Seven years of feast, seven years of famine: boom to bust in the NHS?

The dynamics of international health system reforms: Evidence of a new wave in response to the 2008 economic crisis and the COVID-19 pandemic?

Global economic and health shocks, such as the 2008 global financial crisis and the COVID-19 pandemic typically impact healthcare financing and delivery. Cutler found that profound societal changes in the 20th century induced three waves of healthcare reform across seven major OECD countries. Our study investigates whether major crises in the 21st century induced similar reform waves. Through thematic analysis, we systematically compared health system changes in response to these shocks, using data from the Observatory on Health Systems and Policies and the OECD. Our analysis reveals similar overarching reform trends across countries in response to the 2008 economic crisis: a tendency toward re-centralization of health system governance to control and leverage the efficient rationalization of public health resources. This, to some extent, countered the effects of the market-based reforms of the previous wave. The reforms induced by the 2008 crisis were mediated by its repercussions on the countries' economies. In contrast, reforms in response to the pandemic aimed primarily to address the direct impact of the shock on the health system. Despite its negative economic impact, the pandemic resulted in a substantial but temporary increase in public health spending. A better understanding reform dynamics and their impact on overarching conflicting health system objectives may prevent unintended consequences and enhance health systems' resilience in response to future shocks.

Making and breaking a health service

The creation of the National Health Service (NHS) marked a radical break with the past, making health care universally available on the basis of need rather than means. The NHS was conceived during wartime emergency and has had to survive further regular crises to reach its 70th year, but it now faces challenges that are unprecedented in scale and there are doubts about its ability to continue in its present form. Resources have not increased with need, and the NHS can no longer function as a comprehensive service during periods of peak demand. Policymakers look for solutions in service rearrangements, new technologies, quality improvement initiatives and alternative funding arrangements; meanwhile, chronic lack of capacity is taking a predictable toll on patient care and staff morale. The NHS has become a formidably resilient institution, but securing its future may take as great a collective effort as the one that created it.

Methods for the estimation of the National Institute for Health and Care Excellence cost-effectiveness threshold

BACKGROUND

Cost-effectiveness analysis involves the comparison of the incremental cost-effectiveness ratio of a new technology, which is more costly than existing alternatives, with the cost-effectiveness threshold. This indicates whether or not the health expected to be gained from its use exceeds the health expected to be lost elsewhere as other health-care activities are displaced. The threshold therefore represents the additional cost that has to be imposed on the system to forgo 1 quality-adjusted life-year (QALY) of health through displacement. There are no empirical estimates of the cost-effectiveness threshold used by the National Institute for Health and Care Excellence.

OBJECTIVES

(1) To provide a conceptual framework to define the cost-effectiveness threshold and to provide the basis for its empirical estimation. (2) Using programme budgeting data for the English NHS, to estimate the relationship between changes in overall NHS expenditure and changes in mortality. (3) To extend this mortality measure of the health effects of a change in expenditure to life-years and to QALYs by estimating the quality-of-life (QoL) associated with effects on years of life and the additional direct impact on QoL itself. (4) To present the best estimate of the cost-effectiveness threshold for policy purposes.

METHODS

Earlier econometric analysis estimated the relationship between differences in primary care trust (PCT) spending, across programme budget categories (PBCs), and associated disease-specific mortality. This research is extended in several ways including estimating the impact of marginal increases or decreases in overall NHS expenditure on spending in each of the 23 PBCs. Further stages of work link the econometrics to broader health effects in terms of QALYs.

RESULTS

The most relevant 'central' threshold is estimated to be £12,936 per QALY (2008 expenditure, 2008-10 mortality). Uncertainty analysis indicates that the probability that the threshold is < £20,000 per QALY is 0.89 and the probability that it is < £30,000 per QALY is 0.97. Additional 'structural' uncertainty suggests, on balance, that the central or best estimate is, if anything, likely to be an overestimate. The health effects of changes in expenditure are greater when PCTs are under more financial pressure and are more likely to be disinvesting than investing. This indicates that the central estimate of the threshold is likely to be an overestimate for all technologies which impose net costs on the NHS and the appropriate threshold to apply should be lower for technologies which have a greater impact on NHS costs.

LIMITATIONS

The central estimate is based on identifying a preferred analysis at each stage based on the analysis that made the best use of available information, whether or not the assumptions required appeared more reasonable than the other alternatives available, and which provided a more complete picture of the likely health effects of a change in expenditure. However, the limitation of currently available data means that there is substantial uncertainty associated with the estimate of the overall threshold.

