The King’s Fund, a UK health charity ran a scenario essay writing competition, which I entered. I didn’t win, but here is the link and of course congratulations to the winner: (winner, runner up and other scenarios, but not mine).

Below is a  version of my submitted scenario, revised and generalised to any care system. The scenario builds on the notion of service unbundling and draws on strong and weak signals of changes likely to impact health and social care perhaps to about 2035. The scenario is written as a retrospective view from the year 2047.

Unbundling 2035

Between 2016 and 2035, the way that people worked had substantially changed by widespread digitisation of information. Smart machines and robots had moved from doing physical work to being central to much cognitive work and which led to fundamental restructuring of the economy. By 2035, taxation was changing from taxing people to taxing the work done by devices, cognologies, and robots.

The fault lines between reality and expectations were starkly evident during the 2020s, as public investment in health and social care struggled to cope with the rapidly changing world. People were becoming accustomed to flexible access to personalised services that came to them and expected the same from care provision. Rising displeasure at service decline led to middle-class flight to alternatives with rising use of private medical insurance, progressively fracturing the social contract that legitimated publicly-funded care. Indeed, by 2028, 38% of the population used private care, with over 55% amongst Millennials.

Fearful health and social executives and worried Ministers of Health had reacted to these stresses by pulling the system even more tightly together, to protect jobs and avoid the failure of publicly-funded institutions.

This fed further public displeasure by the dominant middle-aged Millennials who challenged the traditional approaches to health and social care. In the United Kingdom, for instance, this unrest led to the 2028 Referendum on their tax-funded healthcare system, leading to the replacement of this system with social insurers and personal Social and Health Care Savings Accounts.

The process of changes in health and social care around the world has become known as Unbundling. This brief historical retrospective outlines three of the key components of that unbundling.

The 1st Unbundling: of knowledge and clinical work

Professional knowledge was affected by digital technologies which had unbundled knowledge from the expert. This changed how expert knowledge was organised, used and accessed; research institutions and knowledge-based organisations were the first to feel the changes, with librarians being one of the first professions to face obsolescence. Rising under-employment, particularly in traditional male-dominated occupations was still being absorbed by the economy.

Routine cognitive work and access to information and services was increasingly provided by cognologies (intelligent technologies) or personal agents as they were called. Widely used across society, they were embedded in clinical workflow from diagnosis to autonomous minimally invasive surgery. By this time, jobs with “assistant” in the title had generally disappeared from the care system, despite having been seen as an innovative response to workforce shortages through the late 20-teens. These jobs had turned out to be uninteresting, and being highly fragmented, required time-consuming supervision.

The benefits of precision medicine were substantial by this time, enabling earlier diagnosis and simpler and less invasive treatments. Theranostics, the merging of diagnosis and therapy, unbundled the linear care pathway and the associated clinical and support work. This also led to the unbundling of specialist clinical services, laboratory testing and imaging from monopoly supply by hospitals. Indeed, the last hospital was planned in 2025, but by the time it opened in 2033, was deemed obsolete.

The 2nd Unbundling: of financing and payment

The unbearable and unsustainable rise in health and social care costs necessitated better ways to align individual behaviours and preferences with long term health and well-being. Behavioural science had shown that people did not always act in their own best interests; this meant the care system needed people to have ‘skin in the game’, best done by monetising highly salient personal risks.

Existing social insurance systems which used co-payments were more progressive in this direction, while countries with tax-funded systems were forced to reassess the use of co-payments, and financial incentives. The Millennials, having replaced the baby-boomers as the primary demographic group, were prepared to trade-off equity for more direct access to care. It also became politically difficult to advance equity as a goal against the evidence of poorer health outcomes as comparisons with peer countries drove performance improvements.

The use of medical/social savings accounts was one way that gave individuals control of their own money and building on consumerist behaviour, this directly led to improved service quality and incentivised provider performance as they could no longer hide behind the protecting veil of public funding. The social insurers were able to leverage significant reforms through novel payment systems, and influence individual health behaviours through value-based (or evidence-based) insurance not possible under a taxation system.

