Commissioning and the community sector

Last year I had the pleasure of being part of a panel discussion on commissioning and the community sector that was hosted by the New South Wales Council of Social Service.  The panel was convened to try and support those working within the community sector to gain a better understanding of the concept of commissioning and the evidence base behind this.  Given the focus on commissioning and contestability developed by the NSW government, there are a number within the sector who are keen to better understand what the implications of these reforms are for their operation.

Where commissioning reforms have taken place in other jurisdictions we have seen some significant challenges posed for those in the community sector.  A report from the UK House of Commons Public Administration Select Committee found that there was a lack of clarity over working definitions of the concept of commissioning and this posed challenges for community organisations, particularly those who work across multiple government agencies.  The report set out a number of areas where improvements might be made in these processes.  The Third Sector Research Centre at the University of Birmingham also developed a number of case studies exploring the challenges that community organisations have encountered in commissioning relationships with governments and where some of the gaps in the evidence base lie.

NCOSS have continued to do work on this topic to develop resources for community organisations and have developed a series of information sheets.  There are three resources in total that explore commissioning, the government and community sector role in these processes and the potential impact within the context of government funded community services sector in NSW.   These are short and very accessible documents that provide a really helpful and accessible introduction to the concept and its role in the policy context.  The three documents are:

If you are a new-comer to the topic of commissioning, whether you work in the community sector or not, these are a really great introduction to the area and the evidence base.

 

 

 

Commissioning bootcamp

At the newly launched Public Service Research Group one of the things we have been busy thinking about is the development of executive education and professional development courses.  We see this as an important part of the way that we go about translating research evidence in a way that is useful to practice, promoting the impact of our work and supporting those who work in public service contexts.

All of our programs are intellectually-stimulating and delivered in a highly interactive format to ensure that learning is applicable within the workplace.  Our programs can be delivered as intensive subjects over a few days or can be tailored to be ongoing programs (in an action learning form, for example) where participants are supported as they tackle real-life issues.  Programs can be delivered as residential, campus-based or work-place based in any area of Australia and overseas.  We work to an approach that encourages participants to bring their expertise to the learning experience and to combine this with that of others and our facilitators to generate actionable solutions.

We have just advertised the latest of these – a commissioning bootcamp – which is a two day programme designed for those who work in commissioning roles or in provider organisations who are being increasingly required to work within a commissioning environment.  This is designed to bring together a small group who will work together with leading experts to address real-life challenges and find solutions.  Ultimately the bootcamp aims to produce better understanding into the key issues faced by commissioners and providers and to develop useable tools and strategies that participants can apply within their work contexts.

At the end of the bootcamp, participants will:

  • Understand what a commissioning process entails and some of the tools available to improve these processes
  • Have an overview of the evidence for commissioning including the impacts it can produce and the factors which enable high quality commissioning
  • Understand the standards of high quality commissioning and how to apply them in their own organisational context
  • Have an insight into the different roles that partner organisations play in the commissioning process
  • Have an intermediate understanding of how to operate a commissioning approach

You can download the flyer for the commissioning bootcamp here – 170913 PSRG Brochure – Commissioning bootcamp

And more details on our other courses can be found on the website

New South Wales Commissioning and Contestability Resources

In 2016, the New South Wales Treasury established a Commissioning and Contestability Unit (CCU) to assist with the improvement of public services by exploring delivery models including a mix of government, NGO and private sector providers.  Last year’s state budget allocated $2.9 million to create this team, with the expectation that this investment should release efficiency savings.  A key role for the CCU is to help the government decide which areas of service delivery to outsource or externalize through commissioning approaches. 

Late last year the CCU released papers outlining the policy and a supporting practice guide, developed to assist practitioners in applying commissioning and contestability.  I was one of the individuals approached asking to feedback on these documents as they were being developed and was interested to see their publication and what will be developed in this space in the coming months and years. These are pretty helpful resources for anyone working in a commissioning role at present.  

