Managed Care - August 2012 - (Page 35)

sort out their problems in the next two years and get themselves into a position where they can successfully apply to become a Foundation Trust … or face the consequences. One of those consequences seems to boil down to being taken over by another organization. But such a policy hides a multitude of practical difficulties that together generate a toxic political and financial environment. Who will get the blame? If such hospitals are deemed to be failing, what form does the failure regime take and what incentives do you need to offer either another NHS organization or a private company to take it over? What services must be protected and what could be closed down? Who will get the blame when the takeover occurs? Any companies considering the commercial opportunities afforded by taking on such providers — and some may consider that the root problem of such institutions is poor management, and hence inherently solvable — will have to weigh the environment NHS providers are now he opportunities for cross-Atlantic learning being asked to operate in. are considerable, though underutilized. The NHS, having enjoyed average growth of nearly 7 percent a year in real spending since the beginning of this century, now The promotion of “integrated care” is very much essentially faces a real-terms freeze in funding until in vogue, although in the U.K. firm evidence that 2014–2015. If the economy doesn’t pick up, this it delivers what enthusiasts expect of it is disapcould go on beyond that time. pointedly mixed. Indeed, this may be too generous an interpretaWhat is known is that the NHS is required to detion. Some would say that the latest U.K. research liver £20 billion savings by 2014 with the plan being that this money be released back into funding ser(Rand Europe 2012) shows that it doesn’t reduce vices (Department of Health, England, 2010). This costs. Cost reductions are not everything, but their sum is so large that to have any chance of achieving importance can hardly be overstated in a health it, savings will have to be found in clinical services system that is under growing financial pressure. and salaries rather than a reliance on reductions in New challenge administration and other nonclinical costs. Monitor, the organization that regulates FoundaNevertheless the challenge appears to increastion Trusts, has recently advised acute care hospiingly be to provide economy-wide solutions rather tals that they need to find at least 6.5 percent annual than to merely shift costs between organizations efficiency savings (Bennet 2012). — from those funding care to providers (and visa versa), provider to provider, primary care to and Double whammy from acute care, and so on — and anyone with Hospitals in the U.K. face a double whammy: The experience in, and tools to deliver, such solutions will probably find a receptive audience in the U.K. prices they receive for the services they provide are generally dropping, and the PCTs that currently It is possible to view the NHS as a series of manpurchase care on behalf of their populations are aged care entities, as the emphasis is on delivering looking to move activity out of hospitals and into defined targets (waiting times for example) and the community (Smith 2012). health outcomes to a defined population for a fixed Unlike in the United States, (Reinhardt 2006) opportunities to cross-subsidize hospital activities between purchasers are almost nonexistent as effectively all care is purchased by government bodies and largely to a standard set of tariffs. NHS hospitals now have to face up to the unwelcome realization that their traditional means of delivering financial balance and a required efficiency gain — through increasing activity rather than reducing costs — will no longer be viable in many cases. The problems acute hospitals have in balancing their books reflect a wider weakness in many cases — the weakness of the local health economy as a whole. Many places have a problem with inappropriate outpatient referrals, rising emergency room attendances/admissions and excessive length of stay. Can the recent experience in the United States with accountable care organizations be added to the likes of Kaiser Permanente’s record to help the NHS tackle problems that have a cross-Atlantic resonance? T AUGUST 2012 / MANAGED CARE 35

Table of Contents for the Digital Edition of Managed Care - August 2012

Managed Care - August 2012
Editor’s Memo
Contents
Legislation & Regulation
News & Commentary
Medication Management
Evidence Review
Compensation Monitor
Private Exchanges: Practice Makes Perfect
Hospitals and Providers Ganging Up on Plans?
Q&A: Kaiser Permanente’s Sharon Levine, MD
God Save the Health Care System!
Future Points to Greater PBM/Plan Cooperation
Formulary Files
Plan Watch
Tomorrow’s Medicine
Outlook

Managed Care - August 2012