Handing real budgets to GPs: is this really the right approach?

Author: Dr Jennifer Dixon

Published: 2010-09-21

Will GP consortia be able to achieve better value care and control costs in the NHS in England? This policy is the centrepiece of health secretary Andrew Lansley’s NHS reforms, and as we go into the autumn it remains the key point of debate (read our briefing on the health White Paper).

 Already Stephen Dorrell, former Secretary of State for Health (1995-7) and newly elected chair of the Health Select Committee, is asking the obvious: what is the evidence that GP commissioning will work after 20 years of being largely ineffective? The choice of commissioning for the first Health Committee of this government, plus Mr Dorrell’s obvious public scepticism about it, is the opening shot in what could become a battle.

 There are at least two main issues. Let’s start where we are now: first can GP consortia develop adequately and achieve results? Second, is this really the right approach?

 Earlier in May the Trust was privileged to host Prof. Larry Casalino from Weill Cornell Medical College, New York. Larry has spent 30 years working in primary care in the US and more latterly carefully charting the development of consortia of physicians groups. Larry’s observations about the policy to develop GP commissioning consortia were astute and sobering. Join us on 18th October for Larry’s John Fry Fellowship lecture on this topic.

 If the NHS budget is protected at near ‘flat real’ growth as expected in October’s spending review, it is difficult to see how GP commissioning consortia will be able to contain expenditure any better than PCTs before them.

 History shows us that practices were more able to use commissioning to improve primary care than shape hospital care, as outlined in our report, Where next for commissioning in the English NHS?, published earlier in the year. Yet the latter is exactly what is now needed since most NHS expenditure is in hospitals. GP consortia, probably at less than half the size of PCTs, with less developed infrastructure, and having to offer free patient choice, are surely going to find it tough going to influence hospitals, especially those financially stressed.

 Which brings us to the second question: is this really the right approach?

 The principle of giving GPs, as other clinicians, budgets to manage is clearly a good one. The ripest area for enhancing value in health care is in emergency care, care of the elderly and people with long term conditions. Here, GPs need to work with specialists and patients to develop pathways of care to reduce avoidable ill health and use of care. Without this integrated working, there is frankly no hope of achieving the value and efficiency gains now needed.

 In the US, vertically integrated care is now recognised to be the route to high value and efficient care, evidenced by results at the Mayo Clinic, Kaiser, Intermountain, and Geisinger. This is why the Affordable Care Act promotes the development of accountable care organisations, a subject which featured highly in our US/UK bilateral event on reform in Boston in July.

 The former CEO of the Mayo Clinic, Denis Cortese, visiting us this month, was robust about the need for integration, and the experience at Mayo that is useful for us in the NHS. As he outlines in our latest videos, putting 80% of the NHS budget in the hands of GPs risks driving a wedge between primary physicians and specialists – the opposite of what is now needed. 

 Achieving integrated care will take time, with many barriers to overcome, as shown in our recent analysis of sites trying to develop it. Despite national policy, there is growing development along these lines in the NHS, the US, and internationally – join us in Salzburg in November to discuss. Failure to understand this evolution will cost the NHS dearly.



 

Perspectives from the 11th International Meeting on Quality of Health Care, hosted by the Commonwealth Fund and the Nuffield Trust

(Efficiency in healthcare, Commissioning, The future organisation and delivery of care, Competition in healthcare, UK and international comparisons in healthcare) Permanent link

 Author: Vidhya Alakeson and Ruth Thorlby

Published: 2010-09-16

 For the past eleven years, senior academics, policy-makers and practitioners from the United States and United Kingdom have met annually to discuss common areas of work relating to the quality of health care.

 The meetings are held under Chatham House rules which do not permit the direct attribution of comments. What we offer here is a reflection of the main areas of debate and discussion by Nuffield Trust Senior Fellows Vidhya Alakeson and Ruth Thorlby, supplemented by links to relevant articles, blogs and short podcasts with some of the participants.

