Elaine Kelly public payment and private provision
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Elaine Kelly public payment and private provision

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    Elaine Kelly public payment and private provision Elaine Kelly public payment and private provision Presentation Transcript

    • © Institute for Fiscal Studies and Nuffield Trust, 2013May 2013Public payment and private provisionthe changing landscape of health care in the 2000sSandeepa Arora and Anita Charlesworth, NuffieldTrust; Elaine Kelly and George Stoye, Institute forFiscal StudiesUnderstanding competition and choice in the NHS
    • © Institute for Fiscal Studies and Nuffield Trust, 2013Public payment and private provision• Examine relationship between public and private sectors inboth delivery and funding of health care in 2000s.• Two key messages from aggregate data:1. Differences in the growth rates of spending:• Public health spending rose faster rate during 2000s than inprevious 25 years; growth of private spending slowed, and fellafter 2007.2. Increasing share of NHS-funded treatment provided by non-NHSproviders.• Look at a specific example of hip and knee replacements toexplore these changes in more detail
    • © Institute for Fiscal Studies and Nuffield Trust, 2013The changing growth rates of UK public and privatehealthcare spending 1960-2011-2-10123456781960-1975 1976-1996 1997-2007 2008-2011Averageannualrealgrowthinhealthspending(%)PublicPrivateNotes: OECD Health Data 2012
    • © Institute for Fiscal Studies and Nuffield Trust, 2013NHS spending with non-NHS providers• A series of reforms opened up some NHS-funded care to non-NHS providers.• Independent Sector Treatment Centres (ISTC) (2002, 2006)• Any Qualified Provider (2008)• Patient choice (2006, 2008)• Between 2006/07 and 2011/12:• Total public health spending increased by 15% in real terms to around£120bn.• Spending with non-NHS providers increased by 60% to £8.7bn.
    • © Institute for Fiscal Studies and Nuffield Trust, 2013PCT secondary care spending with non-NHS providersNotes: PCT Accounts data 2006/7 and 2011/12.00.511.522.52006/7 2011/12 2006/7 2011/12 2006/7 2011/12 2006/7 2011/12General and Acute Community Health Mental illness Learning DifficultiesPCTspendingonnon-NHSproviders(£bn,2011/12prices)
    • © Institute for Fiscal Studies and Nuffield Trust, 2013Distribution of PCT spending between non-NHS providersNotes: PCT Accounts data 2006/7 and 2011/12.00.511.522.52006/7 2011/12 2006/7 2011/12 2006/7 2011/12 2006/7 2011/12General and Acute Community Health Mental illness Learning DifficultiesPCTspendingonnon-NHSproviders(£bn,2011/12prices)Other (inc LA)VoluntaryIndependent Sector Provider (ISTC +other private)
    • © Institute for Fiscal Studies and Nuffield Trust, 2013What have we learnt from aggregate data?• Growth rate of public health spending increased after 1997, asa result of deliberate policy choices.• Private spending growth slowed 1997-2007. Spending andprivate medical insurance (PMI) enrolment fell during therecession.• As NHS spending rose, so did the level and share of PCTexpenditure channelled to non-NHS providers.• Non-NHS providers deliver a small fraction of NHS-fundedsecondary care, but share has risen by a third between2006/07 and 2011/12, from 9% to 12%.• The largest growth was in spending on what the PCTaccounts term “Independent Sector Providers”.
    • © Institute for Fiscal Studies and Nuffield Trust, 2013Hip and knee replacements: a case study• Some interesting indicative evidence from aggregate data.• Now look at specific case-study where:• NHS and Independent providers deliver both NHS and privatelyfunded care.• Data are available for privately-funded activity: particularlyimportant when assessing substitution between NHS andprivately-funded care.
    • © Institute for Fiscal Studies and Nuffield Trust, 2013NHS-funded knee and hip replacements (2003/04 – 2011/12)010,00020,00030,00040,00050,00060,00070,00080,00090,000NumberofNHS-fundedproceduresKnee replacements (ISP)Knee replacements (NHS)Hip replacements (ISP)Hip replacements (NHS)2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12Notes: Authors’ calculations using HES data.• NHS-funded knee and hip replacements increased by 52% and 45%,respectively, between 2003/4 and 2011/12.
