Collaboration, competition, or both? – Identifying a better way to commission Third Sector services in the health care sector
Research finds that different thinking may be required when commissioning health and care services from Third Sector providers. It also finds that commissioners could be amenable to such a change.
Third sector organisations, or voluntary, community and social enterprises (VCSEs), make significant contributions to the care system in England. Their involvement in health and social care is extensive and highly varied, from community-based day-care to wellness support, and from hospice care to advocacy.
Many of these services and activities are commissioned by local authorities, the NHS, and the evolving integrated care boards.
When these publicly-funded services are outsourced to corporations or third sector organisations such as VCSEs, commodified in effect, the commissioners still seek to retain some control. To achieve this, they often use multiple governance structures to specify, pay for, and influence the services.
The most influential formulation of pro-commodification policies is known as the Washington consensus. This recommends competitive procurement, competition between providers, and specific forms of pricing. Many studies have looked at its application in the hospital sector but few have looked at how it affects health and care activities provided by VCSE organisations. The paper Commodification and healthcare in the third sector in England: from gift to commodity—and back? addresses this with a systematic comparison of the commissioning of health and care activities provided by third sector organisations in six English localities between 2020-2022.
It found that there is, in effect, a spectrum of approaches to commissioning, with at one end a commodified mode of commissioning, and at the other, one with collaboration at its core.
Commodified commissioning centres on competition between health and care providers, and is driven by procurement, rules, contracts, and processes. VCSEs are regarded as service providers rather than partners. The relationship between commissioners and VCSE organisations is not one of equals; the commissioner is in control. Hierarchy and bureaucracy are key features of commodified commissioning and as a result, the potential of the third sector may not be fully realised.
In contrast, collaborative commissioning centres around co-operation, networks, and partnership. Commissioners are not just buyers of services or contract managers but also planners, facilitators, and enablers. VCSEs are not simply providers of a service. They are strategic partners. Trust and shared knowledge are key elements of collaborative commissioning. This comes, in part, through a shared understanding that commissioners and VCSEs need to work together to meet the health and care needs of communities.
English systems for commissioning with VCSE organisations contain both commodified elements (formal procurement, provider competition, commissioner–provider separation) and collaborative, relational elements (long-term collaboration, reliance on inter-organisational networks). The study found that when the two elements conflicted, commissioners and third sector organisations tended to try to work around the commodified elements in order to preserve and even develop the collaborative aspects. Commissioners often favoured the collaborative mode and sought to adjust their commissioning to make commissioning with VCSE less commodified, which suggests that, in practice, they find de-commodified, collaborative methods better adapted to the commissioning of third sector organisations. Whilst not always possible in practice, this general aspiration for more collaboration suggests that a different approach may be required for commissioning services with third sector organisations, than from corporations.
This study is part of a wider study of the vital relationship between health care commissioners and VCSEs. Four research briefings are available at the Centre for Charity Effectiveness research centre area of the Bayes website, as is material from our Creating Collaborations event held in October 2023.
The published version of the paper Commodification and healthcare in the third sector in England: from gift to commodity—and back? is available for download at City Research Online. It is published in Public Money & Management.
