How to minimise the risks of Conflicts of Interests in Clinical Commissioning Groups

It was really only a matter of time until we had some significant exposé on the Clinical Commissioning Groups and Conflicts of Interest. Indeed it is no surprise, since we discussed this very risk many months ago.  Today The Times and BMJ informed us that GPs have awarded at least £2.4bn to their own companies.

I don't think there is much to be gained from revisiting the previous discussion but I think the Department of Health may want to consider their response to The Times and BMJ findings.

There is little mileage in asking for evidence that there was a conflict of interest in the award of the contracts - let's just start with a presumption that there will be. But isn't the real test to be found in whether or not subsequent value for money is delivered? Therefore I would suggest the Department of Health adopt three policies:

1. Create a benchmarking service which publicly shows the table of rates paid across the various CCGs;
2. Place an obligation on providers to demonstrate how they provide on-going value for money, not unlike the previous local government Best Value for Money obligations;
3. Place an obligation on CCGs to publish how they are performance managing their contracts to ensure the required quality of service is maintained, if not improved.

Not rocket science but may help overcome the downsides of Conflict of Interests.

NHS Procurement Tsar meets the Fat Controllers.

The NHS' new procurement tsar looks as if they may have an interesting first challenge - working out
a procurement strategy for 'fat clubs'. The National Institute of Health and Care Excellence (NICE) has endorsed three providers who can deliver, what appears to be, NHS funded places at 'fat clubs'.

The challenge now is how the Tsar will approach the procurement of 'fat clubs' to maximise the purchasing power of the NHS.

With only three providers operating through a network of local clubs we should see some interesting procurement questions answered.

1. Are the local providers endorsed by NICE?
2. Who would be the contracting bodies - the national or local providers?
3. Will payment by results be used?
4. Will the providers collude and carve delivery?
5. How will alternative providers respond to potentially be excluded from delivering the service as they don't have NICE endorsement?
6. How will the EU procurement rule be complied with?
7. Somewhat tongue in cheek, will we see a lean approach pursued?
8. What evaluation weighting will be used?
9. Will the Tsar be able to shape up?

NHS getting ready for another procurement scrub

I found the news in today's Financial Times that the NHS is in talks regarding the future of Commissioning Support Units an interesting brain teaser - what would I do?

The 19 CSUs were set up last year to support the Clinical Commissioning Groups (CSGs) in designing health services, providing back office computer services, payroll and procurement services. Now NHS England is considering the options for their future. Yet, it appears it's the CSUs who have to decide on their own future - how will that work and what freedom will they have to plough their own furrow?

Anyway, it does seem strange that there wasn't a clear strategy when CSUs were set up as opposed to 19 CSUs starting to deliver services and then debating their future so soon.

The usual outsourcing organisations could bid for all or part if the services, but is the current environment (e.g SFO now probing tagging contract) likely to be conducive to productive discussions when the government seem to lack confidence in so many of the providers and also the ability to successfully contract manage?

Alternatively, could the CSU services be provided through the contract let recently for government shared services? That may be difficult since it didn't appear to be in scope. One could of course ask why it hadn't been included in the scope?

Could the Crown Commercial Service provide the procurement aspects? It seems odd that the CCS would allow independence of such a vast amount of spend so early in its life, but then again why haven't they been providing the procurement services up until now, and if they have, have they failed to win over hearts and minds?

Should the NHS aim to let one job-lot contract for the whole of the 19 CSUs and, if so, how will they shape the contract? If NHS England went down that route, how would they avoid being held hostage to the provider? How would they gain the ownership of the CCGs?

Could each of the CSUs become a centre of excellence and each deliver a specialist shared service to the others, say one CSU leading on payroll and another on procurement?

If theoretically it was possible for CSUs to become centres of excellence, with the sole aim of supporting CCGs, why couldn't the CCGs 'cut out the middle men' and just agree among themselves which of the CCGs would become centres of excellence?

Would my position be different depending who I was advising? Well, I think to be honest, if I were in a CSU or one of CCGs, my inclination may well be to let all the others sign-up to a central deal and then use that as the starting position to get better deals from those who were unsuccessful in winning the main contract. When you compare the classic Prisoner's Dilemma scenario doesn't it sometimes make sense to actually avoid collaboration and standalone in procurement?