 It is hard to imagine two more contrasting health care systems than the United Kingdom and the United States: a universal, tax-funded, historically top-down, government -run service versus a market-dominated system in which government action is heavily circumscribed in favour of consumer choice. But there was a strong sense of common purpose at this meeting, not just about the goals of good health care but the means to achieve them.

 Both countries are on the threshold of very wide-ranging changes to the way that health care is financed and delivered. The United States has finally enacted health care reform which will extend coverage to millions of people. There is a tangible sense of achievement and excitement that reform has actually made it into legislation, although this is tempered by the scale of the task ahead.

 The most recent Commonwealth Fund data reinforce the message that the United States needs not just to extend coverage but needs to bring the cost of its health care down and ensure that it starts to improve the health of Americans.

  The Affordable Care Act contains many initiatives and pilots to reduce costs and improve care, many of which have excited much interest and were explored at the meeting.  A central goal of many of the pilots such as “accountable care organizations” and the “patient-centred medical home” is to move from a system of care that is fragmented and plagued by misaligned incentives to one that is highly integrated and efficient.

 The United Kingdom’s new coalition government has published a radical and ambitious plan to reform the English NHS, which will further underline the differences between the NHS in England and the other devolved countries of the United Kingdom – Scotland, Wales and Northern Ireland.

 The focus is now on these English reforms, which aim to decentralise power in the NHS by giving more financial autonomy to primary care physicians and hospitals and loosening the bonds with central government, by rescinding many of the top-down targets which were used (albeit with some effect) to change clinician behaviour.

 The central proposal to create consortia of primary care physicians bears some similarities to Independent Practice Associations (IPAs) in the US – networks of small practices that come together to contract with health plans. The experience of IPAs, those that failed and those that survived and succeeded into the long term, have important lessons for developments in England.

 The reforms have been given a sense of urgency by the scale of the UK’s public deficit. There will be real terms growth in spending on the NHS, but it is likely to be at historically low levels for the next few years, which means the NHS will have to be creative in meeting new demands with only flat or limited increases in resources.  

  

So both countries have embarked on a similar journey: the search for efficiency and better quality, spurred by a sense of economic urgency.  And many delegates at the meeting framed this challenge in a similar way.  Success will, in part, depend on the degree to which physicians themselves are enabled to change, by embracing more effective, evidence based treatments and guidelines and, particularly for primary care, by seeing themselves as custodians of scarce resources for a local population, above and beyond their advocacy for individual patients. 

 Both countries are also attempting through their new reforms to distance the healthcare system from political influence and interference. Reforms in England include the creation of an independent NHS Commissioning Board to allocate and account for resources and the achievement of health outcomes. At the same time, reforms limit the power of ministers over the day to day running of the NHS. 

 The US Affordable Care Act includes the creation of an Independent Payment Advisory Board that will limit the decision-making power of Congress on reimbursement rates for Medicare. It is hoped the new board will be able to impose limits on Medicare growth, which Congress has struggled to do. 

 This amounts to a huge cultural change for both systems. For the US, it means challenging the fee-for- service orthodoxy that has seen more as better. For England, it will mean reversing a level of inertia that has arisen for a complex of reasons, including excessive centralised control.
     
The blend of mechanisms to achieve this vision will vary between the two countries, but there are more areas of common experience than might meet the eye.  For example, although the scope of government action may be much larger in England, getting physicians to change their behaviour at the front line of care is only marginally more straightforward than in a more fragmented, market-dominated system. 

 To take the case of cost effectiveness research, adopting a centralised, government-backed body like the UK’s National Institute for Health and Clinical Excellence (NICE) to determine the cost-effectiveness of drugs and treatments would be an impossibility in the United States, which has instead concentrated on comparative effectiveness instead of cost-effectiveness.  But the implementation challenges faced by NICE in getting clinicians to adopt non-mandatory clinical guidelines and best practice, struck a chord with participants in the United States.

 There have been bottom-up examples, such as the one developed by Blue Cross Blue Shield of Michigan which show that comparative effectiveness research can gain traction within health care organisations, particularly when clinicians intellectually connect with the data.

