Our increasing use of hospital services is out of control and unsustainable and is contributing to the current crisis in accident and emergency (A&E). But the problem isn’t new and 30 years of NHS reforms have tried - and failed - to control it.
We now have figures that show a million more people went to A&E in England between February 2012 and January 2013 than had done the previous year - although changes in reporting may explain some of the increases we’ve seen in the past 25 years. There are also reports that trolley times are routinely reaching 12 hours in some parts of the country.
GPs have now been given control of some £80bn to plan and pay for NHS services (so-called Clinical Commissioning Groups) and many believe they should also be able to treat as many as 30% of people who come to A&E to ease the burden.
In the 1990s we saw the creation of the “purchaser/provider split”, which separated those who planned and bought services from those who provided them - ie health authorities and hospital trusts. With this came the half-hearted introduction of some elements of competition.
But only if we properly understand the underlying issues can we develop a coherent strategy to deal with them. And these problems can be encapsulated in three words: poorly aligned incentives.
A question of supply and demand
The dynamic between supply and demand drives many aspects of the human condition, and this applies to the NHS too. It was created to respond to and meet our health needs. There are elements of preventative care, but they’ve never been as prominent as acute services such as saving babies or heart transplants.
However, demand for any service is based on knowledge of that service, and in healthcare (as elsewhere), this kind of intelligence lies mainly with those who provide them, who use it to drum up business. Until we knew that 3D televisions existed, we didn’t realise how much we needed one. Similarly, in the NHS, until we know that treatments are available for heart disease/depression/impotence, we don’t ask for them.
As in every other industry, the supply of health services tends to drive demand. Hospital funding has moved away from opaque “block contracts” - crudely, an annual allocated amount - to a system based on “payments by results”. As this is actually payment for activity, it tempts hospitals to increase supply to drive up demand.
In commercial industry, demand is largely regulated by price: “I’d love that 3D telly, but I can’t afford one right now”. But NHS services are largely free for us to use.
It’s also free to GPs, who control most of our access to hospitals through patient referrals - except A&E of course, where we decide whether or not to visit.
Traditionally, GPs referred complex cases to their hospital consultant colleagues, or patients that needed high-tech interventions. It’s always been assumed that referrals are driven purely by clinical criteria (what patients need) and specific skills (of a particular hospital specialist), not serendipity or whimsy. Patients' needs and clinicians' expertise are supposed to matter - not consumer choice or doctors' golf or weekend schedules.
However, the balance between supply and demand has depended on assumptions that have been eroded over the years. These include patients seeking help when they need it (though the distinction between need and choice increases as we’re encouraged to become consumers of a “free good”); that hospitals respond to demand (and are not incentivised to increase it) and GPs are professionally driven only to refer patients when there is an absolute need.
Activity-based contracts now mean they are less prepared to absorb grey areas where no explicit activities or payments are described - for example a home visit to a bereaved widow.
Apply these criteria to the A&E situation and the results are obvious. Patients, now consumers used to instantaneous service in other aspects of their lives, are bound to prefer going to A&E than waiting for an appointment with their GP. Not only is A&E open 24/7 but tests that would take weeks to arrange through normal channels are instantly available.
Sure, care is neither continuous or holistic in A&E, but these concepts have been increasingly devalued because they are so hard to measure.
Payment incentives are all wrong
Hospitals receive payment for every attendance at A&E, and get paid some more if patients are then admitted to the wards. Hospitals are also punished for keeping patients in A&E for more than four hours, so admitting patients becomes a no-brainer. It’s only now, when demand is starting to outstrip supply - and the cash to feed it - that the cracks are beginning to show.
If there are no disincentives for GPs to refer patients into hospital then why wouldn’t they do it, when they feel disenfranchised and de-professionalised by the reforms that have been churning round them for three decades?
This is all easy to analyse, but harder to repair. The basic precept underpinning the NHS has been that it’s free at the point of delivery, so the mismatch between consumerism and the welfare state will expand, unless the notion of corporate responsibility in health can be re-introduced or until services cease to be free.
One mooted idea is to increase public awareness of NHS costs, on the basis that this might make them think twice before (ab)using the ‘free’ service.
Activity-based hospital funding isn’t sustainable, and a return to some kind of risk sharing between service providers and those who commission services (the GPs) is a prerequisite to managing demand at an institutional level.
GPs' incentives must be aligned so that it becomes truly in their interest (professionally and morally, as well as financially) to restrict referrals to those that are really necessary.
The biggest issue is that of managing service availability; as long as we increase the supply of hospital services (particularly in A&E departments) this will feed demand.
The deliberate restriction of services would be very hard to sell politically to an already disillusioned electorate. However, if GPs and the CCGs were allowed to do what they were first intended to do, their core purpose would be to extract the optimum health benefit for the public funds allocated to NHS trusts.
Managing demand would be high on their list, and most of them would tell you that given the right tools, they would manage to do this in a much more coherent fashion, albeit at the cost of reduced health consumerism. The challenge is to loosen the stranglehold from central government sufficiently to allow this to happen before all the breath of enthusiasm for doing anything is completely cut off. And that really is a political decision.