Dear Colleague

This MEL sets out some general principles to be followed by Health Boards and Primary Care Trusts in developing LHCCs.

Health Boards are asked to bring this circular to the attention of GP practices.

Yours sincerely

NHS MEL (1999)13

8^th February 1999
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Tel: 0131-244 2415
Fax: 0131-244 2326
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1. The White Paper, Designed to Care, described very clearly in paragraphs 71-82 (see Annex I) the Government’s proposals to create Primary Care Trusts and Local Health Care Co-operatives.

2. The new Trusts will be formally established on 1 April 1999. Full powers in relation to FHS functions will be subject to the passage of the Bill which was introduced in Parliament on 28 January 1999. Formal powers are not required to set up the Trusts themselves or the LHCC structure.

3. At local level many GPs and their teams have been exploring the concept of LHCCs and what shape they might take. There is no single model. Local networks will be influenced by geography, local patterns of service, and the extent to which GPs and other primary care clinicians are involved already in collaborative working. Partnership working takes time to become established and it would be unrealistic to expect a uniform pace of development across the country. In some areas therefore the shape of LHCCs is not yet determined. Over time, as networks mature and the benefits of working collaboratively are realised some LHCCs will wish to extend their range of functions.

4. A key task for the new PCTs will be to develop LHCCs and to ensure that they are appropriately supported. This note offers guidance on the principles which should underlie that development.

5. The exact scope and functions of the LHCCs will be determined by discussion and agreement between member practices and the PCT.

The objectives of LHCCs are as set out at para 81 of "Designed to Care".

• identifying the health care needs of the local population in partnership with public health;
• planning and developing primary care services to meet patient need within a defined level of resources devolved from the PCT;
• supporting the development of member practices;
• supporting clinical quality and standards;
• supporting clinical governance within the PCT;
• supporting development of those who deliver the services through education, training, research and audit;
• promoting the development of extended primary care teams;
• promoting equity of access to primary care services for all patients covered by the LHCC;
• working with other agencies to improve the health of the local population.

6. LHCCs are part of the organisation of PCTs. There is no blueprint for the management arrangements for LHCCs. Models should be developed and agreed locally to suit local circumstances. It is important for the long-term success of LHCCs that the development process and the management arrangements draw in all those who have an interest including all the clinicians who will be involved in delivering services in the LHCC framework. GPs themselves should decide the method by which they will be involved in the LHCC management structure.

a. Staffing

7. Participation in an LHCC will not affect the contractual status of its members. GPs will continue to be independent contractors. Practice staff will continue to be employed by their practice and community nurses and members of the PAMs will continue to be Trust employees.

8. Where new posts are being created to support the work of the LHCC, job descriptions and the qualifications and experience necessary should be agreed jointly between the clinical leaders of the LHCC, including the lead GPs, and the PCT. The selection process should be joint and the candidate appointed must be acceptable to both parties. Subject to the statutory constraints imposed by the terms of the staff transfer orders under the 1978 NHS (Scotland) Act (which confers rights equivalent to TUPE) we expect PCTs to consider all suitably qualified local candidates.

9. In making appointments PCTs and their LHCCs should bear in mind the commitment made in the Organisational Change Policy Statement for all NHSiS employees, to work together to seek to avoid compulsory redundancy arising from Trust reconfiguration, and from other related changes in the organisation of the NHSiS. To ensure that valuable skills are not lost to the NHSiS, Trusts have been asked to include displaced GP fundholding staff in their local arrangements. All appointments should be transparent and made in accordance with the key principles of openness, fairness and equity as set out in the Organisational Change document.

10. Staff appointed to support the LHCC will be answerable on a day to day basis to the LHCC’s clinical leaders. The clinical leader of the LHCC will be accountable to the Chief Executive of the PCT for delivery of the LHCC’s objectives.

b. Financial support

11. £13.5 million has been specifically identified for the support of LHCCs and has been distributed to Health Boards for PCTs on the basis of weighted capitation share. This resource is intended to ensure that LHCCs have the necessary capacity to plan and deliver services. This money will not therefore be available to PCTs as a source of development funding for other services (unless the LHCCs so agree) or for Trust staffing unrelated to LHCCs.

c. Remuneration

12. As operational arms of PCTs, LHCCs will have a key role in the delivery of high quality primary care to local communities. GPs who are actively involved in the management and delivery of LHCC services whether at PCT, LHCC or practice level should be remunerated at a rate equivalent to £77 per session. (At present this is the rate paid to GPs as clinical assessors under the complaints procedure.) The nature of the activities covered by these arrangements are subject to agreement at local level with the PCT.

