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Co-commissioning: ripe for conflicts of interest
By Edmund Forey
When the Health and Social Care Act 2012 came into being, it attempted to put in place structural safeguards against conflicts of interest in health commissioning: if GPs were to commission secondary care services, then at least those GPs couldn’t commission themselves to deliver primary care. So while all GPs are members of CCGs and thus have, individually, greater or lesser responsibility for commissioning secondary care, NHS England was given the job of dealing with primary care: no conflicts of interest – nothing to see here, you can all move on….
Of course, health commissioning, and the distinction in practice between primary and secondary care, doesn’t fall into such neat boxes in practice, quite apart from the initiative towards the co-commissioning of primary care between NHS England and CCGs. This puts many CCG boards and general practitioners in the difficult position of, on the one hand, having to try to integrate services that need to involve primary care to be effective, and on the other, demonstrating awareness of (and avoiding!) the conflicts of interest that could inevitably arise.
In that exercise, CCGs are subject to various distinct legislative requirements, and are also the addressees of substantial guidance. There is much useful detail in that guidance, but before looking at these sources, it is worth putting the issue in broader context: what is the problem, what are the consequences, and what sort of things would alleviate it? If we are comfortable with those general principles, then the detailed solution to a particular practical circumstance may suggest itself.
Firstly, what is a conflict of interest?
CCG members must develop an intuitive ‘feel’ for when a situation might involve a conflict: an unrecognised conflict cannot be satisfactorily addressed. We could define a conflict of interest as a situation where an individual (we’ll call them the ‘decision maker’)
- is required to act independently and impartially in a particular role (the primary role)
- has links to third parties or external circumstances that would be affected by the outcome of the decision taken in the primary role
- will in some way benefit personally from the outcome going one way or another because of those links, most obviously in financial ways but sometimes through less direct means
In other words, there are incentives and pressures acting on the decision maker that are not inherent to the primary (decision-making) role, but result from particular links between the decision maker and external circumstances. We can describe a conflict of interest as actual – where the decision maker is actually being pulled away from acting impartially – or perceived – where the decision maker’s judgment may not have been affected, but the existence of those links undermines confidence in the impartiality of the outcome.
Here are a couple of other definitions from outside healthcare:
“A conflict of interest is a set of circumstances that creates a risk that an individual’s ability to apply judgement or act in one role is, or could be, impaired or influenced by a secondary interest. It can occur in any situation where an individual or organisation (private or government) can exploit a professional or official role for personal or other benefit” (National Audit Office: Cross Government Report – Conflicts of Interest)
“A “conflict of interest” involves a conflict between the public duty and private interests of a public official, in which the public official has private-capacity interests which could improperly influence the performance of their official duties and responsibilities.”(OECD: Managing Conflict of Interest in the Public Service)
Some hypothetical examples:
- A CCG is running a procurement for community services. A member of the CCG is also a shareholder in a referral management company that is a member of one bidding consortium.
o Primary role – impartial procurement award decision
o link – shareholding with potential provider
o benefit – financial
- A CCG is developing commissioning intentions. One of the team is a member of a political party that has been vocal in how the health economy should be structured.
o Primary role – impartial fulfilment of CCG statutory objectives
o Link – political party
o Benefit – achievement of political aims and loyalty to political affiliation
- A CCG is considering whether to terminate a provider contract for poor performance. The daughter of one of the CCG contracts team works at the provider
o Primary role: optimum contracting outcomes and value for money
o Link: family
o Benefit: indirect financial and career benefit for family member
- A CCG is developing a commissioning strategy that could lead to the construction of an urgent care centre. A member of the CCG lives close to the site where the UCC would be developed; the alternative would be on the other side of town.
o Primary role: impartial fulfilment of CCG statutory objectives
o Link: location of family house
o Benefit: convenient family access to out of hours care
- A specialist at the local trust has been co-opted onto a CCG committee deciding commissioning intentions, developing a model for local integrated care and designing the specification that will be used to procure an integrated service. The specification matches what currently happens at the trust.
o Primary role: impartial fulfilment of CCG statutory objectives (even though the person isn’t a CCG member)
o Link: employee at provider
o Benefit: Security of provider
- A CCG is reviewing its prior approvals policies. The parent of a CCG member has a condition that is currently just over the threshold for treatment … (you get the idea!)
The most obvious link, and most typical in practice, concerns situations where the roles of CCG members in connection with the CCG as purchaser of health services could conflict with the interests of individual members in provider organisations – whether as owners, employees or consultants.
What are the consequences?
Decisions that have been affected by a decision-maker’s conflict of interest will not be legally robust. They are likely to be subject to challenge under procurement law, through judicial review, and through sector-specific regulation and codes. Needless to say, dealing with challenges is costly and consumes much management time. There may also be personal sanctions where a decision maker has acted improperly.
More broadly, inadequate management of conflicts of interest will inevitably undermine the perceived integrity of public decisions and public confidence in those decisions and in the CCG more generally, and – if sustained – could reduce the pool of providers willing to participate in a local health economy.
What is the mitigation?
Broadly, four things are required:
- To recognise potential conflicts in advance
- To break the link between the decision-making role and the third party or external circumstance
- In situations where the link cannot be completely broken, to introduce independent checks and controls on the decision
- To document the process adequately
Recognition: this is the classic register of personal interests, which is common to CCGs, members of parliament, judiciary, and other public decision makers: there must be a process for CCG members to register relevant outside interests and to keep it updated as particular projects develop or circumstances change. The importance of this initial step cannot be overemphasised: it would be impossible to justify a decision that had been taken by a person whose relevant outside interest was not declared and known to the CCG.
