Commissioning For A Population Of One
This white paper is based on the keynote speech given by Jay Rebbeck on ‘Key PHN Commissioning Trends’ at the 2016 National Primary Health Care Conference. This white paper explores five major commissioning trends for each Primary Health Network (PHN) to consider in the coming decade:
- The evolving use of outcomes based commissioning
- Co-commissioning with the acute sector
- Health and social services coming together
- Commissioning support at scale
- Stronger partnerships with the Aboriginal Community Controlled Health Sector
- In this white paper I examine how each of these five trends can be used by Primary Health Networks to help
- move health systems towards sustainable models of care
I also explain how the concept of ‘commissioning for a population of one’ is a useful way of framing these trends by helping us consider health care systems from the perspective of individuals and whole systems as opposed to organisations. This approach helps us to optimise the resources across the entire health and social care system to seamlessly wrap services around individuals and deliver the outcomes that really matter for them.
We Are In The Foothills Of The Australian Commissioning Journey
BUT WE HAVE A RICH LIBRARY OF INTERNATIONAL EXPERIENCES TO DRAW ON
Whilst commissioning has existed implicitly in many forms across Australia, we are still in the foothills of developing an explicit commissioning system across Australia’s Primary Health Networks (PHNs).
Fortunately we have a rich library of international and Australian experiences so we know what has worked well in commissioning and what has worked less well over the last 25 or so years.
Combining experiences from UK, New Zealand and the USA probably provides the most directly relevant insights for Australian PHNs although there are pockets of relevant commissioning excellence globally.
But before we look at some international lessons and key commissioning trends in Australia we first need to remind ourselves of the scale of the challenge facing the Australian healthcare system.
Our Health System Is Facing Unprecedented Pressures
AS WITH THE REST OF THE WESTERN WORLD, THE AUSTRALIAN HEALTH CARE SYSTEM IS FACING UNPRECEDENTED CHALLENGES
- People are living longer.
- With more complex conditions.
- And for each long term condition that impacts a patient, the costs increases exponentially.
- Furthermore medical advances are making previously untreatable conditions treatable.
THE FINANCIAL IMPLICATIONS OF THIS ARE INCREDIBLY STARK
Figures from the Australian Government’s Intergenerational Report show us that
“Real health spending on those aged over 65 years is expected to increase around seven-fold by 2050.
Over the same period, real spending on those aged over 85 years is expected to increase around twelve-fold.”
So it’s clear we have massive pressures to contend with.
Another way to think about this is that a single long-term disease like diabetes has the potential to bankrupt any health system in any country in the western world.
Yet We Are All Striving To Improve Healthcare
IN SPITE OF THESE SOARING PRESSURES, WE ARE ALL FOCUSSED ON HOW TO BEST DELIVER THE QUADRUPLE AIMS OF HEALTHCARE
The Quadruple Aims of Healthcare
The quadruple aims of healthcare are:
- Improving the health of our populations and improving their access to health care
- Improving healthcare experience for patients and their families
- Maximising the value for money for our healthcare spend
- Improving the experience for employees working in health care
In order to continue to improve healthcare in the face of increasing pressures we need action from both commissioners on the demand side and providers on the supply side because they are such big problems that providers and commissioners acting alone won’t solve them.
Commissioning Is A Real Time Change Process, Moving Our Health Systems Towards Sustainable Models Of Care
WHEN WE CONSIDER WHAT ROLE COMMISSIONING CAN PLAY FOR PRIMARY HEALTH NETWORKS, WE NEED TO FIRST THINK ABOUT HOW WE VIEW COMMISSIONING AS A DISCIPLINE
Commissioning is about change management
Figure 2: As commissioners, Primary Health Networks can create a compelling vision for the whole health system
International experience tells us that where commissioning has been most successful, it has been viewed as a real time change process, aimed at moving health systems towards sustainable models of care.
By thinking about commissioning as similar to change management it brings a whole range of other powerful commissioning tools into play such as:
- Setting the strategic direction for the whole health system
- Getting the balance right between competition and collaboration in our provider markets
- Building primary care capability
- Introducing new payment incentives
- Engaging with clinicians and the community
- Supporting the development of key health enablers like health intelligence and new technologies
- To give an example, Western Queensland Primary Health Network (WQPHN) has worked
- alongside Hospital and Health Services (HHS), ACCHS, and their providers to get buy-in to a 5-year strategic plan.
