1. Contracts, commissioning and
contracts
Ruth Thorlby
Senior Fellow in Health Policy
Nuffield Trust
09 March 2012 © Nuffield Trust

2. ££
Decision to refer/prescribe/treat
Clinic Clinic
A C
Clinic
B © Nuffield Trust

3. Clinical Commissioning: GMC guidance on conflicts of
interest
“You must act in your patients' best interests when making
referrals and when providing or arranging treatment or care”
“If you have a financial or commercial interest in a business case
being considered by your Primary Care Trust under Practice
Based Commissioning arrangements, you should declare your
interest and exclude yourself from related decisions in
accordance with the Department of Health and your PCT's
guidance”
© Nuffield Trust

4. Conflict of interest: evidence from the US
Study of physician owned groups in California
Capitated budget for patient care
If care costs less than budget, groups keep the savings
Strong incentive to undertreat:
© Nuffield Trust

5. Insurance companies
Capitation fee
$ $ $
negotiated annually,
paid monthly
Physician group or IPA
Primary Drugs
care
Specialists Imaging
Hospitals
Groups take risk
for some or all of
these services
Groups use a combination of salaries, bonuses
and fee for service to pay physicians

6. Add title here
“We don‟t want to pay them for not referring. The
organization is influenced by the rate of referrals, but it
should not figure at the level of the individual physician.”
[Medical director, medical group]
“There are no utilization [reduction] incentives in contracts
with our doctors. We could be crucified if it was in our
contracts. And we have to call it something else, like
„variability reduction.” [Medical director IPA]
© Nuffield Trust

7. Evidence from NHS?
“A group of GPs…have decided to set their own limited company
up to tender a bid to the PCT to take the workload on.
And, interestingly, one of the GPs that is on that public limited
company also sits on the committee that is making the decision as
to where the funding will be allocated in terms of which tendered
bid will be looked on most preferentially by the PCT”
Goodwin et al, Practice Based Commissioning, King‟s Fund 2008
4 Case study sites: all had conflicts of interest
© Nuffield Trust

8. Government’s response?
•Enhanced governance arrangements, including two lay members
•Meet in public
•Publish details of contracts
•Governing body to adhere to Nolan principles of public life
•“we will revise the provisions in the Bill on the quality premium”
© Nuffield Trust

9. GP contract?
“.. a prescriber shall order any drugs, medicines and appliances
which are needed for the treatment of any patient who is receiving
treatment under the contract by issuing to that patient a
prescription form” (GMS Regs, sched 6 para 39)
© Nuffield Trust

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Iruth.thorlby@nuffieldtrust.org.uk
09 March 2012 © Nuffield Trust