The 3rd Unbundling: of organisations

With people used to having their preferences met through personalised arrangements, care was organised around flexible patterns of provision able to respond easily to new models of care. This replaced the “tightly coupled” organisational approach known in the early part of the 21st century as “integration”, which we know led to constrained patient pathways, and limited patient choices unable to evolve with social, clinical and technological changes.

The big-data tipping point is reckoned to have occurred around 2025. Because the various technologies and cognologies had become ambient in care environments they were invisible to patients, informal carers, and care professionals alike; this enabled the genesis of smaller and more diverse working environments.

By 2032, medical consultants were no-longer hospital-based, having become clinical care social organisations, with their cheaper, smaller, portable, networked and intelligent clinical resources. Other care professionals had followed suit. These clinical groupings accessed additional clinical expertise on as-needed basis (known as the “Hollywood” work model); this way of organising clinical expertise helped downsize and reshape the provision of care and met patient expectations for a plurality of care experiences.

It takes time to shift from the reliance on monopoly supply of care from hospitals in those countries that continued to pursue a state monopoly role in care provision. However, most repurposed themselves quite quickly as focused factories, while the more research-oriented specialised in accelerating the translation of research into daily use, helped along by the new research discovery tools and the deepening impact of systems biology which was making clinical trials obsolete.


This Unbundling arose as a product of the evolution of social attitudes, informed by the emerging technological possibilities of the day. The period from 2016 to 2025 was a critical time for all countries, exacerbated by shortages in the workforce coupled with economic difficulties and political instability.

Today, in 2047, we are well removed from those stresses that caused such great anxiety. We must marvel, though, at the courage of those who were prepared to build what today is a leaner, simpler and more plural system, removed from politicised finance and management decisions.

It is hard to imagine our familiar home-based theranostic pods emerging had this trajectory of events not happened. As our Gen-Zeds enter middle age, they will, in their turn, reshape today’s system.

Plus ça change, plus c’est la même chose.

27 December 2047

Note on the Scenario

This scenario is informed by strong and weak signals, including:

Ayers A, Miller K, Park J, Schwartz L, Antcliff R. The Hollywood model: leveraging the capabilities of freelance talent to advance innovation and reduce risk. Research-Technology Management. 2016 Sep 2;59(5):27–37.

Babraham Institute. The zero person biotech company. Drug Baron.

Cook D, Thompson JE, Habermann EB, Visscher SL, Dearani JA, Roger VL, et al. From ‘Solution Shop’ Model to ‘Focused Factory’ in hospital surgery: increasing care value and predictability. Health Affairs. 2014 May 1;33(5):746–55.

Cullis P. The personalized medicine revolution: how diagnosing and treating disease are about to change forever. Greystone Books, 2015.

Does machine learning spell the end of the data scientist? Innovation Enterprise.

Eberstadt, N. Men without work. Templeton, 2016.

Europe’s robots to become ‘electronic persons’ under draft plan. Reuters.

First 3D-printed drug just unveiled: welcome to the future of medicine.

Ford M. The rise of the robots: technology and the threat of mass unemployment. Basic Books, 2015.

Frey BC, Osborne MA. The future of employment: how susceptible are jobs to computerisation? Oxford Martin School, Oxford University, 2013.

Generation uphill. The Economist. [accessed December 2016]

Lakdawalla DN, Bhattacharya J, Goldman DP. Are the young becoming more disabled? Health Affairs, 23(1-2004):168-176.

Susskind R, Susskind D. The future of the professions: how technology will transform the work of human experts. Oxford UP, 2015.

Topol E. The creative destruction of medicine: how the digital revolution will create better health care. Basic Books, 2012.

With Samsung’s ‘Bio-Processor,’ wearable health tech is about to get weird. Motherboard.

English: Broken glass

Sometimes, the system is the problem. Broken glass (Photo credit: Wikipedia)

This report on the regulation of private hospitals in England from the Centre for Health and the Public Interest is important, but 15 years too late.

The UK has had and continues to have a love/hate relationship with the private (or independent as it is termed) healthcare sector. This has created a significant fault line across all reform and policy making on the NHS for at least 15 years. Reluctance to create a level regulatory playing field has been evident for years, despite the obvious need for one. I think part of the reason is that creating a level regulatory playing field so that the NHS and private hospitals had to meet common standards would legitimate the private sector itself.

