Putting the patient first
@reformthinktank
@andrewhaldenby
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Reform
• Independent, charitable think tank
which researches productivity in public sector and private sector
p p
• Established 2002
• 2011 – Think Tank Award of the Year for
Publication of the Year (on teaching standards)
Key themes
• Putting the patient first
• The patient interest vs the producer interest
• There are many, many examples of successful
health reform based on the patient interest
• The producer interest is very powerful in UK
healthcare …
• … and has just defeated the UK Government
(again)
• Nevertheless, the financial pressures facing the
NHS l NHS are real
• Harness the great resource of the actuarial
profession, to the benefit of the NHS debate?
• Risk-based approach could play a
greater role in providing stability for the system at minimum cost
Patient versus producer?
Patient Producer
Workforce headcount Quality Quantity
Infrastructure Quality Quantity
Priority Prevention
Disease management
Treatment
Market structure Competition Monopoly
Decade of the producer
• “The NHS Plan”, July 2000:
• “7,000 extra beds in hospitals and
intermediate care intermediate care
• “over 100 new hospitals by 2010 and 500
new one-stop primary care centres
• “over 3,000 GP premises modernised and
250 new scanners
• “clean wards – overseen by ‘modern
matrons’ – and better hospital food
• “modern IT systems in every hospital and
GP surgery
• “7 500 more consultants and 2 000 more • 7,500 more consultants and 2,000 more
GPs
• “20,000 extra nurses and 6,500 extra
therapists
• “1,000 more medical school places • “childcare support for NHS staff with 100
Greatly expanded NHS workforce
• Part of massive growth in
front line workforce
• Total increase of 1 million, to 6
UK 1999 (m) 2009 (m) +% NHS 1.21 1.62 34 , million in 2009 Education 1.15 1.42 23 Police 0.23 0.30 31 Civil service 0.50 0.53 6
A different workforce
% of organisations Private Public
Pay by length of service 8 57
Pay primarily by 66 15
Pay primarily by market rates
66 15
Operate a pay spine 7 64
Offer a bonus and incentive scheme
38 81
Average length of
tenure 7.7 10.1
Average percentage of job vacancies filled
25 45
Source: CIPD, various, 2011; ONS, 2006 internally
Higher spending
• NHS budget doubled
• 1999-00 to 2009-10 • Real terms
• NB UK private healthcare spend
is steady at around 1 per cent of GDP
• i.e. £15 billion per year
1997-2010 – progress
• Evidence:
• Spending on private sector providers
increased
£bn 2006-07 2007-08 2008-09
• High patient satisfaction
• c.50 per cent of patients report being
offered choice of hospital by general practitioners
• 141 “foundation trusts”, with greater
autonomy
• c.2005: arguments for service redesign,
in name of quality and safety
• ... all opposed by the main doctors’ trade
i th B iti h M di l A i ti NHS spend on private sector hospitals 2.2 2.9 3.4
Putting the patient first
“Yet study after study, in Britain and elsewhere, has shown that this is precisely what improves performance in health care.
The reforms introduced by Alan Milburn during the Blair years, for example, resulted in better provision and lower costs for cataract procedures, MRIs and knee replacements, among much else.
In Germany, Spain and France, private firms are at the heart of the health service; a report published today by the think tank Reform offers many more examples of innovation, from nations as diverse as Finland, India and the United States ”
the United States.
Leader, The Daily Telegraph, 28 February 2012
Case study Reform Outcome
Beacon Health Strategies, Rhode Island
Private company coordinates services for mental illness
Cost of hospitalisations for mentally ill children reduced by 20 per cent in one year
Senior Care Private providers Number of nursing hospital
Integration, standardisation…
Senior Care Options, Massachusetts
Private providers organises community care to low income, elderly people
Number of nursing hospital admissions cut by up to 42 per cent
West German Headache Centre, Germany
Public hospital collects different specialists and services under one roof
Cost of care up to 25 per cent less than national average
Case studyy Reform Outcome
MinuteClinic,
USA Privately-run “micro-clinics” staffed by nurses using standard medical protocols
Cost of care up to 50 per cent cheaper than visiting a GP
LifeSprings Hospitals, India
Chain of maternity hospitals in which care is standardised in checklists and guidelines
Price up to 50 per cent cheaper than market rates
Case study Reform Outcome Coxa Hospital,
Finland
Public-private partnership moved joint replacement surgery from five hospitals to one regional centre
Complication rates below 1 per cent compared to up to 12 per cent for general hospitals
London Stroke Transfer emergency stroke care Highest standards of stroke
… service redesign, information
Case study Reform Outcome
Services, England
from 34 NHS general hospitals to 8 specialist units
care in the country
Health Services Restructuring Commission, Ontario
Arms-length government body reviewed hospital services
31 public hospitals and 6 private hospitals closed. 44 hospitals merged into 14 organisations y University Hospitals Birmingham, England
New IT system to track medical errors and provide decision support to front line clinicians
Medication errors cut by 66 per cent, leading to a 17 per cent reduction in 30-day mortality rates
Cleveland Clinic,