The policy aims to create a platform to support NSW agencies to explore ways to create better services outcomes.  This policy suggests that this will be done through the use of commissioning and contestability to apply rigour to the design and funding of services.  What is welcome in this policy is that this does not suggest that services should be outsourced or externalized, but that consideration should be given to where best particular services sit.  This may involve moving some services out of government, but could also involve moving some back to government from third parties if the intended impacts are not being generated. 

The policy goes on to set out a set of principles that should shape service delivery reform across NSW Government, namely:

·         commissioning of services should focus on improving outcomes and delivering quality services, regardless of organisational boundaries and constraints

·         Government must act in the interest of customers and the community by putting them at the centre, with greater attention to the integration of services and an improved end-user experience

·         productivity, quality and efficiency benefits should be shared with the customer through service improvements as well as being reinvested in Government priorities

·         effective commissioning will clearly define and prudently manage delivery and financial risk

·         commissioning will encourage innovation and an openness to more diverse service delivery models in the public, private and not-for-profit sectors. These models should be flexible, reflect the needs of the customer and recognise the limitations of certain markets

·         contestability allows Government to challenge existing providers to deliver service outcomes within agreed resources

·         agencies should consider their role as policy-maker, commissioner, regulator and provider and whether a separation of roles would be of benefit within the service design. 

Ultimately this policy aims to support agencies to achieve consistency and practice across the entire government.  Definitions of commissioning and contestability are set out in the policy document in a clear and accessible way and there is a clear sense of what these roles mean in terms of the changing role of government.  In doing this the CCU does a good job of getting to grips with some fairly complex ideas and presenting a level of nuance to debates around commissioning that have at times been absent in recent years.  

The practice guide that accompanies the policy provides a foundation for consistency in understanding what commissioning and contestability are and the key steps to consider when commissioning and contesting services.  There is a clear outline of when commissioning should be used, what the process entails and importantly the key questions that agencies may wish to ask at the different stages of the commissioning process.  This last aspect is key.  Not all commissioning processes will look the same or involve all of the same activities and considerations.  One size does not fit all. These questions are a helpful guide to those driving commissioning processes, supporting individuals and teams to take ownership of these processes.  There is also the unpacking of consumer choice, potential funding models and contracting approaches, understanding of markets and how these operate and issues of contract management.  One of the key sections for me relates to capability for commissioning and contestability, in terms of what agencies will need to operate such an approach. 

The practice guide won’t transform the way that NSW agencies work over night; this is a big task after all.  However, this is one of the more useful guides that I have come across recently for those who are seeking to make a reality of a commissioning approach.  If you are in this field I would certainly suggest that you take a look at it.  Further resources will need to be developed to sit alongside this to enable agencies to engage with this activities and my understanding is that this is on the agenda of the CCU.  All in all it seems like NSW is doing some pretty exciting work around this space and I will be interested to see just what happens next.

 

Why commissioning is like a unicorn

Anyone who I have had even the briefest of acquaintance with knows that I have a thing about unicorns.  You will no doubt have seen many of the things people have tweeted me about unicorns and if you are lucky enough to have been in my office you will have seen “unicorn corner”.  I’m not entirely sure where this comes from, although it is pretty difficult not to like a mythical creature that poops rainbows.

