House of Commons Library

NHS Commissioning of Specialised Services

Published Friday, June 9, 2017

This Commons Library briefing paper looks at the commissioning of specialised services by the NHS in England, for patients with rare or complex conditions. How the commissioning process works is set out in further detail, as well as analysis of the financial management and transparency of specialised commissioning, and recent reforms introduced by NICE and NHS England, including reforms to the Cancer Drugs Fund.

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What are specialised services?

Specialised services are those provided in relatively few hospitals, accessed by comparatively small numbers of patients. These patients usually have rare conditions or need specialised teams providing coordinated care. Services cover a range of areas including transplants, radiotherapy, secure mental health services, genetic services, renal dialysis and gender identity disorder services.

Most healthcare in England is commissioned locally by Clinical Commissioning Groups. However, due to the highly specialised nature of these services, the relatively small number of hospitals providing some treatments, and the small number of patients accessing these services, they are coordinated and commissioned nationally by NHS England.

How much is spent on specialised commissioning?

The specialised commissioning budget for 2017/18 is £16.4 billion, 14.9% of the total NHS budget, and is set to rise to 15.8% by 2020/21 to reflect the increasing use of new treatments for previously untreatable conditions.

In its 2016 report, the National Audit Office (NAO) highlighted problems that NHS England had experienced in living within its budget. Some of the reasons for this included an underestimation of the budget required to effectively commission services when NHS England took over commissioning responsibility in 2013, as well as a lack of effective data on how services are commissioned on a regional basis, and problems with effective negotiation of prices with pharmaceutical companies.

This briefing paper looks in details at some of the issues highlighted by the NAO, and recent changes to the commissioning process that allow for a greater degree of cost control.

How are services commissioned?

Under the NHS Constitution, NHS England is required to routinely commission any treatment approved by the National Institute for Health and Care Excellence (NICE). There is a specific NICE appraisal process for highly specialised technologies. Following reforms introduced in April 2017, any clinically effective specialised treatment with a cost of less than £300,000 per additional QALY (quality-adjusted life year) will automatically be routinely commissioned.

For treatments not assessed by NICE, NHS England has an annual commissioning process, where new treatments and technologies are ranked according to clinical and cost effectiveness. Treatments are routinely commissioned based on this ranking and the remaining specialised commissioning budget for the year.

Some organisations, including the NAO, have criticised the transparency of the annual prioritisation process. Although NHS England does not publish the minutes of meetings by the groups responsible for commissioning decisions, it has in recent years increased the amount of information published on the process.

Some recent controversial commissioning decisions, such as those on HIV Pre-Exposure Prophylaxis (PrEP) and on second stem cell transplants for conditions including a number of rare blood cancers, are explored further in this briefing.

Is the Cancer Drugs Fund a specialised service?

The Cancer Drugs Fund (CDF) is Government funding to pay for cancer treatments that have plausible potential for routine commissioning, but where there is some uncertainty about their clinical effectiveness.

NHS England includes the CDF when reporting its overall spend for specialised services. However, the fund is managed separately from other specialised services.

Following a number of concerns about the effectivness of the CDF, and of its ability to stay within its budget, the fund underwent major reforms in July 2016.

Under the new framework, CDF funding is only used to accelerate patient access to drugs approved by NICE, or to fund a period of managed access for drugs that NICE have assessed as worthy of further study. The clinical data from the managed access period is used to inform NICE's final commissioning decision on any treatment.

How are specialised services commissioned in Scotland, Wales and Northern Ireland?

As health is a devolved competence, England, Wales, Scotland and Northern Ireland all have different structures for commissioning specialised services.

Some UK-wide cooperation does exist for specialised commissioning, particularly through the Rare Diseases Advisory Group (RDAG), which makes recommendations to the NHS in each nation on how specialised services should be commissioned. Each national NHS also reports to RDAG on its implementation of the 2013 UK Strategy for Rare Diseases.

Due to the highly specialised nature of the care provided for a number of specialised services, there are often only a few locations which can provide this. As a result, Scotland, Wales and Northern Ireland all commission a significant number of specialised services in England.

Commons Briefing papers CBP-7970

Author: Alex Bate

Topic: Health services

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