However, when I first worked with a colleague to suggest, around the early 1990s, that the NHS hospitals should undergo some sort of accreditation, resistance was clear. At the time, I noted to others that there were more deaths in NHS hospitals arising from substandard care than from road traffic accidents.

But the view at the time was to ring-fence the NHS from that sort of performance and quality scrutiny at an institutional level. Based on some of the work I was doing at the time, and my own experience with accreditation systems, I felt that the negative reaction reflected a fear that NHS hospitals would fail; using pretty standard accreditation standards from the US, Canada and Australia at the time, I perceived that many NHS trusts would indeed fail. Mainly on safety and quality control grounds (I was teaching NHS managers about quality and quantitative methods in healthcare at the time). Many hospitals lacked any quantitative analytical or operations management capabilities within their organisation and had rather weak data for quality control and performance management purposes. The Department of Health, it must be said, had such expertise on contract but that was to inform their own policy making, not to improve operational performance. I would suggest that such quantitative expertise for quality is still missing at the hospital level.

The consequence has been years of fiddling with quality assurance and inspection regimes. Government has been advised, I think badly, by people who also shared the operative underlying assumption that a single regulatory and inspection system for both the NHS and private hospitals would be politically a step too far. Consequently, the private sector and the NHS have moved in different directions. The private sector has been both an opt-out for patients through private insurance arrangements, and an overflow supplier to the NHS when it ran into capacity constraints. Only more recently, has it been a direct and core supplier of services.

The UK situation constrasts wildly with practices in other countries where ownership of the hospital does not exempt the organisation from regulatory oversight. Indeed, many European hospitals seek out US-based Joint Commission International accreditation, a very high standard. Interestingly, there are no private providers in the UK that have achieved this standard, while (with any type of accreditation) there are 26 in Ireland, 3 in Belgium, 2 in Netherlands, 4 in Germany, 26 in Italy, 15 in Portugal, 23 in Spain, 13 in Malaysia and so on. Perhaps they know something?

I agree with the report’s sentiments, though perhaps not so much how it characterises the private sector as exceptionally risky. Indeed, the past years have demonstrated that NHS hospitals can be exceedingly risky. For instance, the report notes the 6000 admissions per year to the NHS from independent hospitals, while also noting that such hospitals do not have emergency facilities. One might ask whether a common regulatory environment would have led some independent hospitals to invest in such facilities? But such a figure should not be a surprise any more than transfer between NHS secondary hospitals of patients who need more complex tertiary and quaternary care; not every organisation can do everything. In respect of equipment, NHS equipment, too, has failed, gone missing or not worked properly (I have had personal experience of a nurse using equipment that lacked recent calibation); so before we cast the net, let’s make sure we know what we’re fishing for.

The report notes that the private hospitals do not directly employ their doctors, as though this were a problem. Many countries do not directly employ doctors, using fee-for-service type arrangements for compensation. What the report failed to note is that the private hospitals in the UK employ a system called “privileges”, which requires doctors to prove competency in areas for which the hospital in turn grants them privileges to offer that service in the hospital; NHS hospitals do not use a comparable system. I have argued that the NHS should introduce a privileges system, which would bring a more rigourous standard of clinical performance management than the NHS consultant employment contract does and would have the additional benefit of increasing flexibility in the supply of doctors, and perhaps importantly, keep doctors within their scope of primary competency.

A few other points that struck me:

1. Clinical risk does not transfer to the private provider when treating an NHS-funded patient. I’m not sure how this is a useful restriction, especially if the patient chose the private hospital. It seems to me that part of a level playing field would ensure that clinical risk transferred, too. The report addresses this obliquely in terms of whether the NHS is the provider of last resort.

2. The observation that clinical workflow is different is interesting, but it does appear somewhat anecdotal. The private sector is excluded from the requirement to take trainees, and that may contribute to the lack of depth, but I doubt the public would feel reassured that the clinical depth the authors referred to was reliance on trainees! We know what that looked like with registrars. The solution is to ensure the private hospitals are included in the system for training the health professions as a consequence of a common regulatory regime. By the way, I’ve looked at the supervision and training of junior doctors and other health professions and one should not be complacent that it is done well. However, I share the authors’ concerns over the organisation of clinical work, but would not single out the private sector on this point.

