Marketing Module - 'Practice-based Commissioning

The Implications for Pharma'

Practice-based commissioning (PbC) went live in April 2005, and aims to enable GPs to break down the barriers to an NHS led by primary care. With any savings that a practice generates being allowed for 'reinvestment' in patient services, PbC is likely to be a major force in changing primary care. But is it just fundholding in disguise?

Held at Sanofi-Aventis the module was opened by Ivor Eisenstadt (MGP Ltd), Chairman of the Society's Education Sub Committee who thanked Caroline Horwood of Sanofi-Aventis for generously supporting the event. He confirmed that this PM Society Marketing Module set out to clarify just what PbC is, and the implications for both primary and secondary care, as well as assessing the impact of PbC on prescribing and the management of long-term conditions. Most importantly, the meeting addressed the opportunities and threats represented by PbC to the pharmaceutical industry.

(left to right) Eric McCullough, NAPC and Dr Peter Smith OBE, NAPC

Why practice-based commissioning?
PETER SMITH

PbC will change the whole way the NHS works. Peter Smith of the National Association of Primary Care (NAPC) agreed that many suspect PbC to be fundholding reinvented but, in fact, only about half of all GP practices were ever fundholders. The difference now is that, ultimately, all GP practices will have to sign up to PbC something the NAPC have been instrumental in getting on the statute books.

Even though PbC was introduced in April this year, many healthcare professionals remain completely unaware of this, as are many within the pharmaceutical industry. This vitally important change has passed a lot of people by and even many of those who are aware of the change fail to understand just what PbC means for them. But the GP with the cash to commission services has power and if GPs understand what it means for them now, they can be ahead of the game.

What is PbC?
PbC is a system that allows frontline professionals to be directly involved in the commissioning and management of appropriate health services for their patients using their unique local knowledge within the constraints of an agreed budget.

Up to now the situation has been that practices are only one of the determinants of how patients utilise healthcare services, with a major influence on what care the patient receives and how the patient exercises choice. Yet, with the possible exception of prescribing, this has come without any need for practices to consider how they are using health service resources and often without the financial ability to secure better and more innovative services for their patients (R Lewis. Practice-led commissioning: Harnessing the power of the primary care front line. King's Fund, 2004). For Peter Smith this is a very important message.

The idea of introducing PbC is not new. Back in 1998, when the Government set out its plans for the new NHS, it was stated that: 'Over time the Government expects that PCTs will extend indicative budgets to individual practices for the full range of services'. In June 2004 the NHS Improvement Plan stated that: 'From April 2005, GP practices that wish to do so will be given indicative commissioning budgets'. It is now planned that by the end of 2006 all GP practices should be participating in PbC.

How will it work?
The change to PbC will mean greater clinical engagement for those who are best placed to make commissioning decisions, i.e. the GP and those in the front line. Local innovation and service redesign will involve all service providers right across the care pathway, and improved efficiencies in service provision will free up resources to reinvest in further innovation. The current Department of Health view is that PCTs do not deliver and with PbC the influence will shift away from them.

The result will be a greater variety of services, obtained from a greater number of providers in settings that are closer to home and more convenient for patients. Clinician-to-clinician dialogue about improving and developing care processes will be supported and there will be early and continuing involvement of practitioners in service development. Ultimately PbC will aid the management of demand.

By the end of October 2005 every health authority has to submit their plan for reconfiguring their PCTs something which must be done by April 2006. The main effect will be that there will be fewer PCTs - it is estimated around half the number there are now. PCTs will lose their provider function by 2008. It is envisaged that there will be multiple providers of services, with a growth in the provision of primary care by the private sector. GP practices will also be able to group together, probably as limited companies, to deliver primary care services.

The new GP contract has been extremely successful, with demonstrably improved patient services - perhaps because it was the only one of the new NHS contracts with performance-related pay. Coupled with this payment by results, by 2008 patients will have unlimited choice and will be able to go to any GP and ask to go to any provider for any service.

