The Nuffield Trust Blog

On the day that the Coalition Government published ‘Liberating the NHS: commissioning for patients’, I found myself here in Auckland as a keynote speaker at the joint conference of the Australian General Practice Network and General Practice New Zealand.  These two bodies represent what in this part of the world is known as ‘organised general practice’ or in NHS terminology ‘GP consortia’.

Travelling to the Southern Hemisphere can be disorientating.  Summer is replaced by winter, and the days are suddenly short again.  What is however reassuringly familiar, both in New Zealand and Australia, is the talk of health system reform and efficiency, the future role of GP networks and organisations, and how far such networks should take on health planning and budget-holding responsibilities if they are to develop better integrated care.

Time and again here, I am being asked ‘what on earth are they doing in the NHS, giving budgets to GPs again for commissioning – isn’t that rather risky?’  To this, my response, as discussed by my colleague Ruth Thorlby when we were in the USA recently visiting medical groups in California, is that yes, there are clear risks in taking such an approach, and careful implementation will be needed if the next incarnation of GP commissioning can deliver where others in the UK and overseas have failed.

However, as I observe the Australians considering (subject to what happens in their upcoming elections) the development of a national system of ‘Medicare Locals’ – primary care planning organisations to sit alongside the long-standing Divisions of General Practice that have been fiercely clinician-led GP collectives for almost 20 years – I wonder if that is not more risky than what us Poms might be doing.

I have been warning Australian colleagues of the very real risk of killing off much of their extensive GP engagement in Divisions, based on what happened in the NHS when the imposition of PCTs effectively snubbed out the clinician engagement in commissioning that had been a hallmark of GP fundholding and total purchasing in the 1990s.

Here in New Zealand, the government is backing a number of highly ambitious proposals to build complex new primary care organisations, having sought expressions of interest from across general practice and other community providers.

Under the banner of ‘Better Sooner More Convenient’, these networks of providers (covering a population base ranging from approximately 30,000 to over a million) are now trying to work out how they can deliver better integrated and more efficient local services, whilst preserving the vital clinician engagement that has been nurtured through the independent practitioner associations that have played a key role in New Zealand general practice for two decades.

This leads me to conclude that the great potential in the current NHS proposals for GP commissioning is the opportunity to rekindle the clinical engagement that was snubbed out in the late 1990s.  The challenge for policy-makers is to enact GP commissioning in a way that excites and engages front-line clinicians, whilst assuring an appropriate degree of public accountability for holding such large budgets.

My hope is that in designing the new arrangements, we can look beyond our own shores to learn from both the successes and failures of colleagues in New Zealand, Australia, Canada and the USA – all of whom have experimented (and continue to experiment) with using organised general practice as the basis for planning and funding local health services. 

To this end, the Nuffield Trust will be publishing a briefing paper in September that explores Californian experience of medical groups, and a monograph in December that examines the New Zealand IPA experience and what it has to offer the NHS.

So whilst the new NHS proposals are indeed risky, they also hold the potential for a new phase of real clinical engagement in service development, as long as we can focus on careful design and implementation of the new arrangements. 

As the former captain of the Australian rugby team, Nick Farr-Jones, exhorted at the conference here yesterday – don’t get dispirited by constantly looking at the scoreboard, focus relentlessly on the detail of your game, and results will surely follow. 

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As the coalition government begins to consult on its radical proposals for NHS reform in England, the boldness of the ideas have begun to be noticed internationally. The ideas contained in the recent white paper, Equity and Excellence: Liberating the NHS, were the subject of much discussion at a recent meeting of policy-makers and academics in Boston, sponsored by the Nuffield Trust and Commonwealth Fund (check back shortly on these pages for a longer write up).

This was partly due to a sense of shared excitement and apprehension about change: the US Congress has recently passed its landmark health care reform act which envisages change to all areas of the health care system and, like the UK, still faces much uncertainty about the health of the economy.

Although the two countries have very different health systems and differing goals for reform – the US is hoping above all to extend basic health care coverage to millions of uninsured people – there were some powerful themes in common emerging from the discussion.

This is partly because a secondary aim of health reform in the US is to contain costs (which have seen relentless rises in the cost of health insurance premiums, driven by price-hikes from hospitals and other providers) and address the increasing fragmentation of care.

Many of those at the meeting agreed that the delivery of high quality, efficient healthcare will hinge on the willingness of clinicians to act not just in the best interests of their individual patients but care for patients across organisational boundaries, as well as acting as custodians of scarce resources.

It is this idea that is at the heart of the government’s plans for the NHS.

