Transcript Market facilitation Devon County Council November 2009

Engaging with independent sector
providers to create a different
market offer
ADASS
Suffolk
January 2010
The size of the market
 Care market still diverse; as of March 2007:
− There were 4,735 home care agencies
registered with the CSCI.
− There were 18,577 registered care
homes for adults of all ages, with
441,958 places.
 In 2005 there were some 378,000 units of
sheltered housing and 20,462 units of extra
care. Does not cover the private sector.
Likely the latter has grown and the former
diminished.
The state of the market
 The current economic climate makes it
harder for providers to raise funding to
start new developments, initiate change
and be experimental in their approach to
social care. Recession may encourage a
retreat to traditional forms of care delivery
and funding.
 If the amount of social care funding per
person available diminishes then some
providers may prefer to only supply to self
funders or diminish their proportion of
publicly funded service users.
 Equally, some providers in their desire to
secure contracts may be tempted to agree
to conditions and prices that they will be
unable to deliver.
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The state of the market
 Costs are likely to increase through greater
transaction costs.
 Danger of ECH market stalling and where it
continues of ECH becoming residential care
in flats rather than a lifetime home of
choice with diversity in design and tenure
being key.
 Issues of regulation home care v personal
assistants.
 Greater purchasing by individuals may
increase uncertainty over future
guarantees of business.
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The state of the market
 Overall, to make the consumer king calls
for supply to exceed demand, plentiful
competition, and price being the overriding
consideration in purchases. It holds true
for the grocery business but does it hold
true for the care business?
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What is required?
 “Work to shape and develop local and
regional markets with the capacity and the
variety to offer the range of options the
population demands”.
P12 Transforming Social Care LAC (DH) (2008) 1
 “Councils will also be expected to have
started, either locally or in their regions, to
develop a market development and
stimulation strategy, either individually or
on a wider regional basis with others, with
actions identified to deliver the necessary
changes”.
Para 16 Transforming Social Care LAC (DH) (2009) 1
The World Class Commissioner and
the market
 “Translates strategy into short-, medium-
and long-term investment requirements,
allowing providers to align their own
investment and planning processes with
specified requirements
 Is aware of market trends and behaviours,
and shows knowledge of and acts on
current gaps in the market to provide
patients with a choice of local providers
 Creates incentives where necessary for
market entry, including understanding the
requirements of full cost recovery
 Stimulates provider development matched
to the requirements and experiences
accrued from user and community
feedback”.
WCC Competencies DH 2007
Assumptions about the market that
need supporting
 That a view needs to be taken of the whole
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market not just services that are funded, or
delivered, by, social care.
That the local authority and the public do
not benefit from the market diminishing in
volume.
That the market will not get to where it
needs to be just through users purchasing.
That existing tendering and procurement
processes need to change.
Need to recognise that expertise has
increasingly shifted towards providers.
Assumptions about the market that
need challenging
 That choice is paramount and available and
will be exercised.
 That GPs are central to, and can deliver,
what the government desires and that PCTs
can control the acute sector.
 That providers will be amenable to local
authority influence.
 That market intelligence and influence is a
cost free activity.
How do we define the market
facilitation task
 “Based on a good understanding of need
and demand, market facilitation is the
process by which commissioners ensure
there is sufficient appropriate provision
available at the right price to meet needs
and deliver effective outcomes both now
and in the future. “
IPC definition
The activities of market facilitation
Market
intelligence
The development of a common
and shared perspective of
supply and demand, leading
to an evidenced, published,
market position statement
for a given market.
The interventions commissioners
make in order to deliver the kind
of market believed to be
necessary for any
given community.
Market
intervention
Market
structuring
The activities designed to give the market shape and
structure, where commissioner behaviour is visible
and the outcomes they are trying to achieve
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agreed, or at least accepted.
Market Intelligence - Beyond the JSNA
 What are the broad population trends and
which sectors of the population will grow
the fastest, eg, over 85’s, older people with
a learning disability.
 Are there geographical distinctions in the
way populations are distributed, eg,
particular areas with greater older
populations?
 What is the relationship between
populations and people who currently
receive a social care service (discriminated
between self funders and those receiving
state assisted care)? Is it possible to
distinguish between populations that are
known, those that the social care function
should know and those that are likely to
remain unknown?
