Creating a consistent buying process in Residential Care Commissioning | adam HTT

What is the challenge?
Meeting the requirements of the Care Act is a major challenge for commissioners of Residential Care placements. Rising demand is exposing the latent issues engrained in the existing commissioning culture.

These issues are then compounded by a significant lack of funding, resource and time.

This makes creating a sustainable market to benefit all an unrealistic objective.

To amplify the pressure, care home places are set to run out in less than three years. Which means whilst care home providers are busily building homes to meet demand, commissioners need to mature their model for placing service users.

Sadly the 59% of Public Sector Organisations tasked with placing service users, are already struggling to create a consistent process for commissioning care home placements. Which means these organisations desperately need to refresh their approach as the landscape continues to look ominous leading up to and beyond 2020.

What’s happening now?
Engrained in the existing commissioning culture is a belief that working with a limited or fixed number of providers is the most suitable response to limited funding, resource and time.

Which time and again has been exposed by rising demand.

Nonetheless, it is simply not a sustainable approach.

Why is that?
This is because commissioners often find themselves working around the commissioning model in place (if they have one at all) in order to fulfil requirements. This cumbersome process not only costs more (time, resource, budget), it also negatively impacts the experience of the service user.
Ultimately, the service user may not receive the care they need, from the most suitable provider, within a reasonable time frame.

Often the output from these challenges is a cry for more funding, resource and people to plug the gap. However, these cries usually echo from the organisations that suffer from a classic set of symptoms…

What are the symptoms you will recognise?

Those struggling to embed a consistent process for commissioning care home placements, usually suffer from a variety of symptoms.

Commissioners are frequently spending their days firefighting to manually fulfil requirements around their existing framework. There’s no consistency to finding a provider, agreeing the requirement, commissioning the service and then managing the back office process.

Instead, brokers will pick up the phone to the providers they know and have a relationship with, to see if they have capacity.

This process is repeated until a provider indicates they do have capacity.

This can result in higher costs of care.

Not to mention the lag born out of manually mopping-up back office process, post placement.

How has this impacted the market?
In some instances, a disenfranchised provider market can then develop over time. This is because in response to rising costs, commissioners are attempting to fix rates for requirements. This approach only fosters a transactional relationship with providers and some may be reluctant to deliver services for these rates that have been forced upon them. Meaning at the end of each year commissioners will experience disputes over prices from their market.

The output often leads to providers being forced to pull out of requirements because they simply cannot afford to deliver the service.

How are commissioners feeling?
This leaves commissioners questioning why they have a capacity problem.

But working in this way makes managing, measuring and rewarding quality an unachievable task.

The combination of these and the most compelling symptom recognised by the Public Sector, is an overspent budget for Residential Care.

Typically, organisations will attempt to solve these symptoms, as if they were causes, believing it will provide the respite they need to improve the service. This comes in the shape of asking for more funding, locking down capacity to certain localities, fixing costs or employing more staff.

Sadly, by focusing on the symptoms will, at best, only provide short-term relief.

Instead, organisations seeking to create a sustainable market through a consistent and effective process, are better placed at uncovering and solving the root causes…

What is the underlying root cause?

Rising demand has exposed legacy commissioning approaches.

Reduced funding and resource has compounded the problem over time.This has left Public Sector Organisations in the eye of a perfect storm.

A number of underlying causes have now reduced the ability of commissioners to embed a consistent process for sourcing, commissioning and managing Residential Care placements.

This is because typically, 80% of the organisations tasked with placing service users into a residential setting have no dedicated commissioning model in place.

Instead they use a rolling yearly contract and pre-placement contracts with a fixed number of providers.

That is the root cause.

This approach cannot affectively deal with the realities of the environment commissioners, providers and service users find themselves in. No one is able to anticipate and deal with fluctuations in the market because commissioners and providers lack market awareness.

Leaving service users with little to no choice over where they are placed.

How can you solve it?

The good news is that evidence is suggesting that there is an alternative approach.

An approach which is sustainable and repeatable, enabling a consistent process to be embedded.

Adding layers of consistency and efficiency through technology is empowering these commissioning teams.

The approach has removed yearly disputes over prices, whilst allowing commissioners to reward quality and foster a collaborative relationship with the provider market.

It means commissioners have more time to communicate with families and support their decision making process for their loved ones.

The result?
A number of Public Sector Organisations are now benefitting from Digital Commissioning Technology coupled with Supplier Engagement and Management.
On average Digital Commissioning increases (quality, compliant) provider capacity by 120%. Commissioners are also averaging between 2-18% better quality services commissioned. The same commissioners are then paying providers with 99.9% payment accuracy via the same technology.

It means:

Haringey Borough Council have been able to develop a Collaborative relationship with their provider market

Several CCGs across the Midlands and Lancashire have transformed their approach to commissioning Care Home placements.

Averaging 5 offers per requirement

Averaging savings between 7-8%

Consolidating invoices into one weekly document

The NHS have already written a case study on its success so far

The consistency added to the commissioning process allows teams to focus on what’s most important, the individual and supporting their market.

The approach ensures providers articulate how they intend on meeting each requirement for the individual in need of a Care Home, increasing the personalisation of care. Smaller providers also have greater opportunity and ability to work with the authorities using the model, improving quality and ultimately capacity in the process.


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