Anyway, a little while back I was trying to think of a way to finish an elective subject I taught on the Masters of Public Policy and Management at the University of Melbourne that was all about Commissioning Public Services. The course was an introduction to the topic and most of those who took it had little direct experience of commissioning.  The students included a great mix of different policy areas and countries that they worked in.
As I’ve written about before, commissioning isn’t an easy task and it is one that is difficult to cover comprehensively in a classroom context.  It is an incredibly broad topic area and one that is quite complex and I was finding it difficult to think about how to conclude the course.
So I started to think about what metaphor I could use to sum up how we might usefully think about commissioning.  Something that took us beyond the Emperor’s new clothes analogy which I have used to describe the current policy debate surrounding commissioning.  Then it came to me – commissioning is like a unicorn. For those of you who have stuck with me and not stopped reading in disgust or gone off to contact some sort of welfare professional on my behalf, well done.  As a treat I’ll now explain why I think this is the case.
Unicorns are mythical and majestic creatures that exist mostly in folklore (and now the dearest recesses of the Internet). I don’t know anyone who would readily admit to disliking unicorns – how could you? Many of us, I imagine, would love to wake up and find a unicorn at the foot of our bed – or maybe outside if you happen to live in a particularly small apartment!  In the commerce literature, the term unicorn is used to describe start up businesses that are valued at over $1 billion and include companies such as Uber, Snapchat and Dropbox. So clearly I’m not the only person to think that unicorns are an amazing thing.  Outside of the commerce literature, No one has ever seen a unicorn and there isn’t much evidence that they exist but it doesn’t stop people looking for them or aspiring to be a unicorn. People will go to great lengths to catch a sight of one or to try and become one.
High quality commissioning has a number of similarities with unicorns. The concept of commissioning is a compelling one and policy makers and organisations go to great lengths in search of this mythical approach. While it looks good on paper as an idea, there is not a huge amount of evidence to suggest that examples of high quality commissioning exists in practice.  But that doesn’t stop us putting a whole series of things in place so that we might try and pursue this mythical creature.
One of the cool things about unicorns is that they have a horn.  I suspect that as people search for unicorns there is the potential danger of being stabbed by this (you can see this in action in these great t-shirts – with thanks to Sophie Yates for spotting this). To some extent the search for high quality commissioning is no different and there are any number of tales of injury in its pursuit.
My former office neighbour, the wonderful Sara Bice isn’t just an expert on Responsible Mining, but is also well versed in children’s books.  She introduced me to the book Thelma the unicorn by Aaron Blabey and this sheds some great insight into the idea of chasing the idea of becoming a unicorn.  Thelma is an ordinary pony with a desire to become much more.  She finds a carrot on the ground and ties it to her head.  A truck coming around the corner swerves and sloshes pink paint all over her.  Thelma is now an internationally famous unicorn with many fans who chase her everywhere and non-fans who are mean to her.  Thelma realises that this life isn’t for her so she washes off the paint, takes off the carrot and goes back to her former life.
This is the tricky issue that many embarking on a commissioning approach are faced with: how is it possible to make a reality of a commissioning approach and in the process drive improvement through public service systems and make better use of resources – and not just simply become a horse with a carrot tied to your head?  For sure there are no easy answers to this question.  But, just like unicorns, high quality commissioning might be elusive but for sure it exists out there somewhere.  Just watch out for the horn.

Myths about commissioning

Recently I seem to have spent quite a bit of time speaking with people about commissioning, particularly in health care where I think it is fair to say that there is still some lack of certainty over what commissioning is – or at least what this means to an Australian context.  I have come across a number of myths about commissioning in these conversations.  In this post I speak about some of these and draw on the evidence base to demonstrate the degree to which these statements do and don’t hold up.

