Behind that line lie all the capitals of the ancient state

1
Lessons from the English NHS (and elsewhere)

• Martin McKee
• London School of Hygiene and Tropical Medicine
• European Observatory on Health Systems and
  Policies
• www.observatory.dk

2
Lets start at the very beginning

• a very good place to start

What are health systems actually for?
3
Possible answers

• The responsibility of government is to improve
  the health of the population, to respond to their
  legitimate needs, and to do so fairly
• The responsibility of a private company is to
  increase the returns to its shareholders

4
but not only responding to what turns up

• Assessing health needs
• Monitoring the outcomes of health care
• Training the next generation of health workers
• Generating the knowledge needed for technological
  development

5
It all seems rather complicated

• Health systems are complex social systems
• Involving real people, with hopes, aspirations,
  and motivations
• They involve multiple interacting elements
• Primary, secondary, specialist care
• They involve multiple stakeholders
• Health, education, industry, regional development

6
If it really is so complicated

• Surely we could simply leave it to the market
• The invisible hand must be better at organising
  this complexity
• No-one at the centre can possibly second guess
  all the individual decisions

7
after all, havent we learned from the 50 year
natural experiment
From Stettin in the Baltic to Trieste in the
Adriatic, an iron curtain has descended across
the Continent. Behind that line lie all the
capitals of the ancient states of Central and
Eastern Europe. Warsaw, Berlin, Prague, Vienna,
Budapest, Belgrade, Bucharest and Sofia.
8
except.

• Markets in health care dont work so well
• Many people who need health care dont realise it
• Even if they do, they may be deterred from
  seeking it
• They often dont know what they want
• Those providing care may not realise these people
  even exist

9
Once it was so much easier

• An individual patient went to a doctor
• The doctor
• made a diagnosis (probably wrong),
• applied a treatment (probably ineffective)
• The patient
• died, or
• got better

10
but now

• A patient with arthritis, Parkinsons, heart
  failure, bronchitis, diabetes, and depression
  goes to a family doctor
• The patient is referred to a series of medical
  specialists, nurses, other health professionals,
  all working together in a network, collaborating
  with each other
• She receives multiple powerful and effective
  medicines, all of which are affected by her organ
  function and by the other drugs
• She remains under continuing review for the
  remainder of her now active and fully engaged life

11
but even in the old days

• Even when the state played a minimal role in
  health care
• It always intervened in some areas
• Mental health
• Infectious disease

12
The inter-relationship of practically everything

• A family is injured in a high speed car crash
• They arrive at an emergency department
• There is no paediatric service it has been
  moved into the community
• The eye injuries cannot be treated as the
  ophthalmologists have been relocated to an
  independent treatment centre to concentrate on
  waiting lists for cataracts
• The complex hip fracture cannot be treated,
  because the orthopaedic surgeons have been
  relocated to an independent treatment centre to
  concentrate on waiting lists for knee
  replacements
• There is no microbiologist to speak to about the
  wound infection because the service has been
  moved 200 miles away

13
An analogy air travel

• You want to go from Stansted to Charleroi no
  problem
• You want to check your baggage in for a flight
  from Rome to Ljubljana via Milan forget it

14
The double agency relationship

• The traveller
• Knows where they want to go to
• The airline
• Knows how to get there
• The travel agent
• Knows all the different options available

• The patient
• Knows that she is unwell, but not why and what
  can be done
• The doctor
• Knows why she is ill, what must be done, but not
  who else did not seek help, or how to put in
  place the complex arrangements for help to be
  given
• The purchaser
• Knows what type of people are not getting care
  and what the best (evidence-based) models of care
  are, and can put them together

15
Another area where markets have problems

• Opportunistic behaviour
• Cream-skimming
• Enrolment for a HMO on 6th floor of a building
  without an elevator
• Declining to treat complex and expensive, but
  inadequately reimbursed patients
• Concentration on conditions with high returns
• Short-termism
• High volume elective surgery, but no provision of
  training

