The Labour Party has outlined plans to integrate health, mental health and social care in a single system, ultimately run by local government.

Shadow Health Secretary Andy Burnham has argued that such a ‘whole person care’ approach is the only way to meet the challenges of chronic illness and the ageing population.

The current system, he argued, merely sees patients slipping in great numbers from primary care to hospital and hence to nursing homes.

Speaking to the King’s Fund health think tank, Burnham said a Labour government would legislate for “a one budget, one service approach”.

Health and social care would merge, he said, with the NHS providing social care and local authorities commissioning healthcare.

Echoing recent statements by NHS Confederation leader Mike Farrar, Burnham said that integrated care was the only way to meet the clinical and economic needs of the NHS.

To shift the balance of healthcare towards prevention, he argued, the Payment by Results tariff needed to be replaced by a ‘year of care’ payment system for patients with complex needs or chronic diseases.

The providers of integrated care might be either acute NHS trusts or primary care services, he said, but in either case both services would be combined – with mental health services brought under the same control.

Burnham said: “In the century of the ageing society the gaps are becoming dangerous. People are falling into the ever-expanding cracks between our three systems. We are paying for failure, allowing people to fail at home and drift into expensive hospital beds and from there into expensive care homes.”

However, critics will argue that local authorities lack healthcare expertise and are often the least responsible and reliable kind of politicians.

NHS commissioning policies stop people with type 1 diabetes from gaining access to essential specialist services, medical experts have warned.

The proportion of people with diabetes who receive all essential checks is much higher for people with type 2 than type 1.

As a result, a disproportionately high number of patients with type 1 diabetes are receiving avoidable hospital treatment for failures of control.

According to the National Diabetes Audit, whereas 56.4% of patients with type 2 diabetes receive all nine NICE-recommended checks annually, only 38.5% of patients with type 1 diabetes do so.

In addition, the incidence of acute diabetic ketoacidosis in patients with type 1 diabetes is rising.

The reason, the Association of British Clinical Diabetologists said, is that type 1 diabetes (which always requires insulin therapy) needs a collaborative care pathway involving primary care and specialist teams.

Current NHS commissioning policy makes this difficult: payment by results attaches a specific cost to each referral, while the ‘Nicholson challenge’ is driving tighter referral management.

However, patients receiving specialist guidance to manage their insulin regimes better could avoid severe hypoglycaemia and ketoacidosis, as well as diabetic foot and eye damage.

Chris Walton, Chairman of the Association, said: “We would like specialist care to have more of a leadership role and to be more accountable. There are alternative ways of commissioning which should enable a more inclusive collaborative arrangement between specialists and generalists.”

For example, he argued, all patients with type 1 diabetes should have access to insulin pump provision; and all areas should have pathways to involve a specialist team when a severe episode of hypoglycaemia or ketoacidosis occurs.

The payment by results (PbR) system for healthcare reimbursement is unfit for meeting the changing needs of society, according to the King’s Fund.

The think tank identified the current tariff as a barrier to the shift of healthcare from hospitals to the community.

A range of payment systems would be needed, the report argued, to encourage local innovation and to balance the priorities of quality, cost and supply.

The report explored the payment systems used in the NHS and other health economies, and examines whether PbR is able to support such long-term objectives as disease prevention and the care of long-term conditions.

Payment by results incentivises hospitals to continue treatment, thereby blocking a shift to preventative and community-based care, the report said.

It concluded that different services require different payment systems: PbR is most appropriate to elective care, but less suited to other services.

In addition, the King’s Fund said, payment systems need to be flexible to assist adaptation at a local level and trade-offs between priorities.

The NHS needs a new reimbursement framework that allows different payment systems for different types of service, the report argued.

Monitor, the foundation trust regulator, commented that it could “recognise many of the areas for improvement identified in the report” and would give it “careful consideration” when developing its pricing strategy.

Health Minister Lord Howe said: “We are working to make sure a payment system supports care being delivered closer to patients’ homes.”

