The need to develop alternative financial incentives.
To be clear from the start.
Money is not the only incentive that makes organisations, teams, and individuals, want to provide care in the NHS.
Last week’s posts recognised the vital importance of mobilising people’s motivations. They will not enthusiastically change the way in which they work unless they see the point of the change and believe it will create better outcomes. That’s true of any work, but it’s even more important if your work is all about caring for people. If a change in practice is to happen, then the overarching narrative needs to enthuse and move them to work differently.
I know we are living in a mostly more cynical age, but people WILL move mountains if they believe it is the right thing to do. And in a health service they will do it with real enthusiasm if they believe it will help patients.
If it matches their own motivations a moral argument will move, teams, organisation and individuals.
BUT, that said, in our society money is also an important incentive. If, as we do now, we continue to organise money in the NHS in such a way as to work against the moral argument for change, it will fatally undermine the efficacy of that argument.
One example we have worked through previously in the blog is the financial incentive, for organisations, of payment by results. A Trust can earn more money for doing more work. But if we want that incentive to influence teams and individuals, it is much more likely to succeed if the teams who do the extra work get some of the resource to spend on their area of work. The organisational incentive then becomes a team incentive.
And sometimes even some recognition of that harder work from individuals. (In a recent post about greater theatre productivity at St Thomas’s, a collective pizza lunch worked very well).
Yet this kind of incentive all falls apart if, at the end of the year (as it did in November in this financial year), NHSE says
“You remember that money we paid you because you earned it doing extra work? We notice that it helped your trust to have a surplus.
So now we want to take that money and give it to a trust that has a deficit”.
Let’s be clear – a financial incentive does NOT incentivise a Trust to do more work if you take the money away.
Far too often NHS financial incentives cut across the goals of the changes that the NHS says it wants.
This needs to change – and change quickly.
In the Spring of 2023 Patricia Hewitt published a review in which she argued that there are much better ways of helping ICSs to achieve the results that the NHS expects of them. She highlighted the role of new financial flows,
“5.35 Many health systems in other parts of the world including those that are entirely or largely taxpayer funded are developing payment models that support and incentivise a focus on health. Meanwhile NHS funding remains over focused on treatment of illness or injury rather than prevention of them and ICS partners struggled to work around over complex uncoordinated funding systems and rules in order to shift resource to where it is most needed. There are lessons from other systems that we should draw on.”
For the purpose of this set of posts we will take this advice as permission to think differently. If our example of increased skill mix is to take place in primary care, then the financial framework that we need to incentivise that reform will be different from the present.
In 1948 Nye Bevan made some very important 1948 compromises. Whilst he nationalised the hospitals, he maintained the small business model of primary care.
As a result it has never been morally wrong in primary care to incentivise a practice by paying it more money for more work. (There are those that think this is wrong for hospitals).
So if we are going to incentivise skill mix in primary care, we can find ways of paying for its outputs. Given that the different skill mix will employ less expensive staff alongside existing clinicians, cost per activity will be reduced.
Primary care is used to being paid for an activity, and used to delivering that activity to get paid. Yet in the last couple of years the addition of new staff performing new roles has not really been financially incentivised in this way.
But their employment could be dependent on a set of outputs. What do we want the skill mix to achieve? How can skill mix help to achieve those outputs? How do we pay for those outputs in such a way as to incentivise that work?
One aspect of the answer that Patricia Hewitt outlines is the incentive to focus financial incentives on health. But health creation is a large remit – most of it lying outside of the purview of the NHS.
One of the main internal ways that primary care plays a role in health is by helping people self-manage their long-term conditions. Our whole health service depends upon many millions of people self-managing their conditions in this way so as not to have to go to hospital as often as they might otherwise.
One of the main aims of any new financial flow must be to incentivise care that helps keep people out of hospital. If we are to create a financial flow that incentives a greater skill mix in primary care, we could judge its efficacy against an output of keeping people out of hospital.
Modern data collection tells us an enormous amount about the acuity levels of patients with long-term conditions who use hospital services – both outpatient and inpatient. We can and do stratify people with different levels of acuity and we have the data on how many times different strata of acuity patients use hospital services.
Some hospitals are trying to reduce those outpatient visits. All hospitals are trying to reduce the emergency visits caused by exacerbations.
This gives an output that could be incentivised by new financial flows. If the NHS hospital wants local NHS primary care to play a role in reducing the number of hospital visits of a cohort of patients with a certain level of acuity, this could be an output.
The input would be employing staff of a range of skill mixes capable of incentivising patients to self-manage healthy behaviours. These staff could, by agreement with primary and secondary care be given a cohort of patients with a certain level of acuity. Every locality knows from primary and secondary care records who these patients are.
Across the NHS the activities that would be a major part of this work are already being carried out in various locations – a wide range of technologically enabled (or face to face) work is being carried out by health trainers. Social prescribing organisers mobilise the local voluntary sector to help people be active and maintain their level of health.
What we will need – following Hewitt – is a new financial flow which incentivises and helps pay for this work. If the service succeeds, this will mean that, in conjunction with the hospitals, we will be helping patients have fewer visits to hospital. What is required is a new financial flow to shift some of that money from the hospital to the primary care organisation.
The fact that this doesn’t already happen demonstrates how old-fashioned NHS financial flows are. For nearly 20 years we have had white papers and plans arguing for greater prevention and for moving care into the community.
One of the reasons this policy has failed, and we have seen the reality of practice go in the opposite direction resulting in an increase in the proportion of work being done in hospitals, is because of fragmented NHS financial flows.
If the NHS really wants to develop an output that decreases reliance on hospitals, it will need an expanded primary care model with a much greater skill mix.
If it wants to financially incentivise that goal it will need a new financial flow which involves primary and secondary care
Until that is created, this 20-year old ‘hobby’ will never be policy and become mainstream.