by Andy Cowper, editor, Health Policy Insight
Sir Denys Lasdun died in 2001. I have no idea if health policy affected his death, but it is a shame that he cannot post mortem be tried retrospectively (as MPs are currently being, for their dodgy expenses claims) on the grounds of crimes against architecture.
Lasdun is the man who blessed Londoners with the naughty twin sisters of the National Theatre and IBM buildings, knackering the South Bank river frontage for decades to come. He also built this shocker for the RCP.
I think we can safely say that he saw them coming.
Which is ironic, goven that a declared founding aim of the RCP way back in tudor times was "to protect the rude and credulous populace", and to punish quacks and unorthodox medical practitioners. Ahem.
Such was my main thought as I entered the Royal College for Physicians, venue for Wellards second annual conference (declaration of interest - I do some work for Wellards, including writing and marketing / PR support).
The conference opened with scene-setting from co-chairs Alan Jones and Professor Matt Griffiths. The dominant theme - the effects of the recession on NHS spending - was unavoidable, hence the conference title’s reference to the need to plan forward to the 2010-11 NHS financial year.
The recently-leaked McKinseys report for the DH suggested that £600 million could be saved on the prescribing budget. However, the policy conversation of the past six months has all been about how the service can make the significant savings promised by NHS chief executive David Nicholson of £15-20 billion over the next five financial years.
Equally important is the need to learn from the negative effects of previous ‘austerity’ funding periods. Delegates were also invited to consider whether (based on past experience) if the next general election sees a new party in government, major NHS organisational changes could follow.
Nigel Edwards (director of policy, NHS Confederation)
A scene setter: into the next decade
One of the country’s best-respected policy analysts, Edwards opened with a series of financial projections based on the recent Kings Fund / Institute for Fiscal Studies document ‘How Cold Will It Be?’.
Edwards told delegates that the projected challenge of saving £15-20 billion over the next five years (confirmed in NHS chief executive David Nicholson’s plans) represents on the most optimistic projections by the analysts - the ‘tepid’ projection (as opposed to the ‘cold’ or apocalyptic ‘arctic’ scenarios) means “flat cash, which the NHS has never had – let alone for five or six years”.
The ‘arctic’ scenario represents both a real-terms budget reduction and a reduction in cash. Edwards noted that none of the political parties was discussing so grave a possibility, suggesting that it was not apparent how Labour and the Conservatives’ suggestions that the NHS would see “real-terms” growth would be possible.
Noting the detrimental impact of growth funding of any kind for the NHS on other governmental departments’ future budgets, Edwards recounted “the perception in Whitehall that the NHS has had lots of money for some years and not spent it terribly well”. He also observed that cuts in spending on social services would have knock-on effects on the NHS.
The cost-pressures on the NHS are, he suggested, about £0.5 billion a year from demography (the ageing population), and about another £0.5 billion a year from the Agenda For Change (AfC) pay deal. The inflationary effect of AfC is not, he said, inevitable, but preventing it is “hard to do”.
Edwards noted that proposed savings cannot be ‘paper’ efficiencies of treating a few percent more patients for the same money; “it has to be cash, real cashable savings to pay staff and suppliers. That means the NHS probably have to release fixed costs.”
He listed various ‘doubtful ideas’ from past experience to achieve savings and their downsides: restructuring and mergers (which both seem certain if the Conservatives are elected); letting waiting lists grow (you save only the variable costs and only once-off – and the operations still need to happen); and training and prevention spending (although these look like soft targets, they are disastrous in the long term).
The five better approaches to achieving savings are, he suggested, “operational improvements (although the NHS has been required to make 2-3% efficiency savings for two decades, these have been largely paper savings); removing waste by redesigning clinical processes (although reducing admitted length of stay in hospital frees up beds, which causes supply-side encouragement of other admissions – this is hard to achieve); redesigning the care pathway between organisations, especially for treating long-term conditions; reconfiguring the estate and fixed costs (if the first three can be achieved); and disinvestment decisions (what to stop doing – politically sensitive and unlikely to be popular with the public).
Listing this range of “tough disinvestment choices”, Edwards warned, “we’re still worryingly far from engagement in this, especially in some big hospitals, where there seems to be a ‘wait-and-see’ attitude – this is coming”.
