The Labour Party has a proud and historic link with the NHS; it reflects and represents our collective spirit, and the values we hold dear. It is fair to say that in most people’s eyes the NHS remains a national treasure. But we know it is not perfect and although the Labour Party has committed to no further top-down structural reorganisation should we be elected into Government in 2015, service change will be needed.
- To this end, and to inform the Party’s internal policy review process, members of the Parliamentary Labour Party undertook an inquiry into the effectiveness of international health systems in improving health care quality and equity. The scope of the inquiry focussed on three broad areas: system funding, how this funding is allocated and how in particular health care providers are paid; the organisation of the system; and on how health and social care services in particular are integrated. The scope of the Inquiry is defined more fully in section 2.
The members of the Inquiry were:
- Rt Hon Sir Kevin Barron MP
- Rosie Cooper MP
- John Cryer MP
- Barbara Keeley MP
- Ian Mearns MP
- Grahame Morris MP
- Lord Nic Rea
- Debbie Abrahams MP
The Inquiry involved commissioning independent ‘reviews of reviews’ of the international academic literature to assimilate the strongest evidence possible, as well as oral hearings with academics and key stakeholders. We also had an invited call to submit written evidence to the Inquiry.
The Inquiry has shown quite conclusively that where there is competition, privatisation or marketisation in a health system, health equity worsens. There is also evidence of a negative impact on staff morale, where there may be conflicts in the values and ethos of a health system founded for social good and, for example, some workers are financially rewarded for quality improvements and others are not. As such the parameters within which private healthcare providers could be used in the NHS needs to be clearly defined.
It also revealed that there is no compelling evidence that competition, privatisation or marketisation improves healthcare quality; in fact there is some evidence that it actually impedes quality, including increasing hospitalisation rates and mortality. After 25 years of an internal market, it is striking that there is no strong evidence that it has contributed to improvements in the quality of healthcare in the NHS. However, there is strong evidence that the additional transaction costs associated with a ‘purchaser/provider’ split, exceed savings made elsewhere in the system.
The Inquiry found that there is also inconclusive evidence that increasing the autonomy of health care providers results in an enhanced quality of care; this includes GPs as Fundholders and NHS hospitals as NHS Foundation Trusts. Although it is recognised that there are examples where this has happened, there is considerable inconsistency. For this reason autonomy of healthcare providers within the NHS needs to be examined in more detail.
Evidence to the Inquiry showed that ‘patient choice’ was less likely to be exercised by people on low incomes, so affecting equitable access to care. In addition, in relation to direct purchasing or ‘out of pocket’ spending on healthcare by patients, there is strong evidence that this reduces access to healthcare for those that need it most, so reducing health equity. Similarly, there is increasing evidence showing issues with the implementation of personal health budgets (PHBs). The Inquiry was concerned that personalised healthcare, which is strongly supported, is too often conflated to mean PHBs.
The Inquiry believes that in view of the investment of public money in health systems, it is staggering that so little is understood about the optimal level of system funding, its distribution to different areas and parts of the system and how this impacts on quality treatment and care. Similarly, there is little known about how provider payment models/methods contribute to quality improvements. There is even less known about how NHS funding levels or provider payment models could promote health equity; however, there is emerging evidence of the association of reductions in mortality in deprived areas with NHS resource allocation formulae weighted for health inequalities.
Evidence to the Inquiry on the effects of different forms of integration in health systems on quality outcomes was quite sparse, but is generally positive. For example, the integration of health and social care management showed a reduction in hospital admissions. Similarly, integrated management, joint commissioning and pooled budgets showed improvements in patient empowerment, choice and dignity. There was also strong evidence that integrated, interdisciplinary teams improve the quality of care, with improvements to patients’ psychological status, clinical outcomes, quality of life and satisfaction with care. However, there was very little evidence of the effects of integration on equity and this was less conclusive regarding positive effects.
