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Radical Reform of the National Health Service in the UK in 2011: Background, Proposals, Prospects, and Lessons for Russia

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National Research University Higher School of Economics Masters in Management and Economics of Health Services Seminar Presentation 21 March 2011 – PowerPoint PPT presentation

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Title: Radical Reform of the National Health Service in the UK in 2011: Background, Proposals, Prospects, and Lessons for Russia


1
Radical Reform of the National Health Service in
the UK in 2011 Background, Proposals, Prospects,
and Lessons for Russia
  • National Research University Higher School of
    Economics
  • Masters in Management and Economics of Health
    Services
  • Seminar Presentation 21 March 2011

Dr. Christopher Davis Department of Economics and
School of Interdisciplinary Area
Studies University of Oxford
2
Motivations for Medical System Reform
  • Control rising cost of medical care, reflected in
    increasing health shares of GDP, driven by ageing
    populations and technological progress
  • Improvement in access to medical care and
    reductions in health inequalities
  • Improvement of quality of medical care
  • Reductions in inefficiencies, duplication in the
    medical system
  • Improvements in health outcomes (survival rates,
    raising life expectancy)
  • Reducing public dissatisfaction with medical care
    and increasing patients choice of treatment

3
Health Reform Waves 1990-2000s
  • Toth (2010) review of reforms in France,
    Germany, Netherlands, New Zealand, Sweden and UK
  • Early 1990s Introduce market-style mechanisms,
    greater competition, purchaser-provider split,
    patients choice.
  • Mid 1990s Criticism of market mechanisms,
    unclear impact on efficiency but worse equity and
    access. Emphasis on improving integration of
    components of medical system. UK abolishes
    fund-holding and adopts Primary Care Trusts.
  • 2000s Emphasis on quality of care and patients
    rights. Patients in NHS can choose provider and
    funds follow.

4
Unexpected Health Reforms During Global Financial
Economic Crisis
  • Russia 2008 Priority Health Project and
    Conception of Health RF to 2020
  • China 2009 Implementation Plan for the Recent
    Priorities of the Health Care System Reform
    (2009-2011).
  • USA 2010 Senate Bill 3590 Patient Protection
    and Affordable Care Act
  • UK 2011 Health and Social Care Bill

5
Questions to be Answered
  • What are the main problems in the UK health
    system?
  • Have past health reforms worked?
  • What are the features of the announced 2010-11 UK
    health reforms?
  • What are the criticisms of the new health reforms
    and the prospects for their adoption ?

6
Structure of Presentation
  • Concepts used in Analysis of Health Reforms
  • Health in Political and Economic Systems
  • Governance in Health Systems
  • Health Production and Health Outcomes
  • Priority of the Health Sector and Health
    Financing
  • Measurement of Health System Coverage of
    Population, Benefits and Cost-Sharing
  • Sources of Data
  • Principles and Development of the UK NHS
  • Health Reforms in UK and Russia 1990-2010
  • 2010-11 Proposals for Radical Reform of the UK
    NHS and Criticisms of Them

7
Political System, State Priorities and Health
  • Importance of politics in health reform
  • Sheiman Shishkin 2009 After an unsuccessful
    start of the programme of monetization of
    benefits in early 2005 discussion of health
    reform legislation was minimized
    ..Transformations in organization, management and
    financing of the health service were moved to the
    back burner.
  • Political system
  • influences health sector (State bureaucracy,
    political parties, legislature, interest groups,
    voters, public opinion and expressions of
    discontent)
  • State priorities
  • influence allocations of resources, protection of
    health sector in a crisis, and degree of
    inequalities

8
Political Actors Influencing Health Reform
9
Governance in Health Services
  • Health systems made up of many institutions
    (central and regional government, regulators,
    boards, medical facilities) that need to achieve
    objectives while maintaining standards and
    controlling costs.
  • To achieve this requires good governance
    (Strategy, Leadership, Vision, Assurance,
    Probity) 2011 Governing the New NHS
  • Governance different from, but related to,
    operational management
  • Many UK NHS reforms aimed at improving health
    governance