However, with the advent of these two separate drivers payment by results (PBR) and unlimited patient choice the system is in danger of running out of control in many areas. Clearly there is something missing to make the process work smoothly. PbC fills this gap and allows the system to function effectively. PBR, patient choice and PbC are three fundamental parts of the same policy.

What is commissioning?
There are three key components to commissioning: planning, purchasing and contracting.

Planning (the aspect in which most GP practices will be involved) will cover assessment of patients' health needs, patient information, treatment reviews, and ultimately the adoption of strategies and services that deliver the most health gains for the patient and the best value for money. Purchasing involves choosing how to deliver the strategy and services then selecting the most appropriate service providers. The final element, contracting, involves negotiating, specifying, writing, monitoring and managing contracts for these services.

As of 1st April 2005 a default budget has been available for all GPs to cover both inpatient and day-case episodes (both with PBR). Non-elective admissions and outpatient services will be covered soon, with community services (and a number of other services) to be covered by agreement. Prescribing is optional. When prescribing budgets were included in fundholding in the past there was downward pressure on costs. The same may happen with PbC.

The benefits of PbC
The benefits of PbC for patients are that there will be more focus on individual patient needs across the spectrum of healthcare: in effect the patient will have a personal commissioner, commissioning services on their behalf. The aim is that services should be of better quality, with increased responsiveness on the part of providers and ultimately more effective healthcare, with greater emphasis on evidence-based medicine. Services will be developed nearer to patients, with improved efficiency and more appropriate patient pathways

For practice the benefits of PbC will be that funding will be available for new ways of working. Practices will have the satisfaction of delivering timely and effective services, as well as being able to develop in-house expertise and increase skill levels, allowing for GPs with special interest (GPSI) to take on new roles that have up to now been the preserve of hospital consultants, particularly in chronic illnesses. At the same time, GP practices will develop closer professional relationships with clinicians in secondary care. And, as well as having more control over services, there is also the bonus that for practices PbC is virtually risk free if a practice overspends its budget the PCT will pick up the tab over the next two years.

The benefits of PbC for PCTs are that it provides the opportunity to include clinicians in budget management, ultimately leading to reduced patient care costs, and allowing for reinvestment of efficiency savings in developing services locally. Payment by results without PbC could result in serious problems for PCTs, so PCTs should welcome PbC.

The implications for primary and secondary care are that PbC represents a genuine shift in the balance of power closer to the patient. With 100% of any efficiency savings available for reinvestment for the benefit of patients (e.g. diagnostic equipment, improved services) there should also be an effect on prescribing budgets. PbC should provide real patient-sensitive commissioning, with more local control at practice level and less influence from the PCT, though there is the question of governance and the potential for tension between practices and the PCT. The entry of the private sector into commissioning will have implications for both primary and secondary care.

There is some potential conflict in the management of long-term conditions however. The GP contract has undoubtedly been good for the management of a number of chronic conditions. PbC and the further implementation of managed care pathways and risk stratification will allow more patients to be managed in the community and thus lead to a decrease in admissions. National contracts will be locally implemented and PCT imposed solutions will be less likely. The net result, in Peter Smith's view, is that PbC will lead to greater local democracy, with personal local commissioning allowing the patient to have more influence.

Opportunities and threats for prescribing
When it comes to prescribing, PbC is likely to mean downward pressure on costs and while there will still be primary and secondary care formularies it is likely that there will be fewer loss leaders in secondary care. It is possible that there will be fewer prescribing advisors, with more autonomy at the practice and consortium level - probably with practices having their own advisors in future. This will mean that single-handed practices will have to become more 'collegiate'. With the change in GPs' individual responsibilities that comes with PbC, plus peer pressure, there will clearly be tension in some relationships. GPs will therefore need to re-explore the relationship between their practice and the NHS.

But these changes are going to happen and the shift in the balance of power will take place. PbC will be fundamentally important in the development of the NHS so the pharmaceutical industry must get to grips with it. Local intelligence will be vitally important in understanding the changes in at a local level. In addition, as we have seen, there will be new providers with new ideas who may wish to source drugs directly.

