Nick Hex, Associate Director, York Health Economics Consortium

Providing Consultancy &

Research in Health Economics



Nick Hex

Associate Director

York Health Economics Consortium

Closing the funding gap



The NHS success story…

Reductions in premature deaths from heart disease, cancer,

strokes and respiratory disease

People living longer

Previously life-threatening conditions can be managed

Reduced risk factors (smoking)

Medical advances (drugs, surgical procedures & diagnostic

techniques)



…leads to increasing demand

Growth in older population

Increased life expectancy equates to increased years of ill health

Increase in LTCs and multi-morbidities

Increased risk factors (obesity, alcohol)

Higher expectation among patients and greater choice



The need for change

Source: The King’s Fund



What does the NHS need?

Source: The King’s Fund



Closing the funding gap

Opportunities include:

Improving productivity within existing services

Delivering the right care in the right setting

Developing new ways of delivering care

Allocating spending more rationally

Monitor (Oct 2013): Closing the NHS funding gap: how to get better value healthcare for patients



Five year forward view

“How can we get there”:

Diverse solutions and local leadership

Aligned national NHS leadership

Support for a modern workforce

Exploit the information revolution

Accelerate useful health innovation

Drive efficiency and productive investment



What is productivity?

“Productivity measures the ratio of the amount of output produced to the amount of input used to produce the output. The fewer inputs used for a given amount of output, the higher is productivity.The amount of NHS output comprises the number and type of patients treated in different healthcare settings, the quality of the care received and measures of the success of treatment. NHS input includes NHS and agency staff, equipment and supplies, and buildings.”

Source: University of York,

Centre for Health Economics



Productivity savings 12-13

Source: King’s Fund

Tariff efficiency, £2,400m

Admin, £163m

Pay freeze, £850m

Prescribing, £472m

Primary care, £194m

Other, £757m

£5.04bn QIPP

saving

Demand mgmt,

£200m



Productivity change 1996-2009

Source: Hardie et al. 2011

-2.5

-2

-1.5

-1

-0.5

0

0.5

1

1.5

2

96 97 98 99 00 01 02 03 04 05 06 07 08 09

An

nu

al

% c

ha

ng

e



BHBV indicators 13-14

Source: NHS Improving Quality

0 200 400 600 800 1000 1200 1400

Pre-procedure elective bed days

Increasing day surgery rates

Managing surgical thresholds

Pre-procedure non-elective bed days

Outpatient appointment DNA

Emergency readmission (14 days)

Reducing emergency admissions

Managing first follow up

Reducing length of stay

Reducing outpatient appointments

£ millions

Total: £5.6bn



Productivity ideas

“Evidenced ideas”:

DescriptionExamples of

improvements

Self-management

Patient-led support for

sufferers of chronic

diseases

Improved health

outcomes; financial

savings

Telehealth/telecare

Broad range of telehealth/

telecare interventions for

older frail people

69% reduction in A&E

attendances; reduced

length of inpatient stay for

nursing home patients

Case management and

coordinated care

Integrated care pilots using

case management

Reduced secondary care

useSource: King’s Fund (adapted from NHS England ‘Any town’)



Productivity ideas

“Promising ideas”:


improvements

Cancer screening

Increase public awareness

of cancer to encourage

earlier presentation

Better health outcomes

GP consultationTelephone consultations

with a GP

Reduced A&E attendances;

reduced work pressure on

GPs

Acute visiting serviceRapid access doctor for

acute care at home

Reduced emergency

admissions; improved

patient satisfaction

Source: King’s Fund (adapted from NHS England ‘Any town’)



Productivity ideas

“Transformational ideas”:


improvements

Urgent and emergency

care networks

Consolidation of

emergency care onto

fewer sites

Reduced patient

complaints; improved

patient safety

Elective servicesSingle specialty treatment

centres

Higher consultant

productivity; reduced LOS

and waiting times

Interoperability of systems

and patient records

Cross-sector sharing of

patient records

Time savings for GPs;

better resource planning

Source: King’s Fund (adapted from NHS England ‘Any town’)



Forward View forecast

A mismatch of £30bn by 2020/21

Demand is rising – can it be moderated?

Efficiency achievement around 0.8% per annum

1.5% should be achievable but aim is for 2% or even 3% per

annum

But it needs productive investment to support new models of care



3 scenarios

Based on a flat budget for the next 5 years:

0.8% efficiency achieved – shortfall of £21bn remains by 2020/21

1.5% efficiency achieved – shortfall of £16bn remains by 2020/21

Productive investment in new care models supports demand

reduction and allows efficiency gains of 2-3% per annum –

funding gap is closed





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Website: www.yhec.co.uk



Nick Hex, Associate Director, York Health Economics Consortium

Healthcare

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