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International Perspectives on Healthcare Lessons Learned Northwestern University May 9, 2007 Richard L. Clarke, DHA,

HFMA US and UK. . . UK. . NHS Plan

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International Perspectives on Healthcare Lessons Learned Northwestern University May 9, 2007 Richard L. Clarke, DHA,

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    1. International Perspectives on Healthcare – Lessons Learned Northwestern University May 9, 2007 Richard L. Clarke, DHA, FHFMA President & CEO HFMA Thank group – if chapter, mention something specific about the chapter from chapter profile. Share a brief, personal story related to trust, consumerism, or HFMAThank group – if chapter, mention something specific about the chapter from chapter profile. Share a brief, personal story related to trust, consumerism, or HFMA

    2. HFMA US and UK

    5. NHS Plan – Huge Investment NHS Investment Euro/US Comparison

    6. NHS Underlying Financial Principles Free at point of delivery Manage within overall resource limits determined by government – greater consideration for longer term time horizon Matching finite resources with essentially infinite demand for health services Structural or technological advances will always secure greater efficiency Intense public and media interest in NHS

    8. Political Agenda Labour government elected 1997: Tony Blair is PM Phase 1 – 1997: Save the NHS ‘New Labour’ thought Conservative Party did not believe in the NHS: Conservatives (Tories) = incompetent & nasty, while Labour = competent & nice Gordon Brown sticking to £s set by Tony Commitment to reducing waiting lists; 100,000 total list. Little reorganisation took place National frameworks introduced A belief in government - we could fix things, use of levers

    9. Political Agenda Phase 2 – Talking Targets (after 2 years or so) Bad Press: trolley waits, lists, critical care, etc. Labour said, “In a real mess because of Tories, but we will put it right” Recognise resources needed: money (lots)+ labour Asked ‘what care are we getting for our money?’ Answer was to use targets as a means to measure where the money’s gone

    10. Political Agenda Phase 3 – Market revisited (2004 - recently) Stems from Number 10 (PM and ministers) Redefining what the NHS is – free care at point of delivery provided by someone? (who, doesn’t matter) no NHS hospitals, only NHS patients? Break down consultant power Devolve decision making down, including FTs.

    11. Political Agenda Phase 4 – Where does it go next? Two scenarios: Optimistic – extra money will deliver enough change to deliver benefits to the public, market drives up efficiency, regulation drives up standards Pessimistic – tax funded NHS not sustainable, introduction of co-payment 2004 policy initiative = “the NHS Improvement Plan – putting people at the heart of public services”

    12. Strategic Agenda Structural changes: Strategic Health Authorities – manage NHS locally and acts as conduit between NHS organizations and Dept of Health, currently 10 in England Primary Care Trusts – cornerstone of NHS locally – provides some primary services, commissions secondary care – manages 85% of NHS budget, currently 152 NHS Trusts – public entities manage service provision including acute trusts with hospitals locally, regionally or within national specialities – commissioned by PCTs Foundation Trusts – created in 2003, semi-autonomous public benefit corporations – currently 62 authorized

    13. NHS Structure

    14. Strategic Agenda Responding to public pressure: Major reduction in waiting lists and times Patient choice Increasing supply side capacity National quality standards Consistency of access and services across the country

    17. National Programme for Information Technology (NPfIT)

    18. Payment by Results (PbR) Old system: Funded capacity not activity Negotiations over cost of inputs not service delivery Few financial incentives to do more Focus on cost control not service New PbR system: Funding linked to activity using HRG 3.5 and national tariff Enables more patient choice – patients move to where service is fast and good. More income to those who provide more (and better) service In 2006/07 more than £22 billion under PbR, 60% of acute hospital services

    21. Key Issues from Finance Perspective Constant tinkering by National government – drives administrative costs while trying to reduce bureaucracy Even with increased funding, system is resource constrained – in 2005/06 many trusts were in deficit spend – PCT “top slice” issue – 06/07 was better, but revenue growth and cost control key issues Future funding growth to be cut in 2007/08 to real growth at 2-4% level – dialing down “expenditure appetite” difficult PbR and national tariff system aims at aligning payment with volume and resources – but needs to focus on evidence-based protocols or pathways. One size does not fit all. IT implementation bumpy at best

    22. Policy Drivers National healthcare systems strive to be: Good (quality, access, effectiveness) Fast (wait times, convenience, efficiency) Cheap (efficiency, point of service cost) Best achieved anywhere is two out of three, many only achieve one UK does a lot with significantly less resources than US. But, would US population trust Federal govenment to work in their interests?

    23. Lessons Learned Demand is insatiable regardless of system Payment/funding systems rarely align incentives well enough to achieve good, fast, and cheap health care Efficiency and effectiveness are problems with most (all) systems – lack of evidence based clinical pathways or care management

    24. Lessons Learned Fundamental blocking and tackling key for both systems: Labor cost management - master staffing, training, culture, etc. Measurement a problem, especially for UK Throughput issues – scheduling, flow management, process improvement, and measurement are key ROI (benefit analysis) on new technologies and procedures Outsourcing of non-core functions WITH appropriate oversight Care protocols/care management systems to reduce variation

    25. References HFMA/US: http: //www.hfma.org HFMA/UK: http://www.hfma.org.uk NHS home page: http://www.nhs.uk NHS: “Options for the Future of Payment by Result: 2008/09 to 2010/11”: http://www.dh.gov.uk/en/Consultations/Liveconsultations/DH_073103 “Accounting for the Cost of Health Care in the United States.” McKinsey & Company. Jan. 07 http://mckinsey.com/mgi/rp/healthcare/accounting_cost_healthcare.asp

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