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How can provider networks agree to change how resources are distributed?


Capitation means that existing money in the system will be used in new ways. Implementing new models of care will require funds to be reallocated between providers. Some will see revenues increase. Some will see revenues decrease. However, by creating a more efficient system all providers are more likely to create surpluses for reinvestment in care for the population. More important than the legal arrangements underpinning the network is its capacity for developing a mature organisation capable of managing trade-offs between partners in the best interests of service users. Developing and sustaining collaborative leadership and effective partnership skills will be key.

Irrespective of the provider network structure, decisions must be made on how financial flows will change that providers are then bound by. The module working group expressed preference for consensus where possible, and this is a desirable goal. However, consensus does not mean that any providers have a veto to block decisions or changes to financial flows. Allowing a veto would grind decision-making to a halt and prevent implementation of new models of care.

This section sets out a process and considerations so provider networks can make decisions in the best interest of the population and the system, even though some of their members may see a fall in income.


The first decision for providers is who should be part of their network. Provider networks will:

  • Include a GP network, because a core principle of Whole Systems Integrated Care is that GPs are at the centre of coordinating peoples care
  • Include social-care as the whole systems vision is to provide for holistic needs of individuals

Deciding which other providers are members of the network and contribute expertise and staff to the multi-disciplinary teams will be an iterative process. After agreeing a new model of care, members will need to revisit whether it has the best organisations within the network or as subcontractors to achieve desired improvements.


Provider networks need to make many different types of decisions, all with financial implications for members.

The module working group agreed that how these decisions are made must be agreed first. Without this step, conflict and gridlock is more likely.

In order to manage disagreements, provider networks must agree some form of voting structure and how votes are weighted. Their options for voting structures are:

  • Veto: all decisions are made unanimously as all providers have a veto. Although this will encourage consensus it risks gridlock.
  • Majority voting: Decisions made by a majority of votes (half the total plus one) are binding on members.
  • Qualified majority voting: decisions are made based on a vote, but with additional conditions to be satisfied. Those conditions might include
    • A super-majority vote required, for example, 70% of the vote which encourages greater consensus without needing unanimity
    • Only providers who do not gain substantial new revenues from a decision can participate in the vote.
    • Providers are given a veto in certain situations. For example, where their ability to meet statutory requirements is in doubt.
    • A majority of a certain type of provider (e.g., primary care) needs to approve certain decisions for them to be made.

For each voting system, it is possible to weight votes so that the representation is more reflective of the investment or risk contributions of individual providers. Provider networks options for vote weighting are:

  • Even weighting: each provider has one vote
  • Votes based on investment: provider votes are proportional to the value of their current budgets invested in the provider network before being reallocated to support new models of care. However, this will give preference to providers who have the greatest funds today and therefore risk losing the most, which could make changing financial flows more difficult as those with the most to lose have the greatest say.
  • Votes based on risk share: providers that are responsible for greater proportions of any deficits receive a greater voting weight. This reflects that they have most at risk if the provider network fails to achieve its goals.

Other considerations for provider networks to make when agreeing decision-making processes are:

  • Role of service users: Co-production means that service users should be involved in decisions about their care. Service users could be given a share of the vote, or could be represented in any decision making board as a non-executive chairman.
  • Right to leave the network: Providers who disagree with decisions may wish to leave the provider network. Allowing this provides an implicit veto. The module working group believed there must be some cost or penalty to avoid this happening. These penalties would likely include the loss of any upfront investments, losing a say in how capitated payments used by the network are allocated as well as a loss of goodwill. They also believed that agreeing a fair decision-making process upfront reduced the risk of a provider wanting to leave the network.


The most important decision affecting resource allocation, performance management and risk and saving sharing is the model of care. After agreeing decision-making processes the provider network must agree how they will organise interventions to achieve desired outcome for their population. Detailed information about this process is in Chapter 6: How do we innovate a new model of care working with users and carers?

In summary, the provider network will be set desired outcomes by commissioners for a population group and have a capitated budget it can use to achieve these outcomes. The providers in the network must work together to identify:

  • Interventions that will support population to achieve desired outcomes
  • Service standards against which the effectiveness and quality of interventions and those who conduct them will be measured. These standards are very important because they inform the provider network performance management framework and risk and savings sharing discussed in the next section.An example list of performance metrics can be found in the Supporting Material A: Discussion Paper Compendium.
  • Resources required to fund the service standards that support new model of care. Details of how to achieve this are in Chapter 6: How do we innovate a new model of care working with users and carers?

The total of all these budgeted costs must be less than the capitated budget paid to the provider network. Provider networks will need to revisit the model of care until they can agree how to achieve the outcomes within the target budget. For a full discussion of how to approach costing models of care see Chapter 6: How do we innovate a new model of care working with users and carers? In addition to funding the service standards, provider networks should also decide allocations for:

  • Personal budgets: When capitated payments include social-care personal budgets, provider networks will need to meet the statutory obligations set out in the Fair Access to Care Services guidance (FACS), which require local authorities to provide individuals with a defined level of support. In addition to the statutory obligations, provider networks may also want to provide personal budgets to other individuals as they represent a cost effective way of personalising care that keeps people well.
  • Internal contingency funds: Provider networks will want to retain a contingency fund that can be used for unanticipated interventions above the agreed model of care. This will support agility and personalisation of care. It also reduces the risk that providers will overspend the capitated budget
  • Operations team: Providers networks may fund a shared operations team to manage the coordination of member organisations, lead performance management and administer the network.

Once the model of care, service standards and resources are agreed, the provider network needs to identify the multi-disciplinary team and where the staff with the relevant skills needed are (or could be retrained or hired) across member providers. Determining which staff will do what will determine how resources are allocated between providers within the network. Following this process will mean that funding flows to where it is needed to support new model of care.


  • How will your provider network make a decision when members disagree?
  • What role do lay partners have in your decision-making processes?
  • How have you allocated funds to support your chosen model of care?