Integration: the past or the future?

Blog post

Published: 25/11/2009

All talk in the NHS is of the big financial challenge ahead. Using that challenge to accelerate development of the NHS rather than set it back will be critical. In the short term bigger than usual reductions of hospital beds, pay restraint and staff reductions, in particular cut backs in managerial costs, and economies in supplies must be on the cards. Done well that will take a lot of effort, but it will not be nearly enough. 

What is needed is change that will set the NHS on a better path for the future, in which short run economic misery will give way to medium and longer term significant pressures in particular from social attitudes, technological innovation, and an older assertive population. The financial squeeze will be the most powerful prompt we’ve had in the NHS for the last ten years to innovate. 

Inside organisations, giving clinicians more responsibility over budgets, aligning financial and non-financial incentives to increase efficiency and quality along a care pathway from hospital to home, linking person-level information on cost, quality, and use and encouraging peer review of clinical performance, must be a route towards better efficiency and quality.

This is why there is so much talk of integrated care at present. One main disagreement in play is whether integrated organisations are needed to achieve it. For some, integrated organisations would be like turning back the clock to the 1980s. To others, it would be nirvana where professionals could collaborate in the same organisation, driven by an internal sense of mission not competition. 

But outside of these lazily politicised extremes, pragmatic men and women in the NHS are struggling to reduce obstacles on their patch to achieve better co-ordinated care which avoids hospital admission. The approach is less of big-bang organisational merger, which the evidence shows does not save money, more of growing networks and evolution. Some radical ideas are emerging across the country, for example in Trafford, Hampshire and Redbridge PCTs. 

The ingredients of proposals are different but common themes include: closer working between clinicians working in hospital and the community; peer review of clinical performance through linked information systems; clinicians taking on a risk adjusted capitated fund and financial risk; exploration of ‘mutual’ or foundation trust organisational structure (see our report: NHS Mutual: engaging staff and aligning incentives to achieve higher levels of performance); and pulling care out of hospital into an ambulatory care delivery system. 
These themes are also emerging from a series of international case studies of high performing health care organisations that we will publish in the spring. In the US they result in eye- popping attention to helping patients stay well. 
Integrated care takes time to develop. At a series of seminars we held this year with the Royal College of Physicians and the Cambridge Health Network, we heard from leaders of Geisinger Health System in Pennsylvania, Hill Physicians in California, Kaiser Permanente, South California, and Group Health, Seattle.  These organisations have been around for at least 40 years, and their (mainly clinical) CEOs and chairs for at least 20. 
These organisations also need an accurate budget to take on the financial risk of managing it. Our recent work for the DH shows it is possible to develop a robust capitation formula, and that the level of financial risk appropriate for organisations to manage can be informed empirically, rather than by political judgement or experience.
Less clear is what conclusions to draw on the impact of competition. In the US high performing organisations operate in different environments, from Kaiser Permanente in a highly competitive environment to Geisinger low.  Also unclear is how, in this evolving environment, commissioning, in particular practice-based commissioning (PBC) will develop.
A new Nuffield Trust and NHS Alliance paper (See Beyond Practice-based Commissioning: the local clinical partnership) sees PBC migrating in time into a multi-professional clinical partnership where, for example GPs as well as hospital-based specialists, could take on responsibility for designing, delivering and commissioning local health services. They would be handed real budgets and would have responsibility for the health outcomes of their local communities – and the organisational form would be owned and determined by local clinicians.  
May be this evolution will stop when the financial climate turns arctic. Looking across at Europe and North America, where similar patterns are emerging, it seems unlikely.  Across the UK some of the clear differences between the four NHS’s may be because the relatively lower funding settlement in England has forced needed change (subject of an analysis we are publishing in January 2010). 
In the end, I suspect the economic crisis will not be wasted.

Suggested citation

Dixon J (2009) ‘Integration: the past or the future?’. Nuffield Trust comment, 25 November 2009.