Making outcomes based commissioning a reality


Photo Credit: Jessie Jacobson via Flickr cc

The Local Government Information Unit (LGiU) has been working for years to support better home care with our member councils, with home care providers and with those involved intimately in the business of care – care workers, people who need care and their families. For a long time, councils have seen needs rising and budgets shrinking. In the past, the response has been to either limit eligibility or squeeze the price of hourly care paid to providers, sometimes beyond what is economically sustainable. This often means that either care workers are underpaid, sometimes below the legal minimum, people who need care don’t get enough or both. In recent years, councils have seen that squeezing prices may be a counterproductive strategy and lead to shaky markets that cost more to shore up. Inadequate or inappropriate care could lead to greater care needs in the medium term and have been linked to ‘avoidable’ hospital admissions.

The root of the current adult social care crisis is lack of funding and poorly structured funding that doesn’t reach all need.  However, even if we were to have adequate funding that wouldn’t be enough. Our current care system is based on time and task that treats care workers like cogs in a machine and treats the hour of care that people receive in their home as the ultimate goal with little measurement of quality or impact.

Outcomes-based commissioning promises improved care quality and better value for money, but councils have made very limited progress implementing new payment mechanisms over the past ten years.

One of the main barriers to implementation has been developing measurement systems: in an almost cliched truism ‘what gets measured gets done’. Since the beginning of care outsourcing to independent providers the number of visits and how much time has been spent in someone’s home has been one of the few measurements.  Because this is often the only measurement, this has formed the basis for paying for care – making it challenging to guard against perverse incentives and manage risks to both providers and councils.

The absence of information systems that can measure outcomes, facilitate communication and create greater transparency between councils, providers and care receivers and their families has resulted in a crisis of trust. Councils aren’t able to trust providers sufficiently to afford them the freedoms they require to achieve outcomes and providers aren’t able to trust that councils will reward them for providing quality care. Families both aren’t trusted by the care system to actively participate in providing care and are rapidly losing faith that the system is able to keep their loved ones safe and dignified.

Outcomes-based commissioning (OBC) turns this equation around. Councils set priorities for better quality of life and maintaining dignity and independence for as long as possible. OBC has been an aspiration for many councils, but hardly anyone has achieved it. This paper explores some of the issues around why that is so, explains how technology can help and sets out new models of payment that can increase trust, reduce costs and improve quality.

LGiU has been working with Kingston Council to develop CoCare, an app which helps councils to implement outcomes-based commissioning.

This paper explores some of the issues around why that is so, explains how technology can help and sets out new models of payment that can increase trust, reduce costs and improve quality.

Adult social care has been in crisis for a number of years and the intensity of the crisis has increased as funding has tightened. While there has been some increased financial support in the past few years, funding for adult social care is down three per cent in 2017-18 from spending in 2009-10. In the face of rising demand this is nine per cent lower spend per person needing care (Phillips, David and Polly Simpson: Changes in councils’ adult social care and overall service spending in England 2009-10 to 20017-18; Institute for Fiscal Studies; June 2018). This falls to 17% less in areas of deprivation, where there are often more people who qualify for state funded care. The 2018 budget announcements have allocated more money to social care as well as money targeted to reduce delayed transfers of care, but the amount promised does not meet current or projected need.

As a result of reduced funding, eligibility assessment criteria has often been tightened, so the needs of the average person receiving state funded care are often higher and more complex than in the past.  Although the 2014 Care Act tried to create consistency across local authorities, the reality is that there is still much unmet care need and needs of those receiving care are higher.  As of 2016, there were already over a million older people with unmet care needs (basic help for things like washing and dressing) which is up by 48 per cent since 2010 (Age UK analysis).

While councils have been seeking to protect adult social care budgets and have largely done so, the overall state of council finances and the need to fund services for the general population as well as competing statutory duties has meant that it is increasingly difficult for councils to continue to fund adult social care at a sustainable level.

Under the Care Act, councils now also have responsibility for both care market management and for picking up the pieces if care providers fail.  In LGiU research on provider failure, we found the home care market to be increasingly fragile. In 2015, just under half of councils surveyed had experienced a home care provider failure in the year previous, but a survey from ADASS (Evidence of Deepening Crisis Media Report) found that over a six month period just a little over a year later in 2016, almost 60 per cent of councils had had a home care provider hand back a contract.  The collapse of businesses on this scale is a clear indication that the current system of payment by hours in time and task commissioning simply isn’t working. The market is failing and councils are contributing to it by commissioning care in what can be an impersonal way and by paying rates that are in general too low.

What is outcomes based commissioning?

