Skip to NavigationSkip to content

The devil is in the detail

Published on 10/06/05 at 04:39pm

Practice based commissioning looks set to have a major impact on how pharma companies organise their salesforces and promote and sell products. Understanding how it will be implemented and developing genuine GP-based partnerships will be the key to benefiting from the planned restructuring of healthcare services and how it is delivered.

The Department of Health published Making Practice Based Commissioning a Reality (technical guidance) on practice based commissioning at the end of February 2005. The guidance covers the following areas:

  • Governance arrangements
  • Budget setting and risk management
  • Management costs
  • Use of efficiency gains

Commissioning is the way the population's health needs are assessed, responsibility is taken for ensuring that appropriate services are available which meet these needs (including the delivery of national and local NHS planning framework targets) and the accountability for associated health outcomes is established.

Traditionally this role was carried out by PCTs in England, excluding specialist services (eg, liver transplantation) which are commissioned at a national and regional level.

Practice based commissioning transfers these responsibilities, along with the associated budget from the PCT to primary care clinicians, including nurses. This means that GPs and nurses will determine the range of services to be provided for their population while the PCT will retain the responsibility for undertaking the necessary procurement and administrative tasks required to underpin these processes. This will reduce the need for duplication of administration at a practice-by-practice or locality-by-locality level.

Governance and principles

The guidance offers practices the opportunities to work together within localities to reduce administration and realise economies of scale and encourages the involvement of other clinicians, including nurses, such as community matrons, with their own budgets for managing long-term conditions.

What the guidance doesn't clarify is how this would work if the nurses concerned were managing a caseload of patients spread across a number of different practices or localities.

PCTs still have a corporate responsibility to meet locally and nationally set targets and therefore practices or localities will be expected to agree in advance with their PCT how the PCT's right to intervene will be exercised if the delivery of a key target is threatened by practice based commissioning.

In effect, the delivery of national and local targets, along with the contribution towards the PCT's delivery of the core and developmental standards set out in the DH's National Standards, Local Action (Health and Social Care Standards and Planning Framework 2005/6-2007/8), will be required for practices or localities to retain commissioning rights.

The development of practice based commissioning, combined with the increased focus on patient choice, is likely to speed up the development of the roles of Practitioners with Special Interests as PCTs and practices review local referral mechanisms.

If practices, or localities, are provider and commissioner of services it will be important to ensure that there is no conflict of interest. Patient involvement in the development of practice based commissioning will be important to demonstrate and patients must be able to exercise choice and not feel pressured into choosing their GP practice as a service provider.

Budget setting and risk management

The guidance details the support that will be provided to PCTs and practices in calculating the indicative budgets for practice based commissioning and practices are encouraged to hold budgets for the full range of patient care.

The overall size of the commissioning budget for a given service is expected to be based on historical activity, the national tariff price for the intervention and the PCT's financial allocation. The 2005/6 budget will be based on 2003/4 referral data uplifted for increased demand and practice list composition.

This approach will inevitably favour practices who have been 'high referrers' within any particular speciality but over time the budget setting process will move away from this basis towards a more equitable 'fair shares' approach.

PCTs will still remain accountable for the budgets spent under practice based commissioning arrangements and therefore need to have a risk management strategy to protect against potential overspends. It is proposed that PCTs will 'top-slice' part of the devolved budgets as a contingency reserve with the use of this fund being agreed locally between the PCT and Local Medical Committee.

Calls upon the contingency reserve that are judged as being avoidable will be considered as debts owed to the fund and future savings made by the claimants will need to be spent initially repaying these debts. The contingency fund may be treated as either a recurring annual expense or a non-recurrent fund. If the latter approach is adopted PCTs will be expected to pass on any underspends back to practices at the end of each year.

Management costs

The management costs involved in establishing practice based commissioning will vary depending on local circumstances. The PCT will be expected to provide the funding to set up the schemes initially but will be able to reclaim this outlay from any resources subsequently freed up at the end of the year.

Clinical time spent on service redesign must be reimbursed and practices and PCTs will be encouraged to make full use of existing commissioning expertise within their localities to keep costs to a minimum. The Professional Executive Committee (PEC) will oversee the use of management costs and make recommendations to the PCT Board to ensure they are reasonable.

