A charity for blind people approaches a Primary Care Trust (PCT) with a proposal for a health support service in the area. Under this, staff and volunteers of the charity would greet blind people at NHS establishments and welcome them and show them around safely. For this service, the charity is asking the PCT for payment.
Stakeholder engagement and communications
The relevant service manager and a procurement manager start work together on this issue. They hold a workshop with relevant NHS staff (especially from the front line) blind people and blind people’s organisations. They establish three things clearly. First, there is a demand for such a service from blind patients. Second, there is more than one organisation in the area that is able to provide such a service. Third, it will be necessary to be absolutely clear about who (NHS or external service provider) is responsible for a user’s health and safety at every point in the service.
At the same meeting, it is established that the main outcomes of the service will be greater user satisfaction and, by extension, greater take-up of, and compliance with, relevant treatments. The NHS managers present confirm that these outcomes align with local NHS and sustainable communities plan priorities. They work these up in SMART terms.
Meanwhile the team in the PCT works on some internal issues. First, the managers speak to the PCT’s legal adviser and establish that there is legal power to deliver and/or commission such a service. Second, with the PCT’s finance manager, they identify a suitable budget.
The PCT has a dilemma here. On the one hand, a charity has come forward with the proposal, and there are clearly other third sector organisations (TSOs) ready to provide the service. But these organisations will benefit from some capacity building. On the other, the service can be well specified, and there is a need in any financial relationship to allocate the various risks (especially patients’ safety) to the right parties.
In the end, the Finance Director agrees that the most sensible way forward will be a competition for a grant. The resulting grant agreement will include the required section on risk allocation.
Competition and efficiency
The competition for the grant will tend to promote value for money. The service itself will tend to ensure blind people receive the health care they need promptly and courteously. The capacity building element in the grant will improve the working of the chosen provider(s).
The main risk in the programme, already mentioned, is the risk to patient safety. This will be handled in the financial relationship by a section in the grant agreement that clearly allocates risk. This will be managed throughout the life of the service by the PCT and TSOs.
A lesser risk is that unsuccessful TSOs will complain. This will be managed by using a grant making process that is fair, open and reasonable and is compliant with the Compact.
[The competition has now taken place and two organisations will now receive grant funding.]
The PCT and the TSOs (now providers) recognise that this service will involve long-term commitment in, for example, staff and volunteer development. They therefore agree on three years of funding.
It is important that the TSOs that are providing this service are not squeezed out of business by poor financial decisions by the PCT. The key to this is full cost recovery. The PCT’s and each TSO’s accountants agree which formula for full cost recovery to use. The results feed into the overall amount of grant.
Both the winning TSOs are small organisations with small reserves. But the service will involve costs up-front in areas such as recruitment, training and equipment. However these are not huge. It is therefore agreed that the PCT will pay the TSOs three-monthly in advance for planned expenditure, on the basis of anticipated milestones. Actual expenditure will be regularly reconciled against planned expenditure and adjustments made. This may involve additional payments or the recovery or netting off of any payments made in advance of need.
Monitoring will focus on compliance with patient safety. The PCT and the TSOs agree a procedure for putting this into place. This does involve some paperwork for the TSOs but this has been built into the full cost recovery. As well as paper checks, NHS staff will visit from time to time and accompany TSO staff in their work.
The service includes some novel elements for both PCT and TSOs. It is therefore decided to commission a formative and summative evaluation. This will be relatively small in scale and cost but will be made available to the wider community of the NHS and TSOs for blind people. The evaluation is handled through a separate procurement process, which is won by the local university and a third sector umbrella organisation.