16
Reaching out to those in need

• Doctors tend to gather where the climate is
  healthy... and where the patients can pay for
  their services
• Ivan Illich
• "the availability of good medical care tends to
  vary inversely with the need for it in the
  population served."
• Julian Tudor Hart

17
And another specifying the product

• Uncertainty
• What single diagnosis for a patient with multiple
  pathology
• Clinical thresholds
• Data manipulation
• DRG creep

18
Looking to the future

• To respond effectively we need to take a long
  time perspective and engage in sustained
  investment to meet future needs
• We must increase dramatically our ability to
  forecast the needs for these resources
• We must incorporate flexibility to adapt to
  changing circumstances

19
Changing circumstancesKnown knowns and unknown
unknowns

• there are known knowns there are things we
  know we know. We also know there are known
  unknowns that is to say we know there are some
  things we do not know. But there are also unknown
  unknowns, the ones we dont know we dont know.
  And if one looks throughout the history of our
  country and other free countries, it is the
  latter category that tend to be the difficult
  ones.

20
So in the end it is an empirical question

• Markets beat planning where the conditions for a
  market exist
• Less certain whether this applies in health care
• Which gets the best results?
• Planned services
• Unplanned services (free market)

21
Type I diabetesThen and now

• Discovery of insulin changed a rapidly fatal
  disease of childhood into a lifelong disorder
• Now compatable with a normal life span, but large
  differences in actual attainment
• Healthy survival requires co-ordination of
  efforts by many people and organisations
• Pharmaceutical supply and distribution
• Primary care
• Specialist care
• Self care

22
Value for money?
US health expenditure 15 of GNP Swedish health
expenditure 9 of GNP
23
Cheap, convenient, and deadly

• Some Hospitals Call 911 to Save Their Patients
• A 44 year old man underwent thoracic surgery in a
  small specialist hospital in Texas
• He developed respiratory problems
• There was no medical care on site
• The nurses called 911 to get help from a nearby
  full service hospital
• He died
• New York Times, 2 April 2007

24
Preventing deaths from cervical cancer more may
not be better

• Number of cervical smears in a lifetime
• Germany 50
• Finland - 7

5
4
Germany
3
2
Finland
1
0
1990
2000
25
Avoidable mortality

• Idea goes back to Florence Nightingale
• Concept developed in 1970s
• List of causes of death at particular ages where
  death should not occur
• Examples include
• diabetes under age 49,
• leukaemia under age 15,
• Asthma under age 65

26
Change in avoidable mortality 1998-2003
27
Still, maybe the private sector gives better
value?

• In Australia, after adjusting for case-mix,
  public hospitals are more efficient than
  privately operated ones
• Perhaps because private hospitals treat patients
  more intensively
• Systematic review of 149 comparisons of US
  for-profit and not-for profit hospitals
• 88 found not-for-profit better cost, outcomes,
  access
• 43 found no difference
• 18 found for-profit better

28
and not just in health care more market
successes

• Break up of UK telephone directory enquiry
  service
• Millions spent on marketing by new operators
• Recouped by much high charges
• Quality of service appalling
• Customer confusion
• Collapse in demand
• 118118 (market leader) abandoning product
• A complete disaster

29
The English experience

• Recognition that the UK was lagging behind
  similar countries
• Low cancer survival
• Long waiting lists
• Concern about future affordability of health
  system
• Ageing population
• New technology

30
Projections of future expenditure on UK NHS under
three scenarios

50 bn
Fully engaged major commitment to health
improvement
Source Wanless Report
31
So what happened?

• Wanless recommended sustained investment in
  health promotion and health care capacity over a
  10 year period
• Gordon Brown wanted results quicker (the tyranny
  of the electoral cycle)
• Rapid increase in expenditure
• Limited scope to increase supply
• Price inflation

32
Drive to increase capacity

• Patients sent to France, Germany, Belgium for
  surgery
• Private finance initiative to pay for new
  hospitals
• Independent Sector Treatment Centres for elective
  surgery

33
Going abroad cheaper and faster
The first nine patients sent to France by the
English NHS
Comparing prices
34
Building new hospitals

