (PCT) to develop additional intermediate care beds, which will also increase general nursing home bed availability
• Increase in payment to domiciliary providers for 2003/04 to enable them to attract more staff into the workforce

Further action will also be required to ensure that in the domiciliary market, providers can compete with other organisations and attract care staff and that the local authority can support additional nursing home bed capacity by working with providers to ensure that new homes are supported through the planning application process in order that new economically viable homes are built.

A number of homes in both the residential and nursing home sector are not economically viable due to the limitations on size. There is a danger, particularly in the nursing home sector, that if new schemes are not supported, a potential closure of some homes will lead to significant under capacity, with resultant delayed discharges in hospital beds and fines being imposed.

One of the key ways of increasing market stability will be the development of block contracts. Work is currently being undertaken to identify the levels of activity in each market segment that could be confidently block purchased. Three-year block contracts with preferred providers can then be placed to increase market confidence. However, a pre-requisite for effective block contracts will be an agreed mechanism for annual price negotiations and where possible agreement of increases over the three-year period. This will be an area of risk and a new departure for the statutory bodies, particularly when the funding they receive is not fully predictable.

To ensure increased capacity and stability in these sectors, decisions will need to be taken as to where new investment should be targeted. We can predict that investment higher than inflation will be necessary in nursing and domiciliary care as a result of continuing cost pressures and, the need to develop new and better services. There will also be significant pressures from the residential home sector as their perceived need for the cost of care was not met in 2003/04. As there are major pressures already on Social and Health care budgets, savings to support these areas may need to be found elsewhere but this work has just begun.

Working in partnership to increase capacity also necessitates joint working on workforce development. The requirement for certain staff groups to meet specific training targets for the National Care Standards Commission is causing added burden on the independent sector. This is an area that through joint initiatives and training opportunities, the partners can maximise resources through training programmes that are accessible to all relevant groups of staff from all sectors of the health and social care economy.

The local authority and the PCT have already pooled budgets for nursing home provision to ensure maximum flexibility and a reduction in bureaucracy e.g. only one contract with nursing homes rather than each organisation having their own. Pooled budgets will need to be developed further particularly in areas such as intermediate care which also cuts across the various markets.

THE WAY FORWARD

The new Joint Commissioning Team (see Appendix A) will continue to recruit to vacant posts and develop their understanding of the local markets and the requirements for Commissioning.

The proposed timetable to be adopted for negotiations with the Independent sector is as follows:

August Joint Commissioning Team agree Commissioning Strategy and complete market analysis

September Joint Commissioning Team meet with representatives of providers to explore each others position

October Joint Commissioning Team and Providers negotiate three year contracts with both block and cost per case elements

The negotiating team for the commissioners will be:

Gillian Baker Deputy Director of Commissioning and Partnerships

Conal Grier Senior Joint Commissioning Manager

To be agreed Financial Advisor

To be agreed Contracts Manager

OUTCOMES

The following are the desired outcomes of the above processes:

1. A vision for services, which is agreed to by all stakeholders – delivered through commissioning strategy.
2. Capacity and stability in the market place enabling better services and outcomes for individuals – delivered through block contract agreements.
3. More effective use of limited resources across the health and social care economy – delivered through development of pooled budgets eg Intermediate care, Community Equipment, Learning Disability service.

RELEVANT PLANS, POLICIES, STRATEGIES AND PERFORMANCE INDICATORS

CONTEXT

The government has laid out a blue print within the NHS Plan and Modernising Social Services for the development of services which support people to make faster recovery from illness, encourage independence and provide reliable high quality ongoing support in the community. All these developments have underlying principles:

• The support and promotion of independence
• Social inclusion and equitable access
• Rights and choices for people using services and their carers
• Better care and higher standards
• Care at, or closer, to home
• The need for a whole spectrum of care options
• Delivery through integrated working, unimpeded by organisational boundaries and supported by harmonised budgets

The Joint Commissioning Team will be applying these principles when commissioning services. It is also important that there is a clear understanding of government targets and the need to commission to meet specific targets.

These include Public Service Agreement targets.

Provide high quality pre-admission and rehabilitation care to older people to help them live as independently as possible, by reducing preventable hospitalisation and ensuring year on year reductions in delays in moving people over 75 from hospital.

This involves achieving:

PAF D41 Delayed Discharges

C28 Number of households receiving intensive home care

C26 Supported admissions to residential care

Local Delivery Plan targets

T22 Improving quality of life and independence so that older people can live at home

T23 Each year there will be less than 1% growth in emergency admissions and no growth in re-admissions

Increase in Intermediate care beds and people benefiting from Intermediate care

Achievement of targets is not only important for the benefit of individual clients who will receive better access to services and better outcomes, it is important for achievement of star ratings for both local authorities and the health economy.

CONSULTATION PROCESS

Providers have been consulted through the Joint Care Partnership Forum.

FINANCIAL, LEGAL, CRIME AND DISORDER IMPLICATIONS

There are no legal or crime & disorder implications at this stage. Financial consequences are to follow.

APPENDICES ATTACHED

Isle of Wight Primary Care Trust Structure – Planning, Commissioning and Performance

SUPPORTING DOCUMENTS

Building Capacity and Partnership in care (2001) DOH

Contact Point: Gillian Baker, Deputy Director Commissioning and Partnerships

(535439 email: [email protected]

Gillian Baker

Deputy Director Commissioning and Partnerships

Isle of Wight Primary Care Trust

Structure

Modernisation Manager

(Joint post

with IWHCT)

Nikki Turner

Planning, Commissioning and Performance