He added: “We are working to expand our best practice tariff programme which supports patient-focused care, encourages innovation and makes better use of resources.”

The Department of Health (DH) has abandoned plans to use the Payment by Results tariff to stop private health providers ‘cherry-picking’ the easiest cases.

The decision breaks with a DH commitment made in November 2011 in response to the Government’s ‘listening exercise’.

However, the decision to deal with cherry-picking by “strengthening guidance” to providers has been positively greeted by the BMA and the King’s Fund.

Concern over private health companies contracted to provide NHS services selecting only the most profitable cases dates from the previous Government’s Independent Sector Treatment Programme.

It was a key concern among critics of this Government’s NHS reforms, leading NHS Deputy Chief Executive David Flory (pictured) to promise that using the tariff to discourage such behaviour would ensure “transparency and fairness.”

However, Flory recently informed NHS managers that the DH no longer planned to use tariff payments for this purpose.

“After extensive consultation and advice by the experts we believe that strengthening guidance around Payment by Results is a more effective way of preventing cherry picking,” said a DH spokesperson.

The BMA commented that using the tariff might not have solved the problem and “could have been interpreted as opening the door to price competition”. The “underlying problem” was “market reforms”, it said.

Nigel Edwards, Senior Fellow at the King’s Fund, said the tariff plan had been naive: “Pricing isn’t subtle enough to take into account all the complications of risk.” He argued that retrospective price adjustments might be more effective.

NHS hospitals are losing specialist diabetes consultants and nurses, with negative results for patient care, experts writing in the BMJ have said.

The editorial argues that poor management of diabetes by the NHS is due not only to patient lifestyles but also to financial pressure on hospitals.

It points to a major increase in the death rate of young women with type 1 diabetes as evidence that specialist NHS treatment capacity is declining.

Reports on the crisis of NHS diabetes care tend to focus on the increasing prevalence of type 2 diabetes, most cases of which are related to obesity.

However, according to the National Diabetes Audit, the death rate among women aged 15–34 with type 1 diabetes increased ninefold from 2007 to 2011. Obesity is rarely a factor in such cases.

The authors note that financial pressures on PCTs has led to a growing pattern of diabetes specialist teams being reduced or dropped altogether.

Hospital teams of diabetes specialist nurses are tending to be replaced by practice nurses who have less expertise in this complex treatment area.

Specialist diabetes consultants are being replaced by acute physicians. A recent survey showed that 30% of diabetes specialist registrars were unable to find a consultant position within a year of qualifying.

The authors argue that the payment by results tariff is “a barrier to integration” that “deprives patients of access to a specialist team”.

Some areas have “informally” bypassed PbR to make more integrated care of diabetes affordable, they note – and this approach “needs to be introduced nationally” to facilitate patient movement between primary, community and secondary care.

How does the NHS Operating Framework influence pharma’s engagement with the NHS?

Economics continues to dominate the healthcare headlines. There has been much conjecture in recent weeks about NHS spending and how crucial promises of a ‘ring-fenced’ NHS budget appear to have been broken. Treasury statistics show that frontline spending on the NHS has increased by £3.4 billion since last year. But opponents claim the £1.6 billion surplus reported by PCTs and SHAs in 2011/12 has not been ploughed back into the health service – breaking David Nicholson’s 2010 vow that ‘every penny’ saved by the NHS would be reinvested in patient care. The DH says the surplus is being made available in the 2012/13 budget. With the NHS facing up to the realities of the ‘Nicholson Challenge’, the political debate over healthcare spending will run and run.

Operating Framework

The latest NHS Operating Framework clearly outlines the spending plans for 2012/13. It confirms that SHA/PCT surpluses will continue to be made available during 2012/13 and final year-end surpluses will be carried forward to the NHS Commissioning Board in 2013/14. PCT surpluses are expected to be made available to the relevant local health systems in future years. Conversely, PCTs carrying a legacy debt will be required to clear it during the year. Incoming CCGs will not be responsible for PCT legacy debt but they are expected to work closely together to ensure the situation does not arise.