• Public Private Partnerships
• Nothing new
• All hospitals (except in the USSR) have always
  involved some public-private involvement
• New model involves private sector designing,
  building, and operating facility on behalf of
  state body
• PFI in UK most widely applied model

35
Suggested benefits

• Private sector intrinsically better at managing
  projects than public sector
• If so, why leave public sector with even more
  complex task of managing the PPP?
• Most important removes funding from public
  sector borrowing requirement, so allowing Finance
  minister to achieve his Golden Rule of no net
  borrowing over economic cycle
• Except that this no longer applies as PSBR has
  been redefined

36
and also

• More likely to complete on time
• Except time from project conception to completion
  may be longer
• Transfers risk to private sector
• Except, risk comparator pseudo-scientific
  mumbo-jumbo
• Official from United Kingdom National Audit
  Office

37
In practice

• Higher cost (in some cases unaffordable)
• Favours new build over refurbishment
• Longer, costly, and more complex procurement
• Inflexibility
• Lack of real evidence due to secrecy
• Problems with quality

38
The cost of private provision

• High costs of preparing tenders, involving very
  extensive legal specifications to cover all
  foreseeable events
• High costs of preparing tenders, with losing
  contractors passing costs on in next bid
• Cost of borrowing higher for private consortium
  than government
• Governments have AAA status
• PFI bonds typically BBB (just above junk status)

39
Flexibility The hospital of the past
Medical
Medical
Medical
Medical
Paediatrics
Pathology
Maternity
Surgery
Surgery
Theatres
ICU
Geriatrics
Radiology
Outpatients
Geriatrics
A E
40
The hospital of the future?
Medical Assessment
Major trauma
Minor Injury
Primary Care
Paediatrics
Children
Imaging
Pathology
Imaging
Specialist Imaging
Pathology
Imaging
Diagnostics
Pathology
Theatres
Ambulatory care
Intermediate care rehab
Medium
High Dependency
Maternity
Theatres
Imaging
ICU
Source Edwards McKee
41
The bed issue
n
Too few
contracted
Beds
Too many
requirements
0
Now 30 years
Now
42
and populations change

• Need for reconfiguration of hospital services in
  many places
• Take an area served by 3 hospitals, which now
  needs only 2
• One is a PFI hospital
• If it closes, the health authority still has to
  pay as if it was open
• Already a problem with PFI schools

43
Higher quality?

• Bishop Auckland Hospital
• Generator and core electrical systems had to be
  redesigned immediately after opening
• Norfolk Norwich Hospital
• Negative pressure rooms were not properly
  operational for 2 years
• No ventilation in the kitchens so staff work in
  30 C temperatures (with 44 C being recorded)
• Hereford Hospital
• Boiler house opened with no water treatment plant
• Doors too heavy for the opening restraints
• Seacroft Hospital, Leeds
• Mental health facility found to have breached
  every section of the fire safety code

44
But we should look beyond Europe too

• La Trobe Regional Hospital, Melbourne, Australia
• Built by a private company to replace older
  public hospitals, having entered into a
  confidential contract with the government of
  Victoria to provide hospital services for 20
  years.
• In 1999 the hospital lost AUS6 million and was
  projecting ongoing losses.
• The Victoria health minister reported that the
  scale of losses was such that the hospital could
  no longer guarantee its standard of care.
• In 2000 the company was released from its
  contract in return for an agreement to drop legal
  action against the government.
• It sold the facility to the government for
  AUS6.6 million (about half of what it was valued
  at) and made an additional payment of AUS1
  million.

45
Dead but not buried?
46
ISTCsHow are they performing?

• Paid 11 above NHS rates plus a further subsidy
  to cover bidding costs
• Compliance with contracts uncertain but estimated
  that only about 70 of contracted work being done
• Data were so variable and incomplete as to render
  any attempt at commenting on trends and
  comparisons between schemes and with any external
  benchmarks futile
• increasing evidence that they are unable to
  manage complications

47
In summaryModernising the English NHS

• Creative destruction
• McKinsey Co
• We had to destroy the village to save it
• Peter Arnett quoting unnamed US Army officer in
  Vietnam

• Modernisation
• or The Great Leap Forward