Based on this evidence, the Inquiry’s PLP members have defined a number of recommendations to address the issues identified, but also to identify action to take forward Labour principles of equity and fairness into health policy for the future. These are as follows:
Recommendations to the Labour Party
i. NHS funding, allocating resources and payment models
- a. Restore the key principle of NHS resources allocated based on health need (and health inequalities)
- b. Develop a ‘Healthcare For All’ funding model: Undertake a review of NHS resource allocation formulae and budgets in order to simplify and develop a new resource allocation model reflecting NHS principles and values
- c. Analyse and develop alternative healthcare provider payment models based on quality, equity and capitation rather than activity/utilisation and ‘choice’
- d. Review the evolution needed by Health & Well Being Boards (HWBs) and Clinical Commissioning Groups (CCGs) to enable them to integrate budgets and jointly direct spending plans for the NHS and social care
ii. Organisation of the NHS
- a. Undertake a prospective assessment of the costs and benefits associated with an integrated, collaborative and planned approach to commissioning and providing healthcare in improving quality and equity in healthcare and social care
- b. Ensure that privatisation of the NHS is prevented by exempting the NHS from EU/US Transatlantic Trade and Investment Partnership and ensuring corporate healthcare providers’ investment is not protected beyond current contracts
- c. Ensure that a duty to ‘co-operate and collaborate’ is placed on CCGs and local authorities, and on NHS Trusts with local authorities including social care providers
- d. Define the terms for private healthcare providers’ involvement in the NHS, in particular in the provision of clinical services
- e. Review how to strengthen the democratic accountability of the NHS, including, for example, through locally accountable HWBs
iii. Integration in the NHS
- a. Build on and supplement the evidence-base on integration within and between the NHS and social care with particular emphasis on quality and equity, for example through action-research pilots including single budgets for health and social care
- b. Develop national standards for integrating the NHS and social care focusing on quality and equity, with local approaches for implementation
- c. Develop holistic, ‘whole person care’ approaches to support people with long term conditions, and explore opportunities for NHS and Department for Work and Pensions (DWP) collaboration in this
iv. Research and surveillance
- a. Restore data collected to monitor health inequalities including the former ‘dicennial supplement’ inequalities data
- b. Within existing research budgets, increase the proportion of research into the health system wide effects of interventions such as organisation and resourcing on quality and equity in health and care
- c. Implement Health Equity Impact Assessment: assess the effects on health systems, of local and national policies including all sectors of government as part of the Impact Assessment process
1. Introduction
1.1 We know how important being in good health is to each and every one of us. Study after study has shown that at an individual level, being in good physical and mental health is fundamental to our personal well being. The determinants of health act at several levels, from our genes to our lifestyle, but especially our socio-economic conditions: the work we do, the income we have, where we live and how we live (Marmot Review, 2010). And our health and care services are also important health determinants. Having a healthy population is not only important to us individually, it is essential for a productive and vibrant economy. From a social justice perspective, Labour’s commitment to improve health and reduce health inequalities, so that we all live in good health for as long as possible, should rightly continue to be our priority and central to a One Nation health policy (Abrahams, 2013).
1.2 As the next General Election approaches, it is important that we develop health policies that are evidence-based, recognise the economic and social context we face (and that affects health), and reflect our values. The Government’s enactment of the 2012 Health and Social Care Act (HSC Act), together with their economic and social policies, is already having a detrimental effect on the health of the population (Bambra, 2013) and on the services provided by the NHS (Hunter, 2013). A central tenet to the Government’s argument for the changes to the NHS that they are making under the HSC Act is that competition from the corporate and voluntary health sectors is a pre-requisite for improving quality in healthcare and reducing health inequalities (Burns, 22 March 2011).
1.3 There is a lot to unpick from this, not least that the HSC Act is increasing the level of predominantly corporate private sector involvement at all levels of the NHS, providers and commissioners (NHS Support Federation, 2014). There is also a real concern that the determination to press on with Personal Health Budgets (PHBs), even when they are being scaled back in other countries because of substantial problems, is that they will be a fore-runner to a personal health insurance vouchers (Reynolds & McKee, 2012). Similarly there is concern that personalised healthcare, which is strongly supported, is too often conflated to mean PHBs. It is surmised that this is also the reason why the Government are so keen to weight NHS resource allocations according to age rather than the deprivation of an area (Bambra, 2012; Bambra and Copeland, 2013).
1.4 In order to contribute to the Labour Party’s policy review process, members of the Parliamentary Labour Party (PLP) decided to undertake an inquiry into the effectiveness of health systems in delivering high quality and equitable healthcare. This involved a comparative analysis of international health systems and an independent synthesis of international evidence on the effects on healthcare quality and equity of reforms similar to those in the HSC Act (e.g. privatisation, marketisation).
1.5 This report describes the process and findings from this Inquiry, and it makes specific recommendations for the development of future Labour health policy in England. The Inquiry supports and complements the work undertaken as part of the health and social care and public health policy reviews.
2. About the Inquiry
2.1 The Inquiry was launched in autumn 2012 with the aim to undertake a comparative analysis of international health systems, and sub-systems where appropriate, and their effectiveness in delivering high quality and equitable health care. For clarity, health systems were taken to include the entire range of primary (General Practice and community services), secondary and tertiary care (hospital services) including dentistry, ophthalmic and Allied Health Professional services.
2.2 Although this Inquiry was undertaken by members of the PLP, the members were determined that the methods and process should reflect best research practice, and that the findings and recommendations should reflect the evidence. To ensure this, we appointed an independent advisory group of academic experts and commissioned two evidence reviews (Footman et al, in press and Bambra et al, in press in Appendices 1 and 2).
2.3 The Committee agreed on the following definition of ‘quality’ adapted from the World Health Organisation (WHO, 2006) and encompassing:
- Professional performance – delivering clinical services that meet or exceed technical competence standards and achieves positive health outcomes;
- Efficient treatment and care – delivering clinically timely services, making effective use of resources;
- Managing risk – assessing, mitigating and managing risk associated with clinical services;
- Person-centred care – involving patients as equal partners in decision-making about their healthcare increasing the patient’s locus of health control;
- Holistic care – identifying health needs and delivering care for the whole person (physical, mental, social health dimensions);
- Patient satisfaction – monitoring and learning from patient experience.
2.4 It was agreed that ‘health equity’ should be defined as the absence of socioeconomic inequalities in health care utilisation and health outcomes (Bambra et al, in press, Appendix 2). Additional dimensions of health equity (geographical, gender, race/ethnicity, mental/physical ability, sexual orientation) were not considered in this review.