3. The volume of work in specific areas is a point well taken. However, I would again suggest that is an artefact of the regulatory system, and lack of effective use of the clinical resources themselves. Proper contracts for suitable volume, rather than handling overflow, would shift workload closer to levels where higher quality standards apply. It might also enable the consultant, for instance, to integrate their clinical workloads, rather than adding the private patients on at the end of an already busy day. Again, organisation of work arises from the current rules and may perhaps be causative of may of the identified problems.

4. I note that only one of the two authors is a specialist in healthcare or health policy, particularly patient safety with grounded expertise.

Many of the report’s comments, with which I broadly agree can seem quite disturbing, really arise from the regulatory box that the private sector has been put in. Given that private hospitals use the same doctors in the main as practise in the NHS, do these doctors lose their minds when they practice privately, or something else is certainly wrong at a system level. My guess is that the box is the problem, and the private hospitals are quite capable of meeting care standards, given a level playing field.

My remarks are meant to focus attention on the important distinction between the NHS as an organising principle for ensuring (and assuring) healthcare to people and the mechanisms used to identify and engage providers who meet the requisite standards. Focusing on the latter, would necessite doing what the report recommends, but ’tis a shame it has taken this long, to say once again, what has been said for years.

Is now any different?

Further reading: Vito Tanzi’s excellent book, Government versus Markets The Changing Economic Role of the State. Then think again about this



1. I don’t have private health insurance.

2. I have received NHS-funded care in a private hospital.

3. My NHS trust has recently been reviewed as overall inadequate by CQC.

4. I know something about the issues I am writing about.

Health care systems

How to choose? (Photo credit: Wikipedia)

The scandal that has now led to the ‘resignation’ of the head of the US VA Health System matters to more than just the US and US veterans. The VA health system is the closest thing the US has to the UK’s NHS and to the health systems of many other countries where the state is the controlling force.

According to reports in the New York Times, three factors are relevant and expanded in Forbes:

  1. shortage of physicians
  2. perverse incentives
  3. culture of dishonesty

Boiling this down to critical factors that are relevant to systems outside the US leads to specific considerations to countries which try to control healthcare through greater state intervention:

  1. Physician shortages are caused in the main by health systems limiting access to medical schools (and indeed to other professions). There is far too much evidence that labour force forecasting is inaccurate and given the highly specialised nature of healthcare, we really don’t know how many doctors, nurses, etc. we need, just that it is unlikely the current system of rationing produces sufficient supply. While the costs of training of health professionals are high, the rewards are also high and of good quality. These benefits accrue to the individuals as well as society. Why, though, the public purse should subsidise this as much as it does, and also limit access needs to be rethought.
  2. Health systems use a variety of incentives to coerce or alter clinical behaviour. While putting doctors on the payroll is assumed to limit financial conflicts of interest, it embeds clinical behaviour within a managed system full of rules and regulations which invariably will put administrative convenience above clinical and patient needs. Falsifying records is nothing new, but using data to influence rewards only creates the incentive to game those rules to maximise the benefits. Gaming of incentives is not new, but it is possible to model/test whether the proposed incentives will work and how they might be perverse.
  3. Dishonesty is embedded in the culture of work, and rooting out dishonesty needs to go back to, perhaps incentives again, to understand why it is more beneficial to lie. This may exist more easily within highly bureaucratised systems, where people are dislocated from the patients, and see themselves simply tasked with ensuring the stability of the system. This is a tough one but in some countries doctors’ employment contracts explicitly put them in a conflict with their employers by emphasising the relationship between their work and costs.

As the US has noted on the VA, the system often put the doctor in a conflict of interest between the patient and their paymaster, the government. Many countries have the same arrangements and should not, therefore, be complacent.

It is certainly timely and appropriate for policymakers and those who think systematically about healthcare systems, to study carefully what happened at VA, and apply that learning on their own healthcare systems. I am sure there would be much to think about.