  1. Commissioning is a coherent model. It isn’t unusual within everyday speak to hear someone refer to a ‘commissioning approach’ or ‘the commissioning model’, but commissioning is anything but a singular or coherent model. Commissioning is a broad term and frankly the terminology isn’t terribly helpful as the word doesn’t mean much to many of us (and even less to those outside the system).   There are many different definitions of this concept and often they are fairly broad in nature such as ‘the process of finding out about public needs, then designing and putting in place services that address those needs’. As this definition suggests, commissioning approaches vary according to the contexts they operate in and need to be tailored to the aims of the process and the environment this takes place in.
  2. There is one way to do commissioning. Following on from the previous point, it probably comes as no surprise that there is one right way to ‘do’ commissioning. Indeed, just a cursory glance at the literature reveals a whole range of different forms of commissioning: joint commissioning, strategic commissioning, outcomes-based commissioning and even “intelligent” commissioning (important for those of you out there planning unintelligent commissioning!) amongst just a few. Commissioning can take place at a number of different levels, aim to achieve different things and draw on a variety of tools to support this process. Commissioning happens in lots of different ways and one size does not fit all.
  3. Commissioning is just a different word for procurement. This myth has emerged because although the definition of commissioning is broad, in practice much of the attention has been around one particular aspect of this approach. Despite the fact that most commissioning cycles incorporate needs analysis, planning, stakeholder engagement, service design, performance measurement and a range of other different sorts of functions, a remarkable amount of the literature and the debate among policy makers and professionals involved in commissioning processes seems to focus on the procurement or purchasing of services. The emphasis has been on the processes of identifying suppliers and buying these under some sort of contracted arrangement. Australia is not alone in this situation, in a study of mental health commissioning in the UK, Miller and Rees observed that although organisations have moved towards a commissioning approach, many typically focused simply on a few components (typically purchasing and contracting) and not enacting a broader notion.  But the important point about this is that where this has happened, commissioning approaches have not been successful and commissioning has been seen as simply another word for procurement and not a broader process of reform.
  4. Commissioning is just about outsourcing.   Given that much of the policy literature tends to focus on processes of procurement, then it is not surprising that there is significant concern with the relationships with third party providers of public services. It is true that in the UK discussions about commissioning emerged around the same time that a number of different policy areas have increasingly shifted from being predominantly delivered by government agencies towards an expansion of involvement from private and community organisations. It is sometimes assumed that a commissioning approach should involve a process of outsourcing as services are externalised from the public sector. The Institute of Public Care argue that the existence of a market of some sort is necessary for commissioning (and I’ll post a more detailed analysis of this case soon). However, markets do not need to be dominated by, or even necessarily involve, private or community organisations. Indeed, much of the early experience of commissioning in the English NHS took place in a quasi-market where purchaser and provider functions had been separated and the majority of providers in the secondary care market remained within the public realm. The key message here is that outsourcing is not an inevitable part of the commissioning process and a decision needs to be taken about the most appropriate provider for the purpose of the services.
  5. Commissioning is a technical exercise. One of the problems with commissioning approaches that I often hear described is a lack of data or an ability to pull together information systems to facilitate commissioning processes. Data is a crucial part of commissioning, of course, but is not the only crucial element and just analysing more data and better will not help overcome these challenges. For example, needs assessment exercises in health care often become debates over epidemiological and demographic data and what receives less attention is debate over what we do value in terms of services and health outcomes, where we should invest and where not.  If at its most basic commissioning is about improving services for a particular population, then it involves difficult decisions about what to focus on (and by implication what not to).  This is not a technical exercise and is highly normative.  To believe all this can be achieved through just a closer analysis of data is unrealistic.
  6. Commissioning is a new thing. If the discussion of the last few myths demonstrate anything, it is that commissioning is broad and crosses a number of reform-related themes and issues that public services have been grappling with for some time. Yet, many of the present discussions around commissioning tend to work from the starting point that this is a new idea and agenda. As the UK Health Committee recognised: ‘Although the term ‘commissioning’ has only been in use since the 1990s, the functions it refers to have been present, in one form or another, since the inception of the NHS. It has always been necessary to determine the health needs of the population and to design services accordingly, with due regard to the available level of resources. The NHS has always aspired to ensure that its services meet high quality standards’. It may therefore be that there is nothing entirely new or specific about the commissioning agenda. Having said this, organisations have not, on the whole, attempted to bring together this full range of themes and activities within the context of one strategic reform programme as is associated with a commissioning approach. The processes and activities associated with commissioning should therefore be seen as an extension of a reform journey, rather than an entirely new path.  A further implication of this is that even if a specific focus on commissioning retreats from policy, these themes are not going to disappear overnight.
  7. Someone else will be more expert in your commissioning approach than you.  If the UK experience demonstrates one thing, it is that commissioning agendas are able to spawn entire support industries. There are a number of different organisations presently position themselves so that they can garner business from the current commissioning push.  But the reality is that no one else can do all of your commissioning approach for you.  Nor are they more expert in your organisational context and history than you are.

