Fundamental changes to commissioning needed to address current challenges


This report came out late last year, building on the King’s Fund’s earlier work on systems leadership and models of care.

Since then, the planning guidance for the NHS in England has come out which makes this particularly relevant, with the current focus on agreeing footprints for sustainability and transformation plans (STP). However, there are useful insights too for the NHS across the UK.


The report is an analysis of the main challenges facing local health and care economies and sets out a series of design principles and options to support local system planning.


Ham and Alderwick argue that inherent “fortess mentality”, an unintended consequence of perverse system incentives, is a barrier to addressing increasing demand.  A collaborative approach will enable a concerted effort to address wider determinants of health and to tackle the prevention agenda.  There are also benefits from joined up planning and implementation, such as sharing skills, partnerships with third sector and independent organisations and development of new care models.  There are some examples where this approach, or at least the overall principles, is already in evidence including: the acute care collaborations, multispeciality provider and integrated primary and acute system vanguards; DevoManc; and accountable care organisations.


Perverse system incentives can create a “fortress mentality” where different parts of the system are working contrary to what might benefit the overall system.

The design principles are derived from work by Ostrom and others, on managing common pool resources, as well as earlier King’s Fund work.  The key point underlying the work on common pool resources highlights how independent working leads to unsustainability, arguing for a collective and community-based approach to deciding how these limited resources are used.

The 10 design principles focus on:

  1. Defining the system and population;
  2. The partners and services who need to be involved;
  3. A shared vision and objectives;
  4. Appropriate governance;
  5. Identifying the leaders;
  6. How issues will be managed and resolved;
  7. A sustainable finance model;
  8. The management team;
  9. “Systems within systems”;
  10. Monitoring and evaluation.

Implications for commissioning

The report calls for more strategic and integrated commissioning, based on long term planning, capitated budgets and the use of outcomes based contracts to deliver real change.  Ham and Alderwick suggest this shift from transactional to transformational commissioning is unlikely to be achieved on a CCG footprint and  is going to need a balance of local insights alongside a larger planning footprint. It’s argued that the loss of Strategic Health Authorities has created a “vacuum” of fragmented leadership, with some examples of system approaches but overall a lack of capacity and capability.

A case study from the Veterans Administration (VA) in the US shares experiences of moving to population-based capitation budgets. A similar approach in the NHS could see NHS providers, NHS and local authority commissioners and third sector and community organisations working collectively to a long term strategy. Ham and Alderwick argue for a provider-led approach to place-based systems but it would seem more sensible to suggest the lead is is driven by local context and need.


Place-based systems can involve communities in making decisions about how limited resources are used.


NHS commissioners and providers have been tasked with defining the STP footprints by the end of January. Monitor has suggested 37 “local areas”; however it has been suggested that there is likely to be significantly more than 37 and organisations may feature in more than one footprint.

When these decisions are made, there will be considerable work in getting the plans ready. The design principles here may be useful in setting out the process to be followed, but it’s likely that the learning from new care models and other examples of system working will offer more actionable insights.


NHS organisations are currently working to agree footprints for strategic and transformation planning.


Primary paper

Ham C and Alderwick H (2015) Place-based systems of care: a way forward for the NHS in England, King’s Fund.

Photo credits

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