10
Public Concern about Health in Russia, China, USA
11
Health Sector in an Economic System
12
Health Sector Production Process
13
Impacts of Reforms on Health System Coverage of
Population, Benefits and Cost-Sharing
WHO 2008, Fig. 2.2
14
Sources of Data for Presentation
  • Data for Empirical Assessments
  • Official Russian sources
  • OECD databank and reports
  • Data for Diagram of Health Coverage, Benefits and
    Cost-Sharing
  • Information about Current UK Health Reforms
  • Official documents (White Paper and Parliament
    Bill)
  • Think Tanks (Kings Fund, Nuffield Foundation)
  • Academic Journals
  • Newspapers

15
Empirical Estimation of Trends in Axis Variables
in Health Diagram
  • X Axis Coverage of Population ( of population
    covered by a national health service (NHS) or
    health insurance (100 public, mixed
    public-private, or subsidized private)).
    Government statistics and reports. Reliable
    estimation of trends.
  • Y Axis Coverage of Benefits ( of potential
    benefits in a country provided to the
    population). Measurement more problematic .
    Identify maximum standard in a country and
    evaluate how provision of the average citizen
    deviated.
  •  Z Axis Coverage of Costs ( of health costs
    covered by public sources). Estimates of this
    indicator based on government statistics and
    independent reports. Measurement reliable.

16
Establishment of UK NHS in 1948
  • First national health service in democratic
    system not based on insurance. Established in
    July 1948 with principles
  • Universal coverage
  • Free of direct charge
  • General taxation source of finance for NHS
  • Pooling of financial risk at centre
  • Collective provision
  • Promotion of advances in medical science
  • Political struggle over the reform
  • Government and medical professional in favour of
    reform
  • Opposition by Interest groups (hospital doctors,
    GPs, other medical workers, trade unions,
    patients, NGOs)
  • Local government opposed to centralisation
  • Groups fights to maintain freedom of choice
    (patients have right to choose doctors, doctors
    have right to choose treatments)

17
Compromises and Actual Arrangements in
Establishing the UK NHS
  • More a national hospital service than a national
    health service
  • Compromises
  • Teaching hospitals subordinate to centre whereas
    other hospitals under local government
  • Doctors (but not other medical professionals)
    have key management roles
  • Local government keeps control of district
    nurses, child welfare, public health
  • GPs not salaried or employed by government. Sign
    contracts with Executive Committee run by GPs.
    Paid on capitation basis (related to patient
    list)
  • Groups of GPs encouraged but not mandatory
  • Private practice by hospital doctors allowed

18
Structure of UK NHS in 1948
19
NHS Developments and Reforms 1948 1980s
  • Substantial growth of NHS and quantities of
    services provided
  • Significant increase in medical technology in NHS
    and in quality of care
  • Continuing increase in the cost of the NHS (HE
    GDP rises from 3.5 to 5.6 )
  • Improvements in almost all measures of health
    outcomes (e.g. life expectancy)
  • But shortages, queuing, rationing
  • Reforms introduced to improve performance
  • 1950 73 Technocratic change (planning,
    management)
  • 1974 Unification/integration, Regional Health
    Authorities, Community Care Councils
  • 1982 Introduce general management, outsourcing
    (contracting out to private sector of
    non-essential services)

20
UK Elections, Parties in Power and Health
Reforms 1945-1989
21
Structure of UK NHS 1974 and 1982
22
Comparison of the UK and USSR NHS in the 1980s
Davis 1990
23
Performance of the UK and USSR NHS
  • Davis 1990 chapter in Social Policy Review
  • Rising demand for medical care
  • Successful cost containment in both countries
    1984 The Painful Prescription
  • Shortages in both health services, but more acute
    in USSR
  • Pervasive rationing of medical care in both
    health services
  • UK lags behind most EC countries in availability
    of medical technology (71 average MRI), but is
    substantially more advanced than USSR
  • Almost all health outcome indicators better in UK
    than in USSR

