Our London peer learning group went on hold during the height of the Covid-19 crisis. When we reconvened in early August, everyone was keen to know how each other’s services had managed. At the same time, we had not forgotten the group’s earlier appetite to learn about ‘life after SIB’, and invited a commissioner from outside of London to talk about their experience of switching from a SIB-contract to a conventional contract when a service came up for renewal.
In common with the wider experiences that the GO Lab is aware of, encapsulated in the six alternatives for contract management during Covid-19, experiences were mixed.
One of our commissioners runs a family-based service, managed by a ‘prime contractor’ who oversees multiple providers in several locations. The ‘outcomes contract’ form proved adequate to the task of adapting to the pandemic-induced changes. Referral levels had held up as there was a continued need. Engagement was maintained through a swift transition to virtual or online means. In some cases, some service users actually preferred interacting through their phone, in private. The outcome based contract, that had a clear objective but was light on details of how to meet it, proved helpful in enabling the provider to flex as necessary, with no legal or contractual impediment to doing so.
Another of our commissioners uses a relatively large mix of providers for a health-based service under an outcomes contract. During the height of the crisis, this multiplicity of provision created a resilience that proved very useful: some providers were able to carry on by adapting services to go virtual, and others which were reliant on face-to-face contact had to be paused altogether. An innovation, in the form of ‘pre-payment’ of a certain level of outcomes, was used to ease any cashflow issues. Reporting obligations were relaxed. Performance-wise, some providers performed below expectations while others actually outperformed. This was put down to public information around the pandemic increasing the awareness of health-related matters, and causing people to seek testing who may not otherwise have done so.
Another commissioner in the group had to put their dementia-care service on hold completely, and ask their provider to deliver something completely different related to pandemic-response, paid on a fee-for-activity basis. Such was the speed of change that a contract was not even put in place – everything was verbally agreed and action was promptly taken. Having a service ‘at the ready’ was invaluable, and is hoped that post-crisis, the original service will be restored, along with the outcome-based contract aimed at reducing hospital admissions.
Another member of the group whose organisation provides day-care services for adults found the pandemic has prompted commissioners to have a much needed re-think about how those services are provided. The simple approach of merely paying for ‘a day’s care’ against a basic minimal service requirement neglects, in many cases, to put service users at the heart.
One commissioner reflected that offering an outcome-based contract had been effective in distinguishing providers who were genuinely focused on outcomes from those who were more comfortable delivering to output-based targets. Meeting a particular number of outputs (like a number of tests taken by service users) is a question of managing capacity and throughput – things providers feel they can control. Focusing instead on outcomes leads to a much greater uncertainty, but also gives a sense of freedom for providers to innovate and test different service approaches, adjusting their approach according to the levels of success in achieving outcomes. Perhaps that is why outcomes-based working relies on a much closer partnership between commissioner and provider, and joint management of risk.
In contrast, another commissioner found that having ordinary contracts which specified a minimum service requirement proved perfectly adequate during the pandemic. Providers understood the need to flex services radically, and in some cases do something completely different altogether; commissioners understood that these services will cost money just like any other. In the midst of a crisis, people trusted one another to do what was required to keep things going. Indeed, one of our commissioners found that providers who are ordinarily bitter competitors were sharing tips on how to adapt – a further indication of how the pandemic changed attitudes. How resilient these changes will be once the most acute part of the crisis has fully subsided remains to be seen.
The difference that contract forms had made to Covid-19 responses was informative in another way: it gave a taste of the potential longer-term value of contracting for outcomes. Are outcome based contracts useful only to support innovation, or should they be used habitually?
Our group were fortunate to hear directly from a commissioner we invited from another part of the UK who shared her experience of re-commissioning a service that had been born under an outcome based contract in 2015. Multiple health-system commissioners had come together and let a contract to a ‘prime provider’, who oversaw four different organisations in four different areas. Each organisation recruited volunteers to keep company with older people and reduce self-reported loneliness, which triggered payment to the prime provider. After a slow start, self-reported loneliness did eventually decrease.
The four providers used different approaches to reducing loneliness, depending on the culture of the host organisation. Some sent volunteers to people’s homes for a cup of tea, while others worked hard to get people out of the house and into activities in their communities. This inconsistency was not seen as useful and eventually a standardised approach was agreed across all providers.
The prime provider employed a service manager to oversee all the services and this role proved invaluable in ensuring high performance – particularly when it came to recruiting volunteers and matching them effectively with service users. Another valuable innovation was involving a completely different sort of volunteer – as well as the usual over-50s, the prime provider included younger families and university students, which was really enriching. Many of the volunteers who had also reported being lonely found the experience beneficial.
Commissioners reflected that using an outcome-based contract generated a lot of additional admin, but had been necessary to get a service commissioned that would not otherwise have met the ‘evidence bar’. While social prescribing is now ‘in vogue’, that was not the case when the service was launched in 2015. ‘Top-up’ funding and high profile visitors to the locality– initially from the Home Office, and later from the National Lottery Community Fund – brought prestige.
Even then, agreeing a workable funding model had been hard. Local politicians insisted on continuing 100% outcome based funding as set out in the initial contract agreed to reduce the financial risk of commissioning this new service which was not supported by evidence of effectiveness at that stage. But this payment mechanism eventually made the contract unsustainable for the provider. The contract was extended on the basis of an interim evaluation from LSE showing savings to the NHS and social care. This extension took 12 months to organise, partly due to the time taken to get agreement from the National Lottery Community Fund who joined the contract to provide top-up funding at this point.
When the extension expired, a decision was made to recommission a new contract for loneliness with no results-based payment element. The scope of the service was changed from just targeting over-50s to all adults over 18, to take into account the needs of families and young mothers. The contract was won by one of the four providers who had served under the prior outcome-based contract, with a name change to reflect the new focus. Importantly, commissioners felt the SIB had served its purpose in terms of building a local evidence base for something new.
In this commissioner’s area, a focus on outcomes is typical, though this does not always mean payment is tied to them. The council is still considering using SIBs and outcome based contracts, but they are very different from this one – for example, a drug and alcohol contract has a £90k incentive on £4m. Often people say ‘SIB’ and think they are all the same, but this was not the experience of this commissioner.
The impact of CV-19 affected the usefulness of the loneliness measure and implementation due to lock down, so payment was based on the prior six-months performance as per the Cabinet Office’s ‘Public Procurement Notices’ (PPN2 and PPN4). This was possible because by this time the contract had been operating for several years so average performance calculations were reasonable reliable. The commissioners adjusted the payment mechanism after PPN2 to fund remaining outcome payments as the PBR contract was ending and a new provider in place to deliver a new contract to reduce loneliness.
As ever, group members’ experiences of using outcome based contracts were very dependent on the cohort being targeted and the idiosyncrasies of their local context. Some found multiple providers gave resilience while others found this introduced inconsistency. Some found the focus on end outcomes provided helpful flexibility for providers, while others found this flexibility emerged anyway during the crisis. Of course, there was one common thread that emerged, as it so often does: the importance of relationships.