Monday, 24 April 2017

Going to market

Vic Citarella, Director CPEA Ltd, looks at the economics of social care and suggests marketing is more than immediate sales but is integral to every provider’s longer-term business strategy.
Describing a market portrays how buyers and sellers do business. There are many kinds of market and several types of player. Social care is a market with changing characteristics and an evolving cast of participants. Knowing and understanding how it works is central to successful transactions – now and into the future - between customers and service provider. In this respect, social care is like any other business.
In economics, it is usual to identify five types of market:
  • Perfect Competition
  • Monopoly
  • Oligopoly
  • Monopolistic Competition
  • Monopsony
Applying the associated features of each to the social care market, it appears that not to be perfect competition because there are not an infinite number of buyers and sellers. There is one buyer who can alter the prevailing price in the market and that is the local authority. Nether buyers nor sellers have infinite alternatives and choice is a chimera.

Patently nor is there a monopoly with just a single supplier of social care and no reasonable substitute. If there were the supplier would be able to charge whatever they wanted and their income would only be limited by whether the customer was prepared or able to pay.

Neither is there an oligopoly in social care where there are just a few dominant providers. If there were they would be able to collude to set prices and to the customer it would seem just like a monopoly.

If the social care market were monopolistic competition there would be numerous competitors but the differences between each would allow them to charge different prices. Whilst each provider may be different there are usually substitutes available.
Lastly the monopsony market in social care would just have a single buyer. If this were the case they could dictate the price.

Two markets
So, what types of market are there is social care? On a national level, there are two markets. Firstly, the public market - about 40% - which is a monopsony. Here the purchasing local authority can keep the price to the lowest level feasible. The only controls are if there is intervention from a regulator or there are unlawful actions. Both forms of intervention are currently being tested. e57799fa-350c-4d90-93dd-ba847d84f20b.jpg

Secondly the private market which displays aspects of all the other types excepting monopsony. Several providers are seeking to differentiate their social care offer. For example, this is the case at the luxury end of the market and in terms of specialism or niche. There are signs of an oligopoly-like cluster emerging as smaller businesses are squeezed and consolidation takes places through mergers and acquisitions. If this trend continues there will need to be a strong regulator to prevent price fixing between providers and the eventual emergence of a monopoly. There are further signs in some parts of the private market that there is genuine competition (if not perfect) which offers the customer some choices at affordable prices.

Questions and Challenges
Selling to the monopsony provider – the local authority - is becoming untenable. Home care providers are handing back contracts and residential care homes are closing or ceasing to operate for the public-sector customer. The return on investment is insufficient to sustain a business even for a not-for-profit provider. There is little scope to attract and retain a skilled workforce. Much vaunted innovation will not take root in a climate of survival of the fittest. Social care is not a business field where rebuilding or paradigm shift can come out of chaos because of the lives at stake. Such change is much needed but careful incubation is a safer approach.
Residential home providers are either shifting to the private market and/or charging in a way that means private customers are subsiding the shortfall on income from the public customers. The former leads inextricably to a two-tier service with characteristics akin to the airline industry where actual customer service is increasingly for the first class only. Whereas the latter seems duplicitous under consumer legislation.
Inevitably providers are cutting costs – some say ‘corners’ – and seeking ways to raise income from extras – some say from ‘basics’. There are too many services not reaching the minimum standards required by the regulator. The regulator is not well enough resourced to enforce standards. And policing a service that cannot comply brings the system into disrepute with a fall-back position that colludes to allow the standards to lapse.

Knowledge and Expertise
In short – two markets, two tiers of service, falling standards for the have-nots and a get what you pay for service for the haves. The scenarios are last business standing takes the chaotic market into a monopolistic new order or the state intervenes to prop up a failing market and a centralised monopsony is (re)institutionalised with a choice and/or means tested opt out. Not a pretty picture for providers or genuine investors. Not encouraging for the social care entrepreneur unless jeopardising quality and safety are an acceptable risk for permitting the entry of a cohort of more ‘disruptive’ investors.
Markets and marketing are vital areas of knowledge and expertise for social care providers. In social care, both involve individuals with needs, transactions between organisations and purchasers as well as a strategic understanding of the local and national (and indeed international) business environment.

Ask yourself:
  • How well do you know your market – where are the gaps?
  • Who are the key players in your market – the service users, families, the workforce, the commissioners, brokers, agents or regulators – how well do you know them and do you need support in mapping and understanding your stakeholders?
  • What are the emerging opportunities – do you need assistance in developing them?
  • Who are the customers and why should they buy from you? What’s your plan?

Vic Citarella, Director CPEA Ltd, 07947 680 588

Lynden Consulting has a proven track record in implementing successful strategies to achieve excellence and tangible results for providers in health and adult social care. Get in touch to find out how we can help.

Friday, 10 March 2017

Developing effective commissioner–provider relationships

Vic Citarella - a post that first appeared on RiPfA website on the 9th March 2017
As everyone seeks to squeeze more out of the social care system, how can strong and positive relationships lead to improved and more cost-effective working practices?

I have recently authored a Strategic Briefing for RiPfA on effective commissioner-provider relationships and facilitated a workshop on the same topic. I will also be leading their upcoming open access webinar ‘developing effective commissioner-provider relationships’ (28 March, 12-1pm, online). As part of my approach to gather evidence relating to this work, I began by asking some initial questions. I found it helpful to test out some of the underlying assumptions, namely that:
  • there is a problem
  • the relationship that matters is the one between the commissioner and the provider
  • such relationships have character – effective, strong and positive – which can be improved
  • there is an answer to the problem.

