“The Task of Developing the Market”– An approach to market facilitation

Developing Independence, Choice and Control – 20 January 2011

Trudi Wright – Yorkshire & Humber JIP, Community Capacity Building Project

PPF – a four part ambition

EnablementAssistive technologies

Better housing options

Personal budgets

Person-centred support plans

Responsive, flexible servicesUser-led organisations

Community networks

Neighbours

Volunteers

Information advice and advocacy

Leisure, transport etc

The Y & H Region / Regional Commissioning Group and IPC

• JIP• RCG• IPC – a national leader on commissioning

and social care• Managing a two year programme on

improving commissioning across the region.

• One strand of the work focuses on Market Development and facilitation.

Today – Briefly look at...

• National drivers – – size and state of the social care market– Policy and assumptions

• Market facilitation activities– Market intelligence– Market structuring– Market intervention

• Points to “ponder”

Demand and Demography (UK)

• In 1984, there were around 660,000 people in the UK aged 85 and over, by 2009 that number has reached 1.4 million

• By 2034 the number of people aged 85 and over is projected to be 2.5 times larger than in 2009, reaching 3.5 million, some 5% of the total population.

• Population with a LD also rising albeit slowly.• 70% of acute hospital beds are occupied by older

people, 40% of this group have a dementia.• Different views about whether longevity will continue

Demand and Demography (Kirklees)

• Population aged 80 and over is 17,000. This is projected to grow to 31,000 by 2030, an increase of 82%.

• Within that number those aged 85 and over will grow from just over 8,000 to 15,500 an increase of 93%.

• Over the same time period the number of people aged 65 and over predicted to have a dementia will grow from just over 4,000 to 7,000.

Sources POPP

Supply - 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.

Supply - funding & finance (England)

• Public-sector spending should be reduced by £83bn by 2014. Comprehensive spending review dictates the precise cuts in each area

• Projected sceanario for social care to reduce by a third over the next four years

• By 2013-14 the NHS should have cut its management costs by 46 per cent – equivalent to £850m – on 2009-10 levels, according to the revised operating framework.

Sources IFS, Community Care, Health Services Journal

Supply - funding & finance(Kirklees)

• Kirklees spends £100 million on social care, of which £55million is spent on older people and £26 million on adults with a LD (the second highest spend within the region).

Sources NASCIS,

Supply - 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

Supply - 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

Supply - 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?

Policy – Social Care Transformation

• Capable Communities and Active Citizens– Practical approaches to market and provider

development (DH Nov 2010)– Set a framework for shaping the local market

of care and support (4 x elements)• Strong engagement• Market intelligence• Provider development• Flexible arrangements

Policy - NHS White Paper, Local Authorities’ new functions

• Transfer of PCT Health Improvement functions to LA’s and abolish PCT’s– Better alignment with local health and well being

responsibilities.– Establish Health and Wellbeing Boards.– Joint commissioning of social care and health

improvement.– Strategic integration across health and adult social

care, children’s services and wider local authority agenda.

Summary of Policy Aspirations

• Greater integration and partnership working - NHS, social care, public health and other local services and strategies

• That more service users will purchase their own care through personal budgets

• That services users will in general have greater control over their care provision

• That the local authority will continue to move away from being a direct provider of care and from being a block purchaser of services.

• That the local authority’s primary task is to ensure that there is sufficiency of supply to offer choice within the market place

• That this is achieved through a lower level of funding

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 we can continue to afford high cost / low delivery in-house provision

• That choice is paramount and available and will be exercised

• That GPs as commissioners 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

The activities of market facilitation

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 activities designed to give the market shape and structure, where commissioner behaviour is visible and the outcomes they are trying to achieve agreed, or at least accepted.

The interventions commissioners make in order to deliver the kind of market believed to be necessary for any given community.

Market Intelligence – Assessing demand

• What is the relationship between populations and people who currently receive a social care service (past, now and in the future, 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?

• 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?

Market Intelligence – Assessing supply

• Review the size, location and range of the local market (s)

• Review the quality of services and identify what are the local market pressures

• What are providers view of demand and the impact this might have on their business?

• 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 cost-benefit analysis.

The Market Intelligence Product- A market position statement

The product from the review of demand and supply should be a public, published document which 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 – external activities (1)

• Publish the MPS and use it as a ‘calling card’ for meetings and discussions with current and potential future 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.

Market structuring – external activities (2)

• 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

• Where demand for a service exists and where the provider is vulnerable, then identify how commissioners can reduce that vulnerability

Market structuring – external activities (3)

• 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’, e.g., can RSLs do care and repair, can home care agencies deliver assistive technology

• Work with providers on an open book accounting model to cost out new developments and innovations

Market structuring – internal activities

• If there is ‘in house’ service provision, be clear about where and why the LA is a provider. Diminish differences between in-house 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 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

Points to ponder - together• What do we need to do to develop quality market

position statements and what should we do with these once developed?

• Do we know what the range of services should look like to meet demand?

• Have we modelled the potential impact of change, eg, the impact PA’s might have on the home care market?

• What do we need to do to reduce reliance on residential care?

• What financial stimulus package needs to be on offer to the market if we are going to have influence?

For more information or to talk

• Trudi Wright, JIP Project Manager– Trudi.wright@kirklees.gov.uk– 07980 911 654– www.yohrspace.org.uk