13. Payments made under these arrangements may be superannuable if they are undertaken under a contract of employment with the PCT or as a contract with the PCT under Section 37 of the NHS Primary Care Act 1997 when the forthcoming NHS legislation is approved by Parliament. Locum expenses, where necessary and invoiced should also be met.

14. The number of sessions to be remunerated should be determined by the PCT having regard to the size of the LHCC and the scope of its functions.

15. Under the arrangements set out in the White Paper, Health Boards will receive a unified allocation, including an amount, which will be transparent, for FHS prescribing. The allocation of resources from Health Boards to PCTs will reflect agreements reached locally on the Health Improvement Programme (HIP) and the Trust Implementation Plan (TIP).

16. LHCCs will be able to use resources flexibly to plan and develop services for their areas. Plans should be agreed with the PCT as the accountable body. Depending on the range of functions being undertaken by the LHCC these resources could include:

• practice staff;
• premises and computing;
• prescribing;
• support of Out of Hours services;
• community nursing staff attached to practices;
• members of the PAM and CPNs;
• community hospital services; and
• diagnostic procedures and clinical services carried out in primary care.

17. In determining the level of resources to be managed by an LHCC, the PCTs should have regard to the current pattern of resource utilisation, the area’s "fair share" on the basis of need and the scope for adjustment between the two.

18. LHCCs will be expected to manage the resources under their control to deliver their agreed service objectives. Within the allocation process, however, guarantees have been given about ringfencing budgets for GP practice staff, premises and computing. Details are set out in Annex 2. These guarantees mean that an LHCC could not be required to meet any overspend by reducing expenditure of GMS cash limited monies. In particular, where the cost of prescribing exceeds the level of resources available to the LHCC the overspend will be managed within the overall resources available to the PCT and more widely to the Health Board.

19. Further guidance on financial flows and accountability based on the consultative document will be issued.

20. The mechanism of the Joint Investment Fund is a key feature of the new arrangements set out in Designed to Care. Its purpose is:

• to involve primary and secondary care clinicians in designing services within and between different health care settings;
• to encourage the development, from the patient perspective, of seamless care across different parts of the health service; and
• to form the basis of agreements on improving the quality of care and shifting care between hospital and community settings.

Health Boards have been asked to ensure that proposals for using this mechanism are included in the HIP. Proposals for using the JIF mechanism will be developed with support from a small clinical team drawn from the service. More detail on the JIF mechanism and how it might work is given in Annex 3.

21. The existing arrangements for consultation with the professions will be modified in the forthcoming Bill to reflect the proposed transfer of FHS functions from Boards to Primary Care Trusts. PCTs will, therefore, be required to consult the area representative committees or, where appropriate, the primary care sub-committees ( for example, the GP sub – committee) of the relevant professions in relation to the exercise of FHS functions transferred from the Board.

22. It is therefore important for PCTs to begin now to forge links with Area Committees and, where appropriate, with their Primary Care sub-committees, including the GP sub – committee.

23. Guidance on the implementation of clinical governance in Scotland was issued on 27 November 1998 in NHS MEL ( 1998) 75. This highlighted the responsibility of the Board of each NHS body for ensuring that services are managed, organised and reviewed in a way which supports the delivery of high quality care.

24. The MEL makes it clear that the principles of clinical governance apply fully to primary care services, but that their application will need to reflect the independent contractor status of family health service professionals. Mechanisms for the delivery of clinical governance will be developed by each local Primary Care Trust. They will be informed by the outcome of current work on clinical guidance being carried out at professional level.

25. An early priority for the PCTs will therefore be to discuss with LHCC clinical leads how the clinical governance agenda will be addressed. The PCT will also need to consider what support can be offered to the clinicians delivering NHS services in its area to develop sound systems of clinical governance.