24
Russia Health System Coverage of Population,
Benefits and Costs in 1990
25
Male Life Expectancy 1980-2008 UK, USA, China,
Russia
26
Objectives of Health Reforms in UK
  • Control cost of medical care
  • Improve efficiency so that health spending has
    greater impact
  • Reduce bureaucracy, strengthen purchaser-provider
    split, increase competition
  • Devolve decision making and resource allocation
    to consortia of GPs
  • Give patients greater choice of treatment paths

27
Health Reforms in the UK in the 1990s
  • 1990 NHS and Community Care Act of Conservative
    government
  • 1991 Introduction of the internal market.
    Purchaser-provider split. Two models of
    purchasing health authorities and GP fundholders
    (non-urgent elective and community care for
    patients).
  • 1994 Total Purchasing Pilot Scheme allows GPs to
    commission all services
  • 1997 GP fundholders abolished in favour of
    Primary Care Groups and Trusts (PCG, PCT) that
    maintain Purchaser-Provider split

28
UK Elections, Parties in Power and Health
Reforms 1990-2010
29
Evolution of Purchaser-Provider Relationships in
UK NHS
30
Purchaser-Provider Arrangements in the UK NHS in
the 1990s
31
Health Reforms in Russia 1990-2008
  • 1991-1993 Introduction of CMI and other health
    reforms
  • Deterioration of economic performance, weak
    state, over-ambition means most health reforms
    fail in 1990s
  • In 2000s more emphasis on health education,
    prevention
  • Intensified reforms related to management and
    incentives in the medical system
  • Improvements of CMI system
  • Adoption of Federal Goal Programs in health for
    2002-06 to supplement normal activities
  • Priority National Project in Health 2006-10
  • Adoption in December 2008 of Conception of Health
    RF to 2020
  • Real health expenditures from state budget, CMI
    and private sector increase substantially

32
Medical Systems in China, USA, Russia, UK
33
Russia Health System Coverage of Population,
Benefits and Costs in 1990, 2007
34
Male Life Expectancy 1980-2008 UK, USA, China,
Russia
35
Population 142 million Area 17 million ??2
Birth Rate 11.3 per 1,000 Crude Death Rate
14.6 per 1,000
1
36
Russia Health System Coverage of Population,
Benefits and Costs in 2007, 2020
37
Developments of Health in the UKin the 2000s
  • In 2002 Phasing out of Health Authorities, move
    to 152 PCTs with ave pop of 300,000 and
    responsibility for 80 b (80 NHS)
  • 2004 new form of commissioning Practice-Based
    Commissioning (PBC) GP practices given
    indicative budget by PCT and encouraged to make
    savings while achieving quality targets
  • 2007 World Class Commissioning. Set standards for
    PCTs and PBCs

38
UK NHS Structure Late 2000s
39
2010 UK NHS Governance
40
Patient Contacts in NHS
41
NHS Expenditure Early 2000s
42
Primary Care Trusts
  • 300 (reduced to 150) Primary Care Trusts are
    subordinate to the Strategic Health Authority and
    represent the local Primary Care community (GPs,
    dentists, public health).
  • Objectives are to improve the health of the
    community, engage in partnership work and
    community-based health and care initiatives,
    implement population screening programmes,
    develop and integrate family health services,
    medical (primary care), dental and optical
  • Have assumed responsibility from district health
    authorities of commissioning (purchasing) of
    community, secondary care and tertiary/specialised
    services
  • Also responsible for mental health, emergency
    ambulance and patient transport services, NHS
    Direct and walk-in centres

43
NHS Trusts and Foundation Trusts
  • NHS Hospital Trusts
  • Hospital trusts subordinate to Strategic Health
    Authorities and need to satisfy annual
    accountability agreements
  • More freedom of activities than previously
  • Provide services to PCTs
  • Must satisfy standards set by Care Quality
    Commission
  • Foundation Trusts
  • NHS Trusts that are promoted by Monitor because
    they satisfy stringent criteria concerning
    financial viability
  • Greater autonomy in medical and financial
    activities
  • Provide medical services to PCTs in accordance
    with contracts
  • Must satisfy Monitor and Care Quality Commission

