NHS England is at present undergoing rapid devolution and reform. One of the major challenges is tackling the fragmentation of health services across England through better integrated care to improve health outcomes and minimize care costs. Looking at examples of such systems elsewhere points to the need for the NHS to integrate data across different providers, and to ensure their financial incentives are better aligned. By Joseph Kannarkat.
England’s NHS is pursuing a programme of reform aimed at improving health outcomes and becoming more cost efficient by reducing the fragmentation of care among different types of provider. As a result of the NHS Five Year Forward View published in 2014, the NHS and local councils together have established 44 health partnerships called Sustainability Transformation Partnerships (STPs). This has involved the formulation of community partnerships and a formal plan for each of the regional NHS entities and community-based health organisations.
The new 2019 NHS Long Term Plan aims to build upon these relationships through better risk sharing between the partners involved and further consolidation of services. However, this ambition is challenging, as it involves many different stakeholders who have conflicting incentives. For example, a Clinical Commissioning Group (CCG), an organisation that commissions most hospital and community services in their area, tends to be more concerned about overall population outcomes, whereas providers like GPs or hospital staff are more concerned with their individual patients.
STPs are therefore considering novel systems of care integration, ranging from collaborative to contractual in nature. Adopting a new model can benefit from comparison with other current models of integrated care, international and domestic, to investigate how to align both the financial and the care incentives of different stakeholders.
There are quite a few international models of integrated care, but I studied two from the US selected for their similar vision to the NHS, and their unique structural approaches. It is important to note that the US and England follow two different systems of care, particularly in which the NHS is government managed where as care in the US is usually insurance based. Therefore, any systems learning should be thoroughly examined to ensure they can be applied in the context of the NHS.
One was the University of Pittsburgh Medical Center (UPMC), a not-for-profit health system in western Pennsylvania. UPMC is special among US health systems as it is both a provider of care and an insurer serving several million members. This enables UPMC to analyse insurance payment data and patient outcome data to identify how to better serve their constituents. UPMC has developed a Center for High-Value Health Care to perform data analysis through clinical studies, electronic health record analysis, and other strategies.
UPMC is an Accountable Care Organization (ACO), a US entity that links payments and performance for a coordinated group of providers. ACOs are a model promoted by the Center for Medicare and Medicaid Services (CMS), which manages the national Medicare insurance (for individuals over 65). As the largest single purchaser of health care in the US, CMS uses Medicare claims to drive health policy changes. For example, the American Recovery and Reinvestment Act of 2009 required all Medicare and Medicaid beneficiaries in the US to adopt electronic health records (EHRs) by January 1, 2014 in order to retain their health reimbursements.
The lesson from UPMC concerns the challenges presented by a fee-for-service reimbursement scheme, namely financial viability for hospitals, given the economic inefficiencies of the model, which increase care costs by encouraging possibly unnecessary services or procedures. UPMC addresses this through its data integration, linking records for individual patients, suggesting the NHS’s STPs could pursue a similar data-driven approach.
The second US example is the Maryland Total Cost of Care Program. Maryland has had a waiver since the late 1970s that allows it to manage its Medicare funding independently of the CMS’s other operations. An independent Health Services Cost Review Commission can set standardised reimbursement rates across the state. In July 2018, the Maryland Total Cost of Care model was introduced. For the first time in the US a state is accountable for the total cost of care across all types of care providers for Medicare beneficiaries. All Medicare fee-for-service beneficiaries register with a Maryland hospital, and 1% of each hospital’s Medicare revenue is at-risk for its financial performance against a total-cost-of-care (TCOC) benchmark. This potential loss creates a financial incentive for hospitals to develop strong relationships with primary care practitioners, specialists, community organisations, and other stakeholders to better coordinate care for their patients and prevent readmissions. To further support these initiatives, peripheral programs now mean nonhospital facilities, clinicians, and home health agencies may be eligible for payments from Medicare, supporting integration of community care.
The program has resulted in a complete shift by 2018 from fee-for service (for example a fee for every test) to payments based on the number of patients, achieving $916 million savings over the past several years. The lesson for NHS STPs is the importance of total cost of care as a metric for aligning financial incentives and encouraging integration. The STPs should seek to understand the alignment of financial incentives among their stakeholders, and test financing models interoperability requirements for integrating their data.
There is also scope for comparison among England’s STPs. Integrated care goals appear to be consistent across STPs. Major themes include reduction of readmissions, better integrated mental health services, and improved care for complex conditions. Yet STPs vary widely in their structures and demographics, and while this has made uniform approaches to integration strategy impossible, it offers some valuable insights. Some areas, like Frimley, have three CCGs after a recent merger in East Berkshire, while others have just one acute hospital in their area. Some have already taken a stab at integrating governance. For example, the Sussex and East Surrey STP recently appointed the Chief Executive of their CCG to the role of Senior Responsible Officer of the STP.
Many STPs are facing similar challenges. These include funding, accountability between partners, coordinated financing, data integration, and developing a sound organisational structure. There are some similarities across the board including starting with GPs as the center of integrating local care and forming strong provider-commissioner relationships to allow natural governance structures to form. The transition is bound to involve its growing pains, but the promise of integration is that it will lead to higher quality and more cost-effective care.
The views and opinions expressed in this post are those of the author(s) and not necessarily those of the Bennett Institute for Public Policy.
