Lawrence Casalino: what GP consortia might learn from the US
What GP Commissioning Consortia might learn from the development of physician groups in the US: a synthesis of 20 years experience to avoid failure Lawrence Casalino MD, Ph.D. , Livingston Farrand Associate Professor of Public Health Chief, Division of Outcomes and Effectiveness Research We Co e Weill Cornell Medical College ed ca Co ege New York City The John Fry Lecture Nuffield Trust October 18, 2010
Today’s talk1. Two organizing frameworks for thinking about GP commissioning g g consortia2. U.S.2 U S experience with “consortia” and consortia commissioning3.3 Seven theses on GP commissioning4. Suggestions from an outsider
Two views of quality• the individual physician view• the organized process view h i d i
Two types of things that must be created• incentives• capabilities• performance = f(i f f(incentives + i capabilities)
Exhibit 12. Premiums Rising Faster Than Inflation and Wages Cumulative Changes in Components of Projected Average Family Premium as U.S. National Health Expenditures and a Percentage of Median Family Income, Workers’ Earnings, 2000–2009 2008–2020Percent Percent125 25 24 23 Insurance premiums 22 22 108% 21 21 Workers earnings 20 20 20 19 19 19100 18 18 18 18 18 Consumer P i I d C Price Index 17 16 15 1475 13 12 11 1050 32% 525 24% 0 2011 1 1999 9 2000 0 2001 1 2002 2 2003 3 2004 4 2005 5 2006 6 2007 7 2008 8 2009 9 2010 0 2012 2 2013 3 2014 4 2015 5 2016 6 2017 7 2018 8 2019 9 2020 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008* 2009* Projected* 2008 and 2009 NHE projections.Data: Calculations based on M. Hartman et al., “National Health Spending in 2007,” Health Affairs, Jan./Feb. 2009;and A. Sisko et al., “Health Spending Projections through 2018,” Health Affairs, March/April 2009. Insurancepremiums, workers’ earnings, and CPI from Henry J. Kaiser Family Foundation/Health Research and Educational THETrust, Employer Health Benefits Annual Surveys, 2000–2009. COMMONWEALTH FUNDSource: K. Davis, Why Health Reform Must Counter the Rising Costs of Health Insurance Premiums, (New York:The Commonwealth Fund, Aug. 2009).
Exhibit 1. National Health Expenditures per Capita, 1980–2007 Average spending on health per capita ($US PPP) $ 8000 United States 7000 Canada France 6000 Germany Netherlands 5000 United Kingdom 4000 3000 2000 1000 0 1980 1984 1988 1992 1996 2000 2004 THE COMMONWEALTH FUNDData: OECD Health Data 2009 (June 2009).
Quick summary: history of U.S. US “commissioning”• Anticipated move to “full-risk” contracting did not occur.• Most physician organizations created to engage in risk contracting failed – ~ 2000 IPAs created – ~ 200 IPAs successful (at the most)• High profile failures of large fund-holding IPAs.• There is now little or no risk contracting in most of the U.S.• In California and pockets elsewhere, risk contracting persists in modified forms.
Why did risk contracting fail, fail overall, in the U.S.?• policy failures• organizational failures i i l f il
Policy failures - failure to:• risk-adjust• balance incentives – physicians and patients perceived risk contracting to be h i i d i i d ik i b about reducing costs – not about improving quality or patient experience• provide timely, accurate, transparent information to id i l i f i the “consortia”• recognize how difficult it is to build competent g p physician organizations• reduce incentives for specialists and hospitals to churn high profit services
Organizational failures - failure to:• invest in: – physician leaders – skilled managers kill d – IT – adequate staff (e.g. nurse care managers) (e g• adequately analyze the level of risk• track IBNR (incurred but not reported) ( p )• motivate/coordinate their physicians• g gain specialist/hospital cooperation p p p
Flow of funds? NHS GP Consortium HospitalGPs Consultants
Thesis 1It will be extremely difficult to create high-performing GP g p g commissioning consortia. The g government should not expect that p large numbers of high performing g , consortia will be formed overnight, or even within 3-5 years.
