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Thursday 03 March 2016

Public value: caring for our communities

By Alan Turrell

Healthcare management should be about more than meeting targets and cutting costs. Managers need to deliver services that strengthen their communities.


All NHS managers know that their number one priority is providing quality clinical services that represent value for money to the taxpayer. But commissioners and providers of NHS-funded services are increasingly recognising that, particularly in this age of austerity, they have a bigger role to play.

As well as delivering top quality services, healthcare providers – whether public, private or from the third sector – can make a positive contribution to the social, political, economic and environmental fabric of their communities. In his hugely influential 1997 book Creating Public Value: Strategic Management in Government, Harvard professor Mark Moore urged public sector managers to see themselves as “explorers”, “moral leaders” and “innovators” who “seek to discover, define, and produce public value”. 

Did you know that this approach is actually a legal obligation for all commissioners of public services, including healthcare? The Public Services (Social Value) Act 2012 requires commissioners to consider “how what is being proposed might improve the economic, social and environmental wellbeing of the relevant area”, and “how, in conducting the process of procurement, it might act with a view to securing that improvement”.

Building public value into procurement

It may have been on a slow-burn in the NHS, but commissioners and providers alike are now adopting a public value approach. The 2012 Act recognised that procurement was an important vehicle. As part of the tender evaluation process, commissioners are starting require providers to show what they will do to deliver broader social benefits. In turn, providers are increasingly aware that they can make a real contribution to their local communities beyond the delivery of excellent services. 

One recent tender exercise in which we were involved revealed that private and public sector providers already had, or had plans for, a whole range of social initiatives, including: 
  • paying the living wage 
  • creating local jobs
  • apprenticeships and graduate training schemes 
  • supporting national and local charities through salary sacrifice schemes or staff volunteer days
  • buying more goods and services locally
  • investing a proportion of their surplus or profit in the local community
  • carbon reduction schemes, including encouraging staff to use public transport or to cycle to work 

But promises are not enough. As part of contract management, commissioners need to ensure that providers are actually doing what they said they would; and, just as importantly, they should try to measure the impact. This is the most challenging part – measuring the impact of such schemes in both quantitative and qualitative terms is notoriously difficult, although some progress has been made with the development of ‘social return on investment’ metrics. 

Public value accounts

At this stage, one simple approach is to require providers to record the progress and contribution they have made. At Walsall CCG, we will be asking all providers, whether or not they won their contracts through formal procurement procedures, to submit an annual Public Value Account alongside their Quality Account. As well as setting out the specific social, economic and environmental initiatives they have undertaken, we ask them to explain how the organisation’s values are compatible with our public value approach and any relevant policies they have adopted. 

Commitments to delivering public value need to be embedded into the organisation’s culture and strategy in order to be effective. At Walsall CCG, “delivering public value” has been adopted as one of our core values, and one of our four strategic objectives is “securing best value for the Walsall pound and delivering public value”. We have briefed all staff on our approach, and “the degree to which a service or treatment will deliver broader social, economic, and environment impact on the community” is one of the criteria in both the prioritisation process and our ethical commissioning framework. 

Setting an example

Of course, imposing these requirements on providers must go hand-in-hand with commissioning organisations setting an example by adopting such polices for themselves and their own staff. The range of initiatives is similar: apprenticeship schemes, using local suppliers, incentivising staff to do community and voluntary work, and adopting energy saving schemes are all legitimate ways of showing that the organisation is taking this seriously.

As we develop our public value approach, the next step could be for NHS organisations to take a lead from some local authorities and adopt more “hard and fast” social and economic policies. These might include only contracting with companies that pay the living wage, not allowing zero hours contracts or insisting that a percentage of profits be invested in local charities. Many NHS organisations might shy away from such policies, fearing that they are too politically controversial. But if they do put these issues on the agenda, they will be taking a step in the right direction.

Value beyond price

A clear political benefit of a public value approach is that it helps to promote a public service ethos among private sector providers. By adopting a broader definition of value beyond price, it gives some comfort to people who fear that the NHS is being “privatised” by the increasing use of private sector providers. A social value approach also resonates with the philosophy of the third sector and can be a way of bringing charities and social enterprises into the mainstream of healthcare provision. At Walsall CCG, for example, the first Public Value Account submitted by the provider of our in-patient hospice facility, St Giles Hospice, explained how the extensive use of voluntary staff was promoting co-production, how the opening of charity shops was creating local employment, and how numerous fundraising events had helped the charity to engage with the community.

In the current climate much emphasis will inevitably be placed on delivering more for less through new models of care. But in the long term, a public value approach will help to create more socially engaged, economically strong and environmentally friendly communities which, in turn, could have a beneficial impact on health and wellbeing. In time, this could significantly reduce the demand on over-stretched NHS resources.

By adopting public value strategy, NHS managers will broaden their sphere of influence, and may even win the respect of their local populations for having the vision to recognise that healthcare management is about more than providing good quality services — it’s also about promoting healthy, prosperous and sustainable communities. 

Alan Turrell is an MiP link member and programme director for contracting, procurement and QIPP at Walsall Clinical Commissioning Group.

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