English National Health Service’s Savings Plan May Have Helped Reduce The Use Of Three ‘Low-Value’ Procedures

By Sophie Coronini-Cronberg, Honor Bixby, Anthony A. Laverty, Robert M. Wachter and Christopher Millett
Health Affairs, March 2015

Abstract

The pressure to contain health expenditures is unprecedented. In England a flattening of the health budget but increasing demand led the National Health Service (NHS) to seek reductions in health expenditures of 17 percent over four years. The spending cuts were to be achieved through improvements in service quality and efficiency, including reducing the use of ineffective, overused, or inappropriate procedures. However, the NHS left it to the local commissioning (or funding) organizations, known as primary care trusts, to determine what steps to take to reduce spending. To assess whether the initiative had an impact, we examined six low-value procedures: spinal surgery for lower back pain, myringotomy to relieve eardrum pressure, inguinal hernia repair, cataract removal, primary hip replacement, and hysterectomy for heavy menstrual bleeding. We found significant reductions in three of the six procedures—cataract removal, hysterectomy, and myringotomy—in the program’s first year, compared to prior years’ trends. However, changes in the rates of all examined procedures varied widely across commissioning organizations. Our findings highlight some of the challenges of making major budget cuts in health care. Reducing ineffective spending remains a significant opportunity for the US health care system, and the English experience may hold valuable lessons.

From the introduction

The global financial crisis of 2008 has led to the tightening of health budgets, and spending is flattening or declining in real terms in many countries. Simultaneously, soaring demand for health care in the United States and the United Kingdom, exacerbated by aging populations with increasingly complex morbidities; the spiraling cost of health technologies; and growing patient expectations mean that the pressure to contain expenditures is unprecedented.

Health care inefficiencies cost the United States $750 billion annually. This has led to initiatives such as the grassroots, nongovernmental Choosing Wisely campaign, which seek to reduce the usage of overused or ineffective treatments. The return on investment could be substantial. However, disinvestment is difficult, since it is hard to define clinical interventions that are always inappropriate. And, like many other countries, the United States has underdeveloped systems and mechanisms to guide disinvestment strategies.

The NHS is a national single-payer system with one of the most developed centralized systems for assessing clinical and cost-effectiveness in the world. Thus, it should be well placed to achieve efficiency savings more rapidly and consistently than other health systems can. However, the 151 local commissioning organizations (funding organizations known as primary care trusts)—which until March 2013, as explained below, were responsible for purchasing health care for their resident populations—received little disinvestment guidance from the Department of Health or the National Institute for Health and Care Excellence (NICE). NICE primarily provides guidance on which treatments should be offered; it offers much less guidance on which procedures to remove or restrict funding for.

From the discussion

Our analysis shows that the first fiscal year of a major efficiency savings program in the English NHS was associated with significant rate reductions in three of the six low-value procedures assessed. This included a reduction in one relatively ineffective procedure (myringotomy, which declined by 11.4 percent) and reductions in two procedures that are effective only in certain circumstances (cataract removal, which declined by 4.8 percent, and hysterectomy for heavy menstrual bleeding, which declined by 10.7 percent). Comparable reductions in clinically effective benchmark procedures were not evident.

Despite the existence of well-developed mechanisms to guide purchasing decisions in England, there is still a lack of consensus on which procedures to target for disinvestment. Since its inception, NICE has produced abundant guidance to inform the adoption of new technologies in the NHS, but NICE’s contribution to disinvestment decisions is less well developed.

In an effort to address this issue, NICE has established a “do not do” database to support the more efficient use of health resources. However, the database has had a limited impact on purchasing activity because recommendations are limited in their scope, often focusing on the use of specific technologies; are not well publicized; and remain discretionary.

Perhaps reassuringly, our results do not show a clear association between changes in procedure rates and either neighborhoods’ socioeconomic status or commissioning organizations’ financial status. This suggests that there is no particular pattern of inequity. Unlike in the United States, where a person’s ability to pay (through health insurance or out of pocket) primarily dictates the level of access to health care, in England the relationship among finances, neighborhood deprivation, and access to health services is more complex. For example, poorer commissioning organizations in England often receive additional government funding to help address health inequalities.

As more data become available in both the United States and England, it will be interesting to compare the success of the different approaches being taken to reduce low-value care. In England the approach is top-down and specifies the magnitude of savings. In contrast, the United States has embraced new pricing models such as bundled payments and the nongovernmental Choosing Wisely campaign to reduce costs. A grassroots initiative, Choosing Wisely is particularly interesting since it puts a patient-doctor conversation about unnecessary tests and procedures at its heart.

From the conclusion

Our analysis suggests that in a single-payer health system with well-developed centralized mechanisms to assess clinical effectiveness, it is possible to quickly reduce the rate of some ineffective procedures. However, significant variations in reductions were found across local commissioning organizations. This both reinforces the view that disinvesting in low-value health services is a complex process involving several factors and highlights the ongoing challenge of creating affordable and effective health care systems worldwide.

http://content.healthaffairs.org/content/34/3/381.abstract

Right now in the United States there is an intense campaign to control health care spending by changing payment systems to reward value over volume even though the knowledge of methods and effectiveness of doing this is quite primitive. This study from England’s National Health Service provides some limited insight on this approach.

Two of the factors in determining value are price and how beneficial the services are. Regarding price, single payer systems relying on a greater role of government are more effective in establishing appropriate pricing. In the United States, our fragmented system of financing health care not only fails to provide us optimal pricing, but, as this article reminds us, it dictates the level of access to health care based on ability to pay through insurance or out-of-pocket. In England, under the National Health Service, price is not a factor at the time patients access services, thus inequity based on price is essentially eliminated in their public system (though their private system does introduce an element of inequity).

On the other hand, whether or not services are of benefit can be much more difficult to determine. A Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APMs) are being initiated or expanded under the Medicare Access and CHIP Reauthorization Act of 2015 (H.R.2), and yet evidence to date indicates that they have had a variable and largely only negligible benefit in improving value.

The Choosing Wisely campaign being advanced voluntarily by numerous professional organizations seems to be effective in selecting services that are not of adequate benefit. Although admirable, its effectiveness seems to be restrained by the paucity of procedures and services selected and by the lack of authoritative oversight of compliance.

In England, the National Institute for Health and Care Excellence (NICE) has provided much better guidance on which treatments should be offered, but it has not been as effective as it could be since its recommendations are only discretionary as to which procedures should have restricted funding or be disallowed altogether.

Although both England and the United States struggle with ensuring value in health care, the fact that the U.S. pays more than twice per capita than England is related to a greater role of government though their NHS. An example is found in the conclusion the authors offer in this report: “Our analysis suggests that in a single-payer health system with well-developed centralized mechanisms to assess clinical effectiveness, it is possible to quickly reduce the rate of some ineffective procedures.”

Instead of moving forward with our feeble efforts at improving value, we should immediately enact a single payer national health program. Then we will have a framework in which better value can be attained through improved pricing and through a system that would actually be effective in reducing or eliminating spending on some services that lack clinical effectiveness.

But we should not expect dramatic reductions in spending changes based on effectiveness since this study shows that the process is complex. In no small part that is due to the fact that there is considerable low-value care that is not no-value care and thus would be difficult to eliminate.

This is why it is even more imperative that we move to a single payer system. It would immediately give us the increased value we are seeking by eliminating hundreds of billions of dollars in administrative waste.