44
Foundation Trusts
45
Monitor
  • Monitory established in 2004. Executive
    non-departmental public body
  • Oversees performance of NHS Trusts (primarily on
    financial grounds) and grants selected ones
    licences to operate as Foundation Trusts.
  • Has sole responsibility for overseeing Foundation
    Trusts to ensure their financial viability while
    maintaining agreed safety and medical quality
    standards
  • Assigns each FT risk ratings on an annual basis,
    which influences detail of supervision
  • Can intervene to direct activities of failing FTs

46
NICE
  • In 1999 National Institute for Clinical
    Excellence established to provide information to
    patients, the public and medical professionals on
    evidence-based practice in the prevention and
    treatment of illness. Carried out
    cost-effectiveness studies of diagnostics,
    medicines, medical devices, clinical management
    of illnesses, and public health interventions.
  • In 2005 old NICE merged with Health Development
    Agency to form the National Institute for Health
    and Clinical Excellence, but has kept the acronym
    NICE.
  • Produces clinical guidelines concerning
    treatment, appraisal guidance on drugs and
    techniques, and guidance on safety and efficacy
    of curative and preventive interventions.
  • Developing 150 new standards of treatment for
    specific diseases that will be used in National
    Service Frameworks

47
Care Quality Commission (CQC)
  • In 2009 CQC established as new super-regulator
    to supervise and inspect the quality of all
    providers of secondary/tertiary medical care and
    social care
  • Ensures that all organisations adhere to detailed
    Essential Standards.
  • Promotes achievement of outcome measures.
  • Rates the performance of NHS Hospital Trusts

48
UK Total Health Expenditure as of GDP 1980 -
2008
49
Health Expenditure Shares of GDP in International
Perspective
UK
Russia
50
Economic Significance of Health Sectors in UK
and Russia
51
Mortality and Life Expectancy China, USA,
Russia, UK
52
UK Health System Coverage of Population, Benefits
and Costs in 1990, 2007
53
Parliamentary Report on Commissioning
(Purchasing) in the UK NHS in March 2010
54
Conclusions from House of Commons March 2010
Report on Commissioning
  • Expensive rise in share of NHS administration
    from 5 pre-reform to 14 (lack of
    transparency)
  • PCTs lack necessary skills (analysis, clinical
    knowledge, management), do ineffective job in
    commissioning
  • Weaknesses of PCTs force them to make extensive
    use of expensive outside consultants
  • PCTs remain weak relative to providers and do not
    insist on hospitals using evidence-based
    procedures
  • Adversarial system without benefits. After 20
    years of costly failure, the purchaser/provider
    split may need to be abolished.

55
Pre-Election 2010 Proposals for Change in NHS
Structure
56
Parliamentary Election, July 2010 White Paper,
December 2010 Health Reform Bill
  • May 2010 parliamentary elections in UK. A
    government formed from a coalition of
    Conservative and Liberal Democrat parties.
  • Neither party had radical reform of the NHS in
    its election manifesto
  • July 2010 government published White Paper on
    Equity and Excellence Liberating the NHS
  • Proposes radical reforms to organisation and
    functioning of the NHS

57
Health and Social Care Bill January 2011
  • Abolish all 150 Primary Care Trusts and 10
    Strategic Health Authorities
  • Establish GP Commissioning Consortia
  • GP practices to continue to offer community based
    services as independent contractors
  • But groups of GPs to form Commissioning Consortia
    that will be NHS organisations and to be given
    70-80 billion to purchase services
  • Create new NHS Commissioning Board
  • All NHS Hospital Trusts will become Foundation
    Trusts and be regulated by Monitor according to
    financial criteria

58
Proposed Changes in NHS Governance 2011
59
White Paper and Parliament Bill Proposals for
2013 NHS Governance
60
Political Actors Influencing 2011 Health Reform
Coalition government proposes radical reforms
Shadow government strongly opposed to reforms
Conservative party in favour, labour opposed, and
Liberal Democrats divided over reforms
Almost all comments from non-governmental groups
hostile to reforms
Many professionals within HS critical of reforms
61
Opposition in Parliament and Among Members of
Political Parties
  • Labour Party official position is strong
    opposition to the radical health reforms. All
    relevant members of the shadow government have
    publicly criticised the proposals and members of
    the parliamentary party will vote against it.
  • Liberal Democrat party is divided. 12 March 2011
    LD party conference supported resolution
    condemning the reforms and putting forward
    alternative proposals (restrict power of GP
    consortia, limit private sector involvement,
    reduce use of market mechanisms)