By setting out a clear strategic direction for the whole system, WQPHN has been able to influence and steer all organisations in the health system towards a common vision of comprehensive and integrated primary health care.
This strong reorientation away from acute and episodic care towards prevention, self-care and greater coordination has become the mantra for the whole health system.
This is classic change management in action where WQPHN has created a compelling vision and has got all parts of the health system to buy into that vision.
Commissioning Is More Like Change Management Than Purchasing
THE MOST COMMON FAILING I’VE SEEN FROM PERSONAL EXPERIENCES IN UK HAS BEEN WHERE COMMISSIONING HAS BEEN VIEWED AS SIMPLY A PURCHASING PROCESS
When this happens commissioning is essentially considered to be just an annual contracting cycle where every year commissioners contract with providers based on their best guess of the level of demand for next year.
At the end of the year, commissioners and providers are too often left in protracted disputes over who should pay for the fact that more people showed up than planned.
Although great contracting is a necessary commissioning tool, it’s not sufficient by itself.
By thinking about commissioning as similar to change management, a much broader set of commissioning tools become available.
Commissioning For A Population Of One
IN CONSIDERING THE MAJOR PHN COMMISSIONING TRENDS OVER THE NEXT DECADE, THE CONCEPT OF ‘COMMISSIONING FOR A POPULATION OF ONE’ IS A HELPFUL CONCEPT THAT LINKS ALL THE TRENDS TOGETHER
Very broadly speaking, there are three perspectives through which you can view health and social care:
- From the perspective of individual patients & their families
- From the perspective of the organisation you are currently working in
- And from the perspective of the whole health and social care system
We spend most of our time thinking about healthcare from the perspective of the organisations within which we work. This is hardly surprising given that this is where we spend most of our time, where we get paid, and whose goals we spend our days trying to achieve.
Commissioning for a population of one
Figure 3: Moving away from considering health systems from the perspective of organisations
I ENCOURAGE YOU TO INVEST MORE TIME CONSIDERING HEALTH CARE FROM THE PERSPECTIVE OF INDIVIDUALS AND FROM THE PERSPECTIVE OF THE WHOLE SYSTEM BECAUSE THIS IS WHERE THE REAL VALUE LIES FROM A COMMISSIONING POINT OF VIEW
The problem with commissioning from the perspective of organisations and populations is that it’s too easy to make commissioning decisions based on existing financial or organisational structures.
When we start thinking about commissioning for an individual it rapidly becomes clear how poorly integrated the delivery of health and social care really is, and how confusing this can often be for patients.
What we really want to do is to optimise the resources across the entire health and social care system in order to wrap services around individuals seamlessly and deliver the outcomes that really matter for them.
The best example of this concept in action was used in the Torbay Model of integrated health and social care where they designed their model by thinking from the perspective of Mrs Smith, a typical older lady needing a range of health and social care services.
This focus on making care work for Mrs Smith led to the design of one of the most successful and widely cited models of integrated care internationally.
And this theme links together the five PHN commissioning trends I’ll now explore.
The Key Commissioning Trends For PHNs To Watch
I SEE FIVE MAJOR COMMISSIONING TRENDS FOR PRIMARY HEALTH NETWORKS TO CONSIDER OVER THE NEXT DECADE:
Key trends in commissioning
Figure 4: Considering ‘commissioning for a population of one’ helps frame the key PHN commissioning trends
Commissioning Trend 1 – The Evolving Use Of Outcomes Based Commissioning
OUTCOMES BASED COMMISSIONING WORKS BEST WHEN COMMISSIONERS INCENTIVISE PROVIDERS TO ACHIEVE THE OUTCOMES THAT REALLY MATTER TO PATIENTS
Outcomes based commissioning
Figure 5: An example based on falls prevention illustrates how outcomes contracts incentivise the delivery of care in the most efficient setting
Commissioners do this by making a proportion of their provider contracts contingent on the healthcare provider achieving a specific set of agreed health outcomes.
The key difference between outcomes commissioning and straightforward performance contracts is that in healthcare we too often incentivise outcomes that matter to the health system.