Necessary capabilities for GP consortia• leadership• organized processes to improve care (not g p p ( just to commission it)• sophisticated information collecting and processing – and people with the time and skills do do something with the information thi ith th i f ti – sophisticated financial capabilities, including both accounting and modeling g g
Necessary capabilities for GP consortia (more)• ability to create and manage relationships with many external entities• ability to pay claims??• a culture of cooperation and quality improvement – not only within the GP consortium, but with outside entities as well
Even with perfectly designed incentives, incentives the risk of failure is high• inadequate supply of GP leaders• GP consortia likely to underinvest in management• takes time to develop culture• may b very diffi lt t gain cooperation be difficult to i ti from consultants and hospitals• GP consortia will be more like IPAs than multispecialty medical groups or integrated systems
Thesis 2It will be necessary to create incentives for cooperation at multiple levels within the health care delivery system. - GP consortium i - GP practice/individual GP - consultant/specialist physicians - hospitals - and others
To gain support from rank and file GPs:• GPs must believe that changes will significantly improve some or all of g y p the following: – quality of care for their patients – quality of their workday – respect from their peers – physician income
Ways to influence physicians within an organization• develop an organizational culture• include only physicians compatible with the desired culture• educate/persuade/develop guidelines• show physicians in the organization data on: – the organization’s performance – the performance of practices/individual MDs within the organization• choose payment methods to reward desired behavior• require prior approval for certain referrals/procedures (for some physicians?)
Thesis 3Incentives should not focus primarily on generating savings/reducing the g g g g cost of care. They should be balanced among quality, p gq y, patient experience, and cost-control.
Thesis 4Incentives should be neither too strong nor too weak.
Should have:• risk-adjustment• moderate upside and smaller downside risk, p , gradually increasing over time – threat to close a consortium not likely to be enough when consortium membership i h h i b hi is required for GPs• risk modifiers - e g stop-loss insurance for e.g. stop loss outlier patients
Thesis 5It will be critically important to find ways to foster collaboration among y g GPs, specialist physicians, and p hospitals.
What’s in a name?• GP Commissioning is likely not an ideal name• Why not call it “GP Dominance? GP Dominance?”
Other barriers• basically impossible to form a multispecialty group p yg p• incentives not aligned: Payment by Results
We ll We’ll know the system is working when:• GPs and consultants frequently discuss p patients on the telephone p• Phone conversations often replace visits to consultants
Thesis 6Don’t skimp on funds for consortium g management!
Management costs• critical to have: – skilled clinical and lay leaders – infrastructure support (people and data) – data in itself is useless• th must be leaders whose only or main job is to there tb l d h l i j bi t help the GP group improve the care provided• left to themselves, GPs will under-invest in , management – (at least until they see a reliable ROI)
Thesis 7• GP commissioning is likely to result in the transfer of a large amount of NHS g funds to the private sector – (for better or for worse)
UK advantages (1)• “single payer” gives the opportunity to: – collect comprehensive data – risk adjust – balance incentives (cost, quality, patient experience) i ) – invest in the development of physician leaders – invest in management costs in GP consortia
UK advantages (2)• public acceptance of GPs• savings perceived as going to NHS, not to corporate executives and shareholders
UK advantages in developing physician leaders• NHS can pay GP leaders• NHS can provide training for GP leaders• NHS can provide an attractive career track for GP leaders
Suggestions (1)1. anticipate failures; don’t overinflate expectations for rapid, widespread change2. b d f gradual performance budget for d l f improvement by GP consortia - provide upside and downside incentives - with incentives increasing over time3. balance incentives: cost, q , quality, p y, patient experience
Suggestions (2)5. make it possible for GP consortia to have financial leverage vis-à-vis member physicians/practices6. seek ways to create substantial financial incentives for hospitals and consultants to cooperate with GP consortia7. seek ways to make it attractive for consultants to join with GPs in creating multispecialty medical groups
Suggestions (3)8. provide substantial ring-fenced management funds to GP consortia for 4 years, years then blend into their budget (and ? reduce the funds)9. consider a name other than “GPGP commissioning”10. invest in developing GP and consultant leadership