ANNEX 1

71. Developing primary care is at the heart of the Government's commitment to the NHS in Scotland and is essential to the development of an effective and efficient system of care. Our family doctor system is the envy of the world, but if the primary care sector is to realise its potential, it must be supported by the development of a robust organisational structure.

72. Primary care depends on the contribution of a wide range of professionals working together. GPs and the general practice team need to work closely with community nurses, midwives and therapists to offer comprehensive and appropriate support to their patients. Community pharmacists, dentists and ophthalmic opticians provide essential services, and access to their skills and professional expertise can greatly enhance the effectiveness of the team.

73. The NHS has been well served since its inception by the independent contractor status of general medical and dental practitioners, community pharmacists and opticians. The Government have no plans to change that status. It is however important in the interests of good patient care that the Family Health Service practitioners are involved in the design of that care and that the contribution they make is advanced and supported within a cohesive framework.

74. General Medical Practitioners and their teams are increasingly aware of the advantages of working together to plan and deliver new services in different ways. Out-of-hours schemes, primary care purchasing groups and locality arrangements are all examples of such collaborative working. In particular, practices are forming alliances, creating the foundations for new primary care organisations, which will overcome the artificial boundaries which have existed between community trusts and primary care.

75. Recognising the emergence of these new collaborative working methods and the benefits they bring to patients and practitioners alike, primary and community health services will be brought together under a single unifying structure in the form of Primary Care Trusts. The establishment of these Primary Care Trusts will build on the strengths of general practice and give a voice to community nursing and other primary care professionals managing and delivering care to their local communities. In this way primary care will be able to pool resources, work across organisational boundaries, and develop shared aims and objectives which will underpin the drive towards better quality of care for patients.

76. In placing the emphasis on the primary care development role of Primary Care Trusts, the Government also recognise that these Trusts will have substantial responsibilities for the management of some hospital services, and in particular a range of local services for people with learning disabilities, people with a mental illness, and frail elderly people. Primary Care Trusts will need to ensure that they are able to structure themselves so that the needs of patients using these services are met appropriately.

77. Government policy envisages continued progress in the transition from institutional care to a comprehensive range of services provided either in patients' own homes or in homely settings in the community. The successful implementation of this transition depends in part on the creation of effective primary and community health services, and more effective working between health and other agencies, notably housing and social work. The Government have already announced a Local Care Partnership initiative to help find new ways of breaking down boundaries between health and social care, and plan to publish a discussion paper on the relationship between these services. Primary Care Trusts will have a key role in leading the implementation of these policies and can do so through their other responsibilities to develop extended teams of primary care professionals working in partnership.

78. The configuration of services within Primary Care Trusts must take into account natural groups which reflect local circumstances, in line with the Government's commitment to devolved decision-making. PCTs serving urban areas will be responsible for large patient populations requiring an extensive range of community and primary care services. Those covering rural areas scattered across several small centres of population may include elements of acute care provided within community hospital settings in addition to the primary and community services provided through general practice.

79. The new roles of the PCTs will be:

• to provide support to general practice in delivering integrated primary care services;
• to formulate primary care policy and to direct the future development of services within an agreed framework of organisational and financial accountability;
• to work in partnership with Health Boards, Acute Hospital Trusts and others to develop Health Improvement Programmes, to implement local health strategies, through Local Health Care Co-operatives, and to deliver their Trust Implementation Plan;
• to engage primary and secondary care clinicians in forming agreements on the design and delivery of clinical services reinforced through the allocation of Joint Investment Funds (paragraph 91);
• to stimulate improvements in quality and standards of clinical care;
• to address inequalities in health provision and support the development of local initiatives, which address local health needs; and
• to develop the role of community pharmacists, dentists and ophthalmic opticians in providing high quality care to patients as part of the primary care team.

80. PCTs will reduce the bureaucracy associated with fundholding and allow individual practices to concentrate on providing high quality primary care, freeing them from the distractions of managing an individual fund. It is envisaged that primary care clinicians will play a key role in directing and managing these new organisations, creating a strong sense of ownership within the general practice community. The internal organisation of the Trust will reflect the formation of Local Health Care Co-operatives. These will be voluntary organisation of GPs which will strengthen and support practices in delivering care to their local communities.