He listed the four ‘enabling drivers’ for change in both parties’ policy proposals: information and accountability (choice is popular with both main parties); skills and methodology for improvement and service redesign; payment policy changes; and behaviour changes, including a “sense of urgency”.
Organisations should decide what is their best bet for reducing costs, improving care and shifting resource form one area of care to another, always asking “does this offer real cost savings; not just paper ones and on a scale which allows release of fixed costs?”
Andrew Donald (chief operating officer and deputy chief executive, Birmingham East and North PCT)
World-class commissioning: where are we now?
Promising a “real-world feel of what commissioning is like from a born optimist”, Andrew Donald, whose PCT was highly-scored for its commissioning, told delegates that the NHS “has been here before in financial challenges (in 1980, 1990 and 90s and 2006), but not at this level of challenge”.
He outlined a “need to hold our nerve and be quite brave. The easy answer would be to shed loads of staff, stop doing everything, and have no more travel to conferences, etc. The intelligent and sophisticated answer is to try to commission our way out of the problem”.
When the NHS went into financial recovery in 2006, Donald’s PCT “achieved it without cutting anything: we did it by commissioning far more cost-effective servcies”. He echoed Nigel Edwards’s points about the need for real cash savings, rather than paper ones. He cited the example of their PCT saving £250,000 in reducing emergency admissions through providing more services at home.
Donald also mirrored Edwards’ comments about hospitals who had not got the message about recession, referring to recent data about NHS foundation provider trusts financial plans for the next five years, which were all about growth. Every other developed country in Europe and north America is looking at contraction and remodelling services.
He emphasised the urgent need to move the NHS from a paternalistic system to a preventative one: “we have to get individuals to look after themselves better. If not, will the NHS be here to treat them in the future?”
Efficiency is, Donald believes, eminently do-able: “it’s great when I get pressure from my board to prove that innovations we propose can show a return on investment, good clinical outcomes, and high patient satisfaction rates.
“There’s money in the system to create efficiency and get cash out. Lots of services are commissioned inefficiently, and there is real cash we can get out”.
Donald gave an example of his response to NHS providers’ bids for funding for new services: “in 2005, I said ‘prove to me that you’re 100% efficient with your current services, then come back with your bid’. Not one did”. His other examples of waste were unnecessary out-patient appointments and the retention of outmoded service models.
Discussing NHS commissioning, Donald also recounted his PCT’s putting clinicians (a GP and a former hospital medical director) in charge of their commissioning process: “commissioning teams need more clinical validity – that gives us more chance of delivering on the challenges of change”.
Donald added, “we have to stop doing certain things, and that means saying we will stop them. If we stop some services, some patients will have a disbenefit, but we must look at the opportunity cost of that disbenefit to them against doing something else benefiting people more. It’s a challenging debate for health service commissioners”.
He observed that the DH’s QIPP (quality, innovation, productivity and prevention) initiative “is what we should always have been doing, emphasising quality; innovating and breaking the moulds of some traditional services; being as productive as possible”.
He believes that a good commissioner :”needs both collaboration and competition as levers effectively to drive through differences in resource utilisation” outlining a newly-established service his PCT have with a private provider: “they only get their profit if they deliver us cashable savings”.
A good gag about the NHS’s poor dissemination of good practice (“we have more pilots in the NHS than major airlines!”) led on to Donald’s plaintive response to a question about whether there is much imitation in the rest of the NHS of his PCT’s good practice in commissioning: “I can get an idea taken up more quickly on the other side of the world than anywhere else in the NHS. I’m sick of going to conferences where someone explains a good scheme, and then people from elsewhere in the NHS explain why it wouldn’t work in their locality, or that they do something different which works just as well if not better … the NHS is bad at learning from itself; let alone anyone else”.
He also pointed out that necessary innovation involves the risk of failure, and speculated whether the “air cover” exists politically and in the NHS and DH hierarchy in the event of painful but necessary closures and failures of experiments.
The NHS must, Donald concluded, “be brave and courageous. World-class commissioning should be the norm; not the exception”. He called for the development of real partnerships with non-NHS providers – private or third sector: “that means mutual trust and being explicit about what each party gets out of the deal … set up in a legal framework with heads of terms pre-contract and be very honest with the partner organisation and your own board about the risks and rewards”.