There was much debate about how to achieve this. There is, obviously, much greater reliance on the market to deliver reform in the US and there are some examples of spontaneous health plan initiatives to incentivise primary care physicians to find better quality and value for their patients – very similar to GP commissioning.

In one example discussed at the meeting, physicians had already switched their patients to a better value hospital, but ominously, the biggest and most powerful hospital providers in the area were refusing to take part.

NHS Trusts should face stronger incentives to cooperate as the overall NHS budget is fixed, but it will be a challenge to design incentives that ensure good cooperation across institutional boundaries in the NHS, especially if competition is the government’s favoured approach for provider reform.

The other model that has long been of interest to the NHS is the providers of high quality, integrated care.

What is striking about examples, such as Geisinger or Kaiser Permanente, is their comparative rarity.

Competition has not automatically produced integrated care or high quality leadership and positive cultures within organisations in the US, a message which the new government would do well to heed.

There was general agreement that there needs to be more effort on supporting physician leadership and creating the desired culture within organisations. This requires a focus on professional and organisational culture and a much more sophisticated understanding of what blend of government, competitive and regulatory pressures will work best.

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A series of resources, including podcasts from the Nuffield Trust and Commonwealth Fund conference in Boston, will be published on our website shortly.

As details emerge about the new Coalition Government’s plans to reform the NHS by handing GPs more commissioning power, one thing is certain: this reform is high risk and will need very careful implementation if it is to deliver where others in the UK and overseas have failed.

At the point where NHS funding is about to be squeezed, and commissioners need to drive rapid improvements in efficiency and quality, there is little evidence that GP commissioning can deliver to the extent implied in the White Paper.

Most notably, while a handful of GPs around the country are leading the way in GP-led commissioning, the majority have to date shown little appetite for this new role.

There are clearly a great many details to be worked out - these challenges are summarised in our recently published paper Giving GPs budgets for commissioning: what needs to be done?. 

We know from past experience of GP fundholding and total purchasing pilots in the 1990s that GPs can hold budgets, make savings and improve certain aspects of quality of care.

However, the evidence suggests that whilst they are skilled at developing new forms of primary and community care, they typically struggle to have a significant impact on urgent, specialist and hospital care, which is where many savings now need to be made.

Learning is therefore urgently needed from clinician-led organisations that have experience of taking on budgets with which to deliver and commission care for their enrolled population.

With this in mind, we’ve come to the US to find out about one type of clinician-led organisation that is similar to the proposed GP commissioning groups. In California, some GPs and specialists work in large medical groups or networks that bring together small practices to hold budgets for some or all of the health care that their patients will need.

These groups receive a monthly fee from the insurance company (or the federal government in the case of Medicare for older people) from which to provide both primary and hospital services. This is the first powerful incentive – it is in the financial interest of these groups to see that patients are kept well and not admitted to hospital unnecessarily.

The success of these groups, some of which have hundreds of thousands of patients, depends on their ability to support and enable doctors to practise good and appropriate medicine and to co-ordinate care with other parts of the health and social care sector.

The organisations closely manage the performance of their doctors. High quality care is rewarded with bonuses, poor performers are supported to improve, but eventually, poor-quality care can lead to exclusion from the medical group. 

Many of these groups have hired social workers, specialist care managers and hospital-based doctors who make sure that their frailest patients are supported to leave hospital with an appropriate range of support services and are hence at minimal risk of re-admission. These groups now boast readmission rates as much as 60 per cent lower than the national average. 

Judging from this evidence, it is easy to see why the Coalition Government might be excited by the California model. Business savvy doctors have been able to devise new forms of care that have cut a profitable swathe through the highly wasteful US health care system in a way that benefits patients.

But there are some important caveats here that the new government would do well to heed. These groups have invested substantially in management infrastructure, including IT systems and the expertise needed to monitor quality and negotiate multiple contracts with providers. They have also invested in leadership and are training the next generation of physician leaders to take over from the original trailblazers. Time away from seeing patients is always reimbursed and much time has been devoted to building relationships with hospitals and specialists, and although this is a competitive market, in practice, contracts are rarely switched. 

These groups have also taken decades to evolve in a generally favourable financial environment which has seen steady increases in the budgets allocated for the care of a patient each year.

And above all, these groups are the survivors. Many smaller groups who set out on the budget-holding and commissioning road went bust both in California and in the rest of the US. The ones that have thrived have done so with a fair financial wind and a business-oriented culture that accepts failure. These conditions are not currently present in the NHS. The reforms will need to be carefully designed and implemented in the light of these constraints. 

Click here to read Nuffield Trust Director Dr Jennifer Dixon's reponse to the publication of the Coalition Government’s health White Paper, Equity and Excellence: Liberating the NHS.

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