NHS leaders can now explore radical health management organisation options, which run successfully in the US and Spain. But would such approaches really help the NHS deliver £22bn of additional value by the end of the decade?
Of all the aspects of Simon Stevens’ Five Year Forward View for the NHS, the most striking is the opportunity to pursue a capitated budget as part of a new model of care. The aim would be to make it easier to integrate care across the whole pathway, and to prioritise spending according to what benefits the whole population of an area, rather than as the accumulation of individualised responses. The effect would be to move away from activity-driven payments to bring hospitals, community and mental health services into line with the way GPs are funded.
The emerging policy landscape offers local leaders the opportunity to take up two radical health management organisation options – Multi-Speciality Community Providers (MCPs) and Primary and Acute Care Systems (PACS) – and emulate other models from across the world such as the Accountable Care Organisations (ACOs) from the US and the Ribeiro-Salud model from Alzira, in Valencia province.
But are these options really capable of providing a platform for delivering £22bn of additional value by 2020? Or is this another clutch by the NHS for productivity and efficiency straws?
In truth the answer may well be, it depends. The key will be to understand what might make them successful rather than await failure. Stripped back to their bare bones, they definitely have a fighting chance of success as they have the ability in one fell swoop to reconnect the budgets disconnected by the Lansley reforms and to recognise the importance of ‘place-based’ budgets in activating local communities and patients. But there are other lessons that need to be understood.
Experience from elsewhere suggests that, for population health management to work, the clinical model has to change. And this is not just about the organisational structure. Populations have to be more engaged, not seen as passive recipients of services. Contracts need to be longer (most ACOs have contracts of three to five years, in Alzira it’s 15) if the organisation is to benefit from ‘invest now to save later’ strategies. Partnerships must form across organisations if they are to be able to invest in one part of the system to save in others. Local workforce flexibilities are needed to align individual contracts with organisational objectives. And finally politicians may need to embrace new public-private partnerships in terms of inward investment and new relationships with technology suppliers.
Many of these issues look challenging, particularly in the run up to a general election and ignoring them might bring short-term solace, but doing so will almost inevitably bring longer-term costs and downstream strife for a beleaguered health and care system.
The experience of a capitation approach in Spain
The Alzira model in Valencia has operated in its current form since 2003 and has employed different mechanisms with the objective of providing integrated and efficient health services. The model has utilised both capitation and outcome-based mechanisms in support of this objective.
Key to the model’s success has been the adoption of a primary care orientation as part of the integration of primary and secondary care. A single provider is responsible for all healthcare provided to the population of the region, receiving a fixed annual capitated budget.
The contract requires that, for residents from Alzira using the service, the provider is paid at 80% of the rate for healthcare in the rest of the province. Should a resident choose to go elsewhere for treatment, Ribeiro-Salud, the provider organisation in Alzira must pay at full cost for their care.
A number of key clinical and patient experience outcomes are used to assess provider performance.
The model has delivered the following outcomes:
- Improved clinical outcomes and high patient satisfaction, facilitated by closer integration of services and pathways.
- Emergency waiting times in an acute setting of 60 minutes – versus a wider regional average of 131.
- The costs of providing health services to the commissioner have been reduced by 25%, with costs far lower than regionally and nationally.
Mike Farrar is CIPFA's strategic adviser on health
