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Sumerian contract: selling of a field and a ho...

A Department of Health contract with a private provider of healthcare

The Bureau for Investigative Journalism reports that £500 million was spent on private health clinics in the NHS that in their view represents poor value for money. No doubt commentators will point to the private aspects of these contracts as evidence that they failed. A few comments on their Report:

  1. The contracts were pre-paid block contracts, and in most cases the complement of procedures paid for were not used. Now whose fault is that? In the same way as hospitals do not go around soliciting business from GPs, these clinics need referrals. The question in my mind is was there so much capacity that the pre-paid procedures weren’t needed? How many patients did not get treated because of a failure to use these contracts? Of course the same thing can happen in the NHS, just people don’t see it as quite the same waste of money as when private contractors are involved. But they are the same.
  2. That the Department of Health is buying them back is the Department’s problem, which the taxpayer has to deal with. I’m not sure what the point of buying them is, especially since they will close and their treatment capacity lost to the doctors. Is there that much excess capacity in the NHS that they can take out that much capacity? The Report doesn’t clarify what is actually going to happen next. I don’t disagree with them about this being a poor use of money, but the decision to remove these facilities from available capacity is a bad decision, regardless of who runs them. The firms running them have excellent clinical performance track records in the main.
  3. The original contracts were commercially naive. But the UK’s NHS has a very poor track record with commercial suppliers, and so to get anyone interested at a time when there were serious shortages of capacity (and still are of course), they had to underwrite some of the risk. Of course, what might be thought of NHS facilities such as Foundation Trusts are increasingly not publicly owned as such but owned by the organisations that run them, and there are similar contracts with them. (GP premises are also private) Keep in mind, too, that pre-paid block contracts are an acknowledged (but poor) way for buying hospital services, so NHS facilities have also benefited from this — but just to be clear, many NHS facilities over-provide on these contracts, run out of money, usually 9 months into the contracts, then have to pull back in the last quarter. With payments based actual activity, you pay for what you buy, which explains in part why NHS facilities are running out of money — they cost more to run than the activity they are providing based on the income they derive from that activity. Nothing to do with being a public or private organisation, but a lot to do with how contracts are structured and of course how the hospital is managed. One hopes that more sophisticated contracting will emerge.
  4. NHS contracts are generally risk-free, that’s why there is the current fuss over competition in the NHS, as it would introduce risk. If risk were introduced, it would naturally level the playing field for private providers. But with risk-free public contracts, all the private providers wanted was the same contract conditions as NHS providers. The sensitivies around this, though, tend to favour a default assumption that the publicly owned, if that is strictly true anymore, institutions are better value-for-money than the private ones, when it comes to clinical activity.

This Report focuses on the expenditure of money without asking the next level of questions which go the heart of how and why money gets wasted in healthcare and why the NHS has so much difficulty with its contracts (let’s not get started on NPfIT).

But the Report is useful by illuminating the financial consequences of poor commercial decisions within the Department and the NHS. I just wonder whether there has been any learning as a result.

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A Hill-Rom hospital bed

How many of these do we really need?

Before we all jump off cliffs over apparent bed shortages in hospitals in the UK, we need to keep in mind at least two points.

1. According to the OECD in 2009 (a reliable source of comparative data), the UK has 4.1 beds per 1000 people, higher than the US at 3.6, Canada at 3.9, about the same as Spain but certainly less than say France at 8.4 or Germany at 9.2. Countries with higher bed numbers also use hospitals a lot more for things can be treated in primary care, a preference shared by many patients. Using less beds does not equate to a shortage of beds.

2. Beds themselves are not what there is a shortage of, but the ways they are used. The UK is broadly quite efficient in bed use (which is code for how long a patient is in a hospital, and how quickly a bed can be turned around between patients, but which is frequently determined by what time of day they are discharged. Patients can be kept in hospital over a weekend for example, instead of going home at lunch on a Friday simply because the hospital lab may not be able to turn around tests to confirm the patient is well-enough to go home. So for what might be a few extra hours of lab time, a patient and a hospital can incur three extra hospital nights: Friday, Saturday and Sunday.  Moving to fuller use of weekend working, plus at least 18 hour/day labs and imaging reduces these delays. As well, greater use of day-case procedures keeps patients out of an overnight stay; a good day case unit should run three day case shifts over the course of the day. This increases throughput and uses the infrastructure more intensively. Which does not reduce the high touch side of care, you just don’t need to be in hospoital for as long.

