Martin Roland: Supply Induced Demand

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Professor Martin Roland of Cambridge Centre for Health Services Research (CHSR), University of Cambridge, talks about supply-induced demand in health care. He explains that improving care usually costs more and that policy changes often have unintended consequences.

Professor Roland spoke at the event: "Supply induced demand as it relates to general practice" (http://www.nuffieldtrust.org.uk/talks/supply-induced-demand-it-relates-general-practice) in March 2014.

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  • Aberdeen, York, Manchester (compared to Scotland)
  • Martin Roland: Supply Induced Demand

    1. 1. Supply induced demand (2) Martin Roland University of Cambridge
    2. 2. If you pay providers to do things, they’ll do them GP minor surgery following the 1990 GP contract: - increased by 41% - no decrease in hospital referrals for minor surgery Lowy et al BMJ 1993; 307: 413-417.
    3. 3. If you pay providers to do things, they’ll do them Impact of payment by results - annual increase in acute and elective admissions of between 1.3% and 2.5% Farrar et al. BMJ 2009; 339: b3047
    4. 4. Things don’t always work out the way you want Change in emergency admissions p value Evercare1 +16% 0.14 Integrated care pilots 2 +9% 0.02 Impact of intensive case management on emergency admissions for high risk patients 1 Gravelle et al. BMJ 2007; 334: 31 2 Roland et al. Int J Integrated Care 2012; 24 July
    5. 5. It’s much easier to improve quality than to reduce cost % of studies with a positive outcome for health % of studies with positive outcome for patient experience % of studies which showed reduction in cost 55% 45% 18% Powell Davies et al Med J Aust 2008; 188 (8): S65-S68 Systematic review of interventions to improve coordination in healthcare
    6. 6. Investing £1 in care homes results in £0.35 reduction in hospital expenditure Forder J. Health Economics 2009; 18: 1322
    7. 7. Things to remember • If you pay people to do things they’ll do them • There’s always potential for unintended consequences, including supply induced demand • Improving care usually costs more • The easiest way to reduce cost is to do less • If you want to reduce cost without reducing quality, you need to be smart
    8. 8. “To avoid disappointment, employ people in pairs”

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