“Developing Care Markets” National Adult’s Commissioning and Contracting Conference

Today IPCs new Market Analysis Centre Current state of the care market in Adult Care in England The DCMQC programme Outcomes and futures 2

IPC Market Analysis Centre A part of the Institute of Public Care at Oxford Brookes University Founded post Southern Cross. Designed to support, evaluate and inform the supply side of public care across community health, social care and supported housing. We work with national and local government, the NHS and private, state and voluntary sectors We work across the United Kingdom 3

The Market Analysis Centre provides Market research and market reviews Consumer research (mystery shopper, consumer surveying) Evaluation and analysis of particular markets Certificated management development course for provider organisations Leadership development and coaching Publications, workshops and seminars 4

IPC also… … was a major contributor to the recent development of the Government’s White Paper, particularly with regard to the sections on the social care market and housing. … is leading the Developing Care Markets for Quality and Choice Programme for DH. 5

Caricatures of the market – from the LA “Private sector just about making money, not really welcome in the sector. Members would still like all our services to be in- house. Voluntary sector useful but not really able to run with big contracts”. 6

Caricatures of the market – from providers “Local authorities enforce pernicious terms in contracts. Don’t really understand how businesses are run. They are not even handed and protect their in house services from price competition. They pretend to consult but actually only tell you after decisions have been made”. 7

Caricatures of the market – from older people “They only think of us in stereotypes and their approach is always patronising. Local authorities are just focussed on cuts – they don’t really understand the impact on individuals. They pretend to consult but actually only tell you after decisions have been made. They don’t care about those who fund their own care”. 8

The common ground Running a quality service. Efficiency Desire to innovate. Giving greater choice to users 9

Characterising the social care market Mix of private, voluntary and state, different balance in different sectors. Most markets fragmented. Heavily regulated. Unusual in having the state as an active procurer between provider and consumer. Social care generally ignored in terms of business development and economic impact. 10

Do care businesses make a good investment – residential care? A few large providers many small providers, some outside the public company umbrella, some hardly constitute businesses. Mixed economy of private, mutual’s, LA outsources and voluntary. High start up costs, Secured by property but current market behaviour is driving towards larger care homes for older people. Limits to how much cost savings can be rung from the market. Some single home providers moving out of the market. 11

Do care businesses make a good investment – community services? Highly fragmented market, growth of private equity Less secure, low profit margins but low start up costs and high demand. Diminution in guaranteed take up. In England, personalisation likely to drive higher management costs and potentially create unfair competition with personal assistants. Incentives are perverse. Do some voluntary sector services create dependency or promote independence? 12

Do care businesses make a good investment – supported housing? High level of home ownership amongst older people. High start up costs. State support in England & Wales diminished. Little knowledge of what works or what the public desires in a very young market. Poor image for sheltered housing. Unreceptive planning environment. 13

Trends in the UK care market Anticipated consolidation of the market has not really occurred. General increase in numbers of self funders across the UK. Southern Cross changed attitudes to the market although suppliers ceasing to trade is an inevitability of a market and has been happening for a long time. Regulation tends to focus on stopping things happening rather than making the best rise to the top. Need to consider what are we trying to secure through control and what the gains and losses are of that process. 14

Trends in the UK care market Considerable increase in private equity involvement. The more we move away from state control of purchasing, the more the state needs to know about the market if it is to have influence. 15

Impact of the current economic situation on the social care market? Cheaper to borrow money now but harder to obtain due to banks caution. Low interest rates mean people eat into their capital quicker. Harder for older people to sell their property which may make it harder for people to move. If in the future there are labour shortage and / or wage inflation it will hit social care first and foremost, given it is a minimum wage based industry. An upturn may tempt many small residential care providers to sell, leading to less supply/ more market consolidation. 16

Care and Support White Paper “The government supports the diverse range of care providers that currently offer care and support, including user and carer led organisations, small and micro enterprises and social enterprises. To strengthen this diversity, the Government will introduce a duty upon local authorities to promote diversity and quality in the provision of services. To help local authorities carry out this duty, we are offering support to every local authority to create a market position statement or to develop their existing one.” 17

Care and Support White Paper Government announced a consultation this Autumn to cover three areas: Strengthening and clarifying the responsibilities of local authorities in relation to the market. The collection of better market and provider intelligence. To what extent further, targeted, action to address provider distress and failure is necessary. 18

The DCMQC Programme To support local authorities towards legislative change as outlined in the White Paper. To help LAs to move from a provider / commissioner to an enabling and facilitative role, both to consumers and providers of care. IPC asked to develop and support the programme through ADASS and the ADASS regions. To develop an approach that offers a range of options to individual LAs or combined as regions / sub regions and recognises that authorities have proceeded at different rates of change and development. 19

Baseline monitoring To ensure, as a minimum, that each authority has developed and shared Market Position Statements. Providers will be asked as discern that change has taken place even though not in direct receipt of the programme. To enable authorities to asses their progress through a self diagnostic tool. 20

Content Each region will be offered a number of days support. This can be spent individually by authorities or can be spent with the region or sub region. The programme will centre on a fixed set of options. Which will be allocated at a regional workshop. There will be tools and materials developed centrally to support the programme with downloads via a website. Mechanisms for sharing materials between authorities and regions. 21

What is market facilitation? Based on a good understanding of need and demand, market facilitation is the process by which strategic commissioners ensure there is diverse, appropriate and affordable provision available to meet needs and deliver effective outcomes both now and in the future. 22

The Market Facilitation Framework 23

Market Intelligence That LA is well informed about the market, understands the factors that influence demand and supply and has a clear vision of what good quality care looks like and the outcomes that it will achieve. Across all purchasers, who provides what, where, to whom and at what price? What does quality look like? How sustainable are the care businesses that serve the local area? Is there sufficient diversity and flexibility of services to meet local need or is the market dependent on very few providers? What do consumer surveys tell us about the future shape of provision? 24

Market Position statements A brief analytical evidence based document that Gives a picture of supply in terms of its amount quality and distribution. Estimates future demand for care Describes with evidence the kind o care the LA would be keen to see provided. Describes how the LA will perform and behave towards the market. Is used as the basis for discussion with the market. 25

Market structuring Making explicit to the sector how the LA intends to perform and behave in influencing the market. Putting in place the tools and processes required to influence the market based on the MPS. Work with other key stakeholders such as health, housing and planning to stimulate the market. Identifying and removing barriers to market entry, supporting vulnerable providers, piloting innovative approaches. Considering how staff skills need to change, eg, the skills that former contracting officers required may not be the same skill set as those needed to be effective in capturing and using market intelligence. 26

Market intervention Brings the results of the intelligence activity and the market structuring together into a potential number of intervention activities. Stimulating particular parts of the market with financial incentives, Offering specialist training, Support to providers with business planning, Working with providers and consumers in order to deliver good quality information, Creating vehicles for consumer feedback on service provision Setting up not for profit ventures. 27

Aims in facilitating the future market Ensure the residential care market is sustainable but contained. Have a positive, rather than a reactive, approach to dementia care. Stimulate and innovate private sector supported housing. Be clear about the rationale about why the LA will continue to run certain services. Engage in dialogue before the event rather than after. Understand better how the business sector performs and behaves and the impact the LA can have on this. 28

Aims in facilitating the future market Lessen uncertainty through making LA commissioning intentions clear and long term. Make sure the focus is not just on managing demand but reducing it. Have much greater clarity about what constitutes good care and actively influence the market to provide it. Benchmark quality with the sector. Share risk, fund innovation and reduce duplication. 29

Contact the IPC Market Centre