If anyone wants to do this, give me a call.





Once again an NHS trust is highlighted as having poor, if not dangerous, care. See this item in the London Telegraph.

Tacoma Narrows Bridge collapsing, captured in ...

Catastrophic System Failure [Tacoma Narrows Bridge collapsing, captured in 16 mm Kodachrome motion picture film. The view looks west. (Photo credit: Wikipedia)]

Are the problems a result of design flaws in the way the NHS organises itself to deliver care? Some basic elements of the UK’s NHS that are relevant to the argument I’m going to make:

  1. consultants/specialists have contracts of employment and clinical duties are agreed annually in “job plans” in use since 1991
  2. doctors, once qualified, and registed with the GMC, the professional regulator, are immediately employable in the NHS; their authority to act rests on this
  3. performance improvement and clinical professional development is still work in progress in the NHS despite GMC efforts over the years
  4. junior doctors in training rarely fail and marginal clinical performance is not recognised as such
  5. the Royal Colleges act on behalf of the interests of doctors, not in the public interest as that is the job of the General Medical Council, though they no doubt would argue otherwise.

One starting point is that CQC (Care Quality Commission) inspection may identify the problems, but hospital doctors, other clinicians (nurses, OT, etc.), managers and the board have a collective duty to clinical quality. CQC is not a system of accreditation, and so failing hospitals continue to be protected from the consequences of their actions. The only options are bureaucratic and invariably political (merge the hospital with another, shut the hospital), but this does not solve the problem of failed oversight and management. There is good evidence that hospital quality control systems are weak and rigourous quantitative methods are still needed. I have separately argued that hospitals need in-house operations management capabilites to model clinical care systems, for instance — exemplary hospitals providing high quality care use data-driven analytics in improving clinical work flow and patient outcomes. The Francis report is what I would say is a ‘team hug’ approach recognising individual and cultural factors. I’ll also take a starting point that job plans are not working to uphold standards of care. Putting all this together, we might conclude that we have either the failure of hospital management systems, or the absence of the right type of control system.

My suggested solution is that the NHS should introduce a system called “privileges”, by which appointments/employment and clinical work are subject to prior agreement and degrees of supervisory quality control and oversight. This is an evidence-informed quality control system:

  1. The responsibility of clinical quality rests primarily with the hospital, not the NHS as such, and hospitals need to put in place quality systems that check the quality of clinical work. The quality of clinical work is the responsibility of the hospital Board, as advised by the Medical Director
  2. Medical job plans of NHS employment should include explicit use of privileges or contracts should include privilege as the fundamental determinant with respect to the scope of practice in these job plans.
  3. Appointments to a hospital’s medical staff would require a review of credentials, training, fellowships, previous work undertaken by a medical committee with a recommendation to the Medical Director (and then to the Board, which would be the body granting privileges).
  4. The privileges system would introduce a system of control over what clinical work the individual doctor is recognised as qualified to do (say knee surgery but not hand surgery)
  5. Changes in what a doctor has privileges to do would require the doctor to produce evidence of specific training to establish their ability in the required area.
  6. All new medical appointments, regardless of their total time practising since being licensed, would be supervised in their first 6 months to a year, by a senior colleague acting on behalf of the hospital. At the end of this probationary period, privileges would be confirmed.
  7. Privileges are not forever, but are reviewed for substantive changes on an ongoing basis, and fundamentally reviewed every so many years.

I like the idea because I’ve worked in a system that used privileges, where I’ve seen how it acted to improve clinical quality and worked to the benefit of the doctors themselves. It brings order and structure to clincal work within the hospital by better aligning case mix with skill mix. New hospital appointments would be supervised, while monthly notices kept all clinical staff, importantly nurses on the wards and in the operating theatres, up to date to changes in privileges (who had an area added, or dropped).

Interestingly, the private hospitals in the UK use a system akin to privileges to decide whom to appoint to their medical staff, but it lacks substantive quality criteria or credentialling apart from the requirement of having an NHS appointment!

