The NHS - challenging times for commissioners and providers

As 2013 drew to an end, the press described it as the NHS’ “annus horribilis” because of bruising reports about quality of care. There was also the controversy around the role independent sector providers play in delivering our care. Many saw the introduction of The NHS (Procurement, Patient Choice and Competition) (No. 2) Regulations 2013 as heralding compulsory tendering of all health service contracts, leading inexorably towards “privatisation of the NHS”.

If Monitor’s draft guidance is indicative of what Monitor will say in its final guidance, commissioners will have more freedom of choice than this. That is all very well, but whatever the final guidance (expected January 2014) will say, and whatever longevity the Regulations ultimately have, tendering decisions have always had to be made against a backdrop of EU law and our own national Public Contracts Regulations 2006 (as amended). Those are the two main planks against which all commissioning decisions have to be made, and interweaving amongst them is a network of smaller branches involving stakeholder and service user engagement, having “due regard” under the Public Sector Equality Duty, and discharging consultation obligations.

Commissioners, whether at local CCG/CSU level, or whether finding innovative cost effective and quality solutions at Trust level, are striving for excellence with reduced budgets and in a climate where every step they take is scrutinised and at risk of challenge.

The reality is that the tough time the NHS gets in the press is not new. Since the Queen used the term in 1992, “annus horribilis” has been used to describe annual performance of the NHS so many times that it now lacks originality. And the role of the independent sector in the delivery of our care is not new either. In fact whilst the new Regulations add an additional layer of complexity to commissioning decisions, the need to be transparent, to treat bidders equally and not discriminate (and arguably therefore to tender) was there in any event under our existing procurement regime. What the new Regulations have done is add another route of challenge for independent providers, and another set of rules for commissioners to navigate their way through

It is inevitable that the commissioning process will generate friction between commissioner and provider (whether it is a complete failure to put a contract out to tender, or what is perceived as a flawed evaluation process). In our experience, the most effective processes involve early and constructive engagement with stakeholders and service users to understand what really needs to be commissioned or procured, followed by transparent engagement with the market where appropriate to understand what can be offered and what will work, leading to a clear and relevant set of evaluation criteria. That solid foundation eliminates many unnecessary problems which are otherwise likely to arise.

For providers who think the process is going wrong, there is now a multiplicity of routes for them to raise their concerns, each with different timings, cost and outcomes. Many providers will be nervous about upsetting their customer, and will want to raise concerns in a mutually constructive way. Whether on the receiving end of a challenge, or bringing a challenge, the route for challenge used will affect possible outcomes.

Three of the main current routes of challenge now available are:

Cabinet Office Mystery Shopper Service

• Relevant to CCG or hospital/mental health Trust.
• A free route of complaint.
• If a complaint is taken on, the Cabinet Office will take it up on an anonymous basis (hence “mystery shopper”) with the Trust or CCG.
• May result in a recommendation to the Trust or CCG (but nothing stronger), and generally only about future conduct.
• Cabinet Office is unlikely to take a complaint where the company is also in receipt of legal advice.
• Can take time to get to a recommendation.

Monitor complaint under The NHS (Procurement, Patient Choice and Competition) Regulations (No 2) 2013

• Relevant to CCG or NHSE.
• A free route of complaint.
• Monitor has to balance resources when considering whether to take complaint on. Persuading Monitor to take a complaint on is more likely where an issue has a wider significance.
• Monitor has wide powers under the Regulations including to investigate and make directions (although not to direct a commissioner to hold a competitive tender).
• Monitor can set aside contracts for health services after they have been awarded. This is currently one step further than the Courts would be able to go (broadly speaking) for health service contracts as there is unlikely to be a remedy of ineffectiveness in the Courts for Part B services.
• There is no time limit on when a complaint to Monitor has to be made although any delay may be a factor in whether Monitor takes the complaint on.
  

Formal Court challenge

• Affords the claimant company more control over the process as it gets to choose when it lodges the Court papers, and the complainant stipulates what remedy it wants the Court to give.
• If Court papers are lodged during the standstill period, gives the claimant the immediate remedy of halting the procurement process (the “automatic suspension”).
• Entails a cost to the claimant in legal fees, court fees and potential liability to the commissioner if the claimant loses.
• Can give rise to an award of damages.
• Can get the attention of the commissioner more quickly and lead to engagement (and potential solution for both sides).
• Strict time limits need to be kept to (30 days from when the claimant knew it had grounds for a claim, extendable to 3 months’ maximum where there are good grounds for doing so). Claimants cannot wait to see the outcome of the tender process before challenging where they spot a problem early on. Claimants may also lose the right to use the Court process if they go down the Mystery Shopper or Monitor route.

As well as helping providers structure effective bids or pursue complaints, our work involves helping commissioners structure a useful, relevant and robust procurement in the first place. With our clients we focus on a productive process of engagement, whether acting for the commissioner CCG or Trust, or for the private sector provider. We have seen how collaboration and partnering can be used for the benefit of patients to achieve really good care across a huge range of services, from pathology joint ventures, to outsourcing of children’s care, to strategic estates partnerships. We have seen how the health market is embracing new ways of risk sharing, including capitated outcomes based incentivised contracts and social impact bonds.

On the basis that good news is not news, 2014 is unlikely to be hailed as the turning point for the NHS, where commissioners and providers achieve ground-breaking partnerships which save us all money and deliver good care. But we know that some examples of that are happening, even if they don’t make it to the papers.

To read the Sir William Wells Reference Group Partnership Report please click here.

Bevan Brittan is a leading advisor to the NHS, including Trusts, CCGs and CSU, regulators and the Department of Health. We understand the health market from a commissioner and regulatory perspective. We are also pleased to act for private companies that are involved in delivering public services including diagnostics and sterilisation equipment manufacturers, MES providers, patient transport, pathology, infrastructure, facilities management and a wide range of care providers from residential, step down, at home and primary care markets.