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STPs, MCPs, PACS and You! Understanding the latest round of NHS changes and being ready to respond

by Simon Lee and Jamie Foster of Hempsons and Craig Dearden-Phillips 03/11/2016

The NHS is changing. This time around, the change is not happening as a result of a major new piece of legislation, as with the ‘Lansley Reforms’ (the Health and Social Care Act 2012). Instead, the change is being driven, by a shift in policy brought about by the CEO of the NHS, Simon Stevens. As a result, the NHS Five Year Forward View and related New Care Models programme are less in the public eye than were the Lansley Reforms but, we think, could be more far-reaching in terms of how the NHS works in the future. Amid all this are both opportunities and threats for social enterprises operating in health and social care. But don’t sit on your hands. These change are already underway and are expected to accelerate very quickly.

So what are the changes?

The ‘Forward View’ sets out plans to meet the well-trailed challenges faced by the NHS (rising demand, ageing population, higher costs etc). In 2014-15, fifty ‘Vanguard’ sites were selected to test new ways of delivering services or ‘New Care Models’. A particular aim of the Vanguards was to ensure better integration or joining-up of various health and care services. The intention is that these fifty sites, now a year or two progressed, will act as the blueprint for the rest of the NHS.

Alongside the ‘New Care Models’ programme, the NHS has adopted the principle of ‘place based systems of care’. To this end, it has divided England into 44 ‘regions’ each with its own healthcare economy. Each of these regions is, as we speak, developing a ‘Sustainability and Transformation Plan’ (STP) setting out a coherent plan for delivery of integrated services across whole areas, often as large as whole counties or city-regions. All STPs are likely to include plans for one or more ‘New Care Models’ in their area, depending on the existing mosaic of healthcare services.

While STPs will inevitably reflect this existing mosaic, the New Care Model approaches they will roll-out have the potential to profoundly alter the way in which health providers deliver services. The reason for this is that in most STP areas plans are afoot to develop either (or both) types of New Care Model:

  • The ‘Multi-Speciality Community Provider’ (MCP) model
  • The Primary and Acute Care System (PACS) model.

MCP and PACS models already cover about 8% of England. Every STP will contain one or both, so it’s important for any social enterprise in health to grasp how they operate.

What are MCPs and PACS and why do they matter?

  • A Multi-Speciality Community Provider (MCP) is intended to be a new type of integrated provider organisation which combines both primary care and community-based health and care services. In some places, the MCP will be the provider of all services which are not hospital-based. The MCP in any given area will be awarded a contract in the form of the forthcoming new ‘MCP Contract’
  • A Primary and Acute Services (PACS) model is also intended to include primary, community, mental health and social care services, but the big difference is it will also include most acute hospital services. In this way, a PACS will become responsible for care for a whole area’s population. The PACS provider will be awarded a new ‘PACS Contract’

Now here’s the rub for social enterprises and Public Service Mutuals (PSMs). In response to STPs, commissioners are likely to start awarding MCP Contracts and PACS contracts which encompass many of the community services which have up to now been held through standalone contracts, including many provided by PSMs. These contracts will have to be advertised but may or may not end up being subject to competitive tender processes.

In most areas, it is the local acute trusts (in the case of PACS) and GP federations or ‘super-partnerships’ (in the case of MCPs)  competing to hold these contracts whose value may run into billions of pounds over a 5-7 or even 10 year period. The contracts may include a requirement for a lead organisation to coordinate all services under the contract, not just those services the organisation will provide itself. Consequently, it may be difficult for PSMs, even those operating at scale with good track records, to compete as lead contractors for these roles.

Therefore, PSMs may need to accept a different role in the overall picture, reflecting the fact that the lead contractors (whoever they are) are unlikely to want to deliver all of the services themselves – so will be looking for partners and sub-contractors. This may mean, for example, that a PSM becomes a sub-contractor to an acute trust running a PACS consortium rather than contracting directly with a CCG or local authority. This may sound like profound, in some cases uncomfortable, change.

So what can you do?

Whilst there is no room for complacency in this ‘brave new world’ there are steps you can take NOW to ensure you have a part to play under the new contracting arrangements:

  • Start participating today (if you already haven’t) in conversations with commissioners to shape the types of new care models to be developed and contracts to be awarded. Don’t miss the boat here, things do get forgotten.
  • Strengthen your businesses’ relationships with other providers, especially acutes/GPs, so you can be a key partner/member of the supply chain

So what’s happening on the ground? STPs are starting to surface publicly. In response we will see a range of governance groups to deliver their plans and it will be essential that PSMs, as community-based providers, are vocal on those groups, as well as continuing to strengthen relationships on a more informal basis.

Assuming PSMs can get over the initial challenge of getting round the table in the first place then it will be important to have clarity on what is expected from all parties and how this is set out.

In due course, where the main contract bid with the PACS or MCP Lead is successful, there will be a formal contract with sub-contracts in place with all other suppliers – like you. As we all know with contracts, this can take an age to appear! In the meantime, ‘Memorandum of Understanding’ can be helpful which, whilst not necessarily being legally binding, sets out the main roles and responsibilities of parties in the build-up to and submission of bids.  As with most documents, it is the content rather than the label which is important. Get in touch if you want to know more about how this all works.

Moving forward

In summary, to help maximise the chances of swimming safely through the rough seas of STPs, PACS, and MCPs, we recommend that you:

  • Get aware – by ensuring you are familiar with the local MCP/PACS frameworks and what is likely to be put forward in your area through the STPs
  • Get talking – by having early conversations with commissioners and other potential providers to try to ensure that you have a seat round the table where plans are being discussed
  • Get things documented - by ensuring that all parties are clear on their roles and responsibilities through a memorandum of understanding or similar.

Easy to say, not easy to do.  Let us know if we can of any help.

By Jamie Foster, Simon Lee of Hempsons and Craig Dearden-Phillips

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