Dr David Colin-Thomé, (DH primary care czar);
Primary and community care: implementing the new vision
David Colin-Thomé offered a resume of the policy development for primary and community services, which concluded with the plans in Transforming Community Services (DH 2009) for the separation into arms’ length bodies or divestment of PCTs’ provider functions.
The registered list system of general practice remains, he suggested, the best approach to bring about integrated services. He outlined how the “maldistribtion of GPs such that there are less in poorer areas” led to the need for 112 new GP practices in the most deprived areas and one polyclinic per PCT to improve access: “we thought it might encourage the others”.
Community services have, he admitted, until recently “lacked managerial and political attention, even though more is spent on them than on general practice and there are no national systematic metrics or real idea of what they do – a bit like general practice pre-the quality and outcomes framework (QOF)”.
Changes under way in these sectors include new roles for National Institute for Health and Clinical Excellence (NICE) to examine QOF indicators; the remit of the patient survey being widened; and the Royal College of GPs trialling a new GP practice accrediatation scheme. The new quality accounts for all NHS providers will include every GP and dental practice; and the Care Quality Commission will from 2011 register all general medical and dental practices: 17,500 organisations.
Discussing the latest effort to “reionvigorate” GP practice-based commissioning (PBC) - the fourth since its launch in 2004 - Colin-Thomé quipped that “the corpse is not for resuscitation! Progress has been patchy, and there doesn’t seem to be much traction. PBC is not taking off in any systematic way, it’s not seen as a major vehicle for change, to deliver on QIPP (quality, innovation, productivity and prevention)”. He added that clinical involvement in commissioning remains essential “because clinicians really understand the services we’re trying to change”, and suggested that as part of this, hospitals shoulddevlove budgets to doctors and clinical teams.
He also warned that the current policy vogue for integration of services between primary and secondary care “could be the biggest provider capture ever”.
Despite its history, he added that PBC could still be the means to devolve NHS budgets to local population level with clinical involvement (including hospital doctors), delivering more and better services in primary care
He also suggested that the NHS may now in places be “an overfunded service if we look at unnecessary interventions … under Tony Blair, the NHS got 42% of all public sector growth, and I don’t know if we got good enough use".
Possible future roles for the pharmaceutical industry could, he suggested, include redefining the interaction with doctors. The coming demand will be for more cost-effective drugs, but should the industry remain as “only producing drugs? 10 years ago, I thought pharma might diversify like accountancy firms (to use your marketing knowledge, health economics, etc) to offer the NHS services like better long-term conditions management”.
Camilla Batmanghelidjh, Kids’ Company
Peace of mind – one neuron at a time
The remarkable Camilla Batmanghelidjh of the charity Kid’s Company was a surprise addition to the conference programme, raising awareness with delegates about the new joint initiative between her charity and the Association of British Pharmaceutical Industries.
The ‘Peace of mind – one neuron at a time’ project aims to raise £5 million in funding for projects to research and try to treat neurological and neurophysiological damage of abused or chronically neglected children, by selling off the neurons in a virtual brain.
Kid’s Company has done amazing work for many years with some of the most vulnerable children in society, despite highly uncertain funding. Its founder Ms Batmanghelidj has had to remortgage her flat more than once to ensure its continued existence, prior to a recent government grant. This sounds like a very worthwhile project to support.
Meindert Boysen (programme director, technology appraisals, NICE)
NICE in 2010/11: what do companies need to know?
Boysen offered a quick resume of NICE’s many activities since its foundation as special health authority in 1999, including its creation in 2008 of a commercial external consultancy.
The Darzi review, High-quality care for all (DH 2008) brought NICE a broad range of new functions, including NHS Evidence (a ‘google’ for evidence-based health information). Future NICE functions include the setting of quality standards in 2009; diagnostic evaluation tools and QOF indicators in 2010; and more clinical guidelines in 2011.
NICE is also enhancing its technology appraisals, releasing their economic models as was legally ordered following judicial review – although applicant drug companies are also now required to share their models. From November 2009, manufacturer consultees wil be able to attend committes to answer questions. NICE is also becoming involved in handling patient access schemes and flexible pricing agreements.
