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You can find the current article at its original source at https://www.theguardian.com/healthcare-network/2018/may/18/capita-nhs-primary-care-support-services
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| Version 1 | Version 2 |
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| Capita's NHS deal was founded on guesswork. It was doomed to fail | Capita's NHS deal was founded on guesswork. It was doomed to fail |
| (14 days later) | |
| The massive problems that have beset NHS England’s primary care support services deal with Capita, now dissected by the National Audit Office, are a textbook example of how to set up an outsourcing contract to fail. Pretty much everything that could have gone wrong went wrong, with both parties grossly underestimating the size and complexity of the task and the risks involved. | The massive problems that have beset NHS England’s primary care support services deal with Capita, now dissected by the National Audit Office, are a textbook example of how to set up an outsourcing contract to fail. Pretty much everything that could have gone wrong went wrong, with both parties grossly underestimating the size and complexity of the task and the risks involved. |
| The £330m, seven-year contract delivers vital support services to around 39,000 people working in primary care, including GPs, opticians and pharmacists. Each year it includes delivering more than 240,000 orders for supplies, sending out more than nine million invitations for cervical screenings, processing around £9bn of payments to GPs and pharmacists – and moving six million patient records between GP practices. It is the engine powering primary care. | The £330m, seven-year contract delivers vital support services to around 39,000 people working in primary care, including GPs, opticians and pharmacists. Each year it includes delivering more than 240,000 orders for supplies, sending out more than nine million invitations for cervical screenings, processing around £9bn of payments to GPs and pharmacists – and moving six million patient records between GP practices. It is the engine powering primary care. |
| Capita put NHS England patients at risk, says watchdog | |
| When NHS England inherited the services from primary care trusts in 2013 they were a mess, run out of 47 local offices with no common service standards or processes, an archaic IT system running 82 databases and many paper-based records. | When NHS England inherited the services from primary care trusts in 2013 they were a mess, run out of 47 local offices with no common service standards or processes, an archaic IT system running 82 databases and many paper-based records. |
| Meanwhile the government’s first mandate to NHS England required the organisation to deliver deep cuts in administrative costs to focus resources on the frontline – as if the two were separate. NHS England decided to cut the cost of primary care support by 40% by outsourcing to an organisation that could transform it. | Meanwhile the government’s first mandate to NHS England required the organisation to deliver deep cuts in administrative costs to focus resources on the frontline – as if the two were separate. NHS England decided to cut the cost of primary care support by 40% by outsourcing to an organisation that could transform it. |
| The Capita deal was a classic outsourcing contract. The winning bidder was expected to make massive losses in the first two years – £64m – in return for later riches. It was not scheduled to break even until year six. | The Capita deal was a classic outsourcing contract. The winning bidder was expected to make massive losses in the first two years – £64m – in return for later riches. It was not scheduled to break even until year six. |
| Problems began before the contract was let, because NHS England knew little about the shape and scale of services being provided. As the National Audit Office has said repeatedly over the years, if the public sector tries to let a contract without knowing what it wants or what it will cost, it will end badly. | Problems began before the contract was let, because NHS England knew little about the shape and scale of services being provided. As the National Audit Office has said repeatedly over the years, if the public sector tries to let a contract without knowing what it wants or what it will cost, it will end badly. |
| Capita needed to cut costs quickly, so by the end of 2016 it had shut nearly all the local offices and halved the staff | Capita needed to cut costs quickly, so by the end of 2016 it had shut nearly all the local offices and halved the staff |
| Capita got to work, setting up a centralised customer support centre, opening an online portal, introducing new payment processing systems and trialling a new way of moving patient medical records. The folly of relying on something approaching guesswork to estimate the scale of likely demand now became apparent. The orders flooding into the online portal far exceeded the vehicles available to make deliveries, stock shortages in the NHS supply chain created further delays, and the customer support centre could not cope with the ensuing flood of complaints. | Capita got to work, setting up a centralised customer support centre, opening an online portal, introducing new payment processing systems and trialling a new way of moving patient medical records. The folly of relying on something approaching guesswork to estimate the scale of likely demand now became apparent. The orders flooding into the online portal far exceeded the vehicles available to make deliveries, stock shortages in the NHS supply chain created further delays, and the customer support centre could not cope with the ensuing flood of complaints. |
| In April 2016 a new system for moving patient records was finally introduced, which involved them all being routed via Capita’s Darlington depot. Yet more calls to the customer service centre followed. | In April 2016 a new system for moving patient records was finally introduced, which involved them all being routed via Capita’s Darlington depot. Yet more calls to the customer service centre followed. |
| With a big upfront loss, Capita had a massive incentive to cut costs quickly, so by the end of 2016 it had shut virtually all the local offices it had inherited and halved the staff. Vital local knowledge was lost. | With a big upfront loss, Capita had a massive incentive to cut costs quickly, so by the end of 2016 it had shut virtually all the local offices it had inherited and halved the staff. Vital local knowledge was lost. |
| Sticking closely to the script for an outsourcing contract failure, everyone started arguing rather than focusing on fixing the problem. Capita maintained that since there was no reliable performance data, NHS England could not prove it was failing. NHS England countered that Capita could not prove it was succeeding. Default notices were served, rectification plans were written, senior managers moved on, additional staff and vehicles were mobilised. | Sticking closely to the script for an outsourcing contract failure, everyone started arguing rather than focusing on fixing the problem. Capita maintained that since there was no reliable performance data, NHS England could not prove it was failing. NHS England countered that Capita could not prove it was succeeding. Default notices were served, rectification plans were written, senior managers moved on, additional staff and vehicles were mobilised. |
| More cash will force the NHS to address tougher questions than money | Richard Vize | |
| Capita lost £125m in the first two years – double the target. The two parties are still arguing over the contract. | Capita lost £125m in the first two years – double the target. The two parties are still arguing over the contract. |
| The biggest unknown is whether there has been serious harm to patients. No specific cases have been identified, but it seems hard to believe that no one has suffered. | The biggest unknown is whether there has been serious harm to patients. No specific cases have been identified, but it seems hard to believe that no one has suffered. |
| NHS England was too focused on achieving the savings, and failed to assess whether Capita had the skills to deliver such ambitious transformation at such a low cost. | NHS England was too focused on achieving the savings, and failed to assess whether Capita had the skills to deliver such ambitious transformation at such a low cost. |
| With careful planning and good data you might just about be able to do any two of centralise, outsource, slash costs and improve services. Trying to do all four simultaneously was never going to work. | With careful planning and good data you might just about be able to do any two of centralise, outsource, slash costs and improve services. Trying to do all four simultaneously was never going to work. |
| Richard Vize is a public policy commentator and analyst | Richard Vize is a public policy commentator and analyst |
| Join the Healthcare Professionals Network to read more pieces like this. And follow us on Twitter (@GdnHealthcare) to keep up with the latest healthcare news and views | Join the Healthcare Professionals Network to read more pieces like this. And follow us on Twitter (@GdnHealthcare) to keep up with the latest healthcare news and views |
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