The use of efficiency gains

Resources freed up from effective commissioning may only be used for patient services (with the exception of the reimbursement of management costs as described above). Practices and localities are expected to agree how they will use any efficiency gains and the PEC will make a recommendation on this proposal to the PCT Board.

The PEC must ensure total transparency in reaching any decisions and must be able to clearly justify their decision to the practice or locality involved.

The PEC should consider the following issues when making recommendations to the PCT Board:

  • Contribution towards key NHS targets including the white paper on public health
  • Benefit to patients
  • Value for money
  • Agreement of other staff on any commissioning decisions made

Bringing GPs closer to patients

Practice based commissioning will bring GPs and nurses closer to the services experienced by their patients and this is likely to reignite the enthusiasm amongst those clinicians who worked with PCGs when informing commissioning but became disillusioned with PCTs seeing them as overly bureaucratic and disconnected from frontline clinicians.

It is also likely that those GP practices which were first and second wave fundholding practices will take up practice based commissioning at the first opportunity.

An important point to note is that while there are a number of similarities with fundholding in terms of the ability for the GP to directly influence the services received by their patients, the contract/service level agreement for the services will remain between the PCT and the provider.

This removes the high transaction costs that were an element of the fundholding system as each individual practice had to negotiate and renew contracts on an annual basis.

The impact of practice based commissioning cannot be viewed in isolation but must be viewed 'in the round' and in the context of other NHS policy initiatives such as Payment by Results (PbR). PbR gives a national tariff on all activity and any GP practice that chooses to provide a service will have to be able to deliver this at the national tariff price or less by 2008, when PbR is planned to be fully implemented.

The impact on the pharma industry

In some areas the development of practice based commissioning will be slow to take off and may not appear to impact daily activities. However, in the recent DH publication Creating a Patient-led NHS Delivering the NHS Improvement Plan Sir Nigel Crisp, NHS chief executive, says that PCTs need to think about how to engage all of their practices to take part in commissioning by 2008.

Marketers, therefore, need to review the impact of practice based commissioning as part of their strategic plans for 2005-8. Practice based commissioning provides opportunities for the pharma industry to work in true partnership with GP practices and move away from a position of suppliers of commodities and products towards a true partnership based on mutual gain with the patient at the centre.

Let's consider the opportunities provided by a newly diagnosed patient with type I diabetes who needs to be initiated onto insulin therapy. At the moment this would most likely involve a referral to the local secondary care unit for a consultation with a diabetologist, followed by a consultation with a diabetes nurse specialist to agree an insulin regimen and delivery device.

Historically, these referrals would have been made on an ad hoc basis via a block contract agreed between the PCT and the acute hospital trust. Practice based commissioning provides a number of opportunities for the GP practice to make changes to this service model for the benefit of the patient and also potentially make efficiency savings.

The following are ways this service could be delivered within primary care and reduce the patient's need to attend at the secondary care unit:

  • A Local Enhanced Service provided under the new GMS contract from a local GP practice, possibly employing a GP with a special interest or another Practitioner with special interest such as a diabetes nurse specialist.
  • A service provided by a practice as part of a PMS contract.
  • A service provided by an Alternative PMS provider, potentially including a commercial organisation set up as a pharma subsidiary.

A GP practice that offers services for newly diagnosed patients with type I diabetes under practice based commissioning could commission any of these service models, provide it themselves or continue to refer the patient to secondary care under whatever service level agreement was in place between the provider and the PCT.

The pharma industry can play a big role in helping GP practices realise the potential benefits offered by practice based commissioning by offering support and expertise in service redesign, facilitation skills and project management.

As well as offering support services described above marketers should look at how their sales teams are selling the features and benefits of their products to GP practices operating within practice based commissioning arrangements. In the example described above if you could demonstrate that your insulin or delivery device helped patients manage their condition better and reduce the need for consultations with a healthcare professional then it will probably be used more often.

Products that benefit patients and help GP practices realise efficiency savings within the new commissioning arrangements will be welcomed.

Mission Statement is a leading portal for the pharmaceutical industry, providing industry professionals with pharma news, pharma events, pharma service company listings and pharma jobs,
Site content is produced by our editorial team exclusively for and our industry newspaper Pharmafocus. Service company profiles and listings are taken from our pharmaceutical industry directory, Pharmafile, and presented in a unique Find and Compare format to ensure the most relevant matches