2.5 The scope of the Inquiry was limited to the health systems of the 15-high income countries in the Commonwealth Fund’s comparative assessments: Australia, Canada, Denmark, France, Germany, Iceland, Italy, Japan, the Netherlands, New Zealand, Norway, Sweden, Switzerland, United Kingdom and the United States.
2.6 Evidence was assembled in ‘umbrella’ literature reviews (reviews of systematic reviews)1, written submissions from stakeholders and key informants, and oral hearings with academic experts or representatives from stakeholder organisations or associations.
1 Systematic reviews look at the findings from many studies to identify evidence of effects of interventions. Reviews of reviews look at evidence from many systematic reviews. Systematic reviews are considered to be the ‘gold standard’ in health care research.
2.7 Two independent ‘umbrella’ literature reviews were commissioned by the Inquiry: one focused on ‘quality’ (Footman et al, in press) (appendix 1) and the other focused on ‘health equity’ (Bambra et al, in press) (appendix 2). Systematic review-level evidence was searched for on the effects of the following interventions on quality and health equity:
- Health system financing, e.g., general taxation, social insurance;
- Health funding allocation, e.g., centralisation/localisation, budget formulae/weighting;
- Direct purchasing, e.g., private insurance, co-payments, top-ups, personal health budgets;
- Health system organisation, e.g., market system, internal market, planned health care;
- Integration of health and care social services, e.g., integrated care pathways (vertical), integration of sub-systems (horizontal).
2.8 Following a stakeholder mapping process, a call for written evidence was issued to academics, professional associations and other organisations with expertise in the areas under investigation. The two oral hearings involved panels selected from these submissions.
3. Evidence from the literature
Quality
3.1 The ‘umbrella’ review on quality looked at the effects of different health system interventions on various quality measures (as set out in para 2.3). In particular, systematic reviews (appendix 1) on the effects of payment of providers, organisation of service provision and integration of services on quality were collected and analysed. The following summarises the findings from these reviews.
Payment of providers
3.2 Evidence that financial incentives improve quality by increasing practitioner compliance with practice guidelines was variable: one weak review indicated there was some effect, another found incentives were ineffective. In relation to salaried payments, one review found that they may reduce referrals; another suggested there was inconclusive evidence about the benefits of salaried employment as opposed to ‘fee for service’ payments in managed care (Managed care refers to different interventions aiming to increase the efficiency and quality of healthcare )in the USA. However, one high quality review found that ‘fee for service’, as opposed to salary and capitation payment, did improve continuity of care and compliance with guidelines.
3.3 A review into the effects of the introduction of the new General Medical Services (GMS) contract and of related bonuses found they had a positive effect on the co-ordination of care. However other results of studies of the effects of ‘payment for performance’ effects on quality were mixed. It was suggested that further work needs to be done to evaluate different payment methods before conclusions can be drawn.
Organisation of health services
3.4 Low quality reviews of GP fundholding in the UK showed mixed results. One review showed an initial reduction in the rate of growth of prescribing costs and some cost savings, but an increase in transaction costs outweighed these gains; there was also little effect on referrals. Another review also found several studies showing an increase in transaction costs associated with commissioning. In one primary care group, primary care-led commissioning under GP fundholding was reported to have improved responsiveness through an improved provision of information; reduced waiting times were also reported. However, another review concluded that fundholding had no effects quality in primary care and little change in secondary care quality.
3.5 The same review also analysed studies examining the effects of the internal market: health authority purchasing, locality and GP commissioning, and provider autonomy (NHS Trust status) on quality, but the evidence was inconclusive. For example, ‘…the effects of health authority purchasing could not be separated from those of concurrent programmes…’ and there is little evidence to suggest that hospital autonomy had a positive impact on quality. There were some isolated cases where locality and GP commissioning appeared to improve care but this was highly variable.
3.6 A review of the effects of privatisation on quality, e.g., staff-patient ratios, patient satisfaction, mortality and hospitalisation rates, showed that, in 32 out of the 46 studies examined, the for-profit sector was associated with worse quality. Staff ratios were consistently found to be better in non-profit institutions, and were highest in government-run facilities. Another review looking at competition and increased marketisation in health systems revealed mixed results. Competition appeared to improve outcomes in one US study post-1990, but results were very mixed in several later studies. Research in the UK measuring death rates in hospitals exposed to greater market competition purports to show faster improvement in outcomes but this has been subject to extensive criticism of its methodology and the absence of any plausible mechanism to explain the findings observed, raising the possibility of statistical artefact.
Integration
3.7 One review examined methods of financial integration of health and social care bodies including joint commissioning, pooled budgets, aligned budgets, integrated management and structural integration. The evidence was fairly limited but two before and after studies of integrating health and social care management showed a decline in hospital admissions. In addition, one randomised trial of integrated management, joint commissioning and pooled funding reported improved patient empowerment, choice and dignity. In contrast to this, another study indicated there was a lack of evidence that joint commissioning affected health outcomes.
3.8 Two reviews looking at greater integration of emergency departments (EDs) and primary care services show mixed results. The first found that primary care doctors in EDs helped improve efficiency with reduced use of diagnostic tests, referrals and ED utilisation. The second more recent review was less emphatic that GPs do increase efficiency in EDs and admit fewer patients. Two studies showed no difference in patient satisfaction or self-reported health outcomes and no difference in re-attendance rates.