So let’s consider the example in figure 5. We have an elderly gentleman who falls, is taken to hospital by ambulance, has his hip operated on, starts his recovery on the ward and completes his recovery in the community through physiotherapy and rehabilitation.
We would typically measure performance of things like ambulance response rates, theatre efficiency, length of stay on the ward, delayed discharge to community, and length of rehab as opposed to the outcomes that matter to patients, families and carers.
However, a better set of patient centred outcomes might include falling less often, total time to get back to independent living, and living longer.
Another critical aspect of outcomes contracts is the importance of having a single payment for a full cycle of care – which may well necessitate providers coming together in new partnerships.
This provides the flexibility for care to be shifted into the most efficient care setting to give the best outcome for the patient as opposed to the outcome that best meets individual organisation’s objectives.
It should be noted however, that there are significant challenges in implementing outcomes commissioning and there have been some spectacular failures.
The most notable failure being the £800m Cambridge & Peterborough outcomes contract for Older People’s services that collapsed a few months after the contract start because the providers couldn’t financially sustain service delivery after under-performing against their anticipated outcomes targets.
INTERNATIONAL CASE STUDIES IN OUTCOMES COMMISSIONING TEACH US CRITICAL LESSONS ABOUT HOW TO MAKE OUTCOMES COMMISSIONING SUCCEED
Work with patients and clinicians to define the right outcomes for your cohort.
Start cautiously with a modest proportion of the contract being contingent on outcomes – better to start with 20% and build than start with 100% and fall over.
Risk-adjust the target population so more complex patients get paid more than less complex patients – to avoid cherry picking of the relatively easy patients.
Make sure your providers have sufficient cash flow to wait for the longer time lag between service delivery, outcomes being achieved, and the provider getting paid!
OUTCOMES COMMISSIONING IS AN EXPANDING GLOBAL MOVEMENT
The establishment of the International Consortium for Health Outcomes Measurement provides clear evidence of the global commitment towards outcomes commissioning in healthcare.
This consortium, including the Boston Consulting Group, the Karolinska Institute and the Harvard Business School, has already mapped standardised outcome sets for 47% of the global disease burden.
Commissioning Trend 2 – Co-Commissioning With The Acute Sector
CO-COMMISSIONING PROVIDES AN INNOVATIVE WAY TO HARNESS THE HEALTHCARE RESOURCES OF THE WIDER HEALTH SYSTEM
Figure 6: Co-commissioning – pooling PHN and HHS / LHD budgets
Co-commissioning is when two or more commissioners come together to jointly commission healthcare services.
Co-commissioning provides an innovative way to harness the healthcare resources of the wider health system by PHNs jointly commission services with their state funders.
The fact that in Australia, state government predominantly funds acute care, while the Commonwealth funds primary care, creates a uniquely unhelpful barrier to the greater integration of the whole health system.
Co-commissioning is the obvious workaround solution to this fundamental problem.
In practice this could work by identifying (through risk stratification) a defined cohort of patients who are most likely to exacerbate into an acute setting in the next 6 months, assessing their likely expenditure, then setting those funds aside into a co-commissioned budget managed through joint PHN / HHS governance.
Then put in place proactive care plans led by GPs with supported self-care (ideally incentivised by an outcomes contract) to deliver the best possible care within the joint budget.
The first benefit of co-commissioning is in enabling PHNs to access a far greater pool of funding.
The second benefit is that it enables improved alignment of incentives across primary and secondary care – which will enable meaningful re-investment in prevention work that will reduce demand on secondary care.
It’s worth remembering that in the UK, Clinical Commissioning Groups (CCGs) commission services across the care continuum so theoretically they do have the ability to reorientate health systems away from acute care towards primary care, not diminishing the practical challenges in achieving that goal!
Commissioning Trend 3 – Integrated Commissioning Across Health And Social Services
WHEN WE CONSIDER HOW TO ADDRESS THE WIDER DETERMINANTS OF HEALTH IT’S CLEAR THAT THE HEALTH SYSTEM CAN’T DO EVERYTHING ALONE
Integrated commissioning across health and social care
Figure 7: Comparison of costs between acute and residential care
As soon as we start thinking about how to maximise health outcomes for our population, it quickly becomes obvious that the health system can’t do everything alone and that we need to consider the wider social determinants of health.
