Jeremy Hunt gives the impression of not being very enthusiastic about patient choice and competition in the NHS. This may well explain the small number of competition investigations by Monitor over the past 18 months.
On the other hand, he is enthusiastic about the power of data transparency to drive service improvement. He thinks that clinicians, managers and NHS organisations, more generally, are powerfully motivated when data is made publicly available that allows their performance to be systematically compared with their peers.
There are many similarities between the idea of data transparency as a driver of service improvement, as the Secretary of State would like to see, and the concept of ‘comparative competition’.
In the water sector, where comparative competition is used extensively, the regulator uses performance data from each utility to set a five year tariff path. By the end of the five year period, each utility is charging a tariff that is consistent with earning enough revenue to cover the costs of the most efficient provider. In this way, the water sector uses transparent data to drive performance – just as Jeremy Hunt envisages for the NHS – but in tandem with regulatory action, rather than relying solely on the natural, competitive instincts of water engineers and their managers.
Despite these differences, there is an interesting question of whether a model of comparative competition, driven by data transparency, could be used in the NHS to encourage service improvement. And further, whether this could replace existing models of competition that revolve around patient choice and competitive tendering.
Such a development potentially fits quite well with emerging organisational models in the NHS that reintegrate purchasing and provision and are financed through capitated budgets.
Reintegrating purchasing and provision inevitably means a much reduced role for competitive tendering. There is no longer an independent purchaser able to choose between different providers (or threaten to do so). There may also be a much reduced role for patient choice within such a model. It seems to follow that an integrated purchaser-provider will primarily treat the population that it serves through its own provider arm.
Data transparency and professional motivation, rather than threat of losing revenue as a result of losing patients and/or contracts, may in effect become the default basis for incentivising performance improvement for these organisations. Depending on your point of view, this may well be better than the current arrangements for incentivising organisations to provide high quality services.
However, while professional pride may be the strongest possible motivator for service improvement, this does not mean that relying on it will deliver the best possible care, across all services, in all organisations, at all times.
Where care quality falls short, as it inevitably will in some services at some point, what is the choice for the patient? Must the patient continue to use services at an integrated provider even when the patient knows better than ever – due to the efforts that have been made to improve data transparency – that a particular service at its provider is underperforming? Or, is the patient given the opportunity to access services elsewhere?
Simon Stevens, in an interview with Andy Cowper the other day acknowledged that a particular risk of vertical integration is a potential “lack of patient responsiveness: ‘like it or lump it’ care”. He suggested that to address this risk there would be “various tests – starting with a default assumption of a partnership of equals between GPs, community services and hospitals if health economies want to form a primary and community system (PACS)”. I’m sure that this is an important point in developing an effective PACS, but I’m less sure how it addresses the risk of ‘like it or lump it’ care.
It seems to me that a big difference between the Accountable Care Organisations that are being established in the United States, and the vision of integrated CCGs and providers as UK style ACOs, is that the starting point for a US patient (or, in many cases, their employer) is to choose their ACO.
The implicit assumption in the UK, however, appears to be that patients will continue to be served through the existing geographically defined model, without the prospect of being able to opt for another integrated provider.
If choice of integrated provider is not possible, then it might be possible to preserve a degree of provider choice for patients by forming larger organisations that include multiple providers, or to form networks of integrated organisations (a kind of mutation of the Dalton review). Patients could then choose a provider from multiple options within a PACS or from the network to which their PACS belonged.
In some ways, this is how the prime contractor model works. A prime contractor for MSK services, for example, contracts with multiple providers of inpatient services that patients can choose between. (While the patient cannot choose their MSK service, there is at least a choice for what many patients might regard as the most critical part of the service.)
Of course, once patients start accessing services from providers other than their PACS, there is a question of the price that is charged for these services, and whether this is a regulated tariff or subject to agreement (and competition) between providers. (Moving to a capitated budget doesn’t necessarily make the question of tariffs go away.)
There are also the potential challenges that are similar to those that arise in insurance systems in terms of whether patients can access any provider, or just those within a defined network. Where the latter is the case, barriers to network participation by outside providers will tend to arise. (It was this latter issue that was at the core of Circle’s complaint to the competition authorities that started the market investigation into private healthcare.)
I can’t see patient choice going away under a move to integrated commissioning and provider organisations, but the complexities of accommodating it could, in many ways, be equal to – or greater than – what currently has to be dealt with.
It certainly makes me wonder whether there really are significant costs that can somehow be removed from the system by moving from one set of arrangements to another …