3.9 Three high quality reviews on service integration in the form of case management and interdisciplinary teams all showed positive impacts on the quality of care: improvements were found in patients’ psychological status, clinical outcomes, quality of life and satisfaction with care.
Analysis of quality ‘umbrella’ review findings
3.10 Although there has been an increase in the synthesis of research into the effects of clinical interventions in the recent past, there have been many fewer reviews of system-wide interventions. This is partly down to technical difficulties of that arise with multicausal analysis, but also because of cost and the lack of political will. As a result, although there is a good steer from the evidence available to date, there are significant gaps in this evidence-base notably in relation to system-level financing and resource allocations. Although there was some evidence suggesting a link between financial incentives for providers and improvements in quality this was quite variable and has often resulted in ‘gaming’ in the system. It is also more problematic in a complex system like health care, where the costs and benefits from quality improvement activities are often misaligned and where there is a conflict in values and ethos driving the different parts of the system and its workers.
3.11 In relation to the organisation of health systems, after 25 years of the internal market in the UK, it is striking that it cannot be determined whether it has improved the quality of healthcare. There is, however, much more certainty that the additional transaction costs associated with a purchaser/ commissioner/provider split outweighs any cost savings. Although the research studies examining this are mainly from the UK, largely because the models adopted here have attracted little if any support elsewhere, there are still lessons we need to learn from this; similarly we need to understand what specific changes that may have produced short term benefits to patients. There is limited evidence indicating that increasing the autonomy of NHS Trusts improves healthcare quality. This review was not able to incorporate evidence from the Mid-Staffordshire scandal but the managerial pressure associated with the pursuit of NHS Trust status is another area that needs re-examining. Finally the most conclusive evidence was the negative effects of privatisation, competition and marketisation in health systems on quality. This reaffirms the importance of a national health system, and of the NHS as the ‘preferred healthcare provider’ in the UK. Although the UK has embraced multiple sectors in our health system, the evidence from this review also indicates the need for a much clearer understanding of which circumstances under which private providers might be used within the NHS. At the present time, this raises profound concerns regarding the government’s support for the EU/US Free Trade Agreement without seeking NHS exemption and removal of investment protection for private health care companies (Koivusalo & Tritter, 2014).
3.12 The evidence on the effect of integration on quality was positive. However this varied with the form of integration. In developing our policy on integration and whole person care, it will be important to examine in more detail how we can maximise the positive effects on a wide range of quality measures.
Equity
3.13 Another ‘umbrella’ review examined the effects of different health system interventions on equity (utilisation of health care and health outcomes by socioeconomic or income group) (appendix 2). In particular, it looked at systematic reviews related to system financing, direct purchasing, the organisation of providers, and integration. The following is a summary of these reviews’ findings.
General system financing
3.14 Four reviews included studies of general system financing interventions. There was evidence from one review that between 1980-1993 as the public share of health care expenditure decreased and private health insurance increased, social and spatial inequalities in accessing healthcare increased. This was particularly so for preventative, perinatal and sexual health services. Another review found that the increased use of private insurance had negative heath equity impacts in terms of access, whereas free care programmes (such as Medicaid) had positive health equity outcomes.
3.15 Two reviews of fee for service compared to managed care payment plans in the USA found inconclusive results in relation to health equity: the first review found that managed care provided better access to preventative screening services for women on low incomes compared to ‘fee for service’ based care, but were poorer for accessing maternity care. The second review found that managed care was associated with decreased service provision by physicians or did not produce better outcomes. In addition, poor or elderly patients were found to have better outcomes when treated in ‘fee for service’ as opposed to managed care organisations. This review also showed that in ‘fee for service’ versus capitation allowance comparisons, capitation significantly decreased the number of physicians’ visits and hospitalisation, whereas service provision increased when the fee was increased (potentially due to increased supply as a result of the incentive that ‘fee for service’ payments offer to clinicians). Finally, the review reported that access to or quality of care did not differ between prepaid (private insurance) and ‘fee for service’ (pay as you go health care) physician groups. However the relevance of this US evidence to the NHS is very limited as the US system involves quite different types of private payment systems and because the 50 million poorest Americans have no access to health insurance.
Direct purchasing (Out of pocket spending)
3.16 Only one review looked at the effects of direct purchasing reforms that increase out pocket spending. It included two studies; both examined the effects on equity and found that purchasing had a negative impact. The Swedish study found that increases in user fees in the 1960s led to an increase in low income groups that had ‘needed but not sought medical care’, and was accompanied by an increased utilisation of emergency care by low income groups. The Italian study showed that following an increase in out of pocket payments for health services in the 2000s led to an impoverishment of 1.3% of Italian households. The negative impact on income distribution was largely as a result of costs of pharmaceutical, specialist and dental services.
Organisation of health services
3.17 Three reviews examined the effects of the privatisation of health services or marketisation (increased competition within a publicly funded system) on equity. Of these, two found that such reforms were universally negative for health equity, the other review was inconclusive. Most notably, the high quality review found that both privatisation and marketisation of healthcare services in the USA and Sweden were associated with increased inequalities in access and utilisation. In particular after market-based reforms in Sweden in the 1990s, manual workers were less likely to access healthcare services relative to their need and lower income groups were also less likely to report not seeking care for which they perceived a need.
