England’s NHS provides starter lessons on improving value

Health Affairs
March 2015
English National Health Service's Savings Plan May Have Helped Reduce
The Use Of Three 'Low-Value' Procedures
By Sophie Coronini-Cronberg, Honor Bixby, Anthony A. Laverty, Robert M.
Wachter and Christopher Millett

Abstract

The pressure to contain health expenditures is unprecedented. In England
a flattening of the health budget but increasing demand led the National
Health Service (NHS) to seek reductions in health expenditures of 17
percent over four years. The spending cuts were to be achieved through
improvements in service quality and efficiency, including reducing the
use of ineffective, overused, or inappropriate procedures. However, the
NHS left it to the local commissioning (or funding) organizations, known
as primary care trusts, to determine what steps to take to reduce
spending. To assess whether the initiative had an impact, we examined
six low-value procedures: spinal surgery for lower back pain,
myringotomy to relieve eardrum pressure, inguinal hernia repair,
cataract removal, primary hip replacement, and hysterectomy for heavy
menstrual bleeding. We found significant reductions in three of the six
procedures—cataract removal, hysterectomy, and myringotomy—in the
program's first year, compared to prior years' trends. However, changes
in the rates of all examined procedures varied widely across
commissioning organizations. Our findings highlight some of the
challenges of making major budget cuts in health care. Reducing
ineffective spending remains a significant opportunity for the US health
care system, and the English experience may hold valuable lessons.

From the introduction

The global financial crisis of 2008 has led to the tightening of health
budgets, and spending is flattening or declining in real terms in many
countries. Simultaneously, soaring demand for health care in the United
States and the United Kingdom, exacerbated by aging populations with
increasingly complex morbidities; the spiraling cost of health
technologies; and growing patient expectations mean that the pressure to
contain expenditures is unprecedented.

Health care inefficiencies cost the United States $750 billion annually.
This has led to initiatives such as the grassroots, nongovernmental
Choosing Wisely campaign, which seek to reduce the usage of overused or
ineffective treatments. The return on investment could be substantial.
However, disinvestment is difficult, since it is hard to define clinical
interventions that are always inappropriate. And, like many other
countries, the United States has underdeveloped systems and mechanisms
to guide disinvestment strategies.

The NHS is a national single-payer system with one of the most developed
centralized systems for assessing clinical and cost-effectiveness in the
world. Thus, it should be well placed to achieve efficiency savings more
rapidly and consistently than other health systems can. However, the 151
local commissioning organizations (funding organizations known as
primary care trusts)—which until March 2013, as explained below, were
responsible for purchasing health care for their resident
populations—received little disinvestment guidance from the Department
of Health or the National Institute for Health and Care Excellence
(NICE). NICE primarily provides guidance on which treatments should be
offered; it offers much less guidance on which procedures to remove or
restrict funding for.

From the discussion

Our analysis shows that the first fiscal year of a major efficiency
savings program in the English NHS was associated with significant rate
reductions in three of the six low-value procedures assessed. This
included a reduction in one relatively ineffective procedure
(myringotomy, which declined by 11.4 percent) and reductions in two
procedures that are effective only in certain circumstances (cataract
removal, which declined by 4.8 percent, and hysterectomy for heavy
menstrual bleeding, which declined by 10.7 percent). Comparable
reductions in clinically effective benchmark procedures were not evident.

Despite the existence of well-developed mechanisms to guide purchasing
decisions in England, there is still a lack of consensus on which
procedures to target for disinvestment. Since its inception, NICE has
produced abundant guidance to inform the adoption of new technologies in
the NHS, but NICE's contribution to disinvestment decisions is less well
developed.

In an effort to address this issue, NICE has established a "do not do"
database to support the more efficient use of health resources. However,
the database has had a limited impact on purchasing activity because
recommendations are limited in their scope, often focusing on the use of
specific technologies; are not well publicized; and remain discretionary.