81. The objectives of Local Health Care Co-operatives will be to:

• provide services to their patients within an identified level of resources, including expenditure on prescribing;
• work with the support of public health medicine to develop plans which reflect the clinical priorities for the area, whilst taking into account specific health needs of the registered patient population covered by the Co-operative;
• support the development of population-wide approaches to health improvement and disease prevention which require lifestyle and behavioural change;
• improve the quality and standards of clinical care within practices and to support clinical and professional development through education, training, research and audit; and
• support the development of extended primary care teams which are formed around the practice structure, and promote the development of clinical expertise and the emergence of specialisms within primary care.

82. The funding of primary care under PCTs reflects the move away from the individual practice model towards a collective arrangement managed through the Local Health Care Co-operatives. Co-operatives will have the right to hold a budget for primary and community health services, if they wish. The extent of these budget-holding powers will be reviewed by the Government in the light of experience. The fundholding management allowance will be re-directed to support the work of the new Co-operatives, which will require access to specialist expertise providing a range of skills and support across the practices. These arrangements are designed to empower all GPs, working collectively, to ensure that they have flexibility to invest in services which optimise the health gain to their local communities.

ANNEX 2

This annex sets out the detail of the guarantees which have been given by Ministers in respect of monies allocated for practice staff, premises and computing – the GMS cash limited budget.

1. For the period covered by the Comprehensive Spending Review that is for 1999/2000-2001/02, the level of investment in primary care infrastructure funded through the GMS cash limited monies will be maintained and uplifted by inflation. This money is ring fenced at the level of the Health Board and the PCT and cannot therefore be spent at that level on anything other than practice staff, premises and computing. Out of hours funding is also part of the ring fence.

2. LHCCs have freedom to vire between the different elements of resources under their control to deliver the plans which they have agreed with the PCT.

3. However, at practice level the following additional safeguards apply.

ANNEX 3

1 The White Paper ‘Designed to Care’ identifies the goal of the new NHSiS as;

Expanding on this vision, it stresses the importance in a patient centred service of doing as much as possible for patients in the community.

2 To achieve this goal, Health Boards and Primary Care Trusts need to identify:

• what patients need in terms of local, accessible care; and
• how they can deliver care packages which match those needs

3 This process will inevitably highlight areas in which the content or delivery of service needs to change. During the shadow period, it is important not to focus exclusively on the structures and mechanics of transition to the new system; Boards and Trusts should also should begin to address service change, and Ministers expect to see evidence of planned change in the current round of Health Improvement Programmes.

4 Not all service changes require resource shift. Some - like the implementation of managed clinical networks and improved admission and discharge arrangements - may require little more than support for effective clinician to clinician dialogue and a collective will to change. Willingness on the part of Trust and Board management to address these issues quickly and flexibly will be important in convincing clinicians that patients, not bureaucracy, are the focus of the new system.

5 Other changes may require resource shift over time between Trusts (or between sectors within the same Trust). Where such resource shift is substantial, it may need to be phased over a realistic period. One of the Government’s priorities is the replacement of the annual contracting round with a more long - term approach to forward planning, and the rolling 5 year cycle of the HIPs makes it easier to plan and track resource shifts which extend over more than one year. The Joint Investment Fund (highlighted in the White Paper and discussed in more detail below) is simply a mechanism for planning and delivering changes in service delivery which may involve resource transfers between Trusts.

6 It is also realistic to assume that in some cases Boards and Trusts may this year wish to identify in the HIP that a service is under review in advance of having firm proposals for change. In relation to such areas, we expect that current HIPS will identify three - way (Board/Acute Trust/PCT) agreement on areas for detailed examination in 1999/2000. The relevant Board - Trust allocations for 1999 - 2000 in relation to these service areas should be flagged as ‘provisional - subject to JIF review’. This simply underlines the commitment of all the stakeholders to produce revised plans for the service in question which bring it more closely into line with patient need. Those revised plans would normally be reflected in the HIP for 2000 - 2001.

