A New NHS Model of Care?

Today’s report from the NHS Confederation on new models of NHS financial flow may mark the beginning of the new NHS model of care that we need.

OK I know that’s a big claim, but there are a number of different reasons for me to make it. (And full disclosure I was a member of the working party).

First the content. Regular readers will recognise that I have been rehearsing 6 arguments for how to bring about change in the NHS. At the moment fragmented current NHS and social care financial flows do not allow integrated work. So one of my six arguments for bringing about change was to develop a new set of financial flows that will incentivise new models of care. As I argued, when the Lansley reforms were being bedded in, there was quite a bit of discussion about these possibilities, but nothing new actually happened. Last year Patricia Hewitt’s report suggested developing new financial flows to enable ICBs to actually integrated services. The report comes up both with an analysis of what is wrong with the present, and a set of alternatives to explore. I think its content is very important for the NHS.

Second the publishers. When Patricia Hewitt reported last year, the report had been set up by the Chancellor of the Exchequer. This was part of the reason why the ideas in the report have been given little airtime from the DHSC or NHSE. Not a glimmer from either to suggest that anyone would actually DO anything about new financial flows. This was disappointing.

But the trade association that organises ICSs recognised how important this issue was and set up its own working party to work through the possibilities. This was an important precedent. Too often (in fact nearly all the time) the NHS waits for the DHSC or NHS to develop new ideas. It was clear this time that nothing would come from the two performance management organisations, so the Confed stepped in. Providing you don’t need a change in law (and for that you really do need the DHSC and Parliament) NHS organisations can develop a lot of the “new” themselves.

Third (and in saying this I have my fingers crossed) because this report comes from the Confed (their own trade association) I would hope that a few more ICSs may act on it and implement the direction. In a time where so much is happening in a top-down way, I know that may be wishful thinking on my part, but it may also be true that some ICSs might really love developing something with their colleagues.

Let’s look at some of the ideas that report is suggesting.

Firstly, given that these are new financial flows that don’t exist in the UK is it all based upon some ideas for the future? The report goes beyond the crystal ball approach to policy and instead looks at tried and tested financial flows from other health services. Different countries have been trying different payment mechanisms for some time. It’s important to always note that the NHS is a different system, but that doesn’t mean that it is so weird that it cannot learn. If we have the capacity to learn from other countries, there are many experiences from which to learn. Of course, they will all need to be translated into the NHS but there is so much that is not theory but real practice from which we can learn,

Second, whilst the report recognises the important way in which financial flows can incentivise behaviour, it accepts that this is not the whole story. At the moment the fragmented financial flows STOP some of the behaviours that we need to happen.  Paying different parts of the NHS to develop their own separate care service with their own financial incentives has meant that different institutions fragment the patient pathway.

For ten years we have been trying to create patient pathways with a finance system that fragments them.

But financial flows are not the only driver of fragmented care. There are important aspects of professional behaviour and training also. We must not believe that, on tits own a new financial flow will create a new model of care. It will help but there need to be many more changes taking place alongside it.

Third, as I have often argued, there are two very different ways of improving efficiency in the NHS. Technical and allocative efficiency. In 2024 there are very large savings to be made from both. Within the existing model of care there are considerable increases in productivity to be made. These are technical efficiencies. But as we develop a new model of care for the NHS there are also considerable gains to be made through allocative efficiencies. For example, as I often argue, if a domiciliary care worker caring for a frail elderly person in their own home could also monitor their service user’s health this would be allocating a health care resource. If that monitoring, through a referral to primary care, stops those frail elderly person from going into an emergency hospital bed then the allocated resource of a domiciliary care worker means that the currently allocated resource of an emergency bed is not used.

But at the moment the domiciliary care worker and the hospital beds are paid for in two very separate financial systems. This system cannot allocate from one to another. Any savings from the second system will not be transferred to the first.

The current financial system ensures that there is no one actually doing the allocating of resources to increase efficiency.

This is what ICSs are set up to do.

The big argument for developing new payment mechanisms is that if we continue with the current system the NHS will not be sustainable. If we want the NHS to be around in a decade time, we will need to get going on developing greater allocative efficiency.

The report recognises that a change this radical will take some time and some nerve for ICSs to deliver.

Whilst in the future there will be an adoption of risk-weighted capitated payments for NHS services in England learning from international best practice – it will take some time

So the report recommends that ICSs start by developing pathway-based payment mechanisms for the frail elderly. The outcome that the system would be paying for here would be to incentivise the avoidance of admissions to hospital.

This has long been a policy aim of the NHS. How do we develop a system which provides financial incentives to create a care service that keeps more frail elderly people out of emergency beds?

Let’s change that. At the moment we have a financial system that blocks the care that everyone wants. Let’s hope that ICSs use this report to develop a financial flow which incentivises the care for the elderly that everyone wants.

And let’s hope they do that with some speed.

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