It has been said that change is the process by which the future invades our lives (Tottler 1970). PbC represents an enormous change in the provision of health services and there is a distinct danger that some people are going to be left behind. Don't let it be you ...





Changing the delivery of care
ERIC McCULLOUGH

Payment by results and practice-based commissioning are the two sides of the same coin, in the view of Eric McCullough (Chief Executive of NAPC). It is not possible to have one without the other, nor is it possible to sustain a system which remunerates hospitals for undertaking procedures without controlling the demand for those services. In the main, PCTs have failed to manage the demand on their services and because hospital services are relatively 'cheap' hospitals have been undertaking ever more procedures to earn more money. Currently, the government has instructed PCTs to give the hospitals more money and also to decrease some of the demand by getting procedures done elsewhere. The result has been that some hospitals are having to be bailed out and some PCTs are overspent. Clearly the current system is not working. The introduction of PbC should provide the solution.

Yet Eric McCullough believes that many GPs will not be interested in PbC; either that or they will not be prepared to take on the responsibility for commissioning services. However, it has been stated categorically that every practice will have to be a budget holder by the end of 2006 PCTs will not continue as an option. And while many see PbC as a threat, it will in fact provide unprecedented opportunities for improving the delivery of patient care.

PbC is not just about commissioning, but about changing the delivery of care and shifting much of the business of hospitals into the community. If GPs do not take on the task of commissioning, other groups will move in to fill the gaps, e.g. the private sector.

Some GPs are genuinely worried about where they will find the capacity to take on PbC, but Eric McCullough emphasises there is the option of GPs coming together and forming a consortium with other practices. PCTs will not impose such arrangements on practices, however, if GPs do not wish. There will be no geographically imposed groupings for GPs GPs will be able to choose for themselves who they want to get involved with.

The most important point to remember is that PbC is not only about commissioning. It's also about providing and delivering health care and is the counterbalance to payment by results and patient choice. Above all, PbC is hands the initiative to primary care, allowing GPs and nurses the opportunity to lead way in reforming patient services by designing new ways of working which will reshape the boundaries between primary and secondary care.



Talking points
Asked about the role of company reps in PbC, Peter Smith agreed that in future reps will have to take on a different role in many areas. As single-handed practices become more collegiate, it will be increasingly difficult to persuade doctors to prescribe a new drug because formularies will not let them. It will then be a question of approaching those with the responsibility for managing the budgets, i.e. groups of practices. It will also mean changing the rep's role and expanding it to cover disease management. However, we know that 70% of GPs still want support from and a relationship with the industry. In addition, there will be new people to talk to and build relationships with: prescribing advisors, pharmacists, etc. Private providers will have a different approach again, though potentially they will be more difficult for reps to get to. But somebody somewhere in pharma will have to talk to these private providers. And there will be more services to provide. The market is clearly changing so the industry approach will have to change with it.

On the point of a potential conflict of interest for practices commissioning lucrative services for their own financial gain Peter Smith stated that the PCT should provide a check on this. Angela McFarlane (HealthGain Solutions) observed that when fundholding was in position fundholding practices did not become cheaper providers but were much more evidence based in their provision. Peter Smith agreed that it's not just about cost-cutting, although there will be appropriate generic prescribing and the use of cheaper drugs where possible. In his view, PbC will deliver a balance between cost savings and benefits to patients, with the reinvestment of efficiency savings made in improving services. There will be more GPSIs and much more will be done in the community.

Asked how much scope the industry will have for 'packaging' services, Peter Smith felt that if the industry can demonstrate their expertise then it will definitely be possible for them to have an influence within the quality and outcomes framework. Ultimately services will improve when the money is shifted out, particularly in the areas of portable ultrasound, X-ray reporting etc. As a result hospitals will have to get better or their services will be taken away.

Held on: 22/09/2005