Breaking the link: At its simplest, this involves removing the conflicted ‘decision-maker’ from the process of the decision. There are nuances around what stage this should occur at, and how to deal with small teams and lack of expertise. But essentially, if the decision is taken by persons who are not subject to a conflict, and the person who would be subject to the conflict does not participate in the decision, there is no conflict of interest.
Mitigation: where for some reason it has not been possible to remove the conflicted individual entirely from a process, an independent scrutiny or validation of the decision from an outside party may be useful in assuring that the decision has not been swayed by any links the individual in question may have.
Documentation: It is sensible to document how potential conflicts have been dealt with, and (where the solution was less than complete separation of the conflicted individual and the entire decision-making process) what mitigations were adopted and why they were considered to be adequate.
So much for the general principles. These apply to all public functions by virtue of public law principles (and procurement legislation where that applies). Let’s turn to the specific requirements on CCGs, and co-commissioning in particular.
CCGs are required to maintain a register of interests that covers the private interests of CCG members, members of the governing body, committee members and employees. Note: this isn’t just the board, it’s everybody (including non-members that sit on CCG committees or sub-committees). That register must be published or available on request. The CCG must ensure that these persons declare conflicts as soon as they become aware of them, and at any rate no longer than 28 days from that point. This section also requires CCGs to have processes to manage actual and potential conflicts of interest “in such a way as to ensure that they do not, and do not appear to, affect the integrity of the group's decision-making processes”. As to what those arrangements should be, this section then requires NHS England to publish guidance on the topic which CCGs must ‘have regard to’.
In the context of procurement decisions within the NHS-specific procurement regime, there is a further prohibition on commissioners from awarding commissioning contracts “where conflicts, or potential conflicts, between the interests involved in commissioning such services and the interests involved in providing them affect, or appear to affect, the integrity of the award of that contract”. There is an additional obligation to publish procurement decisions, including how any potential conflicts were dealt with. Although this overlaps the core CCG statutory duty above, it gives a direct route of challenge to a procurement outcome, which Monitor can investigate.
This legislation does not really go further than the general principles under which any public body must operate, but it does highlight that the key area for conflict is between the interests of a CCG decision maker as commissioner and his or her involvement on the provider side.
NHS England has duly published and updated its statutory guidance on conflicts of interest. It may seem trite to suggest that commissioners could do worse than read it, but since CCGs must already by law ‘have regard’ to this guidance, familiarity with the guidance is a required starting point.
The guidance contains a useful discussion of what might amount to a conflict (including, for example, “conflicts of loyalty”) and a useful steer on general principles and actions to avoid conflicts. There is the interesting acknowledgment that part of the mindset should be “Assuming that individuals will seek to act ethically and professionally, but may not always be sensitive to all conflicts of interest.” – the very fact that practitioners have an ethical and professional dedication to patient care may cause the governance need to be overlooked.
The guidance then sets out detailed advice on the practicalities of maintaining the register of interests – who should declare what, when. On the issue of decision making where there are conflicted individuals, the guidance suggests that those individuals should be excluded from the relevant parts of meetings, or “join in the discussion but not participate in the decision-making itself (i.e., not have a vote)”. That latter option should be treated with caution, because where an individual with a material interest in the outcome of a decision has participated in a discussion (and perhaps been able to formulate emerging policy and shape the thinking of the committee), it may be difficult to show that there was no influence over the eventual decision.
So the basic position should be to exclude potentially conflicted individuals from the decision-making process. Where that would result in a non-quorate committee, the guidance suggests:
- Referring decisions that would not otherwise be made by the governing body to the governing body and excluding all GPs (and any others potentially conflicted), meaning that the decision is taken by the non-GP governing body members (which would include lay and executive, registered nurse and seconday care members) – in other words, using the governing body (less conflicted individuals) as a substitute decision-maker
- For decisions already belonging to the governing body, co-opting persons from a Health and Wellbeing Board or another CCG (assuming the constitution allows this), or having such bodies review the proposal as a form of independent scrutiny.
The guidance goes into separate detail about the management of conflicts of interest in relation to co-commissioning, noting that relevant procurement decisions should be made by a committee of the governing body which:
- in the case of joint commissioning, would be a joint committee of the CCG and NHS England
- for delegated commissioning, would be a committee established by the CCG.
The majority of members (from the CCG side) should be lay and executive members, not including GPs (or others who may have a conflict), with the chair and vice-chair being lay members. Any minority GP members of the committee can then stand aside in the case of conflicts without the committee becoming non-quorate. The guidance helpfully suggests a couple of options for the actual composition of this committee, using lay, executive, secondary care and nurse members. The Health and Wellbeing Board must be able to send representatives to attend committee meetings (as attendees, not members), and the guidance advises that the committee meetings should generally be open to the public.
The guidance notes that these arrangements “do not preclude GP participation in strategic discussions on primary care issues”, subject to management of relevant conflicts, but apply “to decision-making on procurement issues and the deliberations leading up to the decision”.
This short note cannot restate the entire contents of the guidance, but the guidance remains a good first resource for any CCG board concerned about managing conflicts: any CCG board that has reviewed the potential for conflicts of activity within its organisation, and has consulted the practical suggestions in the guidance, will have gone a long way towards ensuring that its decisions are not challenged on this basis.
Edmund Forey is an associate with law firm Blake Morgan. He has advised the Department of Health and NHS England on the NHS standard contract, including related collaborative commissioning agreements and national variations, and advises commissioners and providers on contracting issues.
 National Health Service Act 2006, section 14O
 The National Health Service (Procurement, Patient Choice and Competition) (No. 2) Regulations 2013/500
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