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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 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. 3
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. 4
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? 5
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”. P 12 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 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 intelligenc e The interventions commissioners make in order to deliver the kind of market believed to be necessary for any given community. Market intervention The development of a common and shared perspective of supply and demand, leading to an evidenced, published, market position statement for a given market. 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 11 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 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 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 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 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? 23
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] ac. uk 24