3.18 A review which focused on increased ‘patient choice’ in England was inconclusive. Negative impacts on equity of access were reported with GP fundholding and under the ‘London Patient Choice project’ patients on low income or with fewer qualifications were less likely to exercise patient choice. But another ‘Choice’ study found that there were no impacts on inequalities in access.
Integration
3.19 Two reviews examining public health partnerships allow the effects of integration of health and social care systems on equity to be considered. One showed slightly positive results or no effects for public health partnerships in England which reflected results in the Netherlands and the USA.
3.20 In the first review there was no evidence of an effect of the New Deal for Communities (NDC) partnerships on improving the relative position of their areas with regard to mortality or hospital admissions. There were also no consistent differences between NDC areas and their comparator areas in the pattern of health-related outcomes with different demographic groups. Health Action Zones were also found to have made no greater improvements in population health than comparison areas. However, Healthy Living Centre attendees’ mental and physical health was less likely to deteriorate compared with non-users; this was attributed to behavioural changes rather than integrated services.
3.21 The second review showed that multisectoral, community-based interventions in deprived areas in the Netherlands that sought to improve health-related behaviours, had very marginal effects. In the US study, preventative care networks of health and education professionals worked together in deprived communities targeting kindergarten children with asthma. However no health benefits were reported for patients or carers.
Analysis of equity ‘umbrella’ review findings
3.22 Once again there is a gap in strong evidence of the effects of healthcare reforms at system level, this time on health equity. It was noted that equity was seldom the focus of these reviews. Another key issue was the reliance and applicability of reviews that were dominated by US studies.
3.23 Applying the precautionary principle though, there is clearly enough evidence in the reviews to know what to avoid (direct purchasing, out of pocket payments, privatisation and marketisation) but if we want a health system that delivers health equity, we need to be developing a more detailed evidence base to inform policy. As with the reviews on quality, evidence on system financing is US-centric with no reviews on resource allocation reforms; this needs to be addressed. There is also a need to explore why some interventions produced the results they did; for example, some integration interventions, NDC and Health Action Zones, had little impact on health outcomes and we need to understand why this was.
4. Evidence from key informants and stakeholders
Quality
4.1 Evidence from stakeholders and key informants to the Inquiry indicated concerns that in both health and social care there was too much variation in the quality of care that is delivered.
A common view in both the written and oral evidence submissions from key informants and stakeholders is that quality in healthcare cannot be attributed to any one specific driver.
4.2 Instead, evidence from stakeholders at the oral hearings suggested a number of important determinants influence quality healthcare, including resource levels, commissioning and delivering evidence-based practice, and the integration of services.
‘….What we hear from people who use services is that they don’t want to experience services in a silo or vacuum…’
4.3 There was less agreement about the most important driver of quality. An adequate level of resourcing and use of evidence-based commissioning were both argued for. Similarly quality issues in different part of the health system were mentioned:
‘…finite resources mean you can’t achieve everything you want to…’
‘…if you compare the stroke pathway and other areas of geographically variable healthcare…may be due to resourcing or commissioning… there is an absence of cogency of what the best possible services are…’
‘…we need to be demanding higher standards from our hospitals…but variations in primary care are a bigger problem. In the North West there is a four-fold variation between when cancer is picked up in primary care…’
4.4 The importance of piloting and evaluating healthcare interventions as well as different approaches to how services are organised was recognised. However, political timetables have often driven the introduction of new services before the effects of these changes have been understood or evaluated.
4.5 Regarding how health and social care are integrated, concerns were expressed that there may not be a ‘one size fits all’ approach. This referred not only to how health and social care services are organised but also how they are resourced. Health is funded through general taxation via Clinical Commissioning Groups (CCGs) and social care through funding to local authorities as well as means-tested contributions from individuals; it was noted that integrating an already complex resourcing process with different allocation formulae would be difficult.
4.6 The current role of Health and Well being Boards (HWBs) in providing a strategic focus to commissioning health services was felt to have unrealised potential. In practice they have very little direct power over budgets and as such their impact is likely to be variable. It was also suggested that as a number of local authorities are not co-located with CCGs this also makes implementing commissioning plans more complex and variable. Their pivotal role in engaging communities was mentioned:
‘…there is an opportunity in [HWBs] being hosts in a community to engage people about health in a different way…’
However, there were concerns that the former Local Strategic Partnerships had a similar role but had varied in their effectiveness in engaging and empowering communities. It was noted that currently HWBs have no direct power over CCGs’ and local authorities’ budgets and spending.
4.7 Concerns were raised regarding how public health and the agenda for health improvement were being sidelined. The public health budget was described as:
‘…at a modest level of £5bn compared with approximately £60bn for CCGs and even this is not fixed…’
With the cuts to local authorities there were real concerns expressed by key informants and stakeholders of the potential impacts on public health spending. The importance of Health Impact Assessments in informing decision-makers about the health effects of specific policy interventions was also mentioned.
