Published on March 21, 2014
Innovations that could transform planned care Michael Macdonnell & Nick Ville 4th March 2014
What we’re going to talk about 2 The strategic context The opportunity in elective care How to seize the opportunity
We forecast a funding gap of £28-44bn by 2021/22 in a “do nothing” baseline case 3 85 90 95 100 105 110 115 120 125 130 135 Funding £bn £44bn £28bn 2021/2220/2119/2018/1917/1816/1715/1614/1513/1412/1311/122010/11 Real terms freeze Real terms freeze through 2014/15 followed by increase with real GDP (2.4%) Historical Funding pressures on the NHS in England (~4%) 1 The forecast spend assumes pressures continue to rise in line with patterns observed prior to 2010/11 and that policy-makers and managers take no action to improve efficiency and reduce costs. This estimate is based on the rising pressures on the NHS from 1) Demographics (principal population projection from ONS), 2) Health care activity (Chronic demands on acute 04/05-09/10; MH 08-10/11; primary care 95/96-08/09; prescribing 08/09-11/12) and 3) Health care costs (Pay 2% a year over GDP deflator; drugs in line with GDP). Assumes NHS funding continues to grow with inflation (GDP deflator). Forecast starts at 2010/11 as that is year with most available data for productivity calculations. 2 The funding gap is estimated to be ~£12-28bn by 2021/22 if the potential QIPP and wage savings to 2014/15 are delivered
So where are the improvement opportunities? IMPROVE CURRENT SERVICES Provider efficiency Reduce spend on low value interventions RIGHT CARE, RIGHT SETTING Patient self-care Prevent hospitalisation through integrated care Shift activity between care settings NEW SERVICES Examples: - Torrevieja Salud - CareMore - Martini-Klinik 4
5 30 6.5-12 2.4-4 1.7-2 5 7-14.4 Gap by 2021/22 Improve current services Right care, right setting Innovate new services Wage freeze to 2014/15 Remaining challenge New services Higher value care models are needed to close the gap £Bn/ pa
...And this view is shared by many NHS leaders 6 0 10 20 30 40 50 60 70 Technology New care models or types of providers Patient responsibility and self management %ofAudience Which of the following is the most important potential solution to the NHS' future challenges?
Healthy & well At risk Episodic needs or single LTC Polychronic and vulnerable elderly Severe illness & specialist needs Acuity Active & engaged patients & citizens Wider primary care at scale Modern models of integrated care High value elective care Specialist centres of excellence High quality urgent & emergency care networks Six future models or characteristics
What we’re going to talk about 8 The strategic context The opportunity in elective care How to seize the opportunity
A step change in the productivity of elective care Population For patients who need a planned or elective procedure (e.g. cataract or orthopaedic surgery) but excluding prescribed specialised services. What is it? Providers rationalise their portfolio to specialise in providing a specific planned care procedure and its aftercare at high volume. By performing at high volume, providers attract the best people, shift tasks to different grades raising quality, reducing variation and lowering cost Providers choose to specialise, do one or few things very well Measure clinical outcomes, report transparently Analyse variations, employ best ‘high volume’ surgeons Focus on improvement & best practice sharing Individual care tailored to patient
There are significant clinical and productivity opportunities to deliver better value elective care 10 Clinical benefits Productivity benefits • Reduced mortality and morbidity associated with higher volume centres • Reduced complication rates for surgical procedures • Reduced length of stay (and infection rates?) • Research capability, which in turn is associated with quality improvements • Better patient experience? • Greater asset utilisation; for example, theatres and other capital equipment • Higher workforce productivity arising from standardisation and potential for task-shifting • Better job satisfaction and recruitment benefits • Fewer complications, less re-work and potentially lower litigation costs • Purchasing / procurement benefits? Better value (outcomes/costs)
Case study 1 : the Shouldice Center, a dedicated and high volume hernia centre 11 About Shouldice Hernia Center Shouldice Hernia Center (Toronto, Canada) have a 55 year history in specialising in hernia surgery (80% inguinal hernia) • Total of >300 000 surgeries performed • 89 beds and 11 surgeons Developed own surgical method —"Shouldice repair" • Short operation time with local aesthetic • Quick recovering process (the patient leaves the operation theatre un-assisted) Key success factors Lower costs—and good outcome • Patients are screened carefully, mostly standard operations • Short operation time and recovery due to local aesthetic Lower fees attracts patients from all over North America • ~50% lower costs compared to other hospitals1 • ~50% of patients originates from outside Toronto and ~20% outside Canada Experienced and dedicated surgeons • Nicholas Obney, chief surgeon for 32 years, annual case load of ~800 surgeries Outcomes VolumeReoperationrate(%) ~7500 hernia surgeries 0 1 2 3 4 Sweden mean -89% Shouldice 3.2 5 year reoperation rate (%) 0.3 Primary surgery 1985 Primary surgery 1992–2007 1. HBS case study shows that a standard hernia surgery at Shouldice costs ~1500 USD, compared to ~3000 USD at other hospitals Source: Swedish National Hernia registry annual report 2012, E. Byrnes Shouldice, Surgical Clinics of North America, 2003 ; HBS Case study
Case Study 2: the ENDO-Klinik, the largest hip arthroplasty unit in Germany 12 About ENDO-Klinik Recognised Centre of Excellence within orthopaedics • ~50% of patients originates from outside Hamburg • Built a strong brand based on high quality since the start in 1976 • Part of the hospital group Helios, one of the largest private players in Germany Specialised in hip, knee, shoulder and ankle surgery • ~7000 patients visit the hospital annually • Only German hospital that is a member of International Society of Orthopaedic Centres Specialised in complicated cases A wide range of cases—including the most complicated • ~2000 hip and knee revisions annually (highest number in Europe) • Many other orthopaedic centers in Germany only focusing on standardised surgery Standardised processes and highly experienced teams • Operation theatres identically designed • Experienced surgeons with annual case load >200 • Only elective surgery minimising distractions from acute cases Outcomes Volume ~2300 hip arthroplasties 0.0 0.5 1.0 Reoperation rate (%) -13% Weighted mean for German high volume units 0.8 ENDO-Klinik Hamburg 0.7 Reoperationrate(%) 1. Antibiotic Loaded Bone Cement Source: AOK Weisse Liste http://weisse-liste.krankenhaus.aok.de/ ; http://www.cementinguniversity.com/centres-of-excellence/endo-klinik/presentation?cookieAccept=true; Interview with surgeon at ENDO-Klinik and former surgeon at Schön Klinik.