CONCLUSIONS

The methods go some way to providing an empirical estimate of the scale of opportunity costs the NHS faces when considering whether or not the health benefits associated with new technologies are greater than the health that is likely to be lost elsewhere in the NHS. Priorities for future research include estimating the threshold for subsequent waves of expenditure and outcome data, for example by utilising expenditure and outcomes available at the level of Clinical Commissioning Groups as well as additional data collected on QoL and updated estimates of incidence (by age and gender) and duration of disease. Nonetheless, the study also starts to make the other NHS patients, who ultimately bear the opportunity costs of such decisions, less abstract and more 'known' in social decisions.

FUNDING

The National Institute for Health Research-Medical Research Council Methodology Research Programme.

Facing the future: the effects of the impending financial drought on NHS finances and how UK radiology services can contribute to expected efficiency savings

The recent turmoil within the banking sector has led to the development of the most significant recession since the "great depression" of the 1930s. Although the coalition government has promised to "guarantee that health spending increases in real terms in each year of Parliament", this may still not be enough to meet future needs over the coming years due to increasing demand and cost pressures. The expected mismatch between actual National Health Service (NHS) funding post-2011 and that required to satisfy increasing demand has been estimated by the Department of Health to require efficiency savings representing up to one-fifth of the overall NHS budget. This paper explains the reasons behind the anticipated slowdown in the growth of real NHS funding, and how, as a discipline, radiology can increase the efficiency of the services it provides in anticipation of future financial austerity within the NHS.

Why hasn't integrated health care developed widely in the United States and not at all in England?

There have been influential advocates for financing and organizing health care in the United States and England based on the model of integrated health care delivery systems (IHCDSs). Despite good evidence that a few IHCDSs provide high-quality health care economically, such organizations are rare and localized in a few market areas in the United States and are absent in the English National Health Service (NHS). The explanation of why this is so includes various contributory factors: the way the development of the medical profession in each country pursued specialization; the division in British medicine between general practitioners and specialists; and the characteristics that we identify of established successful IHCDSs, which created formidable barriers to entry for a new IHCDS. This explains why currently the most promising organizational developments in U.S. health care are hybrids resulting from vertical integration. In England government policies of an "internal market," as adopted in the 1990s and currently, were and are based on a purchaser-provider split with the objectives that providers would compete and be funded by a system in which "money follows the patient." These policies recognize the division in British medicine, which also means that it is difficult to implement a reorganized English NHS based on high-performing IHCDSs.

New hospital payment systems: comparing medical strategies in The Netherlands, Germany and England

PURPOSE

This paper seeks to identify different medical strategies adopted in relation to the new hospital payment systems in Germany, The Netherlands and England and analyse how the medical strategies have impacted on the emergence of these New Public Management policy tools between 2002 and 2007.

DESIGN/METHODOLOGY/APPROACH

A comparative approach is applied. In addition to secondary sources, the study uses publications in professional journals, official publications of the (national) physician organisations and a (non-random) expert questionnaire to obtain the views of the medical corporate bodies in the three countries.

FINDINGS

The results reveal differences in the medical strategies in the three countries that point towards the significance of institutional and interest configurations. The Dutch corporate medical body was most willing to solve the conflict, while the German and English corporate medical bodies seem to be keen to use a strategy of confrontation. The differences in medical strategies also impact on the ways in which hospital payment systems have emerged in the three countries.

RESEARCH LIMITATIONS/IMPLICATIONS

Further research is necessary to study the medical strategies in healthcare reforms from a broader perspective, for instance by including other countries.

ORIGINALITY/VALUE

The paper gives insights into the interplay between the medical profession and the government in the context of new managerial governance practices in the hospital sector. It adds to the scholarly debates about the role of the medical profession in health policy-making.

Modelling the monetary value of a QALY: a new approach based on UK data

Debate about the monetary value of a quality-adjusted life year (QALY) has existed in the health economics literature for some time. More recently, concern about such a value has arisen in UK health policy. This paper reports on an attempt to 'model' a willingness-to-pay-based value of a QALY from the existing value of preventing a statistical fatality (VPF) currently used in UK public sector decision making. Two methods of deriving the value of a QALY from the existing UK VPF are outlined: one conventional and one new. The advantages and disadvantages of each of the approaches are discussed as well as the implications of the results for policy and health economic evaluation methodology.

Purchasing health care in China: competing or non-competing third-party purchasers?

OBJECTIVES

China's government has decided to increase government funding by 1-1.5% of the Gross Domestic Products in the health care sector. However, it is still a question how to turn the new funding into efficient health care.

METHODS

To help to answer this question we analyze three prototype models of organizing the health care system that may be relevant for China, namely the "Government provision model", the "regulated market with non-competing third-party purchasers", and the "regulated market with competing third-party purchasers". The pre- and post-reform English health care system and the present Dutch health care system are used as examples of the three models. During the last 20 years these countries had, just as China, major health care reforms from a national centrally planned system to a market-based system. Based on the experiences in these countries we analyze the advantages and disadvantages of these three prototype models and discuss their relevance for China.