4.8 A discussion at the oral evidence hearings on how healthcare resources should be allocated put forward the merits of prioritising both utilisation and unmet need. There were also arguments for a more flexible, less siloed approach to local funding which prioritises prevention. The importance of high quality primary care in reducing unmet need was emphasised.
4.9 Poor workforce planning was mentioned as contributing to issues regarding poor access to care/under-doctored areas. Key informants providing evidence saw salaried GPs as helpful in addressing this issue but there were concerns that this had not happened fast enough (it is acknowledged that this view may not be shared by some GPs or the Royal College of GPs). In addition medical education and training was seen as vital in improving and sustaining quality in clinical practice. Developing more GPs with special interests was also suggested.
‘…quality in care is dependent on quality staff…’
4.10 Key informants and stakeholders tended to agree that there was now sufficient evidence to indicate that competition in healthcare did not contribute to improved quality in the NHS or other health systems.
‘…there is very little evidence that free markets do anything more than polarise quality – very good care at one end and people who can’t access it at the other…’
‘…we have major reservations about competition…’
‘…under competition [in the NHS] you get a complex public monopoly in someone else’s hands…’
‘…the CQC have no official view [on competition in the NHS] but we do regulate 22,000 care homes. Care homes are a mature market and we don’t necessarily see competition improving quality.’
4.11 Specific suggestions from key informants for improving quality included:
- The ‘Advancing Quality’ programme in the NW – 34 standards across 5 conditions
- Leadership, clinical and non-clinical
- Duty of candour
- Consensus on best practice
- Stability in the system
- Local approach to implementing national standards
Equity
4.12 Key informants and stakeholders were consistent in their message that inequalities in health have origins that go beyond health care: although inequalities in access to health care are important, the most important factors affecting health inequalities are socioeconomic.
4.13 Based on evidence from the Commonwealth Fund it was reported that the UK was the most equitable in accessing health care across all of the OECD countries.
‘In comparison with the US, both white men and women were sicker than the English, but only 92% of this US cohort had [health] insurance…’
4.14 However it was suggested that the NHS did not perform uniformly well and that the understanding of these data needs to be more nuanced. For example, the NHS performs less well when we look at use of the acute sector.
4.15 One witness stated that, from his international experience, the increase in private sector involvement in health systems led to a worse health service when correlated to the health status of the population. He added:
‘There are clearly different drivers motivating the private [healthcare] sector. There is both under and over treatment in the US system and huge disparities…’
Another added:
‘It is shocking to see the move to wholesale competition and ‘Any Qualified Provider’ as a primary driver in the NHS Lansley reforms on the basis of observational studies by the London School of Economics and others…’
4.16 In relation to resource allocations there was agreement from key informants that health inequalities need to be considered in how resources were allocated. It was also commented upon that the market does not necessarily distribute services according to need.
‘…there is evidence of co-morbidities and worse health outcomes [in deprived areas]; the cost of treating people from deprived areas is greater. In relation to cancer although the prevalence is higher in richer groups, survival rates are worse in poorer groups…’
4.17 Key informants reported evidence that there are more GPs per head with shorter lists in richer as opposed to more deprived communities.
4.18 It was also noted that in addition to looking at how resource allocations are made more equitable, there is also evidence that general taxation is the most equitable and efficient way to raise funding for health systems. There are issues with redistributing employee-based health insurance monies in a more equitable way.
4.19 Key informants discussed recent evidence on the ineffectiveness of co-payments in changing people’s behaviour. It was found that these did not influence patients’ use of services and were an inefficient way of raising funding.
4.20 Payment by Results (PbR) was seen as allocating to providers rather than communities. Although PbR was adopted across the EU, ‘few embraced it like the UK’. However the result has been ‘micro-productivity’ without evidence of macro level health gains. The need for productivity was emphasised without the current perverse incentives.
4.21 Personal health budgets (PHBs) were not supported as a way forward. In addition to evidence of major issues in other countries where they have been adopted (most notably in the Netherlands), the real issue is reliability in predicting future health needs. Although there is a seductive argument that PHBs enable patients to focus on their needs rather than the health system, their PHB may ‘run out’, what then? There would be a contradiction with evidence-based healthcare if the use of PHBs was further developed. An analogous concept being promoted by some is the medical savings account. However, it has similar limitations and although its use in Singapore is frequently cited as evidence of its potential, a more detailed examination shows that these claims are highly misleading (McKee and Busse, 2013). It was felt that there is a contradiction between PHBs and of public funding of evidence-based health care.
4.22 Key informants recognised the potential for integration, for example, case studies of case management indicates better integration delivers better care, but they urged caution with a system-wide ‘big bang’ before more evidence was gathered. Better care but not less resources.
4.23 It was suggested that based on comparisons with other OECD countries the capacity to reduce acute care in the NHS may be limited. One key informant posed that it was appropriate to analyse what added value the internal market (the purchaser/provider split) provides. Without the purchaser/provider split, funding mechanisms for rewarding productivity, efficiency and high quality care would be needed.
4.24 Key informants were sceptical about the ability of CCGs to shift care to a more primary care focus or even influence acute care. However, the additional spending power of ‘local teams’ and NHS England may influence that dynamic.