7 The purpose of the Joint Investment Fund (JIF) is:

• to involve primary and secondary care clinicians in designing services within and between different health care settings;
• to encourage the development, from the patient perspective, of seamless care across different parts of the health care system;
  
  
• to form the basis for agreements on improving the quality of care and on shifting care between hospital and community settings.

The JIF is not a formal accounting mechanism - it will not appear in the accounts as a separate funding stream. It will, however, be reflected in the HIP, and will be an important focus for ME performance management. It is intended, as the White Paper stresses, to ‘increase responsiveness without attendant bureaucracy’. Making the JIF work, therefore, is not a matter of drawing up formal protocols for inter - Trust negotiation. Its success will depend far more on developing a culture of collaboration , in which the voice of primary care clinicians is given equal weight to that of their secondary colleagues, and which gives top priority to patient need.

8 Discussions on the JIF are expected to take place well in advance of the financial year to which the JIF applies, and to feed into the process of developing HIPs/TIPs. Since TIPs will be the basis for resource allocation by the Health Board, it is important that the JIF priorities are reflected in the relevant parts of TIPs.

9 Discussion on the JIF is led by the PCT in the context of strategic change set out in HIPs/TIPs. In practice this means that the PCT will in discussion with its LHCCs identify some priority areas. These will be areas where the PCT would like to see improvements which cannot be delivered without agreement on shifts in resources. From these discussions, the PCT will draw up a list of proposals for discussion with the Acute Trust.

10. Where there is debate between the Trusts about the issues for inclusion or exclusion, the Health Board, with its overriding role in securing improvement in health through the HIP, will have an important role in securing agreement to a set of proposals for the JIF. It would be sensible to reach three - way agreement on the services to be examined at a very early stage of the process and before the clinicians begin their detailed discussions.

11. Proposals for the JIF will vary to suit local circumstances. For example they may involve

• major reconfiguration of a whole service over two or three years
• plans to implement a high priority area mentioned in the HIP
• the shift of a specific procedure from secondary to primary care
• a local change which a particular LHCC wants for its patients.

In some cases, the priorities identified may involve shifts within the PCT - for example, GPs taking on new elements of mental health care within the practice. It will be open to PCT management teams to agree planned resource shift internally in the context of the normal process of agreeing the Trust Implementation Plan. They may wish to formalise the process as a sort of ‘shadow JIF’ to ensure that the big issues are not lost in the mass of detail.

12. Resource transfer from the NHS to local authorities to support care in the community remain the responsibility of Health Boards although clearly there also needs to be dialogue between social work departments and NHS trusts to deliver effective community care and a process analogous to the JIF might help to achieve that.

13. The aim of discussions between the PCT & the Acute Trust is to identify, from the priorities offered by the PCT, an agreed plan for progress in the year ahead. Discussions are expected to be led by the primary and secondary clinicians concerned in order to

• clarify the reasons for the changes sought
• explore the constraints on both sides on eg scope and timing of change
• discuss alternative ways of achieving the same clinical and organisational benefits
• identify the resources involved and what reallocation would be needed
• identify changes in clinical practice needed (these may be on both sides: eg changes in GP referral behaviour as well as in hospital treatment)
• identify education and training needed to deliver the JIF changes.

14. The outcome will be an agreement which identifies:

• the service priorities to be tackled and the resources currently used on that service in both primary and secondary sectors
• the desired outcomes, how these would be reviewed, monitored and evaluated, and target timescale
• the resource changes required over what timescale
• the mechanisms by which those resources will be redeployed; and
• agreed changes in activity and/or practice to deliver the plan.

The JIF agreement may well cover several different areas at once; it may cover just one service. This is for local discussion, with the aim of a significant but manageable set of proposals in any given year.

15. The Health Board, as well as the trusts, needs to be signed up to the final plan since it will affect allocations to the trusts. It will be for local decision at what stages the HB is involved: for example, the early discussions between clinicians may not need Health Board involvement. However, the HB will want to be sure that JIF proposals are in line with the HIP and TIPs.

16. Once allocated, JIF money would become part of the PCT’s and Acute Trust’s allocations and planned priorities would be expected not to change in-year.