Some additional potential benefits:

  1. It would create a level clinical playing field between the public and private systems, now that the private or independent sector is becoming more important and perhaps better integrated into the care system in the UK;
  2. Thinking of the future, the privileges system would decouple to some extent doctors’ employment and the work they do. This might increase the likelihood that new ways of organising clinical services in the community, for instance, might become more common.
  3. Patients would have clear evidence that quality and clinical work are connected.

I acknowledge that much is done to create a quality environment within the publicly-funded NHS, and this is not ignored in my comments, which in no way need undermine efforts at team working, or cost control. Job Plans in NHS contracts do not discuss clinical focus in detail and actually spend more space on dealing with private practice and academic appointments than on direct patient care; in essence, they are only workload management plans. However, as employment contracts, they focus on the dimensions of employment (e.g. car allowances, maternity leave and employer responsibilities such as providing the necessary tools for the work to be done).

In my view, the problems have a genesis in these aspects of the system that taken together do not produce the desired outcomes when there are problems, and may actually mask poor quality care. Considering a system like privileges may serve to focus attention on what is really important.

Additional Notes

There are types of privileges: admitting, surgical, courtesy.

Hospitals can add conditions to privileges such as living nearby so the doctor can get to the hospital quickly in an emergency.

Hospitals would revoke or suspend privileges where there is evidence of danger to patients, unethical conduct, and disruptive of hospital operations (that last one’s tricky).


A model of integration — ants do it

Two items in the publication, Public Finance (pledge to integrate care and integrated care a long way off), illustrate the frustrating nature of health system reform in the NHS.

Is integrated care hard to do? Are there perverse incentives in the system (things like free-riders and moral hazard, even NIMBY) that work agains effective change in healthcare, and in particular the neverending saga of the NHS? I suggest the problem lies in the methods chosen to solve the problem of integrated care, rather than the value of the goal itself.

  1. Over the years, the NHS has made great strides improving the quality of managers (I used to teach them and co-direct an MBA full of NHS managers) but many appear to be unwilling to speak ‘truth to power’ and take full responsibility for dealing with, in this case, integrated care. Instead, we continue to seek both permission-seeking behaviours in the executive suites of the providers and purchasers (just hate the commissioner language, so gutless), and reluctance to challenge the status quo, perferring the herd mentality.
  2. Foundation trust status has done wonders for improving institutional governance, but operational performance (as we know from Francis) is still uneven. I believe this is in part due to NHS organisations being incredibly weak in terms of their analytical capacity (working with data, modelling etc.) to understand and respond to day to day challenges, which undermines the ability to plan and structure strategic direction in response to changing health dynamics.

Integrated care is not hard to do but does require understanding the patient journey through the system and how best to organise the bits. So where does the NHS go wrong is solving this particular problem?

The models used, and the two articles evidence this are broken. What models does the NHS use? It uses approaches which I liken to ‘team hugs’ and ‘pass the teddy’, feel-good leadership approaches, which do not focus on the outcomes to be achieved, but processes, which may or may not lead to a solution. The result is an overuse of:

  1. “joined up care” rhetoric continues to confuse, yet we still don’t know what it means though it sounds like something we would want; I think it is what we thought we were paying for all along!
  2. “commitments” by those involved become contractual type language of agreement, and which are used to “clarify” what can and cannot be done. But again we see no focus on the problem, but on regulatory and other controls, which if they need clarifying, are perhaps useless if not actual barriers, so why do they exist in the first place? When do we bell this cat?
  3. “ambitous plans”, which is code for more paper which no one will read but which will clutter people’s diaries with meetings about meetings about meetings….
  4. “examples” of what can be done is supposed to demonstrate to people that what they want to do can be done; but if these folk are truly in charge of their organisations and have taken ownership of the problem, would already be probing the possibilities
  5. “pioneer status” is code for people who get to the early money first and get to take one of the examples and try it out by developing a plan which people can talk about, and around we go again.
  6. “top-down” is to be avoided, but is said as a reminder that ‘you are in charge’ just in case you were confused, but given the wider context, you actually aren’t in charge as if you were, we wouldn’t be having this conversation.

The reliance of policy-based tools, though, drives a logic that may not be as flexible as possible to achieve integrated care. If it is such a good idea, what is stopping people?