    • © Institute for Fiscal Studies and Nuffield Trust, 2013Change in NHS-funded hip and knee replacements-4,000-2,00002,0004,0006,0008,00010,00012,00014,00016,0002003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12Absolutechangesince2003/04Hip replacements (NHS)Hip replacements (ISP)Knee replacements (NHS)Knee replacements (ISPNotes: Authors’ calculations using HES data.• ISPs account for more than half the increase in NHS-funded hipand knee replacements after 2003/04
    • © Institute for Fiscal Studies and Nuffield Trust, 2013What explains the increase in NHS-funded activity?Possible drivers of increased activity:1. Demographic Change2. New procedures3. Substitution from privately-funded to NHS-funded procedures
    • © Institute for Fiscal Studies and Nuffield Trust, 2013What explains the increase in NHS-funded activity?Possible drivers of increased activity:1. Demographic Change• Explains 1/5 of the increase for hip replacements• Explains 1/6 of the rise for knee replacements2. New procedures3. Substitution from privately-funded to NHS-funded procedures
    • © Institute for Fiscal Studies and Nuffield Trust, 2013What explains the increase in NHS-funded activity?Possible drivers of increased activity:1. Demographic Change2. New procedures• Future work will:• Examine how the characteristics of patients have changed overtime, and across provider and funding types.• Assess the implications for patient outcomes.3. Substitution from privately-funded to NHS-funded procedures
    • © Institute for Fiscal Studies and Nuffield Trust, 2013What explains the increase in NHS-funded activity?Possible drivers of increased activity:1. Demographic Change2. New procedures3. Substitution from privately-funded to NHS-funded procedures• Compare:• Hospital level data on all hip and knee replacements (in Englandand Wales) in the National Joint Registry (NJR)• Patient level data on NHS-funded hip and knee replacements inEngland from Hospital Episode Statistics (HES)
    • © Institute for Fiscal Studies and Nuffield Trust, 2013Three-year aggregates of hip and knee replacements recorded inthe NJR and HESNotes: NJR Annual Accounts and authors’ calculations using HES data310,000330,000350,000370,000390,000410,000430,000450,000470,000490,000510,000530,0002004/05-2006/072005/06-2007/082006/07-2008/092007/08-2009/102008/09-2010/112009/10-2011/12NumberofkneeandhipimplantssoldorproceduresreportedNJR leviesHES operations
    • © Institute for Fiscal Studies and Nuffield Trust, 2013Evidence of substitution from the privately-funded to NHS-funded sector• Analysis by provider shows falls in privately-fundedprocedures for:• NHS providers• Independent private hospitals• Private providers that treat both privately and NHS-funded patients.• For patients: implies substitution from privately-funded toNHS-funded care.• For private health care companies: indicates growth in NHSincome has compensated for falls in private patient income.• Further growth in ISPs may be limited by both NHS demandand independent sector capacity
    • © Institute for Fiscal Studies and Nuffield Trust, 2013Conclusions1. Large increases in public healthcare expenditure and activityafter 1997, as a result of deliberate policy decisions.2. A rapid rise in the share of secondary care delivered by non-NHS providers, but NHS providers still predominant.3. Evidence of patients substituting from privately funded toNHS-funded care, particularly after 2007.• Health and Social Care Act opens up new areas of NHS careto non-NHS providers. Experience of previous reformssuggests:• The share of services delivered by non-NHS providers will increase, but• That share will remain small – NHS will continue to provide the vastmajority of care.
    • © Institute for Fiscal Studies and Nuffield Trust, 2013For more information about the Nuffield Trust,including details of our latest research andanalysis, please visit www.nuffieldtrust.org.ukFor more information about the Institute forFiscal Studies, please visit www.ifs.org.uk© Institute for Fiscal Studies and Nuffield Trust, 2013The Institute for Fiscal Studies is the UKsleading independent microeconomicresearch institute, aiming to promoteeffective economic and social policies.The Nuffield Trust is an authoritative andindependent source of evidence-basedresearch and policy analysis for improvinghealth in the UK.