NICE is also now doing topic selection and scoping. Cancer drugs bypass the first ministerial decision hurdle in the process, and soon all innovative medicines will do the same.
NICE’s mian assessment of medicines remains based on costs to the NHS (not broader social costs), and bases judgment on cost versus quality-adjusted life years (QALYs) gained, with likely acceptance under a cost of £20,000 annual cost-per-QALY, and much tougher criteria over £30,000. Recently, NICE was ordered to give higer weight to eexpensive end-of-life medicines that offer a defined quality of life improvement to small patient populations where the prognosis is less than 24 months’ life expectancy.
NICE has carried out 49 standard technology appraisals (STAs) in 47 months. Most work is based on manufacturers’ submissions. It is now being asked to provide STAs much closer to the time of marketing authorisations, and aims to get medicines appraised within 3-6 months of that authorisation, reducing NHS uncertainty time.
Where decisions are spread across multiple appraisal committee meetings, they are more likely to result in an approval to recommend use, even if qualified. 55% of NICE medicines decisions have been ‘optimised yes’, and just 9% an unqualified ‘no’. NICE’s ability to advise the adoption eing helped by ‘special arrangements’ on cost-sharing, such as with Velcade or Tarceva.
NICE also has involvement with flexible pricing; patient access schemes (via their liaison unit – not about cost-effectiveness: about implementability); and roles in uptake and innovation. NICE’s policty is that patient access schemes should not, Boysen said, become the norm, bankrupt the NHS or disrupt its other activities. He also advised delegates to look at NHS Information Centre graphs on medicines uptake post-NICE guidance publication.
Claire Perry, managing director, Imperial College Healthcare Trust
The acute sector: academic health science centre development
Perry introduced the concept of academic health sciences centres (AHSCs) – an innovation in the UK, but internationally, the major centres of medical quality and innovation are on this model. It combines university research departments with hospitals.
Imperial’s vision is to be one of the top 5 AHSCs by 2015, internationally recognised for its outstanding quality for patien cater, education and research. Their values are “to respect our patients and colleagues; encourage innovation in all we do; provide the highest-quality care; work together for the achievement of outstanding results; and take pride in our success”.
Imperial is the UK’s largest acute trust, with a £850 million turnover, employing 5% London NHS staff. It also has one of the UK’s lowest hospital standardised mortality ratios, and is ranked third in Europe and 11th internationally for life sciences and bio-meidcine quality fo research.
Perry suggests that AHSCs could choose to buck “the NHS hospital tradition of continuing doing everything done in the past and taking on more … I think we will share good practice and bring services together for improvement and lower cost with other NHS providers. We see ourselves as both a local and national provider.
Imperial’s working model is “bench to bedside translational research”, and the two hospital trusts (St Mary’s and Hammersmith) which merged into Imperial College University to form Imperial Healthcare NHS Trust were historical leaders of innovation.
Collaboration with pharma companies is an areas where Imperial both perceives and can offer mutual advantages: faster working and feedback; cross-institutions trial enrolment and broad population benefits: “being a huge organisation, we have a better critical mass. The cardiac department from St. Mary’s is moving in with Hammerssmith’s to create the UK’s single largest, alongside an investment of £110 million from Imperial College”.
Imperial boasts a joint research office; an academically-led clinical trials unit; a centre for translational medicine; core support facilities to support clinical research. They use a single trust-wide assent form, shared clinical databases and have a BioBank.
They are creating facilities for clinical research in dediated facilities for key specialties, and want to achieve a single contact, budget, contract and signature process for research deals.
Dr Richard Barker (director-general, ABPI)
Dealing with a monopsony NHS: looking ahead to 2010/11
Barker’s review of the last year and look ahead stressed the importance of pharma companies learning to regard the NHS as “a partner as well as a purchaser”.
The ABPI’s strategic focus on value, innovation, trust and access to medicines mover the past year reflected industry priorities. Their communication with PM Gordon Brown had led to a summit meeting with the secretaries of state of the of relevant departments, at which the industry expressed their message of a lack of joined-up policy over life sciences.