PCT recurrent allocations will grow by at least 2.5% in 2012/13. PCTs are required to set aside 2% of their recurrent funding for non-recurrent expenditure. SHA clusters will hold these funds, with PCTs required to submit business cases to access them. The cost of organisational change during 2012/13 will need to be met from the 2%.

Tariffs and incentives

The framework outlines developments to the payment system in 2013, to incentivise the realisation of QIPP efficiencies and drive the quality and integration of services. Payment by Results has been expanded to encourage best clinical practice and better patient outcomes. Best practice tariffs are extended to:

• Incentivise more procedures being performed in a less acute setting
• Incentivise same-day emergency treatments where appropriate
• Increase the payment differential between standard and best practice care for fragility hip fracture and stroke
• Promote the use of interventional radiology procedures

Quality improvements are also incentivised in areas such as adult mental health, chemotherapy delivery, HIV services, podiatry, trauma, maternity care and paediatric diabetes. CQUIN is also being developed to provide a stronger incentive to deliver QIPP objectives. The amount providers will be able to earn for incremental quality increases above the standard contract will rise to 2.5% – across all standard contracts. Existing national goals for VTE risk assessment and responsiveness to the personal needs of patients will remain. In addition, two new national goals are introduced:

• Improving diagnosis of dementia in hospitals
• Incentivising the use of the NHS Safety Thermometer

Planning and accountability

The final chapter of the Operating Framework outlines the accountability arrangements for the final year of transition to the newly structured NHS. In 2012/13, the DH will continue to work through SHA clusters to hold PCT clusters to account – handing the baton for accountability over to the NHS Commissioning Board in April 2013. The framework warns that NHS organisations must improve the quality of services provided through the year, while delivering transformational change and maintaining financial stability – with under-performance likely to include ‘intervention from the centre.’
In 2012/13, the key accountability arrangements are:

• The current statutory framework – where SHAs and PCTs remain the statutory units of accountability
• The NHS Constitution – securing patient and staff rights
• Contracts between commissioners and providers
• CQC – regulating NHS providers
• Monitor – ensuring Foundation Trusts are meeting their terms of authorisation and delivering against priorities

Transition plans

The transition to the newly structured NHS is a dominant theme throughout the 2012/13 Operating Framework, and measures to plan for it within the current accountability arrangements are clearly articulated. In fact, given the ambitious nature and close proximity of the reorganisation, details around the planning arrangements for the final year of transition are surprisingly brief.

‘As the industry waits for clarification of individual CCG plans, broader strategies designed at PCT cluster level are already available.’

According to the framework, PCT clusters are each required to develop an integrated plan for the period 2012/13 to 2014/15. The plan should have a clear focus on quality and the national priorities outlined in the Operating Framework. The narrative should be supported by ‘data trajectories for each PCT’, and bring together elements around QIPP, finance, activity, workforce, informatics and transition to the new structure.

Shadow CCGs must support the plan, so they have a strong base on which they can develop their own planning for 2013/14. Likewise, the integrated plans need to reflect the outcomes of local Joint Strategic Needs Assessments. As with the NHS Outcomes Framework, emphasis is placed on integrating all care sectors – with PCT clusters urged to ensure that the public health transition elements of their plan are supported by local authorities.

Implications for pharma

The Framework stated that all PCT clusters’ integrated plans needed to be prepared – and approved by SHA clusters and the DH – by the end of March 2012. These plans are of major importance to pharma. They will contain vital information on the priorities, population needs and long-term ambitions of local health organisations. With the four-wave process to authorise 212 CCGs in England well under way, further data on the specific needs of individual local health organisations will emerge in the coming months. The requirement to publish Commissioning Intentions, updated JSNA and a whole variety of other forward-looking documentation as part of the authorisation phase promises to provide pharma with a comprehensive view of its market environment at the local level. But as the industry waits for detailed clarification of individual CCG plans, broader strategies designed at PCT cluster level are already available.