Blue Cross Blue Shield of Michigan supports collaborative quality improvement projects in which groups of specialists use registry data drawn from across the state to identify and change practice patterns.  In contrast to approaches driven by a health plan or by government, this physician led approach to quality improvement leads to much quicker behaviour change.

 In the short run, comparative effectiveness research like this will remain separate in the US from decisions about cost and coverage. Bringing them together remains profoundly controversial.

 Another example relates to implementing new IT systems, a critical enabler of high quality care. Here there is a similar confluence of ideas about government’s role in supporting – but not dictating – the successful design and deployment of electronic health records.

 In the case of the United States, government is unable to directly procure an IT system, but instead has provided a very detailed framework of specifications (called “Meaningful Use Criteria”) for those health care providers that want to take advantage of financial incentives to modernise and upgrade their IT systems.

 The hope is that these incentives will encourage collaboration between health care organisations that are usually competitors in order to facilitate the kind of information exchange that in 10 to 15 years will create significant improvements in quality and efficiency.

 In the case of the English NHS, government policy has supported the successful adoption of electronic health records in primary care – not least by linking the receipt of primary care incentives to the need for computerised records.

 But, as in the US, the next challenge is to encourage data sharing between practices and between primary and secondary care so that information follows patients wherever they receive care. The centralised approach to IT adoption that worked in primary care has been less successful in secondary care in the NHS and a more hands-off strategy now beckons.
 
Both countries are also envisaging that payment reform and financial incentives will also act as powerful levers to achieve their goals. There is now plenty of evidence about the impact of financial incentives on clinician behaviour. 

 In the NHS for example, incentives have been used to positive effect in primary care, with the implementation of the Quality and Outcomes Framework, but there are also examples of badly designed incentives that produce distorted results. A poorly designed reimbursement structure introduced as part of the NHS dentists’ contract led to a steep increase in tooth extractions as dentists avoided more complex, time-intensive procedures that did not generate any additional revenue. 

 The biggest challenge, for both systems, is to design incentives that can support providers to coordinate care, ensuring that patients’ interests are followed as they cross between organisational boundaries. In the United States, there are examples of such initiatives, such as the Alternative Quality Contract run by Blue Cross Blue Shield of Massachusetts, which gives physician groups a global budget and real time data to monitor what happens to their patients.

 Early results from the scheme suggest that physicians have begun to change behaviour by referring less and ensuring better value and quality for their patients. There is much optimism that other variants of this model will be successfully piloted as “accountable care organizations”, as part of the health reform legislation.             
 
It is taken as read in the US that competition (between providers and insurers) is an important lever for innovation and that more competition is better. This implicit assumption also underpins the policy direction adopted by the new reforms in England.

 This emphasis on competition generated two important points for discussion. First, recognising the high performance – but relative rarity – of integrated delivery systems in the US, how can the development of integrated care be nurtured in a competitive environment? 

 Second, there was a growing recognition that competitive environments do not, on their own, generate high quality physician leadership and patient-centred organisational cultures.  These have to be supported and nurtured. Healthcare leaders need to create more environments where physicians are encouraged to adopt an ethos of discovery, evaluation and clinical competitiveness that can drive healthcare improvement alongside the traditional system reform levers of competition, financial incentives, performance measurement and regulation.

 Fundamental to the success of reform in both countries is both political and public support. 

 Compared to the US reforms, the rationale for the English reforms may not be clear to the public. Recent comparative public opinion surveys conducted by the Commonwealth Fund have shown growing satisfaction with the way that the NHS is run and the quality of services, particularly reduced waiting times.

 This contrasts sharply with sentiment in the US, where a large proportion of people believe that the health care system does need to be rebuilt completely. Even though there may be agreement on the need for reform, political support for the legislation is heavily skewed: no Republicans supported the bill and Republican dominated states are threatening legal challenges.

 In England, the highly centralised nature of power means that the government is able to undertake system-wide changes, albeit in the name of greater decentralisation. 

 In the long run, if the reforms prove unpopular, the price will be defeat at the polls at the next election.  In the short run, the cost may be to demotivate the very staff on whom finding the way to increased value at lower cost depends. 

 

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