4.25 It was noted that, of the £8bn spent in the UK on health research, less than 1% was spent on public health or health systems research. Similarly the National Institute for Health Research spends 93% of its budget on clinical areas. Although we spend over £114bn a year on the NHS, we don’t have evidence on how effectively the NHS is organised to deliver equitable, high quality care.
5. Discussion and Recommendations
5.1 There was considerable agreement in the evidence from the reviews of the academic literature and the evidence from key informants and stakeholders:
Quality
- There is insufficient system-level evidence on the relationship between the level of funding, how this is allocated to different parts of the health system and the quality of treatment and care;
- There is inconclusive evidence on the extent that payment levels or methods contribute to quality improvements – payment levels/methods may influence individual clinician behaviour but at an organisational level there was evidence of ‘gaming’ in the system;
- There is evidence that there may be conflicts in the values and ethos of a health system founded for social good and where some workers are financially rewarded for quality improvements and others are not;
- There is no conclusive evidence that the UK’s internal market, including the establishment of Foundation Trusts, has resulted in improvements in the quality of healthcare;
- There is evidence that additional transaction costs in internal markets outweigh any cost savings in other parts of the system;
- There is no evidence that competition, marketisation or privatisation of a health system improves quality; there is some evidence that quality deteriorates in the for-profit sector;
- There is evidence that more integrated health systems can improve quality, but this varied with the form of integration.
Equity
- There is limited system-level evidence on the relationship between the level of funding, how this is allocated to different parts of the health system and improvements in equity in health care access or health outcomes (3 However recent analysis (Barr et al, forthcoming) indicates the health inequalities weighting in NHS resource allocation formulae from 2001 to 2010 was associated with a reduction in absolute health inequalities between deprived and affluent areas from causes amenable to healthcare );
- There is some evidence that general taxation is the most equitable and effective way of raising funding for health systems;
- There is some evidence that some payment models (PbR and PHBs) are inequitable and have perverse incentives;
- There is evidence that competition, privatisation and marketisation of health systems and out-of-pocket financing can worsen health equity;
- There was limited evidence on the effects of integrated health systems on equity.
5.2 Considering the annual expenditure on the NHS and other health systems, it is quite shocking that the evidence-base underpinning the level of funding, how this is allocated, how health systems are organised and ultimately their effect on health care quality and equity, is so weak. This needs to be addressed through research as a matter of urgency.
5.3 There has already been an explicit pledge by the Labour Party to repeal the 2012 Health and Social Care Act, and this inquiry provides the evidence-base to support this. In addition, applying the precautionary principle, it is possible to make further recommendations for consideration in the Labour Party’s health policy review process as a result of this Inquiry.
5.4 These recommendations are focused predominantly on how the NHS and social care system is organised and funded. They reflect the evidence from the Inquiry and the action that can be taken to improve quality and equity by addressing issues associated with NHS funding and organisation. It is recognised that particularly in relation to reducing health inequalities, a broader approach focusing on the socioeconomic determinants of health is also needed.
Recommendations
i. NHS funding, allocating resources and payment models
There is insufficient evidence of the relationship between NHS funding levels, how funding is allocated to different parts of the system and the effects on quality treatment and care. Similarly, there is inconclusive evidence on how provider payment models/methods contribute to quality improvements. There is no evidence of the NHS funding levels or provider payment models that would promote health equity; however, there is emerging evidence of the association of reductions in mortality in deprived areas with NHS resource allocation formulae weighted for health inequalities.
We recommend that the Labour Party should:
- a. Restore the key principle of NHS resources allocated based on health need (and health inequalities)
- b. Develop a ‘Healthcare For All’ funding model: Undertake a review of NHS resource allocation formulae and budgets in order to simplify and develop a new resource allocation model reflecting NHS principles and values
- c. Analyse and develop alternative healthcare provider payment models based on quality, equity and capitation rather than activity/utilisation and ‘choice’
- d. Review the evolution needed by Health & Well Being Boards (HWBs) and Clinical Commissioning Groups (CCGs) to enable them to integrate budgets and jointly direct spending plans for the NHS and social care, including constitution, governance, leadership, management, performance monitoring and regulation
ii. Organisation of the NHS
After 25 years, there is no strong evidence that the internal market has contributed to improvements in the quality of healthcare in the NHS. There is also inconclusive evidence that increasing provider autonomy, including GP Fundholding and Foundation Trusts, results in an enhanced quality of care; although it is recognised that there are examples where this has happened, there is considerable inconsistency. However, there is strong evidence that the additional transaction costs associated with a ‘purchaser/provider’ split, exceeds savings made elsewhere in the process. In addition, there is evidence that privatisation has a detrimental effect on quality, for example, on staff-patient ratios, hospitalisation and mortality, and equity, reducing both access and utilisation. There was evidence that ‘patient choice’ was less likely to be exercised by people on low incomes, so affecting the equitable access of care. In relation to direct purchasing or ‘out of pocket’ spending on healthcare, there is strong evidence that this reduces access to healthcare for those that need it most, so reducing health equity.