If there are other myths or dilemmas around commissioning that you have come across and want me to examine the evidence base around then please get in touch.

Putting clothes on the Emperor: What do we know about high quality commissioning?

A few weeks back I wrote about how some of the conversations around commissioning in Australia tend to have a little bit of a sense of the Emperor’s new clothes about them.  But this scenario isn’t inevitable and here I add a few thoughts about how we might ensure that the Emperor isn’t naked as commissioning is rolled out across the country.

When talking about commissioning it is important to recognise is that there isn’t one model and the approach needs to be relevant to the context that it is being enacted within. This means empowering those who lead commissioning locally to really take on this agenda and understand what is important for that particular area.

The reality is that commissioning often has many different aims and drivers. It is therefore important that you are clear about what your priorities are and what it is that you aim to achieve  through your approach. Inevitably it will be difficult to achieve all of these aspirations at once. Research shows that having a clear sense of which you prioritise and formulating a clear plan in relation to realising these objectives, is far more effective than trying to achieve a whole plethora of aims simultaneously.

How you organise commissioning activities is important and there is no perfect size to operate your commissioning approach over. Again, the form needs to be appropriate to the function.  One important finding that is well illustrated in the recent experience of mental health commissioning in England, is that if you only focus on the procurement aspect of commissioning then you will miss the wider picture. Commissioning is about more than simply procurement practices when done well and yet this has been the main focus of individuals and organisations engaged in commissioning processes.  Just buying things in slightly different ways will not deliver the type of outcomes sought through commissioning approaches and it is important to pay attention to wider activities that support the procurement process.

Commissioning is a data hungry activity and requires a variety of different appropriate forms of data appropriate to the task. While it may seem like an obvious point, the skill set of commissioning staff is absolutely crucial. Yet this has often not been systematically planned for in practice. There are some obvious gaps often cited such as in terms of commercialisation abilities or particular forms of data analysis. There is no doubt that these are crucial, but it is often the case that there are also a broader set of skills and abilities that are necessary to high quality commissioning approaches.

One area that this lack of skill base is particularly apparent, is in respect to engagement. Although not all would agree with me on this, I would go as far as to suggest that engagement is possibly the most important activity in commissioning and one that has all too often been neglected.  Without engagement across a range of different stakeholder groups it can be difficult to identify just what the role and aims of commissioning are or should be, what appropriate data is required and what modes of working are most effective. Without engagement then commissioners can lack the legitimacy to act and this is of particular importance when it comes to making significant and sustained change.

In England, many commissioners found that having not undergone a careful process of community engagement they came across significant opposition when seeking to make changes to services. This was most apparent in terms of hospital services where attempts to move beds from hospitals or close down ineffective emergency or maternity services were met with large opposition from the broader community.  In many cases the public were unsure of who the commissioners were, although they had long standing links to institutions like hospitals. If commissioners are to be effective it is important that they find ways to explain to the general public who they are and why their function is important.

What is clear is that the evidence base for commissioning is not as clear-cut as we might expect given the enthusiasm for this concept. But are we surprised if one approach is unable to solve a series of complex and pernicious challenges that have long been central to public services?  How likely is it that one approach could ever resolve all of these issues in the short term? The likelihood is that we are setting up any approach for failure if we think that it will quickly and easily overcome these challenges.

One of the things that I often hear when speaking with public servants is the phrase – we know what we need to do, we don’t know how to do it’. What people mean by this is that the problems have been well defined and reiterated multiple times. The challenge is knowing how to deliver against these aims.  Commissioning can be, I would argue, one helpful way of starting to address these in the sense that it gives a framework and a vocabulary for reform in terms of the stewardship role of public services systems. This has arguably been lacking in many service systems around the world, which tend towards being provider-centred.

There is also the advantage at present that commissioning has a high degree of political salience, meaning there is at least central support for now. The irony here is that Australia’s commissioning enthusiasm is on the rise precisely at a time when the agenda is losing support in England.

