Integrated Care is the most recent re-naming of Accountable Care: the system currently being implemented in the NHS in England and which is derived from the US. This blog addresses issues arising from this implementation and whether or not Integrated Care is fit for public purpose.
The narrative that comes from Westminster, echoed by parts of the media and even some campaigners, is that whilst cuts and closures, underfunding, understaffing and poor NHS management at the highest levels are all contributory factors to the problems the NHS faces, there is no overarching concern with Integrated Care itself.
On the contrary, the bringing together of commissioners (purchases of services) and providers of services is viewed as getting rid of the hated ‘purchaser-provider split’ which is isolated in this narrative from all other structural components and becomes a proxy for the market system. On this point alone the move to Integrated Care is seen as a stepping stone to a return to public service. There is even some movement to reclaim ‘integrated’ as a term of public service.
There are very good reasons why tackling this issue head on may be politically sensitive. Labour is keen to claim for itself not only the creation of the NHS (which it historically deserves) but a current role as the best defence against Trump. The Secretary of State for Health also claims that he will not allow the NHS to be in US-UK trade talks ‘on his watch’. That is understandable, but the love affair of the major UK political parties with United Health and Kaiser Permanente, amongst others, goes more than skin deep. US Integrated Care has been introduced into the NHS piecemeal over the last 30 years and we are now into the full adoption of an NHS ‘version’ being rolled out at speed. It’s here where the argument lies for politicians, think tanks and amongst campaigners . A question mark is raised over its origins and over whether it is irredeemably bad for the NHS or not.
Our counter argument is threefold:
1. The Integrated Care System does not in fact remove the ‘purchaser-provider split’, but merely changes it to a different type.
2. The constraints put upon the NHS to meet the requirements of Integrated Care are set out in terms of restructuring the service in such a way that it will no longer meet the key tenets embedded in it from its creation: delivering all services for everyone within (mostly) easy reach.
3. “One thing the community cannot do is insure against itself. What it can and must do is to set aside an agreed proportion of the national revenues for the creation and maintenance of the service it has pledged itself to provide.” Bevan’s statement worked on a national level while the ICS model creates a risk and reward system in which profit and loss are to be shared locally between the constituent players of 44 ‘local health economies’. This is entirely upending the basis for financing the NHS.
The concept of Integrated Care is a longstanding method in the United States which was created to try and reduce the healthcare costs which are spiralling out of control. The most expensive part of any healthcare system anywhere in the world is acute care. It needs higher concentrations of staff per patient, more infrastructure – both buildings and equipment – and changes more rapidly than other parts of the service in its response to technological advances.
It follows from an accounting point of view that any measures which can be taken to ‘reduce demand’ on the acute sector will reduce costs. Part of the cost reduction exercise in the US involves forming collaborative bodies (Accountable Care Organisations aka Integrated Care) which share profit or loss across the different constituent bodies – that is to say the insurance groups who provide the funding from their clients (state or private) plus various hospitals, GP practices and other health services. The profit and loss sharing is designed to provide incentives for keeping people out of hospital and in theory to keep them more healthy in the community.
From the above, it is clear that purchasing and providing still exist within US Accountable Care and that it in no sense represents a return to the kind of planning required to run a public service NHS. The same is true of the system being implemented in England.
Restructuring the NHS
In order to attempt to meet the accounting criteria behind Integrated Care, the NHS’ historical provision of local GP family practices, local District General Hospitals that include full Accident and Emergency and other local services must be dismantled. Acute and emergency provision is calculated to be more cost effective if it is concentrated in hospitals that service a much larger population. Local hospitals then become satellites to the centralised major trauma hospital no longer offering the full service we are used to.
GPs are being corralled into much larger units which may run the satellite hospital or work from large centralised clinics. Property made ‘surplus’ from these restructurings can be sold as a result.
These changes are an intrinsic part of the development of Integrated Care. They are not optional, nor do they come about only as a result of the last nine years of below inflation funding.
None of the descriptions above are based on assumptions. They all come from official NHS England and Sustainability and Transformation Partnership policy documents. The reality is evident on the ground.
Risk and Rewards
“Risk and reward sharing is underpinned by a theory of change that expects a provider to adjust its behaviour in response to financial incentives”
Early adopters of the ACO model in 2012 in the US, known as Pioneers (see our report on ACOs for more details), were allowed to move to a full capitated budget. This represents the full transfer of risks from the commissioner to the ACO and it means the ACO has the incentive to cut costs in order to maximise its profit share from the budget. As in those early pioneer ACOs, NHS England has made it clear that it wishes to pass all financial risks to the Integrated Care Systems. But unlike the US model, an NHS ICS does not necessarily have to include acute hospital services in its provider collaboratives. As the greatest losses fall on acute hospital services this creates the possibility of a collaborative being formed only from those providers who can best make profits.
Our report into ACOs explains how many of the participants in the early US pioneer programme failed to see many of the implications of a shared savings programme, seeing only its potential benefits. They later discovered that they had serious financial difficulties.
This question of risk and reward sharing is one of the most important issues for an NHS provider and illustrates how they have moved from being government provided services to government commissioned services. Under this scheme an NHS provider could potentially suffer significant losses risking its financial viability to the point where it may collapse as a business.
The failures of private sector providers, as we have seen in recent years, causes inconvenience for commissioners and loss of services for patients but the potential collapse of an NHS body would have far more serious ramifications. There is also the case where a majority of an ICS’ services are provided by private sector organisations which opens the door to profits flowing out of NHS funds. Furthermore the arrangements for how both risks and rewards will be shared between providers adds another layer of complexity to the transaction costs of the NHS. This, of course, provides yet more work for management consultancies, big accountancy firms and lawyers.
What’s to be done?
We fully appreciate the desire of campaigners to achieve victories in the face of what feels to be overwhelming odds. Each local victory does throw a welcome spanner in the works. However, to ignore the structural changes being brought in and not to recognise the part that each individual closure or downgrade plays in the overall pattern of change is to ignore the elephant in the room.
That is why we think the slogan ‘Act Local, Think National’ should always be embedded in every campaign. It is important to understand that the national picture gives the corporate sector a major role in the future of the NHS as it has done increasingly over the last thirty years and that the model currently being adapted is specifically based on US Integrated Care.
This is a system built fundamentally on business principles with competition and the profit motive in its DNA. This is not a system that lends itself to public ownership and provision serving the public interest.
President Trump’s statement about the NHS being on the table in future trade talks set off a raft of responses including Jeremy Corbyn tweeting, ‘Labour will [..] ensure US private companies cannot lay a hand on our NHS. The NHS is not for sale’ and Matt Hancock saying, ‘not on my watch’. It has understandably provoked a lot of comments on social media and discussions in the press about the importance of keeping the US out of the NHS in the future. But the challenge is to change the conversation so that we openly oppose US corporate interests influencing our NHS now.