At a time when finances across the NHS are being squeezed yet the bar for quality and clinical outcomes is being raised, insight into the challenges facing key customers is a valuable commodity for medical sales professionals. The transition of the NHS to a new structure can be a catalyst for proactive medical sales professionals to improve their environmental monitoring, and significantly develop their understanding of customer need. The challenge for the industry is to ensure that key account managers speak in the same language – the same currency – as the customers with whom they seek to engage. The nature and scope of that currency is defined in national documentation such as the NHS Operating Framework and NHS Outcomes Framework, and within the vast local plans that are emerging as the NHS transition gathers pace. And well beyond it.

Success is about finding a common currency with your customers. The clues are out there.

Plans to introduce a national payment by results (PbR) tariff for mental health services are facing delay due to weaknesses in the patient data.

The Government’s implementation framework for its mental health strategy says a new tariff will “connect payment to recovery and to the patient’s experience”.

But NHS data experts have said the mental health minimum dataset (MHMDS) is not reliable enough to form a basis for PbR decisions.

The proposed system would ‘cluster’ patients into 21 categories according to the type and severity of their condition. However, there is widespread concern that errors in clustering could lead to underpayment.

The MHMDS, managed by the NHS Information Centre, contains patient record data about NHS services for people with severe and lasting mental health problems in each year since 2003.

Emma Stanton, Chief Executive of Beacon Health Strategies, said one major mental health trust had shown a 40% error rate in its categorisation of inpatients.

“Real life is not connected to what the data show,” she warned. “If we have a significant number of inpatients in the wrong clusters, trusts will not be reimbursed at the correct levels.”

The planned national rollout date for the mental health tariff, 2013–14, has now been abandoned by the DH, which commented: “We are working with NHS mental health service providers to improve data quality.”

Monitor and the NHS Commissioning Board will decide when to implement a national tariff.

The Government has published an ‘implementation framework’ for its mental health strategy, involving a wide range of care services.

A ‘mental health dashboard’, allowing progress against the relevant objectives for the NHS, social care and public health to be measured, will be published in the autumn.

The framework’s core principle, and a priority for the NHS Commissioning Board, is “parity of esteem” between mental and physical healthcare.

Other priorities include giving more people access to evidence-based treatments; ensuring that patients and their families and carers are involved in service design and delivery.

The integration of mental with physical healthcare is reflected in the dual priority of improving the physical health of people with mental illness and the mental health of people with physical illness.

The framework outlines steps that commissioners and service providers, as well as business and the community, can take to improve the prevention and treatment of mental illness.

The CCG authorisation process will require applicants to prove they have the capability “to commission improved outcomes in mental health”. CCGs are urged to appoint a mental health lead at senior level, use specialist support and guidance, focus on early intervention and on recovery, and develop “innovative service models”.

Providers of mental health services should “focus on choice, recovery and personalisation”, as well as the relationship between physical and mental health.

GPs are asked to provide “appropriate early interventions”; to recognise and treat “co-morbidity of physical and mental illness”; to provide a choice of treatment for mental illness; and to develop “good practice in care planning”.

Guidelines for local authorities, health and wellbeing boards, social and public health services, Local Healthwatch and employers are included.

Support for these improvements at a national level will be provided by the NHS Commissioning Board, and by the development of a tariff for mental health services that will “connect payment to recovery and to the patient’s experience”.

The year 2012/13 marks the last phase of the transition to the new NHS for England, and the next NHS Operating Framework sets out the template for this. Alan Jones looks into its implications for pharma.

As we approach the next NHS financial year, it is time to examine what the Department of Health expects of the NHS and what this might mean for pharma. The new Operating Framework for the NHS in England 2012/13 is rather dry, but nevertheless is one of the ’must-read’ documents as you start to prepare your business plans for the year ahead. We pick out some highlights here.

