Capitated Outcome-Based Incentivised Contracts
Fragmented care pathways can deliver suboptimal patient experiences and, when combined with perverse incentives from the financial structure, often mean increased costs and poor value for money. These problems can be addressed if the same care is delivered through a seamless and efficient care pathway. This is why CCGs are starting to consider using a model of outcome based commissioning with an accountable lead provider (also known as "COBIC" or Capitated Outcome-Based Incentivised Contracts) to deliver care to patients with health needs that span domiciliary, primary, community and acute care. Examples of this approach include the delivery of substance misuse services in Milton Keynes, and in procurement are musculoskeletal services in Bedford and frail elderly care services in Oxfordshire.
Outcome based commissioning is not a new concept, but it has been given new impetus by the CCGs who are seeking improved services for a reduced cost, and the refresh of Transforming Community Services contracts in the coming 6 – 18 months gives CCGs the opportunity to reconfigure some of the care pathways as part of that process. Outcome based commissioning transforms commissioning for activity into commissioning for outcomes.
An accountable lead provider takes the process beyond this so that the CCGs do not need to separate and bundle discrete services to put out to tender, and then manage the multiple providers of those services. Instead, by procuring outcomes and an accountable lead provider, the CCG transfers the responsibility (and some of the financial risk) for integrating the care pathway to the accountable lead provider. The accountable lead provider constructs a supply chain to deliver the range of services required by patients within the pathway, and it is responsible for navigating all of its patients through the care pathway efficiently and effectively.
In order to manage the risks inherent in an outcome based commissioning contract, the accountable lead provider is likely to implement more joint working arrangements within its supply chain, and therefore the impact of outcome based commissioning may be more widely felt than at first appears. In order to counterbalance the risk, providers need to be able to see an upside from sharing in gains from improved services and more efficient delivery.
CCGs need to be aware of the potential complexities that may arise from adopting an outcome based commissioning approach. We can help with advice on issues such as:
Commissioners have to find a way of delivering effective public services in a more affordable way. The principles for achieving this have long been known – integrating commissioning and budgets, and focusing on early interventions. The challenge is not seeking agreement on these aims; it is finding a practical and effective way of delivering on them.
The challenge with adopting an early intervention approach is that it requires someone paying for activity up front to provide savings that will accrue in the future. Where there is such financial pressure as well as on-going demand for reactive services this is challenging. Commissioners are responding by combining COBIC style contracts with Social Impact Bonds (SIBs). This is now being taken up at scale across the public sector including NHS bodies, local government, Ministry of Justice and DWP. Early examples include payments being linked to reducing reoffending by focusing on rehabilitation, reduced children going into care through greater early support to families and reduced demand on acute beds through greater community based health and social care. The team at Bevan Brittan has closed 2 SIBs to date and is working on 7 others, including what is likely to be the first pathfinder in health for end of life care.
The final, and fundamental, piece in the puzzle that underpins the whole area is how can commissioners integrate budgets and overcome the traditional funding silos. This has been a, if not the, major barrier to progress in this area with commissioners historically only able to work within the constraints of their own funding silo. This means that, for example, even though it may produce improved service and savings to the public sector for the local authority to commission greater community care to reduce the demand on the acute hospital it does not happen because the authority does not have the luxury of paying for discretionary services that will provide savings to the CCG. Early movers in this area are proactively coming together with public bodies in their area to consider how this could be achieved. One approach being developed across the country is the use of a 'LIST' (local integrated services trust) which is a neutral entity owned by public bodies in an area that allows parties to pool budgets, share savings and co-commission on an outcomes basis.
Bevan Brittan is at the heart of shaping and delivering on these new commissioning approaches providing advice to commissioners and providers on COBIC style contracts, social investment, SIBs and how to integrate budgets and commissioning. We pride ourselves on our creative thinking and have a long history of being at the forefront of developing innovative approaches. As a public services law firm advising both health and local authorities we also bring a deep understanding of the integration agenda.
We will be hosting a symposium in the autumn to bring together commissioners from Local Government and Health to consider the initiatives in more detail. This will be a high level one day event that will be open to existing clients. If you are interested in attending please email firstname.lastname@example.org.
If you would like to discuss how we can support you in developing your COBIC procurements please contact a member of our COBIC Team.
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