Perhaps reassuringly, our results do not show a clear association
between changes in procedure rates and either neighborhoods'
socioeconomic status or commissioning organizations' financial status.
This suggests that there is no particular pattern of inequity. Unlike in
the United States, where a person's ability to pay (through health
insurance or out of pocket) primarily dictates the level of access to
health care, in England the relationship among finances, neighborhood
deprivation, and access to health services is more complex. For example,
poorer commissioning organizations in England often receive additional
government funding to help address health inequalities.

As more data become available in both the United States and England, it
will be interesting to compare the success of the different approaches
being taken to reduce low-value care. In England the approach is
top-down and specifies the magnitude of savings. In contrast, the United
States has embraced new pricing models such as bundled payments and the
nongovernmental Choosing Wisely campaign to reduce costs. A grassroots
initiative, Choosing Wisely is particularly interesting since it puts a
patient-doctor conversation about unnecessary tests and procedures at
its heart.

From the conclusion

Our analysis suggests that in a single-payer health system with
well-developed centralized mechanisms to assess clinical effectiveness,
it is possible to quickly reduce the rate of some ineffective
procedures. However, significant variations in reductions were found
across local commissioning organizations. This both reinforces the view
that disinvesting in low-value health services is a complex process
involving several factors and highlights the ongoing challenge of
creating affordable and effective health care systems worldwide.

http://content.healthaffairs.org/content/34/3/381.abstract

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Comment by Don McCanne

Right now in the United States there is an intense campaign to control
health care spending by changing payment systems to reward value over
volume even though the knowledge of methods and effectiveness of doing
this is quite primitive. This study from England's National Health
Service provides some limited insight on this approach.

Two of the factors in determining value are price and how beneficial the
services are. Regarding price, single payer systems relying on a greater
role of government are more effective in establishing appropriate
pricing. In the United States, our fragmented system of financing health
care not only fails to provide us optimal pricing, but, as this article
reminds us, it dictates the level of access to health care based on
ability to pay through insurance or out-of-pocket. In England, under the
National Health Service, price is not a factor at the time patients
access services, thus inequity based on price is essentially eliminated
in their public system (though their private system does introduce an
element of inequity).

On the other hand, whether or not services are of benefit can be much
more difficult to determine. A Merit-based Incentive Payment System
(MIPS) and Alternative Payment Models (APMs) are being initiated or
expanded under the Medicare Access and CHIP Reauthorization Act of 2015
(H.R.2), and yet evidence to date indicates that they have had a
variable and largely only negligible benefit in improving value.

The Choosing Wisely campaign being advanced voluntarily by numerous
professional organizations seems to be effective in selecting services
that are not of adequate benefit. Although admirable, its effectiveness
seems to be restrained by the paucity of procedures and services
selected and by the lack of authoritative oversight of compliance.

In England, the National Institute for Health and Care Excellence (NICE)
has provided much better guidance on which treatments should be offered,
but it has not been as effective as it could be since its
recommendations are only discretionary as to which procedures should
have restricted funding or be disallowed altogether.

Although both England and the United States struggle with ensuring value
in health care, the fact that the U.S. pays more than twice per capita
than England is related to a greater role of government though their
NHS. An example is found in the conclusion the authors offer in this
report: "Our analysis suggests that in a single-payer health system with
well-developed centralized mechanisms to assess clinical effectiveness,
it is possible to quickly reduce the rate of some ineffective procedures."

Instead of moving forward with our feeble efforts at improving value, we
should immediately enact a single payer national health program. Then we
will have a framework in which better value can be attained through
improved pricing and through a system that would actually be effective
in reducing or eliminating spending on some services that lack clinical
effectiveness.

But we should not expect dramatic reductions in spending changes based
on effectiveness since this study shows that the process is complex. In
no small part that is due to the fact that there is considerable
low-value care that is not no-value care and thus would be difficult to
eliminate.

This is why it is even more imperative that we move to a single payer
system. It would immediately give us the increased value we are seeking
by eliminating hundreds of billions of dollars in administrative waste.