Healthy Competition

While there are important differences between the NHS and the US health system, both face similar challenges in improving productivity and disrupting the traditional model of healthcare that is no longer fit for purpose. Both are facing rising demands of an ageing population, increasing prevalence of chronic conditions and consumer expectations. Both systems have powerful incumbent providers such as general hospitals that are not always responsive to changing patient and system needs. As Elizbaeth Tesiberg and many others of both sides of the Atlantic have argued, “innovation is the only long-term solution to high-quality, affordable health care.”

Leading pioneers from around the world are already transforming healthcare. In its recent report, Healthy competition, the London based think tank Reform, highlighted a number of case studies of successful change. Reform explored four crucial areas that can improve productivity in healthcare: service reconfiguration, integrating care, standardisation of processes and procedures, and measuring and publishing outcomes.

Greater patient safety through service reconfiguration

Successful reconfiguration has achieved higher quality and greater value for money. In Finland, the Pirkanmaa region closed joint replacement departments in five hospitals and concentrated care at one specialist hospital.  The new hospital delivered complication rates below 1 per cent compared to an average of up to 12 per cent for general hospitals. The NHS in London moved emergency stroke care from 34 general hospitals to eight specialist units with dedicated staff. London now has the highest standards of stroke care of any major international city.

Reduced costs through integration and competition

The fragmentation of traditional health systems has been a driver of costs and waste, and prevented patients perceiving high quality of care. In Rhode Island, Beacon Health Strategies, has created an integrated care pathway for mental healthcare services, which were previously highly fragmented.  In one year the cost of mental healthcare hospitalisations for children was cut by 20 per cent. The West German Headache Centre now provides integrated care under a single roof, bringing together different specialties and services that were previously offered at different sites and not coordinated. Patient outcomes have improved and hospital admissions have been significantly reduced, while the cost has been estimated to be 25 to 30 per cent cheaper than the national average.

Reduced costs through standardisation of clinical practice

Medical practice and clinical quality remain variable, creating poor outcomes and inefficient care. Medicine is becoming less intuitive and more precise. Consequently the role of caregivers is changing and healthcare can become more standardised and process driven. In the United States MinuteClinic has developed strict protocols for a range of routine services. This has allowed the clinics to use nurses instead of more expensive doctors, enabling them to provide consultations 30 to 50 per cent cheaper than a visit to a GP. The Indian specialist maternity hospital LifeSprings has focused on providing a limited number of procedures and used standardised clinical protocols. Doctors’ productivity is four times higher than non-specialist providers and prices are up to 50 per cent lower than of market rates.

Greater patient safety through better data

Measurement, and integrating data with performance management and quality improvement, is one of the key “habits” of high performing systems. Birmingham University Hospitals in England took the initiative to develop its own IT infrastructure to track medical errors and provide decision support to front line clinicians. Medication errors were cut by 66 per cent and contributed to a 17 per cent drop in 30-day mortality.  The Cleveland Clinic in Ohio has published its clinical outcomes and data used by the hospital leaders to manage productivity, benchmark clinicians and improve quality. The hospital is one of the highest ranked in the United States for quality but costs are half those of equivalent providers.

Like all health systems, England’s National Health Service, needs to achieve value for money on an unprecedented scale. Over the last decade health spending in England grew faster than most other developed countries, doubling in real terms between 1999 and 2011. Following global economic and fiscal crisis all health systems will not be able to meet rapidly rising demand without radical transformation in the way care is delivered. For innovation in the NHS to succeed providers need to freedoms to change, the opportunity to compete and the rewards for doing things differently. Reforming governments in England have tried to open up the NHS to encourage competition and create greater freedoms for hospitals to innovate, but there is a long way to go.

Thomas Cawston is a Senior Researcher at the independent think tank Reform. Healthy competition is available at www.reform.co.uk

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