Well, it gave me something to muse on during this morning's flight in the absence of the facts - what would you recommend?

A very public negotiation

Last week I suggested we were seeing brinkmanship in the NHS between ministers and GPs. Today, the next hand appears to have been dealt with the announcement that GPs can expect to see an increase in their ranks of 2,000 by 2018.

Needless to say the Royal College of General Practitioners applaud this announcement:

If we have more GPs able to spend longer with patients and communities then we can adapt to meet the needs of the 21st century.

Let's try to deconstruct the Royal College's justification. If GPs are more involved in CCGs how will they be able to spend more time with their patients? Indeed why wasn't this issue raised when CCGs were first grasped with open conflicts of interest? Are the Royal College seriously arguing that GPs are unable to adapt to the 21st century without an increase in numbers? Other public service providers are expected to adapt with lesser numbers and greater use of digital. Indeed is it not the case that there is greater self-diagnosis of potential GP door-steppers using web-based sources. Are the Royal College really justifying the case for GPs, and I assume their own longer-term negotiating power.

On the other hand, will the Department of Health question that rationale and why the Royal College haven't taken responsibility for ensuring GPs have been adapting to the 21st century? Will the DoH ask for evidence of impact? In this game of brinkmanship, surely the DoH should have used those levers earlier in the game?

However, if I was in the Royal College, I'd say thanks and wait for the next offer - DoH want CCGs to succeed and politicians will want a good NHS story as they approach the next election.

Fortunately this negotiation is appears to being played out in the public domain - we can all watch and learn.

Brinkmanship at the NHS

I've been discussing Clinical Commissioning Groups and the various twists and turns for some time - there's no denying they're turning into one of those procurement case studies which just keep on giving.

A very quick summary:

1. In 2004 the government negotiated, what is widely viewed as, a bad deal with GPs. The GPs got more money and were able to opt out of providing an 'out of hours' service.
2. GPs involved with CCGs expressed concern that they lacked the skills to handle the procurement aspects for CCGs.
3. NHS Guidance on procurement appears flawed and has to be rewritten just as it is required.
4. CCGs are identified as having clear conflicts of interest within procurement.
5. Demand on A&Es increases as a result of the systemic displacement from GPs opting out of providing 'out of hours' services.
6. GPs say patient care is suffering through the need to be involved in CCGs.
7. GPs are viewed as 'badies' and ministers hope to renegotiate the 2004 contract.   
8.  GPs trade union are threatening a withdrawal of the NHS' flagship Clinical Commissioning Groups. 

I'm sure there's no suggestion that GPs have less to gain through CCGs since the conflicts of interests were highlighted. Nor, I'm sure, is there any connection between the suggestion that the GPs contracts should be renegotiated by ministers and at the same time CCGs are precious to ministerial aspirations for the reform of the NHS.

You could of course view the whole thing as a shambles. But then again you could say it's just brinkmanship. It does have the appearance that one side is better at negotiation than the other though. 

You're Procurement, get me out of here

If only procurement professionals had the escapology skills of Harry Houdini. Day by day I see bad contracts entered into and hear the mantra "you're commercial, get me out of here".

Why does it all go so wrong with people entering into contracts they no longer can/want to live with.

To me, it starts to go wrong when procurement people are not engaged early enough in the market dialogue. Technical specialists are problem focussed and want to speak to techies who can talk their language and give them what they want.

Naivety and gullibility play a part. Firms which exist to make a profit and sellers incentivised to make a sale find it easy to smile, say yes, and shape the dialogue to reflect their unique selling proposition. The movement of negotiating power from the buyer to the seller is palpable.

Failure to consider alternative options doesn't help - but why on earth would a techie want to consider alternative options, there's is to get a problem solved. Not taking a wider perspective and seeing the transference of costs to elsewhere within the same system blinkers the cost/benefit analysis.

Pride and face saving make it hard to back track and say, "sorry, that's not a good deal for us".

A sense of urgency doesn't help. The requirement is urgent, so there is reduced time to take corrective action.