62
Coverage of Health Reforms in Media
  • Most recent television reports and articles in
    printed media have been critical of the health
    reforms
  • 7 March The non-national health service
  • 10 March Lib-Dems from top to bottom are in
    revolt over NHS reforms
  • 15 March Doctors gunning for Lansley over
    reforms
  • 20 March David Cameron's health reforms risk
    destroying the NHS, says Tory doctor

63
Opposition by Groups of Medical Professionals
  • 15 March Special Conference of British Medical
    Association to discuss reforms. Almost all
    motions before conference are negative.
  • Most doctors opposed to reform and believe it
    will result in a worsening of the quality of
    patient care and increased inequality
  • 7 March Chairman of BMA Consultants Committee
    argues that reforms will damage management of the
    NHS, waste resources, and give the private sector
    the most lucrative components of treatment, with
    the NHS responsible for the unprofitable residual
    care

64
David Cameron's health reforms risk destroying
the NHS GP in Conservative Party
  • "It is one thing to rapidly dismantle the entire
    middle layer of NHS management but it is
    completely unrealistic to assume that this vast
    organisation can be managed by a Commissioning
    Board in London with nothing in between it and
    several hundred inexperienced commissioning
    consortia.
  • New commissioning consortia are "doomed to fail
    and will have to hand over their commissioning to
    the private sector".
  • An organisation responsible for 100 billion
    needs people who seriously understand accountancy
    and, trust me, GPs do not.
  • "It is no use 'liberating' the NHS from top down
    political control only to shackle it to an
    unelected economic regulator. If Monitor, the new
    regulator, is filled with competition economists
    with a zeal for imposing competition at every
    opportunity, then the NHS could be changed beyond
    recognition.

65
Critical Analyses of Health Reform Proposals by
Think Tanks (Nuffield, Kings Fund)
  • Financial environment of reforms
  • Tight constraints on real health spending in NHS.
    PCTs facing 2 cuts in real health spending. Need
    efficiency savings of 20 billion 2011-14.
  • UK health spending (8.7 GDP) low by OECD
    standards.
  • Difficult to keep financial control during time
    of reorganisation
  • Reforms require better management, but overall
    NHS target of 45 cut in management costs over
    next several years.
  • GP Consortia
  • Past experience with GP fund-holding reveals many
    deficiencies. Years needed to develop necessary
    expertise. GP Consortia wont have necessary
    competence in commissioning and planning.
  • GP Consortia should be subjected to same critical
    evaluation as NHS Trusts currently receive.
    Should have to prove themselves.
  • Need safeguards to prevent conflicts of interests
    of GP Consortia

66
Critical Analyses II
  • NHS Commissioning Board
  • New Board will play important role. Will be able
    to intervene in work of GP Consortia.
  • But lack of clarity of functions and
    accountability of Board. Experience from New
    Zealand reforms not positive.
  • Unclear if Board can ensure high standards in
    both GP commissioning and provision of medical
    care.
  • Abolition of Strategic Health Authority
  • Huge reorganisation will distract management and
    entail substantial additional costs
  • Will result in loss of experience leadership with
    long-term vision because not many managers will
    transfer to GP Consortia
  • NICE
  • New freedoms to GP Consortia raise possibility
    that they will not adhere to standards developed
    by NICE
  • Conservative government not supportive of
    quasi-governmental organisations

67
Conclusions
  • UK NHS has been performing well over past several
    decades given tight financial constraints
  • NHS has been subjected to many reforms, not all
    of which have been successful
  • New radical health reforms promise to reduce
    bureaucracy, improving efficiency and quality of
    care, providing more choice for patients
  • But most independent analysts highly critical or
    reforms and most political forces against it
  • Modified version of bill is likely to be adopted,
    but the reforms will not deliver promised results
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