It is in the interests of healthcare vested interest groups to fixate on bed numbers as this is a simple measure, easy to cite, there is a finite number of them and fewer appears worse than more, so that presumably having more would be better and without more, dire things will happen to patients.

Such shroud-waving ignores that fundamentally more complex processes underpin poor use of beds, and hence treatment of patients. Improved pain management for example can chop a whole day of how long a patient needs to stay in hospital. Improving how efficient the operating theatre is can reduce how long a patient is under an aesthetic and so shorten the hospital stay — you don’t want to look at how poorly run operating theatres are, in terms of time management or surgical performance.  As a simple example, using a robot arm to hold the endoscopic camera rather than employing someone to do this reduces surgical time dramatically but how many of these are in regular daily use — how widely adopted is this technology, which is made in the UK?

Given that the UK’s four health systems have to look hard at spending, we should avoid a fascination with bed numbers, and indeed whether local authorities/municipalities can and can’t afford to do things. There is nothing stopping a well-run NHS Trust from investing in an effective free-standing step-down unit to handle the shift of patients into the community or contracting with the surplus capacity of nursing homes to provide skilled nursing care.

Yes, this doesn’t solve the whole problem, but it solves parts. Health systems are complex, and chipping away is often a rational strategy to avoid centrally planned chaos. The whole point of shifting the system toward more local decision-making is to enable creative solutions.

There is always room for improvement in healthcare, but having more beds does not always equal patients being treated particularly well or effectively or indeed being treated at all.  It is important that we keep this difference clear.

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The elephant in the room in healthcare is the hospital, about which I have suggested that we will build the last one in 2025.  What will “smart hospitals” look like, and why should we care?

Hospital Universitario Marqués de Valdecilla, ...
Hospital Complex, Spain

Why should we care?

Hospitals are expensive and complex labour intensive organisations originating in industrial era thinking.  Little has been done to modernise the institution itself, although much has been done of course to improve what hospitals do. We also know that hospitals account for a considerable carbon burden and consume a huge amount of energy since they operate 24 hours a day. We know that as labour intensive institutions they suffer from the challenges all such organisations face as they try to improve operating practices and reduce running costs. Healthcare delivery is characterised by regulated cartels, which serve both to protect the public, and protect professional practice from incursion by other health professionals.  A bit like an early 20th century factory with craft guilds.

We should care because these institutions need to become smarter in the use of modern technologies and practices, but this process is slow and cumbersome, and while they evolve, the taxpayer is faced with paying the costs of institutions which in many cases should be replaced. This is not to say that those who lead hospitals are not focused on these issues, but only to say that their job is not easy and with the many vested interests around, challenged.

What would be refreshing would be leadership for clinical workflow change to come from the professions themselves, due recognition of their need to evolve and reform rather than simply protect the status quo.  We need these groups to drive change in healthcare, rather than waiting for politicians or Ministries of Health to set the agenda. Of course, informed and empowered patients will eventually not put up with much of the nonsense that confronts them when they seek healthcare, but that is another story.

What will they look like?

We are left with wondering how to improve how they do what they do.  Enter ‘smarts’. This brings together a constellation of forces currently abroad in the world, ranging from automated building management systems, smart grids, energy recovery systems, to wireless technologies in hospitals to remove the wires.

Coupling smart systems together creates networks that can link patients in their home to monitoring facilities and first-responder capabilities. With the added advantage of wireless, we have untethered remote monitoring.  In the end, we have real-time healthcare.

Smart hospitals will not need to define themselves in terms of their geography or location, that is in terms of buildings. They will define themselves in terms of two factors:

  1. their capabilities and
  2. how they deliver these capabilities.

Indeed, the organising logic of the modern hospital will be replaced with one akin to a dating agency — it will link people with needs to capabilities to meet those needs — built on a sea of clinical, and patient information, and connectivity to various organisations that can deliver the services (healthcare) that is needed.  This breaks the current approach to vertical integration (based on the industrial conglomerate model) and replaces it with the virtual hospital, a network of focused and tasked organisations.

I had scoped such an approach to a redesign effort for a teaching hospital, which would have replaced a campus model (mainly an old building and some attached add-ons) with a distributed and electronically-linked (ehealth stuff here)  network of perhaps 24 centres scattered across a city of a million or so.  But industrial era logic prevailed and they went with the single building.

I guess we won’t get smart hospitals until we have smart planning.