All this seem familiar? It certainly appears to be demonstrated through the negotiation of GP contracts in 2004, and the recognition that costs have only been transferred to A&E. It also looks as if we're going the same way with Clinical Commissioning Groups - yes, we think the GP contracts were wrong yet are we making the same mistakes? It also looks as if some high level 'staff exit' packages aren't immune.

Yes, maybe we should ask a procurement person to get us out of here - more often than not that cry is heard too late when what should have been heard, right at the start, was, "I'm going into the jungle, can a procurement person get in here with me, now?"

Is 78% non-compliance with procurement procedures the tip of the iceberg?

Waterford City Council, reported to have 78% of a sample of procurements audited to be non-compliant with procurement procedures and, 40% of contracts awarded without a procurement process must be up there with a claim for the Guinness Book of Records - it certainly places them on the procurement map. Almost €219k had to be returned to funders as it was not spent in accordance of the rules (mind you this is not the first time we've encountered this risk of claw back of money previously spent).

 The Council's defence is also potentially worthy of an award in itself:

"Whilst acknowledging that the full rigours of the procurement rules were not adhered to, the adhered to principle of obtaining value for money was of upmost importance" 

It is inconceivable that the Council can believe their own rhetoric in the absence of a more comprehensive review. Unfortunately, I can visualise that flawed defence being echoed many times in the future by CCGs given their poor foundation.

Insofar as I can base my views on the Internal Auditors Report, I agree the need to professionalise their procurement and embark on a skills development programme but I personally don't think that will be suffice.

I suspect that what we are seeing is only the tip of the iceberg. The administrative processes for the receipt and opening of bids, and a sample review of tender evaluations were not included in the review. I suspect the inclusion of those areas within the audit could have revealed a minefield open to corruption and awards not made to the most economically advantageous tender. Nor did the review consider the effectiveness of contract management - can the constituents of Waterford really be confident that their Council are getting what they have paid for?

Why not give the Internal Auditor's Report a read and use it as a test of your own organisation - it would be great to hear from you if you can beat the benchmark of 78% non-compliance.

Defining the scope for conflicts of interest in CCGs

It was only on the 15 March, discussing the potential Clinical Commissioning Groups' conflicts of interest, I said "what we don't know is how big a scandal some of those involved in CCGs could be walking into out of ignorance". Today's Sunday Times, 'naming and shaming' provides some indication that it will be a big scandal.

While "NHS England is creating guidance which outlines how conflicts of interest can be avoided and mitigated in the reformed health service" media attention and public scepticism just won't wait and have already jumped to conclusions.

I suspect a level of naivety in the NHS and CCG on procurement decision making and when those with a potential conflict of interest should absent themselves from the decision making process.

In commissioning the potential to exercise 'undue influence' is long before the decision of who should be awarded the contract and indeed long after. For example, the opportunity to influence for personal gain can be exerted:

1. In completing a strategic needs analysis and identifying which services would help match the needs of the area;
2. In prioritisation of the identified needs;
3. In determining the budget allocated to specific needs;
4. In determining the make/buy decision;
5. In determining the level of competition required;
6. In determining the potential for collaborative commissioning partners;
7. In determining whether the identified needs should be expressed as outcomes or narrowly defined inputs/outputs;
8. In agreeing the risk allocation;
9. In agreeing exit clauses;
10. In agreeing the bundling of contracts;

"NHS tendering 'a threat to patients' "?

I suspect many of you will not have access to today's Times but it has  a fascinating letter from Dr Hilary Cass (President, Royal College of Paediatrics and Child Health), Prof Sue Bailey (President, Royal College Psychiatrists), Dr Clare Gerada (Chair, Royal College of General Practitioners) and Prof Lindsey Davies (President, Faculty of Public Health).  Yes, the sort of people who you may be inclined to listen to if you were not deaf.

Their letter includes:

... we are concerned that Clinical Commissioning Groups will be forced to open services to competition against their will - creating an unnecessary bureaucratic and financial burden on commissioners, and unnecessary drain on vital NHS funding. There is also a real danger that the enforced tendering of one service may damage another independent service in a different part of the same organisation or care pathways which are key to providing high-quality healthcare to thousands of children and mental health patients every year.