Integrated care can be driven on the purchasing side by, for instance:

  1. Incentivising providers through bundled payments for whole packages of care that cross institutional boundaries;
  2. Incentivising the emergence of new types of providers to achieve care integration;
  3. Tracking outcomes for processes of care.

Integrated care can be driven on the provider side by, for instance:

  1. Pursuing forms of vertical or horizontal integration that achieves a measure of care integration for specific populations of patients, by avoiding the problems of inter-institutional referrals;
  2. Creating new units of care activity that overcome internal organistional barriers, such as bolting on primary care onto the front-end of the hospital, using step-down units and other alternative provision for different strate of risk;
  3. Ensuring the urgent does not wag the dog and draw resources away from better service stuctures — why does is emergency service so overwhelmed yet the capacity of the system to anticipate and predict so weak?
  4. Bridging skill mix cartels and protected working practices embedded in professional regulation to enable flexible working.
  5. Did I mention working 7 days a week and running at least 18 hours a day? An example of the failure of integrated care is a hospital not discharging a patient on a Friday because [1] the lab doesn’t work late or [2] social services won’t start home care on a Friday afternoon. Integration means doing things when they need doing, not when it is convenient to do them.

It all comes down, in the end, to how you solve a problem. The NHS continues to use methods that have failed in the past, yet these tools continue to be trotted out over and over again.

There are better ways. Email if you want to know more.


The title it a bit obscure, but makes the distinction between people who pay for medicines and those who prescribe them.


There is a pathway for new medicines into markets, and increasingly it is not by marketing to doctors. The pharmaceutical industry to a great extent still sells medicines like the Avon sales person, or the old Fuller brush salesman. It feels almost door to door, and for the pharmaceutical reps, it is doctor’s door to doctor’s door.


But let’s think about this again. A medicine may be priced per-pill, and perhaps that is the essential cost to patients paying cash or with a co-payment. To the payer — the insurance company or government — it is that unit price times the number of patients perhaps taken over 5 or 10 years. I prefer to think of medicines costs in that way as it better captures the longer term population level investments and costs that are involved. Granted there is the selling of the clinical benefits of a new medicine, but increasingly this is an evidence-informed decision making process involving such analyses as health technology assessment. By using my model, the numbers get big and scary really quickly and illustrate the real boundaries of decision making and the adoption of a new medicine.


That means, medicines need to be brought to market as a structured offering, costing perhaps a few hundred million dollars over say 5 years, with associated clinical and outcome benefits to patients and incprporating true value and not just price. In that respect, this will better capture the challenges facing payers, who must weigh out the pros and cons of particular health investments.


In a recent interview by the McKinsey Quarterly, Chip Heath, co-author of a new book on decision-making notes “The typical Fortune 500 manager will run projections from the market data. …  The entrepreneur’s reaction is, “I’m gonna experiment. I’ll find my way into the market as opposed to project my way into it.” The entrepreneurs’ impulse to experiment is right.”


Now, this is quite interesting, and echos Clayton Christensen on the dilemmas of innovation. Running the market numbers does not capture the essential challenges new medicines


English: Example of promotional "freebies...

face and I believe inappropriately positions new medicines as commodity products, rather than what in many cases are true innovations. Mistakenly, companies price new medicines to compete against incumbent products on the market, as though this product had got the price/value equation right. The way forward is to examine the essential cost drivers of payers and linking pricing to these challenges — engage with a payer on the real value and benefits of medicines, taking account of patient and clinical adoption, patient adherence, and longer term value.


So it is time to stop selling and marketing medicines in the old way. Time to move beyond advertising blitz, to true value pricing. One benefit will be smarter discussions between industry and payers. But that will necessitate companies overcoming their own highly fragmented market-facing organisational structures.


Just a word of caution: payers must become more sophisticated buyers of medicines as they will frequently fall into the trap of asking for a discount, rather than negotiating for more value to patients. By the same token, industry may fail to present what today are the essential value drivers of their products. This of course means that in most countries the reimbursement/pricing models are broken or nearly broken, and has not been helped by the sloppy decision-making where austerity is concerned.


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Continuing with my thoughts today on excess costs (last post was on medicines waste), I thought I think about excess hospitalisation, another type of waste.

