The Business of Health Care

The KP Model in the UK

I’ve had a couple of meetings recently with leading figures in UK health policy – one of them a senior figure at a doctors’ organisation, the other at a private health company – who both talked excitedly about the lessons Britain could learn from the US.

That’s rarer than you might think. Our National Health Service may be cautiously embracing market-led reforms, but there’s still plenty of scepticism about the US’s full-on competitive system, and people here tend to be nervous about citing it as an inspiration.

Still, the two figures I am referring to, both leading players in the British Government’s NHS reform programme, were talking not about US healthcare as a whole, but about one particular organisation with something of a cult following on this side of the Atlantic.

I am referring to Kaiser Permanente, and its ideas are about to become very big over here.

Kaiser is one of those iconic organisations that aren’t just known for what they do, but whose names come to define their particular way of doing things – in Kaiser’s case, managed care.

It is the classic managed care organisation, running all the disparate parts of the local health system as a fully integrated whole, and deftly incentivising doctors to make sure patients receive their care in the part of the health system where it can be delivered most efficiently.

In the UK, Kaiser Permanente has always held a peculiar fascination for health policy experts. Some love the idea of managed care, as the ideal solution to the ballooning cost pressures on the NHS… and others, for reasons I’ll explore later, absolutely hate it.

The UK’s pay-for-performance system for family doctors already owes a little to Kaiser, but it’s only now that the NHS is making a serious stab at adopting Kaiser-style managed care, under the latest stage in the Government’s health service reforms.

The Department of Health is to run national pilots of a system called ‘year of care’, where a single provider will be asked to manage the entire budget for the care of eligible patients – sub-contracting bits to other providers as need be.

It’s basically managed care in action, aiming to make a single organisation responsible both for primary care and for expensive acute care… and handing that provider an incentive to make sure patients get more of the former and less of the latter.

And as I’ve said, not everyone likes it. There are those – including Dr Clare Gerada, the head of Britain’s Royal College of GPs, who worry that managed care is just a sophisticated way of ensuring patients are treated as cheaply as possible by denying them hospital care they might in fact need.

Particularly controversial is the incentive the managed care organisation receives to ensure it oversees its year of care budget as efficiently as possible.

At present, it is just envisaged that companies will be paid a management fee for keeping the health system within budget, but there are plenty who would like to see that concept expanded to include the offer of profit shares for providers that come in under the bottom line.

To critics, that will sound perilously close to a cash payment for blocking doctors’ referral decisions and restricting access to hospital care.

But to enthusiasts, like the leading public doctor and the private entrepreneur who talked to me so enthusiastically about Kaiser, it sounds like the future for our NHS.

Richard Hoey is editor of Pulse, a weekly magazine for UK primary care professionals and physicians. He writes Pulse’s editorials and muses on general practice in his weekly blog. You can follow him and read other news about the NHS at

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