However, if we are to enable commissioning to be more than a passing fad then we need to put some meat on the concept. As I have already argued, one of the key ways to do this is through engagement, having a clear sense of what consumers desire in terms of public services and what the important features of the specific contexts within the commissioning locale are. It also involves all of playing a role in critically analysing proposed changes and not simply going along with these for fear of looking stupid. Providers need to take a responsibility for these processes as much as commissioners and cannot simply note that they knew the Emperor’s clothes were missing all along but didn’t feel the need to point this out.

 

 

Explaining Primary Health Networks and commissioning

As Primary Health Networks approach their first anniversary a number of people have asked what kind of progress they have made to date and what’s to come over the next 12 months or so as they roll out their first commissioning strategies.

The Health Services Research Association of Australia and New Zealand recently hosted a webinar ably chaired by Associate Professor Suzanne Robinson (Curtin University, WA) and comprising a panel of me, Learne Durrington (Chief Executive, WA Primary Health Alliance) and Jason Trethowan (Chief Executive Officer, Western Victoria Primary Health Network Ltd.) to review the progress of PHNs to date.

The background to the webinar can be found below and if you want to view the discussion then you can find this here (due to some odd technical issue I am missing for the first 10 minutes or so!).

Health systems are challenged by pressures of increased demand and rising costs. The rise in complex chronic conditions means that the current system design that stems from an era when communicable disease was more prevalent than chronic is struggling to meet the changing health needs of the population. As governments look to ways to reform health systems we have seen an interest in the role of commissioning as a mechanism through which to reform many different aspects of public services. Primary Health Networks (PHNs) have been charged with commissioning primary care services in Australia. The essence of commissioning is to take a stewardship role with a focus on providing vision and direction for the health system, collecting and using intelligence, and exerting influence – through regulation and other means.

As PHNs reach their first birthday it’s timely to take stock of how commissioning is developing both nationally and internationally. The webinar incorporated research, policy and practice perspectives on the development and implementation of commissioning in Australia.

The panel session focused on broad areas relating to the following:

  • The current understanding of commissioning, and what it should achieve in PHN  localities;
  • The challenges and opportunities of the commissioning process in Australia;
  • Concepts and elements of successful commissioning;
  • How are PHN commissioners working with wider stakeholder groups?

Commissioning: Background and evidence reviews

There are an increasing number of reviews that describe what commissioning is and review the evidence pertaining to this concept.  Some of these are written from particular vantage points (e.g. community sector, health or commercial sector view) or focus on particular types of commissioning approaches (e.g. integrated, strategic, intelligent).  Here I have summarised some of those which I think are most helpful in providing a good background and sense of the evidence around commissioning in a general sense.

I’ve done a few of these reviews myself in recent years.  The most recent of these was published by the Melbourne School of Government and this sought to extract lessons from the evidence base that are of relevance to the Australian context.  This review examines what commissioning is and what is important in developing a commissioning approach.  This built on previous work I had been involved in, such as this review of different commissioning models that was done for the National Audit Office in the UK in 2012.  The report focused particularly about the role that the third sector plays in these models (and was published by the Third Sector Research Centre).

The UK Cabinet Office hosts a commissioning academy and this sets out a short and very straightforward introduction to this concept.  It was published a few years back but provides a helpful overview before starting to delve into the detail.  For those with an interest in children’s services, this document can be a helpful companion, containing some case studies to exemplify these ideas in practice.  The Office for Public Management sets out a literature review of multi-level commissioning which provides definitions of this concept.

In 2015, the Irish Government undertook a ‘rapid review‘ into the evidence relating to commissioning in human, social and community services.  This is a pretty helpful introduction to commissioning in Ireland, what commissioning is, the different approaches and models and the benefits, risks, impact and cost of commissioning.  The report finishes with a series of key messages such as the need for a coherent policy rationale, the need for a clear definition of commissioning and that the outcomes of commissioning are hard to measure.