Excess risk of hospitalisation is calculated as the difference between observed hospitalisation (for a condition) and expected population rates.

What are the determinants of excess hospitalisation?

  • Excess hospitalisation can be driven by factors which increase population risk, such as influenza/epidemics, and seasonal and weather variation (e.g. respiratory/COPD, asthma, stroke).
  • Readmissions are viewed as excess hospitalisation.
  • There is some research, in the US, showing ethnic and gender variation in hospitalisation.
  • Complex conditions indicate potential for excess admission with failed primary care but that is a design feature of the health system. Complex/high risk patients disproportionately account for hospital activity. Depending on the other co-morbid conditions, some conditions signal excess costs some of which translate into (excess?) hospitalisation (e.g. Alzheimers), depending on how care is managed.
  • Not having a primary care doctor is a factor in excess use of emergency services and hospital emergency departments, and in turn to excess hospitalisation. On average, perhaps 10% of excess (inappropriate) emergency visits convert into admissions.
  • There is also misdiagnosis and excess length of stay caused by adverse hospital events (such as hospital acquired infection, accidents, patients falls, dropping patients, medicine errors).
  • Excess capacity (where utilisation is less than about 70%) leads to over-provision of care and obviously excess hospital admission. Incentives in reimbursement systems can drive hospitalisation.

Just so you don’t think I’m making this up, consider:

  1. US data show 17.6% of all Medicare hospital admissions were readmissions costing $15 billion annually, of which $12 billion was deemed preventable admission.
  2. The number of BSIs caused by MRSA and G3CREC was extrapolated from EARSS prevalence data and national health care statistics. Prospective cohort studies, carried out in hospitals participating in EARSS in 2007, provided the parameters for estimating the excess 30-day mortality and hospital stay associated with BSIs caused by either MRSA or G3CREC. Hospital expenditure was derived from a publicly available cost model. Trends established by EARSS were used to determine the trajectories for MRSA and G3CREC prevalence until 2015. In 2007, 27,711 episodes of MRSA BSIs were associated with 5,503 excess deaths and 255,683 excess hospital days in the participating countries, whereas 15,183 episodes of G3CREC BSIs were associated with 2,712 excess deaths and 120,065 extra hospital days. The total costs attributable to excess hospital stays for MRSA and G3CREC BSIs were 44.0 and 18.1 million Euros (63.1 and 29.7 million international dollars), respectively. Based on prevailing trends, the number of BSIs caused by G3CREC is likely to rapidly increase, outnumbering the number of MRSA BSIs in the near future. [de Kraker M, et al. Mortality and Hospital Stay Associated with Resistant Staphylococcus aureus and Escherichia coli Bacteremia: Estimating the Burden of Antibiotic Resistance in Europe, PLOS Medicine, October 2011]
  3. A total of 538,580 admissions generated 4,310,654 hospital bed-days and total costs of €940,026,949. People with diabetes accounted for 9.7% of all hospital discharges, 13.8% of total stays, and 14.1% of the total cost. Of the total cost for individuals with diabetes (€132,509,217), 58.3% were excess costs, of which 47% was attributable to cardiovascular complications and 43% to admissions for comorbid diseases. Individuals 45–75 years of age accounted for 75% of the excess costs. The rate of admissions during the study year was 145 per 1,000 inhabitants for individuals with diabetes compared with 70 admissions per 1,000 inhabitants for individuals without diabetes. [Oveira-Fuster G, et al. Excess Hospitalizations, Hospital Days, and Inpatient Costs Among People With Diabetes in Andalusia, Spain,Diabetes Care, August 2004]
  4. Schwartzberg studied health literacy among patients, and noted that patients with low literacy skills were twice as likely to be hospitalised and twice as likely to report poor health. She argues that low health literacy may cost $73 billion [US figures] annually in excess hospitalisation days alone. Much depends on improving the ability of patients (with help from their families) to carry out complex health instructions on their own. [Schwartzberg J. Patient safety. Low health literacy: what do your patients really understand? Nursing Economics, 20(3-2002), 145-147]

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As you local hospital to tell you what they do.