What do we want to achieve by pooling budgets?

Section 1

Introduction

We need to build an integrated system of care that puts service users first. We aspire to a system for care that empowers and supports individuals, improves quality of care, and enables people to reach their personal goals. However, at the moment, what we commission is divided across three sets of commissioners – CCGs, NHSE and local authorities. Moreover, this is further subdivided into narrowly focused organisational and service line budgets. This fragmentation of commissioning makes it difficult for commissioners to commission integrated care. Pooling budgets between commissioners is the most practical way to overcome that fragmentation to jointly commission as a whole system.

Commissioners need to consider which budgets they will pool to fund new models of care for population groups to support improvements in outcomes. New joint governance arrangements will be needed to support shared decision-making about pooled funds. There are four models for joint commissioning, with increasing levels of integration. Commissioners should make a decision about what sort of coordination best enables them to deliver Whole Systems Integrated Care for their populations.


What are pooled budgets?

Pooled budgets combine funds from different organisations to purchase integrated support to achieve shared outcomes. This will enable organisations to build on previous joint working experience in order to fund truly integrated care services.

What is the Better Care Fund (BCF)?

From April 2014, CCGs and LAs must work together to receive funds from the BCF. This is hoped to be a catalyst towards change in health- and socialcare.

By March 2014, CCGS and LAs will need to have plans in place as to how they can use the money that will be transferred to a pooled budget specifically for the provision of integrated care. By 2015/16 this will be at least £3.8bn across England.

Payment of these funds will be performance related and can only occur if an agreement between an LA and a CCG has been signed off by a Health and Well-being Board.


What is the problem with the current system?

Today, health- and social-care budgets are fragmented. An individual’s care will be funded by a range of commissioners who fund many different providers responsible for hundreds of different services. The exhibit overleaf shows the fragmentation of budgets across North West London commissioners, using different payment models that can create contradictory incentives.

The impact of this fragmentation is:

  • Duplication because similar services, like care provided in a person’s home, are funded by different commissioners
  • Gaps because there are no combined or holistic services to meet many individuals’ complex needs
  • Siloed working where different budgeting processes lead to different priorities
  • Lack of coordination because separate organisations have differing processes, timescales for delivery and capacity levels for different roles and functions
  • Delays because decision-making involving more than one commissioner takes longer as multiple agreements are needed

Why pool budgets?

The most important advantage to commissioners of a pooled budget is the ability to align providers against a common set of outcomes for their population. This should support an improvement in the quality of care delivered and a reduction in the duplication of functions, which in turn will represent better value for the system. This is because pooling budgets makes it easier for providers to deliver the care people need. Instead of having to deliver highly specified services targeting narrow outcomes against fragmented budget codes, providers can personalise interventions according to the best interests of individuals and respond much faster when needs change. In Torbay, for example, pooled commissioning budgets enabled providers to create health- and social-care coordinator roles to focus on services that helped individuals. They were able to take an overview of all the steps involved in the care process, and strip out those which were not necessary. By focusing on a shared set of goals across commissioners they were able to dramatically improve response times.

A working group of providers, commissioners and service users believed that to achieve Whole Systems Integrated Care, budgets should be pooled whenever they fund services that are critical to achieving shared outcomes. They believed that pooled budgets had many benefits, including:

  • Flexibility for providers to invest in whatever keeps people well, whether it is more health or more social-care, rather than managing services separately against different contracts and budgets.
  • Innovation as funds can pay for other models of care and services that meet holistic health- and social-care needs. This could result in improved convenience for people who receive care and reduced duplication of cross-cutting services by using pooled funding for one multi-disciplinary team from across health- and social-care rather than separate services.
  • Closer working and collaboration as money is shared and decisions made together
  • Enabling use of capitation (see Chapter 8: How can commissioners align provider incentives?) to fund providers to look after whole population groups and achieve shared outcomes rather than focusing on activity
  • Faster decision-making as there are fewer steps in a process to agree the funding of care for individuals that cut across commissioners responsibilities. In Torbay, for example, pooled budgets enabled professionals to be able to stop doing "two of everything” in order to meet the requirements of different commissioners, which speeded up implementing care packages after a referral from weeks to hours. More information is available in the case study opposite.

