Commissioning for outcomes Tom Hampshire, PwC Sheena Nixon, Beacon Karen Foster, Cobic 1 Introduction The NHS currently faces an unprecedented set of challenges - including a potential funding gap of up to £54 billion by 2021/22. Existing payment systems within the NHS focus predominantly on rewarding organisational activity rather than the outcomes that matter to patients. This has created an episodic, fragmented model of delivery focussed on acute care, rather than an integrated, whole-system approach. Policy trends within health and care point clearly towards closer integration of services between providers and care settings as a means to overcome these system challenges and fragmentation. There is also a need to deliver value based care - that is, care which delivers the best outcomes at the right cost. Outcome based commissioning - OBC - is an opportunity to meet these challenges through commissioning differently. OBC aligns incentives across the care economy to deliver the outcomes that matter to patients and the public. 2 A shift towards value based care The central issue in the delivery of health care is the value of care delivered for patients and the public. health outcomes achieved Value = cost of achieving those outcomes • Value transcends organisational boundaries – it is must be a commonly held goal by all organisations involved in the delivery of care. • Within the context of diminished resources, a focus on value is crucial pressures on the NHS as whole are expected to grow at approximately 4% a year over the coming decade. • Central to the delivery of value based care is achieving the best outcomes for patients, delivered at the right cost – OBC seeks to drive this shift through the way that we commission services across health and care. 3 OBC seeks to drive this shift towards value Incentivising providers to innovate to deliver highly valued outcomes for Working with patients stakeholders across the care economy to define outcomes that matter Aligning provider, commissioner and public goals Incentivising efficiency through the use of a capitated or bundled payment mechanism How does an outcome based approach drive value across the system? Outcome based commissioning Removing perverse incentives for providers to deliver low value activity Removing barriers to shifting resource to where it produces greater value 4 Through this approach, OBC aims to achieve: 5 Broadly, there are two main approaches to OBC 1. Population based, using a capitated approach A provider – or group of providers – is allocated a capitated budget to manage all health needs for a defined population group. 2. ‘Pathway’ based approach Commissioning a single ‘pathway’ of care, making the provider(s) responsible for a person’s outcome related to a particular condition over a specified period of time. The contract may apply to the care for a local population within a specific geography, the care for a clearly defined segment of this population, or for a group of related conditions. E.g. ‘Swedish hip’ model. These type of contracts are often referred to as COBICs - Capitated Outcomes Based Incentivised Commissioning. Providers are incentivised to choose the right intervention focussing on prevention and coordinate care across the pathway. Payment may include a capitated or bundled payment for all treatment relating to that condition. 6 Understanding the outcomes model What is an outcome? An outcome is defined as a health and/or social gain experienced by a person with an illness, as defined from the person’s, rather than the system’s or the clinician’s, perspective. An evidence-based approach The outcomes based approach for OBC organises outcomes into a hierarchy following that devised by Professor Michael Porter, Harvard Business School. Porter has developed an outcomes hierarchy that has three tiers of outcomes: health status achieved or retained, process of recovery and sustainability of health. Outcomes for the full cycle of health and care To ensure sustainability of health, it is necessary to develop outcomes relevant to the full cycle of healthcare, from an initial problem through to recovery. TIER Tier 1 Health Status achieved or retained LEVEL Survival Degree of health/recovery Time to recovery, maintenance of/return to normal activities Tier 2 Process of recovery Tier 3 Sustainability of health Disutility of the care or treatment process – diagnostic errors and ineffective care, treatment related discomfort, complications, or adverse effects, treatment errors and their consequences in terms of additional treatment Sustainability of health/recovery and nature of recurrences Long term consequences of therapy e.g. care induced illnesses Outcome hierarchy – Psychosis 7 Prioritised Outcomes According to Tier Everyday activities: Extent Tier 1 Survival to which I feel I am able to do activities without my illness getting in the way Degree of autonomy: Extent to which I feel I have control over my life (managing my own finances; running my own home) Health Status Achieved or Retained Degree of physical health: Extent to which I feel I can Degree of recovery / health manage my physical health with my mental health Housing & employment: e.g. Housing, benefits & employment are in place for service user; e.g. Extent to which I feel I have safe and comfortable housing. Tier 2 Time to recovery or return to normal activities Timely Response: Extent to which I feel I have timely access to assessment & treatment; e.g. Extent to Process of Recovery Tier 3 which I feel I receive help quickly so that things don't get any worse than they could have; e.g. Extent to which I feel there is time to Disutility of care or treatment process (e.g., treatment-related discomfort, complications, adverse effects, diagnostic errors, treatment errors) respond to relapse plans; e.g. Extent to which I feel illness can be prevented if early signs present Sustainability of recovery or health over time Maintaining housing & employment: e.g. I keep my tenancy and employment status over time Sustainability of Health Long-term consequences of therapy (e.g., care-induced illnesses) Maintaining relationships: e.g. Extent to which I feel my relationships have been maintained Psychosis suggested outcome indicators Tier 3 Sustainability of Health Tier 2 Process of Recovery Tier 1 Health Status Achieved or Retained Porter Hierarchy & Tiers Service User Outcome Examples 1.1 Survival “Extent to which I feel I am able to do activities without my illness getting in the way” 1.2 Degree of recovery /health 8 Outcome Suggested indicators & develop numerator, denominator, thresholds People will live longer • Mortality, suicide People will re-gain their former level of functioning • ADL (activities of daily living – existing questionnaire to be enhanced to cover employment, education and housing status) score at baseline “Extent to which I feel I can manage my physical health with my mental health” • Number of bed days people spend in an inpatient mental health trust and/or inpatient acute trust 2.1 Time to recovery or return to normal activities “Extent to which I feel I receive help quickly so that things don't get any worse than they could have” People will receive timely access to treatment • Time from GP referral to confirmed diagnosis • Time from GP referral to the start of treatment 2.2 Disutility of care “Extent to which my family/partner is supported when I am ill” Carers feel supported in their caring role • Carer stress – using carer strain index or equivalent • Inclusion of carers in individuals care planning “I keep my tenancy and employment status over time” People retain their ability to undertake meaningful activity People continue to live in stable accommodation • % of people continuing to live in stable accommodation one year after diagnosis • % of people in paid employment “Extent to which I feel my relationships have been maintained” People will maintain family and friends (no negative consequences from their treatment) • Self report of social networks before and after treatment 3.1Sustainability of recovery or health over time 3.2 Long-term consequences of therapy 9 9 Incentivisation Incentivisation: • Number of indicators Manageable (not KPIs) • Quantum of incentive £ meaningful and material to the provider Not destabilising Different outcomes may carry different weighting. • Thresholds Baseline performance Thresholds for Good, Improved and Excellent performance • Pace of change Develop for steady state Phased implementation • Gain share arrangements to share financial savings with providers and commissioners 10 What type of care is incentivised? • High value interventions – delivering care in settings where the best outcomes can be delivered at the right cost. • Shifting resources to services in the community – delivering high value care will likely mean more services provided in the community and at home, where appropriate, rather than in hospital. • A focus on keeping people healthy and in their own homes – investing in services to prevent emergency admissions to hospital, costly for both people and the system; supporting people to return home as soon as possible after a hospital admission; supporting older people to stay independent and in their own homes. • Delivering outcomes that matter to people using the services – focussing on the experience of people using the services and achieving the outcomes that matter to them. • Coordinated care – working in collaboration to provide a coordinated service across organisational boundaries and care settings. 11 Evidence from similar approaches elsewhere Measured benefits (case study specific)* Improved health outcomes Overall cost savings (where quantified) Milton Keynes COBIC, UK l 15- 20% reduction in spend La Ribera model, Valencia l 25% reduction in spend l l l PACE , US l 5-15% saving per capita l l l Roverto Study, Italy l 29% saving per capita l Geisinger, US l Not quantified l Beacon Health, US l Not quantified Veterans Health Administration, US l Not quantified Selected whole system case study Reduced acute activity Reduced emergency admissions Reduced bed days and/or LoS Reduced rate of institutionalisa tion Improved patient experience Key method(s) driving integration l Capitation + Outcome measures l l Capitation + Outcome measures l l Capitation l Integrated provision l l Outcome measures l l l l l l l l * Blank boxes indicate the absence of evidence / measured benefits rather than the existence of negative outcomes Capitation Capitation + Outcome measures Any questions? Group discussion: suggested questions • What are the main opportunities that outcome based commissioning offers? • Which service areas will be impacted by these approaches? • What are the main risks from outcome based commissioning and how can these be mitigated? • What support might community providers need to engage with commissioners about these approaches?