RESULTS AND CONCLUSIONS

We conclude that the creation of prudent third-party purchasers, who have the incentive and ability to act on behalf of individual consumers, is a critical success factor, whatever model China chooses to implement.

Quality of clinical primary care and targeted incentive payments: an observational study

BACKGROUND

Payments for recorded evidence of quality of clinical care in UK general practices were introduced in 2004.

AIM

To examine the relationship between changes in recorded quality of care for four common chronic conditions from, 2003 to 2005, and the payment of incentives.

DESIGN OF STUDY

Retrospective observational study comparing incentivised and non-incentivised indicators of quality of care.

SETTING

Eighteen general practices in England.

METHOD

Medical records were examined for 1156 patients. The percentage of eligible quality indicators achieved for each patient was assessed in 2003 and 2005. Twenty-one quality indicators referred to asthma and hypertension: six subject to and 15 not subject to incentive payments. Another 15 indicators referred to depression and osteoarthritis which were not subject to incentive payments.

RESULTS

A significant increase occurred for the six indicators linked to incentive payments: from 75% achieved in 2003 to 91% in 2005 (change = 16%, 95% confidence interval [CI] = 10 to 22%, P <0.01). A significant increase also occurred for 15 other indicators linked to 'incentivised conditions'; 53 to 64% (change = 11%, 95% CI = 6 to 15%, P <0.01). The 'non-incentivised conditions' started at a lower achievement level, and did not increase significantly: 35 to 36% (change = 2%, 95% CI = -1 to 4%, P = 0.19).

CONCLUSION

The introduction of financial incentives was associated with substantial apparent quality improvement for incentivised conditions. For non-incentivised conditions, quality did not appear to improve. Patients with non-incentivised conditions may be at risk of poorer quality care.

Managing to manage healthcare resources in the English NHS? What can health economics teach? What can health economics learn?

OBJECTIVES

To provide a 'thick description' of how decision-makers understand and manage healthcare prioritisation decisions, and to explore the potential for using economic frameworks in the context of the NHS in England.

METHODS

Interviews were conducted with 22 key decision-makers from six Primary Care Trusts (PCTs) in northern England. A constant comparative approach was used to identify broad themes and sub-themes.

RESULTS

Six broad themes emerged from the analysis. In summary, decision-makers recognised the concepts of resources scarcity, competing claims, and the need for choices and trade-offs to be made. Decision-makers even went on to identify a common set of principles that ought to guide commissioning decisions. However, the process of commissioning was dominated by political, historical and clinical methods of commissioning which, failed to recognise these concepts in practice, and departed from the principles. As a result, the commissioning process was viewed as not being systematic or transparent and, therefore, seen as underperforming.

CONCLUSIONS

Health economists need to acknowledge the importance of contextual factors and the realities of priority setting. Our research suggests that the emphasis should be on integrating principles of economics into a management process rather than expecting decision-makers to apply the output of ever more seemingly 'technically sound' health economic methods which cannot reflect the dominating and driving complexities of the commissioning process.

Economic evaluation and decision making in the UK

This article reviews the development of economic evaluation of health technologies in the UK and its impact on decision making. After a long period of limited impact from studies mainly carried out as academic exercises, the advent of the National Institute for Health and Clinical Excellence (NICE) in 1999 provided a transparent decision-making context where economic evaluation plays a central role. This article reviews some of the key characteristics about the way NICE works, for example, the way NICE has defined the form of analysis that it requires, reflecting its objective of maximising health gain (QALYs) from the predetermined and limited UK NHS budget. Two broad areas of widespread concern are noted. The first relates to the cost-effectiveness thresholds that NICE uses and the basis for them. The second is the patchy implementation of NICE guidance and the possible reasons for this. But even within the UK, NICE is the exception in making extensive and explicit use of economic evaluation and this article goes on to suggest that if there is to be a more widespread and consistent use of economic evaluation at both central and local levels, then health economists and others need to address three issues. The first is to be clear about what is the correct conceptual basis for determining the cost-effectiveness threshold and then to ensure that NICE has the empirical evidence to set it appropriately. The second is to recognise that even using the limited view of costs adopted by NICE, economic evaluations imply temporal and cross-service budgetary flexibility that the NHS locally does not in practice enjoy. The third issue is that with academic pressures for ever-increasing sophistication of 'state of the art' economic evaluation analysis, the NHS has more and more precise understanding of the cost effectiveness of just a few new technologies and little or no analysis of most. This limits the value of the former by reducing further the scope for appropriately disinvesting from cost-ineffective technologies to meet the additional costs of investing in cost-effective new ones. Whilst NICE stands out as an example of a context where high-quality economic evaluation plays a major role in decision making, the process is far from perfect and certainly is not representative of the use made of economic evaluation by the NHS as a whole. Health economists need to engage with the public and the health service to better understand their perspectives, rather than focusing on academic concerns relating to details of theory and analytical method.