Market Intelligence - Beyond the JSNA
contd
 Are there changes in demand that
providers are experiencing and are these
quantifiable, eg, changes in the frailty and
age of people being admitted to care
homes?
 Are there market sectors that will have
particular problems in meeting need, eg,
dementia, strokes, people with profound
and multiple disabilities etc?
 How might past trends over time match the
future trajectory of demand?
Market Intelligence - Beyond the JSNA
contd
 What surveys of the general public and of
service users have been conducted? Can
these be brought together with material
from inspection reports and national
research into clear indications about future
trends and desires?
 What sensitivity is there to price and what
relationship do people establish between
price and service quality. Are there sectors
of the market where people would be
prepared to pay more for enhanced
provision?
Market Intelligence – Assessing the
current market
 Review the size, location and range of the
local market (s).
 Review the quality of services and identify
what are the local market pressures.
 Develop a view of good practice. (in
particular not just the shape of individual
services but their overall configuration).
 Have an effective grasp of simple costbenefit analysis.
The Market Intelligence Product- A
market position statement
The product from the review of demand and
supply should be a public, published
document that is widely consulted upon.
Therefore, the market position statement
should describe:
 The overall market direction the local
authority (LA) wishes to see taken.
 The LA’s view and predictions of future
demand, identifying key pressure points.
 The LA’s picture of the current state of
supply covering both strengths and
weaknesses within the market.
The Market Intelligence Product- A
market position statement
 The areas where the LA wishes to see
services develop and those areas where it
is less likely to purchase or provide in the
future or encourage service users to
purchase.
 Identified models of practice the LA will
support at what price.
 The support the LA will offer towards
innovation and development.
Market structuring – internal activities
 Publish the market position statement and
develop a process for updating in line with
future commissioning strategies and
JSNA’s.
 If there is ‘in house’ service provision, be
clear about where and why the LA is a
provider. Diminish differences between inhouse and external systems where these
potentially compete in the same market.
 Open up discussions with planning,
business support and regeneration.
 Review tendering and procurement
processes, evaluate their impact on
provider communities and explore how
improvements can be made that will help
drive the market.
Market structuring – external
activities
 Use the statement as a ‘calling card’ to
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initiate discussions with providers.
Actively promote the model of what the
range of care should look like based on
good practice.
Develop an awareness of providers long
term business plans and where future
support might be needed. Identify business
cycles across the third and private sectors.
Discuss whether support to strategic
business planning is needed.
Work with providers to assess the impact
that greater choice, via personal budgets
and direct payments, might have on costs
and availability of service provision
Market structuring – external
activities
 Where demand for a service exists and
where the provider is vulnerable, then
identify how commissioners can reduce
that vulnerability.
 Identify where there are barriers to market
entry where new resources are needed and
identify with providers how these might be
overcome.
 Look for potential diversification amongst
existing organisations’, eg, can RSLs do
care and repair, can home care agencies
deliver assistive technology.
 Be able to work with providers on an open
book accounting model to cost out the
impact of new developments and
innovations.
Market intervention
 Refocus local authority business support
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initiatives on to the health and social care
market.
Explore how local projects can attract
capital investment and what guarantees
may be needed.
Develop social enterprise organisations
Explore where planning barriers exist and
negotiate how that process can be
improved for providers.
Offer access to training that commissioners
and providers agree can improve
performance.
Promote local ‘Which type’ care guides
which emphasise a consumer perspective.
Market intervention
 Help to broker consolidation of the market
where there are gains to be made from
small businesses becoming less vulnerable.
 Offer purchase documentation for
individual service users / carers to use.
 Ensure standard frameworks and contracts
are used that are fair to purchasers and
providers.
Points for LA’s to ponder
 What proportion of our transformation
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effort is focused on service content,
configuration and delivery as compared to
the RAS and personal budgets?
Do we know what the range of services
should look like to meet demand?
Have we thought through the impact that
PA’s might have on the home care market?
What needs to happen in the market to
reduce reliance on residential care?
What financial stimulus package is on offer
to the market if we are going to have
influence?
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Contact
 For further information or discussion
contact
 Professor Andrew Kerslake
Associate Director IPC
Bath office phone 01225 484088
Oxford office phone 01865 790312
[email protected]
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