“Three pillars of the environment need to change: the NHS should become a champion of innovation, rather than resisting it; we need an integrated and effective R&D base (public, private and third sector bodies such as Wellcome Trust, British Heart Foundation and Cancer Research UK); and an appropriate tax environment – especially for small companies whose venture capital has dried up”.
Lord Drayson, former head of Powderject, has been a successful minister for the new Office of Life Sciences (OLS), according to Barker. Unusually, the ABPI secured weekly meetings for six months with a minister! The resulting ‘Blueprint’ document, though good, is “not the end product”.
Industry-NICE engagement has grown and improved yearly, and although the industry clearly don’t agree with all NICE decisions, NICE is now “a fixed point in healthcare, it’s no good to wish it away. NICE has a growing role, influence and budget and 10 years on, the industry should be used to it. It’s real progress that companies can now be represented at table when the decision is being made”.
He outlined the new innovation pass, whereby medicines treating few patients with incomplete cost-effectiveness data will go straight to market, funded from a central budget (of £25 million in this first of three years). “It establishes critical principles that not all medicines, especially those for small numbers, can come out with proper cost-effectiveness evidence (though companies should try to build it in); and that the NHS should give some medicines the benefit of the doubt”.
The new ‘super-clusters’ see industry working with research charities to makethe UK globally competitive in translational medicine and other research. This needs national scale, with sub-clusters in specialties and stages of research.
Other positives include the new Innovation Fund; new money for regenerative medicine; and the Patent Box concept of favourable tax treatment to retain R&D exploitation rights developed here.
Barker also mentioned the Kennedy review of NICE valuing innovative medicines, and the focus on cost per QALY: “the ice has begun to crack on that issue, which is good for future credibility of NICE, for the pharma industry and for patients’ access to new drugs”.
“PPRS renegotiation is at early days, but we think it will be positive for industry, as it will look at uptake rates in the UK vs. European comparators”. He also welcomed the new horizon-scanning mechanism to help PCTs to see new medicines coming through development, helping the NHS budget for innovation.
While noting the need for the NHS to change “to become a champion of innovation, rather than resisting it”, Barker also told delegates that changing ingrained negative perceptions of the pharma industry among some NHS staff was “a body-contact sport. Get out there, meet these people, convince them that you really have patients’ interests at heart”.
Answering a question about “the trust agenda”, Barker told delegates that in his meetings with senior managers at strategic health authorities and primary care trusts, the atmosphere has been “positive and business-to-business-like. But when we got really talking, it became obvious that obvious no-one from the industry has ever been around that table.
“If we wait for people who like us to invite us in, we’ll wait a long time … Be in contact with the NHS and behave like partners.”
Intensive joint working with the NHS is “a substantial part of the future landscape”, Barker observed, noting his surprise that a show of hands revealed that only half of delegates were in companies engaged in joint working with the NHS.
He cited work on redesigning oncology care which has made 11% efficiency on delivery; work in a north-west PCT on COPD to stop unplanned exacerbations and admissions to critical care, which has made savings worth an estimated £120 million in a year: “knowing the worth of this is important to dialogue”.
Observing possible future health secretary Andrew Lansley’s keenness on value-based pricing (VBP), Barker said, “personally I don’t think it’s worthwhile to oppose VBP; we’re past that point. Now it should be about discussing how VBP could work, recognising practical barriers, like limited cost-effectiveness data. Industry needs to think about how a value-system could look”.
He ended with a grand challenges for the industry. “How do we as industry respond to £15-20 billion NHS funding gap? Jim Easton (head of QIPP and in charge of getting the £15-20 billion cashable savings out of the NHS) tells me he doesn’t want 152 PCTs all doing different pilots: he wants pilots at scale, and a business-to-business relationship with life sciences. He’s told me ‘I know how to cut your price; it’s more fulfilling to work out together how to deal with big nuggets of disease burden and improvement potential’.”
Three questions follow, Barker concluded:
1. what skills and assets can we bring to the £15-20 billion problem?
2. what kinds of partnerships can we propose to keep people out of hospital?
3. might this not lead to new business modes to industry? Has been cautious to be other than innovative – how about outcome measures, pathways etc?”
by Andy Cowper, editor, Health Policy Insight