Under traditional commissioning, care providers are paid based on the hours of care they deliver. Sometimes these payments are based on the number of hours agreed in support plans, and sometimes they are based on the actual number of hours delivered, as measured by the care provider themselves either through manual recording or through automated time recording systems.

This approach can reinforce a focus on time-and-task, with little or no incentives for care providers to improve care quality, reduce dependence and engage with families and community resources.

Outcomes-based commissioning is about shifting the focus towards outcomes for individuals and outcomes for the wider population. Helping people achieve greater independence both reduces costs and improves the quality of life of care receivers.

The Social Care Institute for Excellence (SCIE) describes outcomes based commissioning in Outcomes-Focused Services for Older People:

Outcomes refer to the impacts or end results of services on a person’s life. As such, outcome-focused services aim to achieve the aspirations, goals and priorities as defined by service users.

It enables commissioners to create the circumstances where provider organisations find innovative solutions to deliver improved outcomes for service users at a lower cost. This will enable the delivery of new models of care.

Most councils want to commission and pay for care based on results – i.e. outcomes, not just because it provides an opportunity to improve services and foster innovation in an efficient way, but also because it rightly maintains a focus on the individual and the families that support them.

Why has progress been slow?

The LGA’s “Integrated commissioning for better outcomes” commissioning framework provides a good summary of the current resources available to councils, along with some good common-sense standards for commissioning. However, the framework and referenced resources don’t explore the practical steps councils can take to create the environment required for home care providers to achieve care outcomes.

In LGiU research, we found that while almost all councils want to implement some form of outcomes based commissioning only around 1 and 10 have made any significant progress toward putting it into practice. We have found that there are some key cultural barriers to achieving outcomes-based commissioning.  These are:

  • Lack of trust between providers and commissioners
  • Lack of trust in home care workers
  • A cultural focus on rigid time and task planning of care support, leaving little professional discretion for care workers and little room for providers to organise and deliver care in an innovative way.

Although lack of trust between parties is a problem, blind trust is not advisable or desirable. Councils need to be able to routinely monitor how effective care is and how people who receive care perceive it. Often the only real measure, if there is one at all, is how much time is spent in the home. To compensate for the lack of oversight, sometimes councils over-prescribe what must be done in the home with inflexible care plans that may not be appropriate for a given visit and certainly may not be appropriate due to changing circumstances between re-assessments of social care needs which can be twelve months or more.

Additionally, for outcomes-based commissioning to really take hold, providers must be incentivised through payment structures. While many providers also wish they could operate in a way that meets client needs more effectively, if they are only paid to deliver care by the hour then they will deliver care by the hour.

Councils have been increasingly interested in outcomes-based commissioning, but few new payment mechanisms have emerged. Some councils have explored the idea of removing care hours from payment calculations, but this relies on being able to determine exactly how much each “outcome” is worth. This poses a challenge as care recipients often have complex and deteriorating conditions and achieving the same outcome for two different people can require vastly different levels of resources. Shifting payment systems away from hours can introduce significant risks for providers too. As care profits are very low, if outcomes aren’t achieved a provider will have a very high risk of failure.

However, removing hours from the equation might not actually be necessary in order to achieve the ambitions of outcomes-based commissioning. With care provider profits typically at around two to three percent (according to the United Kingdom Homecare Association’s Minimum Price for Homecare and backed up by our own research on provider failure) even very modest performance bonus payments can have a big impact on the bottom-line for providers.

Incentives are only half of the story though, to achieve results, councils need to be able to confidently give providers more freedoms to provide flexible care, to work more intensively at times and less intensively at other times, and to work with families and community resources.

Outcomes based commissioning approaches

There are broadly two different approaches: population-based (capitation) and individual-based (pathway). There are also hybrid models which use elements of both of these.

Under population-based approaches, providers are normally allocated a geographical area and are responsible for the care and outcomes of that entire population.

Under individual-based approaches, providers are responsible for the care and outcomes of specific care recipients for a period of time, as agreed in a support plan.

Approach 1: A population based example

Using a capitated approach, the council asks suppliers to bid a total amount to provide care for the whole eligible population of the area. Bonus payments can be made for achieving population outcomes like reduced hospital admissions, reduced falls and improvements on reported quality of life measures. CoCare can also be used to measure achievement of personal goals and experience of care for care recipients in the area. A population-based approach has been a useful way to commission services related to public health outcomes and around the management and maintenance of diverse assets, such as a council’s housing stock. Benefits to this approach in housing, for example, include incentivising high quality maintenance rather than paying for multiple call-backs on cheaper repairs.  The theory in home care is that by paying a provider a single, large payment to cover a population of older people needing care, is that providers will find incentives to do things differently and to innovate.