Problem – what problem?
Clearly social care is experiencing unprecedented financial pressures which is characterised as a problem or even a ‘crisis’. RiPfA identified this as a key issue back in 2012 in the publication: How to maintain safe, effective and quality services with reducing resources.
The underlying assumption is that integral to the problem are poor relationships between commissioners and providers. Community Care and the Guardian certainly think so. The guidance and toolkits say so. If only commissioners and providers got on better, they could make the money go further and people in need would get what they want. Implicit in this assumption, and reinforced in the Care Act 2014 guidance (Chapter 4), is that it is for the commissioner to do something about this problem. They have the money, the power and are the public authority.
But is this in fact the case? Does the responsibility lie at their door? The forthcoming webinar offers an opportunity to check this out.

A many-faceted relationship
Perhaps a more worrying assumption is that the relationship we are talking about involves just the two parties – commissioner and provider. But social care is patently a more complex system involving lots of people, organisations and stakeholders. Relationships between two people are hard enough. Imagine how much more convoluted relationships are in the multi-agency, multi-professional and multi-faceted world of social care.
The webinar session will try to unpick some of these relationship interactions and dynamics, and look at common purpose, co-production and role clarity. We will look at ideas around stakeholder mapping, user-led approaches and person-centred coordinated care.

The character of a relationship
That a strong relationship is a positive one and leads to more effective services is another assumption we can test. From there we can explore what steps can be made to build strength in relationships. How we turn our social care values into commissioning and service providing practice is the proving ground for the customers.
Clearly trust and communication are at the heart of all kinds of relationship building – but what do you actually do to make these things happen? The webinar will also look at how the behaviours of the participants in the commissioner-provider relationship can be (positively) developed, drawing on examples that have been tried involving individuals, groups and organisations in a variety of settings and formats.

A problem demands a solution
Lastly there is an assumption that there is an answer to the problems of poor commissioner-provider relationships. There is no sure-fire formula for success. Like personal relationships, those in business and between organisations require continuous work (and as with personal relationships there are online quizzes to evaluate the partners’ starting point and where they want to go with a business relationship, for example: In fact, the similarities between the advice offered by relationship counsellors and business gurus is quite remarkable. Writ large are trust, open communication and respect.
What we will examine during the webinar is ways for commissioners and providers to work together, how to make the time, and some methods that have been found to work. We will consider approaches to procurement and contracting as procedural processes to cement relationships, to record agreements where the players may change and to cater for endings and failures as well as success.

If you are a commissioner or service provider (of any kind – registered/not registered/large/small/private/voluntary), please do join us at the webinar on 28 March. As we are looking at relationships between commissioners and providers in social care then it would be beneficial if people who have worked together in these roles could participate jointly (although this may of course not be possible). People who use services and/or directly commission for their own needs are very welcome to attend.
If you have any thoughts or questions, please email me in advance at – although I am not offering relationship counselling!

About the author
Vic Citarella is a qualified social worker and a former Director of Social Services. He now works with local authorities, NHS bodies, private and voluntary social care providers, to help them improve standards and quality of services.

Related resources

Wednesday, 1 March 2017

Workforce retention?

Richard Banks looks ahead to this year’s Skills for Care conference where the focus will be on recruitment and retention of the social care workforce.

David Mowat MP, the Parliamentary Under Secretary of State for Community Health and Care, voted as did most Conservative MPs, against guaranteeing EU citizens rights to stay in the UK ahead of the ‘Article 50’ negotiations. If passed the amendment would have ensured that all EU citizens legally living in the UK on 23 June 2016 (the date of the EU referendum) would have their right to stay and work protected.

Across the UK EU nationals comprise around 4.95% of the staff in NHS trusts and Clinical Commissioning Groups, and 5% of the UK social care workforce[1]. In England, there are 1.43 million people in the social care workforce[2] - The Cavendish Coalition[3] estimate that there are 90,000 EU nationals in employment – this is around 7 % of social care workforce. [4]

So, 90,000 people working in England in social care are now uncertain of their future as social care workers and as residents, along with their families, of the UK.  Horrible for them and how can any of us imagine how we might reassure our relatives supported and cared for by these people?

The social care sector in England has difficulty in recruiting and retaining staff; there are about 90,000 job vacancies[5].  All indications are that the need for increased levels of social care support will require a continued growth in the workforce.

Dodging responsibility
Respect and support for the social care workforce might be the least one might expect from the Parliamentary Under Secretary of State for Community Health and Care sadly this has not been the case.  Recently, in attempting to dodge responsibility for the Government’s social care funding crisis, David Mowat blamed uncaring families. In doing so he not only insulted families but also implied that social care was an unskilled occupation that any family member might do.  With the EU amendment vote last week he went further and completely dismissed the importance of 90,000 social care staff.

So, it will be interesting to hear what messages David Mowat will have when he speaks at the Skills for Care Conference entitled Recruitment and retention: the road to success (Thursday 9 March in Liverpool).  Social care conference participants are remarkably unmoved by banal government representatives (almost as if they expect no better). Let’s hope that on this occasion David Mowat can explain how he has a plan to support social care recruitment and retention. He might even manage to show some respect for the social care workforce who surely are an example for the Conservative slogan of being for ‘hard working people’ 

Of the overall percentage, the detailed breakdown shows geographical variances:
·         22,000 staff in London - 12% of workforce;
·         23,000 in the south east – 10% of workforce.
·         There are a higher proportion of EU nationals in regulated professions, e.g. nursing, than managerial posts.
[5] Skills for Care 2017 Conference information