@reformthinktank @andrewhaldenby Putting the patient first Andrew Haldenby, Director, Reform 1
Reform Independent, charitable think tank which researches productivity in public sector and private sector 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 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 Supplementary insurance 2
Patient versus producer? Patient Producer Workforce headcount Quality Quantity Infrastructure Quality Quantity Priority Prevention Treatment Disease management Market structure Competition Monopoly Decade of the producer The NHS Plan, July 2000: 7,000 extra beds in hospitals and 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 GPs 20,000 extra nurses and 6,500 extra therapists 1,000 more medical school places childcare support for NHS staff with 100 on-site nurseries. 3
Greatly expanded NHS workforce Part of massive growth in front line workforce Total increase of 1 million, to 6 million in 2009 UK 1999 (m) 2009 (m) +% NHS 1.21 1.62 34 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 market rates Operate a pay spine 7 64 Offer a bonus and incentive scheme Average length of tenure Average percentage of job vacancies filled internally 38 81 7.7 10.1 25 45 Source: CIPD, various, 2011; ONS, 2006 4
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 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 bn 2006-07 2007-08 2008-09 NHS spend on private sector hospitals 2.2 2.9 3.4... all opposed by the main doctors trade union, the British Medical Association 5
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. Leader, The Daily Telegraph, 28 February 2012 Integration, standardisation 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 Options, Massachusetts West German Headache Centre, Germany organises community care to low income, elderly people Public hospital collects different specialists and services under one roof admissions cut by up to 42 per cent Cost of care up to 25 per cent less than national average Case study Reform Outcome MinuteClinic, USA LifeSprings Hospitals, India Privately-run microclinics staffed by nurses using standard medical protocols Chain of maternity hospitals in which care is standardised in checklists and guidelines Cost of care up to 50 per cent cheaper than visiting a GP Price up to 50 per cent cheaper than market rates 6
service redesign, information Case study Reform Outcome Coxa Hospital, Finland Public-private partnership moved joint replacement surgery from five hospitals to one regional centre London Stroke Transfer emergency stroke care Services, from 34 NHS general hospitals to England 8 specialist units Health Services Restructuring Commission, Ontario Arms-length government body reviewed hospital services Complication rates below 1 per cent compared to up to 12 per cent for general hospitals Highest standards of stroke care in the country 31 public hospitals and 6 private hospitals closed. 44 hospitals merged into 14 organisations Case study Reform Outcome University New IT system to track medical Medication errors cut by 66 Hospitals errors and provide decision per cent, leading to a 17 per Birmingham, support to front line clinicians cent reduction in 30-day England 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 party 7
Coalition - inconsistency Contradictions in health policy: Competition with the private sector 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 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 responsibility changed from competition to integration Providers given voice on commissioning groups Stronger powers for National Commissioning Board Reintroduction of central waiting time targets 8
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 could still reform radically around the patient interest, but then it could before Much depends on the attitude of decisionmakers 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 9
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 tighter spending than the current Spending Review If growth disappoints, more spending reductions and tax rises will be needed 10
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. Nick Timmins, Financial Times, August 2010 11
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 Groups with ihfinancial i 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) Potential benefits of a risk-based approach: Stronger accountability Budgets provided according to population financial risk Larger commissioning groups A more transparent approach to risksharing: Either a formal structure of risksharing 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 teams 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 i.e. private finance 12
Supplementary insurance? Greater pressure on NHS finances: Local commissioners already decide what to 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 Contradictions in policy breed bad policy Budgetary pressure will be a catalyst for change How can actuaries add value to the NHS policy debate? 13