The importance of social care quickly becomes evident.
As a simple example, every night that an elderly person spends in a hospital waiting for a residential care place to become available, the budget spent is 10 times greater than if that older person was being treated in the more appropriate care setting.
By pooling budgets across health and social care we move into a position to incentivise that shifting of care.
I worked on this first hand developing Lincolnshire’s Better Care Fund in 2014. The most striking thing for me was discussing with one NHS commissioning chief exec that he was getting to the point where social care cuts were so bad (at a time where NHS budgets were protected) that he thought the only ethical thing to do was to start giving money from healthcare to his social care neighbours.
By far the most far-reaching attempt to jointly commission health and social care in the NHS is the Greater Manchester ‘DevoManc’ initiative where they have pooled £6 billion of health and social care budgets into a single budget.
I believe that the trend for integrated commissioning across health and social services will only increase in the coming years.
Commissioning Trend 4 – Commissioning Support At Scale
THERE ARE SIGNIFICANT OPPORTUNITIES TO ACHIEVE ECONOMIES OF SCALE THROUGH SHARED COMMISSIONING SUPPORT UNITS
Commissioning Support Units
Figure 8: The 6 UK Commissioning Support Units
We’ve already seen the emergence of the health intelligence unit in Western NSW and discussions around a shared health intelligence service are well afoot in Queensland.
The basic argument for shared commissioning is that there are some commissioning capabilities that can be delivered at higher quality with better value for money at a greater scale than an individual PHN.
The benefit of shared commissioning support units is that they are able to create a critical mass of core commissioning skills rather than having specialist skills dispersed across small teams across multiple PHNs.
Commissioning Support can include transformational capabilities such as health intelligence and service transformation as well as more transactional capabilities such as HR, IT & Finance.
UK’s Commissioning Support Units (CSUs) are not well known in Australia but they are major players on the UK commissioning scene. For example, UK Clinical Commissioning Groups (CCGs) bought £602m of services from Commissioning Support Units in FY13/14.
The UK started out with 20 CSUs that have subsequently merged into 6 larger CSUs.
Interestingly, the CSUs that succeeded during the period of consolidation in recent years were the ones that grew organically from a base of strong CCG support.
This is the way I would recommend Australian PHNs start increasing their use of shared commissioning support; by developing commissioning support organically to suit the needs of friendly groups of PHNs, HHSs and Aboriginal Community Controlled Health Services (ACCHS).
Commissioning Trend 5 – Stronger Partnerships With Aboriginal Community Controlled Health Services
The Australian Government has consistently funded ACCHS over the past 20 years, and ACCHS have put in place impressively sophisticated commissioning systems as well as innovative models of care
To give an obvious example, ACCHS have been running Healthcare Homes for the past 20 years, which mainstream services are only now piloting.
ACCHS have been able to invest in local GP centred models of care that have supported stable and comprehensive primary health care services.
This has been particularly important in rural and remote Australia where mainstream services have often been reliant on a fly-in-fly-out model of rotating locum GPs.
There is currently a real opportunity for PHNs to:
- Recognise their shared primary health care priorities with ACCHS
- Harness and embed ACCHS significant intellectual and cultural capital
- Jointly contribute towards a better connected, easier to navigate and more efficient model of care across local health systems
Getting Ahead Of The Trends
All five of the commissioning trends set out in this white paper represent significant opportunities for PHNs to take a strategic leadership role in helping their health systems move towards sustainable models of care
If you would like to discuss how to turn any of the ideas explored in this white paper into a practical reality for your health system then get in touch. We would love to hear from you.
Managing Director, Rebbeck Consulting
0414 400 524
I WOULD LIKE TO THANK SEVERAL FRIENDS AND COLLEAGUES WHOSE DISCUSSIONS AND IDEAS HAVE HELPED SHAPED THIS WHITE PAPER:
- Stuart Gordon, Western Queensland PHN
- Chris Mules, EY
- Dr Tim Smyth, WNSW PHN & CES PHN
- Derek Felton, Felton Consulting
- Paul White, New High Consulting
- Tom Gash, UK Institute for Government
- Justin Toh, Health Outcomes Australia