We recommend that the Labour Party should:
- a. Undertake a prospective assessment of the costs and benefits associated with an integrated, collaborative and planned approach to commissioning and providing healthcare in improving quality and equity in healthcare and social care
- b. Ensure that privatisation of the NHS is prevented by exempting the NHS from EU/US Transatlantic Trade and Investment Partnership and ensuring corporate healthcare providers’ investment is not protected beyond current contracts
- c. Ensure that a duty to ‘co-operate and collaborate’ is placed on CCGs and local authorities, and on NHS Trusts with local authorities including social care providers
- d. Define the terms for private healthcare providers’ involvement in the NHS, in particular in the provision of clinical services
- e. Review how to strengthen the democratic accountability of the NHS, including, for example, through locally accountable HWBs
iii. Integration in the NHS
Although the evidence of the effects of different forms of integration on quality outcomes is fairly limited, it is generally positive. For example, the integration of health and social care management showed a reduction in hospital admissions. Similarly, integrated management, joint commissioning and pooled budgets showed improvements in patient empowerment, choice and dignity. There was also strong evidence that integrated, interdisciplinary teams improve the quality of care, with improvements to patients’ psychological status, clinical outcomes, quality of life and satisfaction with care. However, there was very little evidence of the effects of integration on equity and this was less conclusive regarding positive effects.
We recommend that the Labour Party should:
- a. Build on and supplement the evidence-base on integration within and between the NHS and social care with particular emphasis on quality and equity, for example, through action-research pilots including single budgets for health and social care
- b. Develop national standards for integrating the NHS and social care focusing on quality and equity, with local approaches for implementation
- c. Develop holistic, ‘whole person care’ approaches to support people with long term conditions, and explore opportunities for NHS and Department for Work and Pensions (DWP) collaboration in this
iv. Research and surveillance
Less than 1% of health research in the UK is spent on health systems and public health; there is a dearth of evidence on the effects of many system-wide policies and programmes. However, many of these are introduced system-wide without any evidence of their effectiveness in improving quality or equity in healthcare. We must always strive for evidenced-base policy, but in these straightened times it is vital that public money is spent well. The ability to monitor and evaluate interventions is being exacerbated by reducing data collection which in some instances has been collected over hundreds of years.
We recommend that the Labour Party should:
- a. Restore data collected to monitor health inequalities including the former ‘dicennial supplement’ inequalities data
- b. Within existing research budgets, increase the proportion of research into health system wide effects of interventions such as organisation and resourcing on quality and equity in health and care
- c. Implement Health Equity Impact Assessment: assessing the effects on health and health systems, of all local and national policies as part of the Impact Assessment process
6. Conclusion
6.1 This Inquiry into the effectiveness of health systems in improving quality and equity in healthcare has assimilated evidence of the highest order from the literature, and from key informants and stakeholders. This evidence has shown quite conclusively that where there is competition, privatisation or marketisation in a health system, health equity worsens. There is also evidence of a negative impact on staff morale; there may be conflicts in the values and ethos of a health system founded for social good where some workers are financially rewarded for quality improvements and others are not.
6.2 It also revealed that there is no compelling evidence that competition, privatisation or marketisation improves healthcare quality; in fact there is some evidence that it actually impedes quality, including increasing hospitalisation rates and mortality. After 25 years of an internal market, it is striking that there is no strong evidence that it has contributed to improvements in the quality of healthcare in the NHS. However, there is strong evidence that the additional transaction costs associated with a ‘purchaser/provider’ split, exceeds savings made elsewhere in the system.
6.3 There is also inconclusive evidence that increasing the autonomy of health care providers results in an enhanced quality of care; this includes GPs as Fundholders and NHS hospitals as NHS Foundation Trusts. Although it is recognised that there are examples where this has happened, there is considerable inconsistency.
6.4 There was evidence that ‘patient choice’ was less likely to be exercised by people on low incomes, so affecting equitable access to care. In addition, in relation to direct purchasing or ‘out of pocket’ spending on healthcare by patients, there is strong evidence that this reduces access to healthcare for those that need it most, so reducing health equity.
6.5 In view of the investment of public money in health systems it is staggering that so little is understood about the optimal level of system funding, its distribution to different areas and parts of the system and how this impacts on quality treatment and care. Similarly, there is little known about how provider payment models/methods contribute to quality improvements. There is even less known about how NHS funding levels or provider payment models could promote health equity; however, there is emerging evidence of the association of reductions in mortality in deprived areas with NHS resource allocation formulae weighted for health inequalities.
6.6 Although the evidence of the effects of different forms of integration in health systems on quality outcomes is quite sparse, it is generally positive. For example, the integration of health and social care management showed a reduction in hospital admissions. Similarly, integrated management, joint commissioning and pooled budgets showed improvements in patient empowerment, choice and dignity. There was also strong evidence that integrated, interdisciplinary teams improve the quality of care, with improvements to patients’ psychological status, clinical outcomes, quality of life and satisfaction with care. However, there was very little evidence of the effects of integration on equity and this was less conclusive regarding positive effects.
6.7 The Inquiry’s PLP members have made a number of evidence-based recommendations to address the issues identified, but also to identify action to take forward Labour principles of equity and fairness into health policy for the future.
References
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This article was first published on Debbie Abrahams website, where it is accompanied by an academic appendix:
Health system intervention effects on quality by Katharine Footman, Kayleigh Garthwaite, Clare Bambra, and Martin McKee