PCT Provider Arms
Growing the right kind of legs to survive and thrive
Written by: Andrew Vincent, Medicology Ltd. Published: 3rd June 2010
As more and more PCT Provider Arms aremoved to arms length, we want to explorethe heart and soul of the legs that arerequired in order that they may stand ontheir own two feet – phew, that’s a lot ofbody parts for a first paragraph!
Evolution towards a common form
Ironically, although everyone is talkingabout the diversification in healthcare withISTCs, social enterprises, PCT provider arms,hospitals, Foundation Trusts and more, intruth there is convergence towards a singularbeing – PROVIDER. Presently, we separateproviders as being distinctly different fromeach other but if we consider the directionbeing travelled, they will eventually operateon some common principles:
- They will collectively constitute theprovider group for healthcare delivery
- They will be judged based on thevalue they deliver (which itself isa combination of clinical & costeffectiveness, coupled to patientexperience)
- They will be remunerated for whatthey do, not what they cost(obviously there is a relationship)
- They will be responsible for theirown destiny
- They will compete with each other
Arguably that places all providers in thesame boat – the same boat that commercialcompanies have shared for a long time –that is the one where you have to stand onyour own two feet or run the risk of a rapiddescent to Davy Jones’s locker. The transitionfor any healthcare organisation represents asignificant change in culture but we wonderif that cultural shift is greatest at the PCTProvider level. Why?
Coping with a new structure
As commissioning and provision getseparated at the hip, in most cases itappears to be commissioning that getsthe both the legs (the Government givesit money to spend that includes runningitself) and the head (the Board/ existingsenior management structure appears toremain). For the provider that means newmanagement, sometimes a new homeand maybe a change in funding too. Thisis a considerable level of upheaval for anyorganisation and the expectation is that theday job continues to run smoothly whilstyou grow new legs and get used to your newhead.
Losing your safety net
With separation goes the safety net. Thesafety net has been the principle of internalfunding i.e. that the organisation holds thefunds that it needs to deliver its service.Whereas that funding has traditionally beenand will remain on a direct basis i.e. paidbased on the actual costs incurred ratherthan the tariff-based system in hospitals, itis no longer guaranteed. By this, we meanthat the provider must apply for funding,just like any other provider and is subject toother providers submitting a tender for thesame funding. Whether a provider continuesto keep its funding will be a function ofthe value it delivers in relation to otheropportunities to spend the money or indeedother offers for the same service.
To individual services, this means that poorperformance becomes an enormous riskfactor for service demise, requiring providersto address and improve performance withmuch greater gusto than previously. We havea saying “there’s nothing like the risk of notgetting paid to keep you on your toes” andthat saying has increasing resonance for PCTprovider arms.
Learning to compete
So, PCT provider arms need to developathletic legs. That is, they need to adoptthe core principles of what we call ClinicalBusiness Excellence – a balanced andcomprehensive approach to all aspects ofservice success. Although everyone willidentify their own components, services willonly be sustainably successful by address the6 core components:
- Clinical effectiveness
- Financial effectiveness
- Attraction effectiveness (acquiring thepatients)
- People effectiveness
- Patient experience
- Strategic effectiveness
Drop the ball in any single area and it startsto impact all the others. The challengefor many Provider Arms is that when youremove the head and the legs, the corecompetency of the remaining body is clinicaleffectiveness and that’s the area that justallows you into the game.
