Can the NHS operate two different funding streams?

(creating a funding flow for prevention.)

My last post explored how payment for activity could (if implemented in a way that provided a real incentive) work in such a way as to encourage providers (including some hospitals) to do more work and help bring down waiting times.

This post continues the theme of using funding flows to incentivise work within the NHS and care system, but with a very different aim in mind – that of stopping the flow of patients into hospitals.

Providing better care at home to bring down the numbers of patients going into and filling hospital emergency beds would release beds for carrying out the elective work encouraged by my previous post.

To take a very big example.

On July 11th Age UK published an analysis which said that almost 900,000 older people were taken to A and E every year, often into emergency beds, because the NHS was failing to help them stay at home. Given the growth in the numbers of older people if, in the next few years, the NHS fails to prevent many of these hospital visits it is probable that it cannot be sustained.

Yes, I know we are talking about two different funding flows here.  And a surprising number of people tell me that the NHS could not cope with two different funding systems working at the same time. Especially as one encourages more work being done in hospitals and the other discourages patients from going into that same hospital. But these are different patients, with different needs. So, I think the naysayers are wrong. The NHS can easily do two different things at once.

At the moment most people argue that we need to do more to develop prevention. All recognise that between 70 and 80% of prevention work not be carried out by the NHS and social care system directly. It’s about food companies, clean air, wider sets of social and economic interventions.

If wider society doesn’t do a whole range of things about those the NHS will, within a decade or so, be overwhelmed by the extent of ill health created.

But that still leaves 20-30% that the NHS and social care system can achieve to prevent worse ill health. Most of it is secondary prevention,

 “I’m afraid you’ve got diabetes. But our nurse will help you with a diet and if you work very hard at that diet and exercise programme you can reverse this diabetes. It will be tough but if you want to do it, we have a staff member that will help”.

Successfully reversing diabetes would have a big impact upon an individual’s health and over time would prevent the NHS from spending a lot of its resources on amputations and treating other complications of long-term type 2 diabetes.

But the nurse helping with the weight and exercise management costs money now, probably in primary care. Medication costs would be saved immediately the diabetes is reversed.  If the patient’s long term complications were prevented that would save money – but probably in secondary care and a few years down the line.

At the moment there is no financial mechanism for using that secondary care saving to pay the primary care salary of the nurse.

So, the nurse may not be employed, and the prevention doesn’t happen.

In recent years has been the NHS has been wishing for such preventative pathways but since they can’t pay for it out of future savings, it mainly doesn’t happen.

Luckily, at the beginning of April, Patricia Hewitt[1] reported with her independent review of our Integrated Care System (ICS). This was based on a number of principles suggesting that ICSs must move from focussing on illness to promoting health. All ICSs have 5 year strategies to demonstrate how, in their local areas, a more preventive approach to healthcare could improve the overall health of their local population. But mainly these just don’t happen.

To move from focus on illness to promotion of health necessitates a reset of our approach to financing to embed change. Simply wishing for prevention won’t work unless there is a financial flow pay for it. Hewitt recommended,

5. 36 I therefore recommend that NHS England work with DHSC, HM Treasury and the most innovative and mature ICBs and ICSs, drawing upon international examples as well as local best practice, to identify most effective payment models to incentivise and enable better outcomes and significantly improve productivity. It should consider a number of potential models including:
·      incentives for individuals or communities to improve health behaviours.
·      bundled payment models, which might generate a lead provider model covering costs across a whole pathway to drive an upstream shift in care and technical efficiency in provision at all levels.
·      payment by activity, where this is appropriate and is beneficial to drive value for populations.

If a local ICS wanted to keep frail elderly people out of emergency beds how might this work?

Given the last decade’s fall in the number of district nurses we cannot expect virtual wards in numbers of frail elderly homes to be run by district nurses – but they could be run by domiciliary care. With training and new technology social care staff could take a number of simple daily medical tests that could then be communicated to primary care. For some older people whose health was deteriorating there may have to be a series of interventions to hopefully succeed in stabilising their health. This would allow the frail elderly to stay in their own beds, preventing both the relative disasters of them occupying a hospital bed, and losing their independence.

That hospital bed, now not being used for an emergency, could be used to carry out the elective work outlined in my earlier post, and the trust would gain some income for doing it.

Some of that income would have to be invested in the new preventative work in domiciliary and primary care. This is a different financial flow, one that ensures there is a relationship between where the money is spent and where it is saved.

Can the NHS operate two different funding streams?

Of course it can.

[1] As usual in this blog full disclosure 15 years ago I worked as Tony Blair’s health policy adviser 2005-7 when Patricia Hewitt was Secretary of State for Health. Therefore we have worked closely together and know each other well.