Case study/example

Torbay Care Trust has pooled budgets for health- and social-care services. This has given it the flexibility to establish:

  • Integrated health- and social-care teams organised around zones of ~30,000 people with single point of access and single assessment
  • Health- and social-care coordinators liaising between users and teams

Since 2003, the impact has been a:

  • 24 percent reduction in emergency bed use
  • 144 fewer people in residential and nursing homes
  • Recognised quality improvements from a poorly performing social-care system to positive assessments by the CQC.

Pooling budgets has also enabled Torbay to dramatically improve the speed of decision-making on care packages that cut across health- and social-care. This has seen a reduction in the time from referral to care starting from weeks to hours.

This was achieved by front-line professionals from across health- and social-care joining together in a large workshop and setting out all of the different process steps they needed to complete. The workshop then identified which ones were unnecessary, such as a back-and-forth or duplication between commissioners, and then redesigned a more efficient process. Central to this new process is the role of the health- and social- care coordinator. They are able to modify care packages as individuals’ needs change without needing to refer them to separate assessments.

Why would you not pool budgets?

The working group believed that some budgets did not necessarily need to be pooled. This was the case when budgets are for:

  • Services where coordination is less relevant: Some services, such as dentistry or ophthalmology, tend to need less coordination across other providers. This is because there is less dependency or overlap with other services or interventions.
  • Highly specialised services: When services are provided to very few people and are very high cost, for example transplants, budgets may not benefit from being pooled because of the disproportionate impact these interventions will have on managing total costs. Within one provider network there are unlikely to be many of these specialist interventions each year. Instead, these specialist services could be continue to be commissioned by NHS England on a strategic basis across larger geographic areas.

Where are they used already?

Within North West London, most localities already have joint commissioning arrangements, sometimes with pooled budgets. These arrangements have been used in particular to support:

  • Learning disabilities (almost £50m of joint commissioning across North West London in 2013/14)
  • Older people’s services (£36m)
  • Mental-health services (£20m)
  • Physical disabilities (£13m)

A detailed summary of this research is available in Supporting Material I: Research and existing joint commissioning arrangements.

Nationally, pooled budgets have been used, for example, to improve coordination on finding appropriate solutions to care homes in Oxfordshire, or integrating health services into adult social-care visits to improve quality of care while increasing efficiency in Herefordshire. See case studies in Supporting Material A: Discussion Paper Compendium for more details.

What are the challenges of pooling budgets?

National legislation places different statutory responsibilities on health- and social-care commissioners who must demonstrate their responsibilities are being met by the care they fund. When budgets are tight, it is easier to rely on traditional ways of working that make it obvious how core statutory duties are being fulfiled. A pooled budget risks responsibilities not being met. For example, if a pooled budget was invested in social-care at home but was later not able to afford hospital admissions, it could create tension in meeting statutory duties.

How could these challenges be overcome?

Joint governance arrangements are needed to:

  • Build on trust and strong working relationships across health- and social-care commissioners. This could be supported with formalised legal structures in order to "future proof”.
  • Agree a shared vision and common set of outcomes that could be jointly commissioned and performance managed.
  • Oversee the budget together to select and fund integrated care services that meet all commissioners’ responsibilities.

Where could local areas start?

The overlap between people’s health- and social-care needs can be seen clearly in their own homes or residential care, where local authorities and CCGs both commission separate sets of similar services for people needing support in these environments. There are many stories of people having multiple care visits to their home each day from health care and social-care professionals, sometimes at the same time, who carry out very similar tasks and meet very similar needs. These multiple visits do not take into account:

  • Inconvenience for people of having many short visits from different people rather than fewer longer visits from the same person.
  • Lack of continuity or holistic care as professionals are responsible for some, but not all, of a person’s needs.
  • Waste from duplication where there may be opportunities to better use professionals’ time.

As a first step towards pooling budgets, local areas could consider whether there are opportunities for the local authority and CCG to take the lead in commissioning combined services for these different settings. For example, local authorities could delegate responsibility and the budget for all home care commissioning to the CCG. This would enable the CCG to commission an integrated service including combined "health- and social-care workers” supported by multi-disciplinary teams. In return, the CCG could delegate responsibility and the budget for residential care to the local authority to commission. These arrangements can be overseen through local Health and Well-being Boards. Over time, local authorities and CCGs could work towards pooling these budgets for home care and residential care, rather than delegating responsibility.

Check and challenge

  • Have you spoken to other commissioners about working together to commission integrated care services?
  • Are you willing to pool any of your budgets to fund integrated care?