Written evidence from the Shelford Group

ABOUT THE SHELFORD GROUP

The Shelford Group comprises ten leading NHS multi-specialty academic healthcare organisations. We are dedicated to excellence in clinical research, education and patient care. We aspire to demonstrate system-wide leadership for the benefit of patients and the prosperity of our country.

Our members include:

• University Hospitals Birmingham NHS Foundation Trust
• University College London Hospitals NHS Foundation Trust
• Sheffield Teaching Hospitals NHS Foundation Trust
• Oxford University Hospitals NHS Foundation Trust
• Newcastle-upon-Tyne Hospitals NHS Foundation Trust
• King’s College Hospital NHS Foundation Trust
• Imperial College Healthcare NHS Trust
• Guy’s and St Thomas’ NHS Foundation Trust
• Central Manchester University Hospitals NHS Foundation Trust
• Cambridge University Hospitals NHS Foundation Trust

The commissioning of specialised services is of central importance to the Shelford Group; specialised services make up a large portion of the member trusts’ activity, with the proportion of income for these services received by member trusts ranging from 35-56%. In particular, the Group is interested in both reform to the payment mechanism for specialised services and the centralisation of services to centres of excellence. There are concerns around the stalled progress on both of these fronts, and the Shelford Group is therefore calling for the development of a cohesive strategy to address both of these challenges in tandem for 2017-18 in order to improve efficiency in the specialised services budget, whilst improving patient care and outcomes.  

Representatives of the Shelford Group would be pleased to provide oral evidence to the Public Accounts Committee, should this be of value, in addition to the below written response.

SHELFORD GROUP RESPONSE

• The Shelford Group would urge greater exploration and understanding of the relationship between commissioning and outcomes. As our trusts are required to submit outcomes data on our services via audits on a regular basis, this data should be available for use at a national level to support the development of an evidence-based strategy for specialised services.

• The Group remains supportive of the specialised services strategy endorsed by NHS England in previous years, centred on reducing the number of providers and concentrating activity, with a view to increasing outcomes and cost efficiency. This involved the establishment of circa 12-15 major centres of excellence, with the potential for networks to be built around these. However, this strategy has not been pursued, and we are concerned that this indicates a shift in NHS England’s approach.

Whilst we warmly welcome Dr Jonathan Fielden’s appointment as Director of Specialised Commissioning at NHS England and the leadership he will bring to specialised commissioning, there is an urgent need for a strategy to be put in place to address service configuration and funding for specialised services.

• There is a lack of joint working across specialist commissioning areas (i.e. beyond CCG commissioning), particularly where providers serve a significant number of patients from outside the geographical area covered by their lead specialist commissioner. This has contributed to fragmentation in relation to strategic commissioning.

• With regards to funding, it is well known that the tariff does not cover the costs of delivering the most specialised services. Furthermore, it is not granular enough to be effective. HRG codes assumes that all organisations treat a similar cohort of patients. However, the Shelford Group trusts treat a significantly higher proportion of complex patients than other organisations. Any strategy for reconfiguring and transforming specialised services, must also address the considerable shortfalls in the current funding mechanism.

Previous initiatives - such as Project Diamond funding – have been imperative at keeping the providers of specialised services financially sustainable. Their removal in 2015/16 is a significant contributor to the economic difficulties our trusts are currently facing.

Moreover, any future reduction of specialist top ups will cause significant destabilisation of key providers, for example specialist children’s hospitals within some of the Shelford member trusts, thereby reducing their ability to provide leadership or support for the broader system. Tariffs therefore need to reflect and incentivise the work that specialist providers do to support service provision and to build capability in district general hospitals. Removal of payment for network leadership and the lack of remuneration for continuing education and development provided by specialist centres for the staff of general hospitals is perverse.

• There are ongoing concerns around the balance of risk between providers and commissioners. Whilst the Shelford Group welcome the decision not to implement a marginal tariff for specialised services 2016-17, we would note that asking Sustainability and Transformation footprints – all of whom have overspent finances – to fund networks at a time when NHS England is asking providers to take on more commissioning responsibilities is particularly concerning and evidence of a further shift of cost and risk to providers at a time of downward pressure on funding received for services delivered.

• International health systems strongly indicate that systems with centralised and standardised activity have more sustainable financial footings. Examples of best practice from overseas should be considered for application to the English NHS.

• Whilst the NAO’s report argues that organisations with a both a higher proportion of funding from specialised commissioning and a greater mix of income sources have historically been less effected by the efficiencies being driven through the National Tariff, wider financial squeezes are putting further strain on our ability to absorb tariff funding pressures. For example, the flex around research and teaching funding streams have been constrained, further compounding the effect of an unfit-for-purpose tariff.

The wider financial environment of the NHS is therefore critical to the debate on specialised services commissioning, and must be factored into, rather than isolated, from any recommendations the Public Accounts Committee put forward. Whilst the efficiency target for 2016-17 has been set at 2%, in reality this will be far greater. The Shelford Group’s Cost Improvement Programme (CIP) targets for 2015-16 range from 7-12%.

• The Shelford Group is not currently in favour of transferring specialised services to local commissioning, on the basis that the changes would be unnecessarily disruptive and there is already an overwhelming amount of options available. This is something to perhaps review once the financial crisis is resolved and services are set on a truly sustainable footing, and local commissioning more robust. The number of CCGs themselves fragment the system and are an inefficient use of taxpayers’ money, particularly in London where there are 32 CCGs.

6 May 2016