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
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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
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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?