We urge the Government to think again about how the section75 regulations are framed and their potential consequences. We want to see a full debate in Parliament and engagement with the Medical Royal Colleges and health professions to ensure these regulations are redrafted in the best interests of patients.

That's a fairly clear statement to the effect that key stakeholders have yet to be convinced on the way forward.

I have no reason to doubt the NHS procurement staff who, for many years, made clear that helping clinicians engage with professional procurement has been a major challenge; indeed many consider gaining their ownership of procurement initiatives the equivalent of winning an Olympic Gold.

Are these medical luminaries fighting against the changes as they see the erosion of their own vested interests or is patient care their sole motive? Are these very clever people, who appear to have resisted all forms of NHS reform, just creating yet another filibuster?

NHS Commissioning looks poorly

I had thought we had done away with public flogging but today's Public Accounts Select Committee certainly gave me cause to doubt that. What was even more bizarre was that some of the witnesses appeared to be wearing self-written sandwich boards which said "I haven't really prepared for this grilling and I don't plan to demonstrate any humility today and certainly not accept personal accountability".

It was a gruelling session for all those involved and the patience of the MPs seemed to be sorely tried - I may return to some of the evidence in more detail. Four points though are worth reflecting on and one worth discussing:

1. Hospital consultants appear to have negotiated wonderful contract which led to being paid more and being less productive. 'Pay more for less' just isn't that best outcome for a buyer from a negotiation.
2. The reason why we are 'paying more for less' is, believe it or not, being a consultant has become more complicated in the last decade. I'm sure that's not what they meant to say but they made a point of reiterating that argument.
3. There was great play made of the presence of annual plans for clinical consultants. The committee appeared to struggle to understand why their presence alone was worthy of credit while the lack of an associated performance management system.
4. There is a need to really understand what you have authority to do - our friends seemed unsure whether Treasury Guidance, because it had been around for some time, still needed to be adhered to.

However, there was another strange twist in the Clinical Commissioning Group saga, now we find "Commissioners should only use competition where there is evidence it works". I would have liked the Committee to have been more probing on this statement and what the guidance will say. Given the conflicts of interest we discussed on Friday this does not strike me as a good foundation for achieving value for money:

• What will be acceptable evidence that competition works?
• What incentive would there be to try to prove competition works?
• Will it be possible for potential challenges that 'competition doesn't work'?
• What incentives will there be to ensure that those who have demonstrated poor negotiation in hospital consultants' contracts will be able to negotiate contracts without competition? 

It is certainly is an interesting precedent to set and one which I am sure others will crave for. Why on earth did the Public Accounts Committee let that pass?

Conflicts in Clinical Commissioning Groups

I overheard a discussion on the Thursday morning' s Today programme which made reference to BMJ published research suggesting one in three of GPs involved in the new CCGs have a conflict of interest - I couldn't access the report but you can read more here. The actual expenditure at stake is £62bn.

Last week I discussed the chaotic nature of how new commissioning rules are being cobbled together inside a month.  We also know from Ben Goldacre's excellent Bad Pharma that, in spite of self-professed business acumen and nous, GPs are not immune from the wily salesman.

The NHS Code of Conduct, insofar as procurement is concerned, implies that it is okay for those who have declared a conflict of interest to participate in discussions but be excluded from the decision making. To me that is insufficient and needs to be significantly strengthened during the rewrite to the new procedures to ensure that those who have a conflict of interest absent themselves from any related discussion and, any perceived undue influence in the procurement process is treated with sufficient seriousness to act as a deterrent.

We know procurement fraud costs money, we know there is a lack of personal accountability, we know the Code is weak, we know there are a lack of skills - what we don't know is how big a scandal some of those involved in CCGs could be walking into out of ignorance.

This change management process does not inspire confidence - anyone aware of the risks having been assessed?

P.S. Sunday Times 31 March 2013 headline, 'GPs' Private Firms Grab NHS Cash' , now there's a surprise (not).

PPS in a later blog I expand on this and suggest where conflicts could arise.