However, there are a number of issues with this approach. As margins for care providers are often very small and demand for care can be unpredictable, it can create very high risks of provider failure. Unless geographic areas are very large, luck can play a significant role in determining the profits of a provider. This is also true for population outcome indicator results but can be partly negated by also measuring individual care receiver outcomes. Large geographic contracts themselves can increase risks for councils too, as they can create local care monopolies.

Typically, a very small subset of care recipients (normally under 20%) consume over half of care spend. Focussing solely on big-ticket items like hospital admissions can incentivise providers to invest more in people with lower-level needs, as these make up a bigger proportion of the population and so can have the biggest impact on the measured result. This can create a perverse incentive to limit resources for the most vulnerable people.

These issues might help to partially explain why capitation hasn’t yet been widely adopted for at-home care.

Approach 2: An individual based example

A weekly personal budget is agreed for each care receiver during support planning. Providers can deliver care in a flexible way over each monthly period, providing the budget cap for the care receiver is not exceeded. If the budget cap is exceeded, the provider’s payment is limited to the budget cap and a reassessment is automatically triggered. Providers and councils can also both trigger reassessments to review the personal budget as required.

At the end of each month, for each care receiver the provider is paid in full for any care delivered and is also paid (for example) 10% of the undelivered personal budget for the month. This 10% creates an incentive for providers to reduce dependence on care, as 10% will be more than double their profit on a care hour.

Providers can also receive performance bonuses for each care recipient. For example, these could be:

  • A percentage bonus on the monthly payment for that care recipient if personal goals are achieved
  • A percentage bonus on the monthly payment for that care recipient if they rate their care as “Outstanding”
  • A percentage bonus on the monthly payment for that care recipient if their self-perceived quality of life has improved in that month.

To measure personal goals, care experience and quality of life reliably, councils will need a measurement system that is standardised across their care providers and can routinely collect this data, like the CoCare app. As these bonuses are per care recipient, the most vulnerable and dependent care receivers will generate relatively larger bonuses compared to people with lower needs. These bonuses provide strong incentives for providers to invest in care quality and to work with families and other stakeholders to achieve results.

CoCare can help councils and providers communicate, manage budget caps and calculate the amount due for each provider each month automatically, replacing invoicing systems and reducing administrative costs. CoCare can also assist providers with achieving outcomes, by providing a platform for communication with council staff, health staff, families and the voluntary sector. This approach can be relatively easy to implement, as providers can elect not to use CoCare but if they do so would not be able to receive bonuses as it would not be possible to verify their performance.

Support for outcomes based commissioning

LGiU is offering outcomes based commissioning support workshops which are free for LGiU members and low cost for non-members.

CoCare: Measurements for outcomes

CoCare was developed out of frustration. Following the Burstow Commission on the Future of the Home Care Workforce, it was clear that the care system was serving no one well. While councils wanted to change the way that they commissioned home care, outcomes based commissioning was proving hard to achieve. The LGiU, the service design company Tackle, the software and information systems company Cubicus, and Kingston Council started to work together to develop an app and information portal that would deliver the kind of information needed to make outcomes based commissioning a reality.

Other software solutions exist that monitor time. Some also include some form of outcome measurement or the ability for care professionals to coordinate and for families to stay involved. But no other tool has been designed to make outcomes based commissioning a reality.

By working directly with families, care workers, care managers, the wider voluntary sector, health professionals and social care commissioners, CoCare has been co-designed to meet the needs of each of these types of users – so the final product is intuitive and easy-to-use, has a low time burden for hard-pressed care workers and has a low data load so that care workers aren’t having to reach into their own pocket to use the app. While it can be used to support existing time and task commissioning, it has a number of design features that nudge providers and commissioners to meet service user needs more personally. It is also designed specifically to support an outcomes based commissioning approach.

Key features:

  • Recording of personal goals and progress towards achievement
  • Measurement of wellbeing, health conditions and social care needs for predictive analysis to support proactive commissioning
  • Regular surveys of care recipients and their families to capture care experience
  • Recording of care hours, social worker visits, voluntary sector visits, and even family member visits (if they choose to record them)
  • Standardised measurement of all of the above across care providers, enabling comparable and reliable results
  • CareCircle management, enabling care receivers and their trusted family members to control access to their records, adding in public sector organisations, voluntary organisations and informal care providers as appropriate
  • Messaging platform for care receivers, families, care workers, councils and all other CareCircle members to communicate
  • Notes recording for professionals to record care notes, as appropriate
  • Cross-organisational workflow, reducing telephone calls and creating a formal record of requests
  • Management information dashboards enabling councils to manage provider performance, understand population-level needs and health conditions, identify care receiver risks and support a more personalised approach to support plan reviews and safeguarding enquiries.

To find out more about CoCare contact Ingrid Koehler at