Senior NHS, private and third sector leaders have called for a dramatic rethink of healthcare contracting models, according to a new report.

The Power of Partnership – funded by Sodexo, the world’s largest services company, and informed by a reference panel made up of leaders from all three sectors – urges all three sectors to seize the potential of cross-sector partnership in improving quality of care for patients.

The report finds that for complex, high spend and strategically important services, cross-sector partnerships offer great potential for innovative breakthroughs in productivity and quality; significantly more so than in more traditional outsourcing models.

In a survey of over 280 industry leaders, only 1% of the NHS and 2% of private and third sector leaders believe there are no advantages to partnership working. The majority of both NHS (54%) and private/third sector (64%) feel the greatest potential for partnership lies in delivering clinical services.

Sir William Wells, chair of the reference panel and former chair of the NHS Appointments Commission says that as the unrelenting pressure to reduce cost and improve productivity continues, public, private and voluntary sectors must act now: Traditional contractual relationships based on fixed specifications of inputs and outputs are unlikely to generate the kind of innovative breakthroughs or productivity leaps that the NHS needs. New service models will have to be procured and must embrace the best skills, knowledge and capacity that are available within and beyond the NHS. This new report offers practical advice to all sectors contemplating multi-provider partnerships to deliver NHS services. I urge organisations to seize the opportunity and re-examine the way they do business together. Organisations must assess the areas where partnerships could bring efficiency and quality gains.”

The group was spurred by the recent Department of Health and NHS England procurement review, Better Procurement, Better Value, Better Care, which focussed largely on the opportunity for savings in the procurement of goods. The reference panel felt the review missed a crucial opportunity to look at how to procure and contract for clinical and support services. The new report builds on the review by providing all sectors with advice on how to set up and deliver services through partnership models.

Dr Daniel Poulter MP, Parliamentary Under Secretary of State and the minister responsible for procurement reform adds: “I welcome Sir William’s report on procurement and partnerships. In August this year I published Better Procurement, Better Value, Better Care, setting out our plans for improving procurement across the NHS. At its heart was our ambition to improve procurement capability at all levels and spread best practices across the system. Sir William’s report complements this ambition by describing good practice for delivering successful partnerships with suppliers. We will take this advice and embed it into our plans for delivering improvement.”

A number of leading NHS organisations have contributed detailed case studies to the report to show how cross-sector partnership works in practice. Camden and Islington NHS FT and Turning Point detail how they partnered in 2010 to deliver integrated drug and alcohol services in North London. The example highlights the importance of careful project management, open consultation and constant board engagement. Care UK and Sussex Partnership NHS FT show in the report how they co-operated to redesign mental health services by capitalising on a pre-existing relationship.

A third case study reveals how Taunton and Somerset NHS FT, Yeovil District Hospital FT and Integrated Pathology Partnerships (iPP) established a joint venture (Southwest Pathology Services, SPS) to consolidate pathology services in Somerset. The case study explains the planning, procurement and governance arrangements for the joint venture.

Simon Scrivens, Managing Director at Sodexo Health and Chairman of iPP notes: “This report is aimed at all parties, not just the NHS; the private sector must heed the advice too. It captures how we, the private sector, must start thinking. From my experience, there is a lot to learn about working with the public sector. Each party has strengths and weaknesses. You need to critically assess the capabilities of both parties and work out how these can fit together to deliver an outstanding service for the patient.”