Tenders Direct Blog

Comment from the experts at Tenders Direct.

Commissioning outcome based incentivised contracts

Posted by TD Admin on August 29, 2013

Commissioners need to find a way of delivering effective public services in a more affordable way. The basic principles for achieving this are integrating commissioning and budgets, and focusing on early interventions, but the challenge for Commissioners is how to find an effective and practical way of delivering this.

There is a cost associated with an adopting an early intervention approach and it requires someone paying for activities up front to provide savings that will accrue in the future. That isn’t a potential easy sell, but if costs are to be decreased and improved value for money demonstrated then a change of approach seems essential.

Commissioners are responding by introducing COBIC (Commissioning Outcome Based Incentivised Contracts) style contracts, with an accountable lead provider combined with Social Impact Bonds (SIBs). The advantage to the CCG of having an accountable lead provider, is that the CCG will no longer need to separate and bundle discrete services and put them out to tender, instead the CCG will transfer the responsibility and it must be said some of the financial risk, for integrating the care pathway to the accountable lead provider. This provider will construct a supply chain to deliver the range of services required by patients within the pathway, and will ultimately be responsible for navigating all of the patients through the care pathway.

Outcome based commissioning is not new, but it has been given new impetus by the CCGs who are seeking improved services for a reduced cost, and the refresh of Transforming Community Services contracts in the coming 6 – 18 months. There are inherent risks in this style of contracting and the CCGs need to be prepared for the complexities that are associated with an outcome based approach, some of which centre around the terms of contract, commercial pricing approach, NHS procurement regulations and EU procurement requirements.

Bevan Brittan is at the heart of shaping and delivering on these new commissioning approaches providing advice to commissioners and providers on COBIC style contracts, social investment, SIBs and how to integrate budgets and commissioning. We pride ourselves on our creative thinking and have a long history of being at the forefront of developing innovative approaches. As a public services law firm advising both health and local authorities we also bring a deep understanding of the integration agenda.

Commissioners are faced with an immense challenge, not only in this area but also with social investment, social impact bonds and budget integration but it is one that if approached with creative thinking and the development of innovative approaches, can be delivered. Interesting times for this sector.

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