First off, the document sets out the business and planning arrangements for the NHS and describes the national priorities and the ‘system levers and enablers’ needed for NHS organisations to improve the quality of services provided, while both delivering transformational change and maintaining financial stability (aka ‘grip’). It also sets out the practical steps that need to be taken to carry the NHS through a stable transition over the coming year as it moves towards its new structures.

There is much about transforming service delivery and the major shift to a more outcomes-focused approach. The main chapters are on quality, the reform process, finance and ‘business rules’, and planning and accountability. Note that this will be the final Operating Framework for the current delivery system of PCTs and SHAs, and probably the last one of its kind, since this is the final year of transition to the new system.

Outcomes to the fore
This document is rather dry, because there is now a lot of other ‘sexy’ health policy stuff around in documents such as those on clinical commissioning group (CCG) authorisation, clinical commissioning support and the more recent 2012/13 NHS Outcomes Framework – again, all important documents to peruse, and with major implications for pharma.

Pinched from the latest Outcomes Framework are new national performance measures laid out according to the various domains, described in detail in the Annex to the document. For example, from ‘Domain 2: Enhancing quality of life for people with long-term conditions’ there are measures around early intervention (mental health measures) and unplanned hospitalisation in diabetes patients (long-term condition measures). By 2013/14 both the NHS Commissioning Board (NHSCB) and the CCGs will be held to account for such outcomes delivery, and will be expected to publish data on achievement against the indicators in the Outcomes Framework at a local level. This will be linked to the proposals for the new Commissioning Outcomes Framework (COF), which is due to go live in 2013/14.

Some of the COF indicators will be based on NICE quality standards, and as with the Outcomes Framework there will be a particular focus on clinical effectiveness. Also stressed is the link of COF not only to the NHS Outcomes Framework but also to the Public Health and Adult Social Care Outcomes Frameworks. Readers might want to examine these closely to see where they overlap with shared indicators – this is particularly relevant with the new drive towards better integration of care in long-term conditions such as schizophrenia.

QIPP and innovation
The NHS Operating Framework spends a fair amount of time going through some of the outcome measures or proxies in the five domains of the NHS Outcomes Framework – all hugely relevant to pharma. CHD/CVD, diabetes, mental health, cancer, asthma, COPD, epilepsy and venous thrombolembolism are all in the mix. With payers no longer wanting to be sold ‘pills and gadgets’ but solutions that unlock quality and value, now is the time for brand managers to finally step up to the NHS mark.

Early diagnosis and treatment are stressed, as are NICE quality standards. There is to be a renewed push on implementation of the national dementia strategy, and commissioners need to ensure that providers are compliant with NICE quality standards and that diagnosis rates improve.

Interestingly, there are some reform indicators for the first time – e.g. the percentage authorisation of CCGs. NHS and NHSCB Chief Executive Sir David Nicholson points out in his foreword to the document that this is the second year of the quality and productivity challenge, and he emphasises the need for the NHS response to this challenge to accelerate.

QIPP gets considerable coverage, with examples of good practice being given and available resources noted – such as the NHS Evidence website and the Atlas of Variation, with Volume 2 of the latter now published with prescribing maps. Sir David wants more rapid diffusion of good practice (industry should be able to help here), and the new Innovation Review sets out specific measures to achieve this. Service change and clinical service redesign are seen as key, and again this is something that pharma must factor into its forward plans.

New customers galore
2012/13 is seen by the Government as a critical year for the building of the new NHS architecture and delivery system. The CCGs will have to focus on improving care of long-term conditions; clinical networks and clinical senates will be established; and the Health and Wellbeing Boards plus the NHS Commissioning Board will go onstream. There will be more NHS Foundation Trusts, though it is expected that around 20 hospitals will not make the grade. There will be continued rollout of Any Qualified Providers plus the new commissioning support organisations, and there is mention of the newly-integrated organisations that have arisen via the Transforming Community Services programme.