Back in Australia again, the Sax Institute published a rapid review of the evidence for the New South Wales Ministry of Health in 2015.  Again this report cycles through issues such as what is commissioning, what impact it has and the requirements for effective commissioning.  This is focused on the evidence with particular relevance to an Australian primary care context and a focus on supporting chronic disease management.  It finishes with  a series of tables that set out features of the Australian primary care context and the potential impacts and implications for commissioning, which are helpful in thinking through the future operation of this agenda.

There are a range of other reviews around but many of these don’t go beyond the sort of evidence and lessons set out here.  Next time around I’ll put some documents and examples up that deal with commissioning for outcomes.

The NDIS, markets and self-regulation: If we build it will they come?

I recently was invited to speak at an event hosted by the Victorian Council of Social Services on the topic of markets and human services.  I spoke about the need for more active market management in disability services and was asked to write up the talk for Power to Persuade’s current series on Social Service Futures.   The link to the piece can be found here.

The National Disability Insurance Scheme (NDIS) has been described as a once-in-a-generation reform that will benefit all Australians. The A$22 billion scheme is in the process of being progressively rolled out across most of the country.  
For many, the NDIS is an incredibly welcome scheme. For too long, Australian disability services have been underfunded, inflexible and built around the needs of the system rather than those of the individual. An OECD study found that Australians ranked lowest in terms of quality of life for disabled people. Other data sources echo these findings, showing that Australians with disabilities have low levels of income and labour force participation. People with disabilities experience social exclusion and significant levels of violence.  Given these trends something needs to be done to improve disability services and the outcomes and life chances of people with disabilities.Choice and control are at the heart of the NDIS, reflecting a belief in consumer-led reform supported by market forces.  People with disabilities have welcomed this in a context where services have traditionally been underfunded with little flexibility. The existing one-size-fits-all approach was built more around the needs of organisations and the system than people with disability.  This follows a broader international trend towards consumer-directed support, in the expectation that this should produce better and more relevant services for consumers through mechanisms of choice and control.   Others have also argued that these mechanisms are a more efficient way to spend scare resources.
The NDIS is in many ways illustrative of the sorts of changes that last year’s Harper review spoke of.  This spoke about the need to put consumer choice at the heart of government service delivery, through policies that will encourage diverse and competitive markets populated by innovative and responsive providers.  It argued that consumers are best placed to make decisions about their needs and the role of governments should be to ensure equitable access, minimum quality standards and the availability of relevant information to help consumers exercise choice.  Harper argued strongly for the separation of purchasing and providing functions as a way of ridding governments of conflicts of interest and to allow them to stick to their core business.  The role of government therefore is strategic – setting out the overall direction and then performance managing against this.  It is largely expected that the impending Productivity Commission report into human services will echo a number of these key themes.Of course, the use of markets in public services is not a new thing.  Indeed many in the community sector are presently grappling with the implications of moving from grant-based relationships to contracts.   We have seen reforms across a number of sectors that have sought to harness the strengths of markets but these have typically not had the impact that was desired.  We need only look at recent experiences around employment services, the VET sector or early childhood education to see that these have not always been a success.  These challenges are not confined to the shores of Australia and have also been experienced in other countries.  There are various reasons for this, but one of the key factors is that markets do not simply self-regulate.

The argument goes that separating the functions of purchasing and provision and giving more control to consumers will generate competition between providers will ensure that providers are responsive to consumers.  Providers will be incentivized to become more efficient and more innovative, finding new and different ways to deliver services.  Those who do not deliver what people want will receive no business and will disappear.  The market will self-regulate, with consumers getting what they want.

However, in order for this system to work there are a number of principles that must be in place.  These relate to the ability of consumers to be able to act with a degree of sovereignty to achieve desired outcomes, that they can do so rationally (meaning that there can be a judgment on the basis of sound evidence), there are few barriers to entry and all partners have a reasonable degree of intelligence and information about services.  Yet, as we start to apply these ideas to a public service context we find that they do not hold up.

