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You can't get to a system like Kaiser starting with a system like the
NHS. So adopting one of their ideas in isolation and suggesting we drop
PbR as the mechanism for paying hospitals is a naive mistake.
For most of its history the NHS has spent too much on its hospitals
relative to the rest of the system. This was true when it was an
integrated system (with no PbR) and remains true now we have a split
between providers and commissioners (with PbR). Neither system achieved
much integration. So it doesn't seem likely that abolishing PbR would
change things.
But current reforms might if they strengthen the hand of the
commissioners.
Splitting the payers from the providers of healthcare is designed to
balance the incentives in the system between rewards for doing work and
being efficient and constraining the system as a whole not to overspend.
the NHS is budget constrained and can't over-treat patients as a whole so
as long as the government is disciplined, PbR isn't likely to give us USA
style levels of spectacular over-treatment. PbR is also designed to reward
those providers who can attract more patients under choice because they
offer faster or better treatment. This should create a system wide
incentive driving quality and efficiency. This is heavily undermined,
though, by the existing commissioners. PCTs have an all too frequent
tendency to interpret their mission in terms of making sure the local
hospital stays open rather than getting the best healthcare for their
population. The two goals are frequently flatly contradictory (see the
recent story from cheshire where the PCT has closed a local ISTC which was
popular with patients and demonstrated higher quality than local
hospitals).
If GPs prove better commissioners than PCTs and balance the budget
while being ruthless in where they spend their money (allowing inefficient
and low quality hospital departments and even whole hospitals to close
where good alternatives are available) then PbR could drive big
improvements in health. GPs are in a good position to judge whether a
different balance of investment across the system (eg more care at home,
less in hospitals) would bring benefits to patients and savings. They
could even use their leverage over the money to push hospitals to engage
in a more collaborative system.
Kaiser exists in a competitive market for insurance income and all
its employees know they can't do well as an organisation if they over-
treat their patients or fail to establish systems that serve patients well
as there is no source for extra funding if they spend too much. The NHS
has historically lacked that discipline across the system even though it
has been a resource constrained organisation (in the past individual parts
of the system who overspend get bailed out by the centre or by other parts
of the system with no discipline). And other parts of the NHS have
perverse incentives to be inefficient (many hospital consultants make a
generous part of their income from private practice which relies for its
business on dissatisfaction with the NHS: making the NHS better would cut
their income).
We can't recreate Kaiser here and we need to find the right balance
of incentives to drive the NHS to be more integrated and better balanced
using realistic changes to the current system not single ideas from other
systems that won't work in our context.
Abolishing PbR wouldn't fix the integration problem in the NHS
You can't get to a system like Kaiser starting with a system like the
NHS. So adopting one of their ideas in isolation and suggesting we drop
PbR as the mechanism for paying hospitals is a naive mistake.
For most of its history the NHS has spent too much on its hospitals
relative to the rest of the system. This was true when it was an
integrated system (with no PbR) and remains true now we have a split
between providers and commissioners (with PbR). Neither system achieved
much integration. So it doesn't seem likely that abolishing PbR would
change things.
But current reforms might if they strengthen the hand of the
commissioners.
Splitting the payers from the providers of healthcare is designed to
balance the incentives in the system between rewards for doing work and
being efficient and constraining the system as a whole not to overspend.
the NHS is budget constrained and can't over-treat patients as a whole so
as long as the government is disciplined, PbR isn't likely to give us USA
style levels of spectacular over-treatment. PbR is also designed to reward
those providers who can attract more patients under choice because they
offer faster or better treatment. This should create a system wide
incentive driving quality and efficiency. This is heavily undermined,
though, by the existing commissioners. PCTs have an all too frequent
tendency to interpret their mission in terms of making sure the local
hospital stays open rather than getting the best healthcare for their
population. The two goals are frequently flatly contradictory (see the
recent story from cheshire where the PCT has closed a local ISTC which was
popular with patients and demonstrated higher quality than local
hospitals).
If GPs prove better commissioners than PCTs and balance the budget
while being ruthless in where they spend their money (allowing inefficient
and low quality hospital departments and even whole hospitals to close
where good alternatives are available) then PbR could drive big
improvements in health. GPs are in a good position to judge whether a
different balance of investment across the system (eg more care at home,
less in hospitals) would bring benefits to patients and savings. They
could even use their leverage over the money to push hospitals to engage
in a more collaborative system.
Kaiser exists in a competitive market for insurance income and all
its employees know they can't do well as an organisation if they over-
treat their patients or fail to establish systems that serve patients well
as there is no source for extra funding if they spend too much. The NHS
has historically lacked that discipline across the system even though it
has been a resource constrained organisation (in the past individual parts
of the system who overspend get bailed out by the centre or by other parts
of the system with no discipline). And other parts of the NHS have
perverse incentives to be inefficient (many hospital consultants make a
generous part of their income from private practice which relies for its
business on dissatisfaction with the NHS: making the NHS better would cut
their income).
We can't recreate Kaiser here and we need to find the right balance
of incentives to drive the NHS to be more integrated and better balanced
using realistic changes to the current system not single ideas from other
systems that won't work in our context.
Competing interests: No competing interests