So there are many new industry customer groups since this time last year! Note that the first time, the document states that the Health and Wellbeing Boards should be the ‘local systems leader’ with the key role of integrating local commissioning and overseeing a clear local strategy across the three separate systems of the NHS, public health and social care through joint strategic needs assessments (JSNAs). Please remember that local government is where the director of public health will be based in future, which is another good reason to put local authorities on your radar…

CQUIN and PbR
The document also proposes new national CQUIN goals, and the amount that providers can earn goes up to 2.5% of income. It is suggested that they may want to use the measures of the Innovation Review to help them set up such schemes. Commissioners must share agreed schemes on the NHS Institute website, and if you have not visited this site there is a real treasure trove of local schemes there. Some of these case studies could usefully be shared with customers. Click here for further information.

Local CQUIN schemes that are developing will need to be watched. And watch out too for developments within PbR in 2012/13, aimed at improving the links with quality of care, driving integration and incentivising the implementation of QIPP. That means expanding best practice tariffs, incentivising the performance of procedures in a less acute setting, pathway and mental health tariffs, and both chemotherapy and HIV joining the PbR club.

Clinical Commissioning Groups
Finally, note that CCGs are expected to be given £25 per head of population to be spent on management costs. This is before any entitlement to a COF ‘quality premium’. This sum is at the lower end of the expected range for the running cost allowance, and probably places the future of some of the smaller CCGs in doubt. Indeed, some CCG mergers have already begun. Through the coming year, folk will need to track the authorisation (or not) of each CGG, as this again is essential key account management stuff!

CCGs will also be thinking now about commissioning support and whether or not they need external support. This must be highly relevant to the pharma account management strategies beginning to take shape for the new ‘payers’, as well as the folk in head office considering new ‘support offerings’. Note that some aspects of medicines management also seem to be in the mix, and some of these providers could well be private companies.

Wrapping up
So there we are: another outline sketch of the key annual NHS business planning document and the year ahead. This is all key need-to-know stuff regarding the future new customers of pharma. With an acceleration of new customer groups springing up, industry account managers will have a lot to think about. The onward development of the CCGs particularly needs to be tracked, as does the commissioning support system being proposed. The development of the NHS Commissioning Board will also need to be watched, as it will be a brand new and critically important national account. It will, for example, have a ‘medicines optimisation’ role. Who will be the gatekeeper(s) in head office?

As the journey’s end draws near, the NHS at the end of 2012/13 will look and feel very different to the NHS at the beginning of the year. Are you getting ready for the final transition?

Alan Jones is an occasional contributor to Pf. He commentates and presents widely on the ongoing reform within the NHS and its implications for pharma and is a consultant to Wellards. An independent healthcare policy analyst, adviser and NHS trainer and mentor, he can be contacted here.

The way the NHS is paid must modernise and change, Health Secretary Andrew Lansley has said.

The majority of hospitals are largely paid based on the volume of activity they carry out, rather than the quality of results and the outcomes for patients.

The Health Secretary says the current system has “perverse incentives” and has called for an updated method using a “pathway-based” tariff.

Speaking at the Nuffield Health Trust Annual Summit, Mr Lansley (pictured) said the current ‘Payment by Results’ method is misleading and how a fresh approach was needed to bring the best out of the NHS.

“We need modern, successful public services, and we need to pay them for the results they achieve for patients,” he said.

“I want every incentive and every reward to have the same goal - improving outcomes for patients. That means better survival rates, a faster, fuller recovery, more prevention, and the effective management of long term conditions. At the moment, this is far from the case.”

He said that at present hospitals were rewarded for “processes and ticking boxes” which did not improve patient care.

But he believes the new tariff would encourage early assessment and, depending on the results, the provider would receive a fixed sum up front. Any such method would then be in the interest of the provider to be as pro-active as possible to manage any other conditions and to prevent the need for any interventions.

The NHS Commissioning Board, along with consortia, may now design a tariff which pays the Health Secretary required results with Monitor expected to ensure the tariff prices are fair to commissioners and providers.