Many of the kinds of factors that need to be in place to drive market forces are not present.  For example, consumers do not always use their own resources and can have limited sovereignty.  While it is nice to think about individuals having choice over a variety of services, people may not have full information over these, or a sense of what they should want or expect in terms of services.  Human services are often mediated by professionals who have significant influence over what people seek to choose.  We also need to remember that using human services is not always an option that is chosen for some but is chosen for them (e.g. child protection, some mental health services).  There can be significant informational asymmetries, substantial entry and exit costs and the ramifications of provider failure can be extreme.  We know that some areas will struggle to attract providers or the ‘right’ sorts of providers at least.  It is unlikely that large scale and widespread market failure will be allowed in a human service context in the way that we would see in a text book version of a market.

One the arguments that is often made in support of market-based reform is that government has failed in terms of provision in human services and should therefore leave it to the market to offer what government cannot.  But this seems to negate the fact that there is a far more active role that needs to be played by government in a context of market-based reform.

Markets need to be managed to ensure that there are sufficient providers, providing the kinds of services that consumers want and need and at the right price.  Recent evidence from the UK suggests that some with individual funding arrangements have found that they cannot afford the same sorts of packages of care that were previously available to them as care funding has been reduced in the drive to austerity.

The important point here is that a reliance on the existence of markets alone will not solve the challenges of the system we are currently faced with.  Although the logic of market-based-consumer-led forces driving changing is a compelling narrative, we would do well to remember that it takes a lot of effort to develop effective markets.  It is not, as Kevin Costner spoke about in the movie Field of Dreams, a case of ‘we will build it and they will come”.

If we simply think that by having a market and giving consumers some amount of control then significant reform will result then we are likely to be sorely disappointed.  If we are to see real consumer-driven reform we will need to see significant steps forward in terms of the ability of governments to operate a market stewardship perspective – which is also sometimes knows as a commissioning approach.  This is about more than simply contract management and involves significant engagement with a range of different stakeholders.

In doing this there are no magic bullets and it takes a lot of ongoing hard work in order to ensure that the appropriate sorts of systems and processes are in place for that area – and this will look different around the country depending on the particular characteristics of that locale.  Many of the lessons for government relate to providing clarity and transparency over systems and processes and constantly collecting intelligence to ensure that nothing significant has changed, that incentives are having the desire effect and systems are operating as expected.  For providers it will be more important than ever to be in touch with the mission and values of that organization and how these play out in business activities.  Workforce capacity and capability will need careful assessment, as will ways of working with consumers.  In navigating this kind of difficult terrain no one group or individual will have the answers.

 

Commissioning resources

Around the country many people are currently grappling to come to terms with the concept of commissioning, how to understand this and in some cases how to operationalise a commissioning approach.  As I’ve written about before, one of the challenges with the commissioning literature is that it mostly comes from a different national setting – in this case England.  This doesn’t mean that there aren’t important lessons to be learned from this evidence but we need to be careful when trying to learn across jurisdictions.

There is a challenge in learning from England if you are not familiar with the systems, processes and cultures of public services then it can be difficult to ‘land’ some of the concepts.  If you aren’t familiar with the language and the various different actors then it can make it difficult to extract useful ideas to help drive commissioning in a rather different context.

There is a further problem for learning from other national settings too.  Where we look at evidence from a system we are familiar with it is pretty easy to spot where things are truly helpful examples and solid lessons and where things don’t quite add up.  There has been a lot written about commissioning over the past decade or so and there is a significant industry in the UK and this is growing in other countries.  This industry purports to variously support, develop, diagnose and facilitate high performing commissioning.  Yet, there isn’t a very strong or consistent evidence base relating to this topic and it is difficult to say with certainty which approaches do definitively support effective commissioning.  If you aren’t familiar with the system and the different issues at play then if can be a challenge to decide which sources to trust.

I have been collecting various resources and case studies that I think are helpful in informing those seeking to better understand or develop a commissioning approach.  Over the next few weeks I will post these into the commissioning resources section of this blog.  Wherever possible I have drawn on free and publicly available sources so that these are easy to source without having to be subscribed to academic journals.

If there is anything I have missed or you would like to see added to these pages then drop me a line.