Ohio Not-for-profit independent hospital publishes full clinical outcomes annually
One of the highest ranked hospitals in the United States for quality. Costs are half those of equivalent providers
Coalition – ambitions
• Reforms:
• Put the patient first: “no decision about me,
without me”
• Commissioners to be led by GPs • Devolution
• Open competition for NHS-funded patients
• Attacked by medical unions and Liberal Democrat
Coalition - inconsistency
• Contradictions in health policy:
• Competition with the private sector
• Patient choice (of elective care and community Patient choice (of elective care and community
care)
• Autonomous hospitals • Stronger commissioners • No national targets • Greater efficiency
• Higher spending (at slower rate)
• Greater NHS employment of front line staff (less
of managers)
National staff agreements
• National staff agreements • All but no service redesign
• Local government control of public health
Coalition – retreat
• Result: “listening exercise”, then:
• David Cameron and Nick Clegg attack
“privatisation”
Economic regulator downgraded
• Economic regulator downgraded –
responsibility changed from “competition” to “integration”
• Providers given voice on commissioning
groups
• Stronger powers for National Commissioning
Board
Central direction
“NHS patients should be visited by a nurse at least once per hour” (David Cameron, 6 January 2012)
Secretary of State for Health still formally accountable for performance of the NHS. Contrast that with position over academies and police forces, for example, where Government would argue that it has devolved accountability
Where now?
• Health and Social Care Bill passed
but:
• Little has changed
NHS ld till f di ll d th
• NHS could still reform radically around the
patient interest, but then it could before
• Much depends on the attitude of
decision-makers
• The retreat on reform has sent the strongest
possible signal against change
• E.g. independent sector providers are now
turning away from clinical treatment – “too political”
• E.g. Ministers are campaigning against the
closure of local hospitals, even when they are clearly too small and therefore dangerous
Burning platform
NB bound to be worse than this, given Eurozone crisis and disappointing growth
“Austerity is the new normal”
• Autumn Statement, November 2011:
• 2016-17 and 2017-18 are forecast to have
i h di h h di
tighter spending than the current Spending Review
• If growth disappoints, more spending
Department of Health, July 2010
Department of Health consultation paper, Commissioning for patients, July 2010
A true insurance-based system?
“The health department, however, now has a funding formula that, put crudely, will allow it to allocate the cash much more closely to individuals. This could break the geographic link so that a patient could go to any health care commissioner, not just the local primary care trust or local GP commissioning consortium. It is not yet using this formula. But it could. “These two observations lead to the conclusion that patients could well find themselves taking their tax-funded care allocations to one of a small number – perhaps half a dozen, perhaps 50 – of competing care commissioners.
“This is what has happened in the Netherlands, which has developed a system of competing health insurers operating within a national system that offers broadly uniform coverage.”
Potential benefits of a risk-based approach
• Problems of status quo:
• Weak accountability for commissioning
groups
• Budgets provided according to historic
position and local factors e.g. deprivation i h fi i l bl b il d
• Potential benefits of a risk-based
approach:
• Stronger accountability
• Budgets provided according to population
financial risk
• Groups with financial problems are bailed
out from the centre
• Possibility of instability
• Many commissioning groups will be very
small
• Perhaps – little incentive for
commissioning groups to improve population health
• (Public health is now a responsibility of
local government)
• Larger commissioning groups • A more transparent approach to
risk-sharing:
• Either a formal structure of
risk-sharing and risk allocation within the NHS
• Or the possibility of reinsurance
from outside the NHS
• Commissioning support groups may help
Delay … probably terminally so?
• National Commissioning Board:
• Will be created later in 2012 • Key decisions deferred until then
• But…
• Clinical commissioning groups looking more
and more like Primary Care Trusts
• E.g. employing the same finance teamsg p y g • Will employ under the same terms and
conditions
• “How can you achieve transformational change
if you’re just changing the name plate above the door? The same pool of people won’t change the culture just because they’re in new structures”
• Note Ministers’ rhetoric against “privatisation”
Supplementary insurance?
• Greater pressure on NHS finances:
• Local commissioners already decide what to
fund and what not to fund – but not in a fund and what not to fund but not in a transparent way
• Might NHS commissioners have to define
entitlement?
• If so, would that create the possibility of new
supplementary insurance markets?
• Can actuaries help policy makers understand
how this would work?
Conclusions
•
It is right to want to put the patient first
The medical lobby is uniquely powerful
•
The medical lobby is uniquely powerful
•Contradictions in policy breed bad policy
•Budgetary pressure will be a catalyst for
change
•