Case Study 3: the Schön Klinik Neustadt, a dedicated orthopaedic hospital 13 About Schön Klinik Neustadt Specialised within 8 surgical areas, i.e., orthopaedics, spine surgery and neurology • The hospital was bought from the municipality in 1995 • Annual case load of ~1500 hip arthroplasties and ~1000 knee arthroplasties Strong growth and internationally recognised as a Centre of Excellence • Between 1997 and 2005 annual case load grew at CAGR 6% • Extensive collaborations with international partners (i.e., Harvard Business School) • Swedish Global Health Partner and Schön collaborates in developing a spine surgery registry Key success factors Extensive focus on quality • Comprehensive documentation, reporting and follow-up • Developed own process called QED (Quality empowered by documentation) Cost-efficiency • Strong focus on identifying cost drivers and correct allocation of costs • Continuously streamlining operations by standardisation of processes, without affecting clinical outcomes negatively Outcomes VolumeReoperationrate(%) ~1500 hip arthroplasties 0.0 0.2 0.4 0.6 0.8 Reoperation rate(%) Weighted mean for German high volume units 0.8 Schön Klinik Neustadt 0.0 Källa: AOK Weisse Liste http://weisse-liste.krankenhaus.aok.de/ ; Schön Kliniks hemsida, http://www.lakartidningen.se/07engine.php?articleId=13843;
An important corollary: measuring mortality is not enough to expose the full benefits of specialisation 14 0% 5% Incontinence Severe urinary dysfunctionSevere erectile dysfunction 35% 7% 43% 76% German hospital average1 Martini-Klinik Complication rates 1 year post-operation (2012) 1. BARMER GEK insured 2012 Source: Quality report Martini Klinik, Budäus et al., Dtsch Ärztebl 2011; 108, personal communication Prof. Huland, BARMER GEK Krankenhausreport In surgery at least, there is an experience curve: for every doubling of experience (volume), quality improves by ~15%
15 What could this mean at a macro level? Planned care accounts for more than 30% of acute spend, or about £12.2bn per year Breakdown of planned tariff income1 £ billion (2012/13) 46% 29% 25% 24%22% 1%5%19%17% 11% 1% ELIP medical 0.1 ELIP other 0.6 ELIP surgical 2.3 ELDC other 0.1 ELDC medical 1.3 ELDC surgical 2.1 OPFU 3.0 OPFA 2.7 Total 12.2 3.0 3.6 5.6 58% of all acute spend 42% of all acute spend Acute 48 28 20 Non-tariff 20 Unplanned tariff 14 Planned tariff 14 29% 29% 42% Non-tariffTariff Breakdown of acute trust income from patient activities1 £ billion (2012/13) 1 Tariff income refers to income from activities subject to the national tariff. Difference in planned tariff income between charts due to coding adjustment SOURCE: Analysis based on FIMS; DoH Annual Report and Accounts 2012-13; and HES 2012/13 (Inpatient and outpatient datasets) Adjusting for coding errors, estimated at £12.2bn
A conservative estimate, based on reference cost variation, suggests the overall opportunity is at least ca £0.7-0.9bn 16 Opportunity from reducing cost variability to mean (e.g. shift to efficient providers) £ Million % of spend (12/13) 5% 8% 5% 9% Total opportunity 660 – 910 Inpatients 210-310 Day Cases 140-230 OP Follow- Ups 210-230 OP First Attendances 100-140 However, this opportunity is based on expensive providers achieving mean costs. What could be achieved if much more productive models were implemented and the bar was set by the best performing providers internationally? SOURCE: Analysis commissioned by Monitor based on 2012/13 Reference Costs
What we’re going to talk about 17 The strategic context The opportunity in elective care How to seize the opportunity
Making it happen........ 18 0 10 20 30 40 50 60 70 Lack of money Political or policy barriers Cultural resistence to change %ofAudience Which of the following barriers to change is the most important?
Challenges for national organisations 19 Partnership working • Join up our work and enable local health economies to take a system view Enabling • Be flexible in our approach and remove barriers Informing • Promote research and analysis the helps local decision- makers Active supporter • Lend our support to local ‘proof of concept’ or pilots Incentivise • Learn how we can better incentivise innovation and adoption
How can we encourage the emergence of high value elective care centres? Thoughts for local health economies 20 Understand what you’re buying • Require quality and cost data as a condition of purchase Allocate resources in search of better value • Move activity to best providers Consider incentives that reward value • Can pricing, CQUIN etc encourage providers to specialise? Commissioners Providers Do real strategy • Portfolio rationalisation (doing what you’re good at) is key Take a health economy perspective • An ecosystem of specialised providers operating at scale Consider innovative risk & reward sharing structures • To grease the wheels of collaboration This makes it sound easy -- taking patients and the public along will also be critical to successful implementation
Discussion question What can we do that would support innovation and promote its adoption more widely in the NHS? 21
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