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Carolyn Hughs Tuohy: A tale of three healthcare reforms

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Carolyn Hughs Tuohy: A tale of three healthcare reforms

  1. 1. A Tale of Three Healthcare Reforms – and a Short Story: the scale and pace of change in four advanced nations …….and implications for England in the future Carolyn Hughes Tuohy Presentation for the London School of Hygiene and Tropical Medicine and the Nuffield Trust September 27, 2010 1
  2. 2. System Change: Four Nations
  3. 3. National Pre-Reform Ideal Type Post-Reform HybridExample (1980s) (2010)UK Beveridge:(Big-bang) Rule-based state hierarchy Professional influenceNetherlands Bismarck(Blueprint) Sickness funds Private insurance Coordination through intermediary associationsUS Residual(Mosaic) Employer-based private insurance as norm Public programs for elderly and poorCanada Single-payer (SP) + mixed(Incremental) market (MM) SP for physician & hospital services MM for all other services
  4. 4. National Pre-Reform Ideal Type Post-Reform HybridExample (1980s) (2010)UK Beveridge: Internal market (England)(Big-bang) Rule-based state hierarchy Purchaser-provider split Professional influence Hierarchical control through monitoring, evaluationNetherlands Bismarck(Blueprint) Sickness funds Private insurance Coordination through intermediary associationsUS Residual(Mosaic) Employer-based private insurance as norm Public programs for elderly and poorCanada Single-payer (SP) + mixed(Incremental) market (MM) SP for physician & hospital services MM for all other services
  5. 5. National Pre-Reform Ideal Type Post-Reform HybridExample (1980s) (2010)UK Beveridge: Internal market(Big-bang) Rule-based state hierarchy Purchaser-provider split Professional influence Hierarchical control through monitoring, evaluationNetherlands Bismarck Managed competition(Blueprint) Sickness funds Universal mandatory insurance Private insurance Comprehensive regulation of all insurers Coordination through intermediary associationsUS Residual(Mosaic) Employer-based private insurance as norm Public programs for elderly and poorCanada Single-payer (SP) + mixed(Incremental) market (MM) SP for physician & hospital services MM for all other services
  6. 6. National Pre-Reform Ideal Type Post-Reform HybridExample (1980s) (2010)UK Beveridge: Internal market(Big-bang) Rule-based state hierarchy Purchaser-provider split Professional influence Hierarchical control through monitoring, evaluationNetherlands Bismarck Managed competition(Blueprint) Sickness funds Universal mandatory insurance Private insurance Comprehensive regulation of all insurers Coordination through intermediary associationsUS Residual Dual(Mosaic) Employer-based private Universal mandatory insurance insurance as norm Employer-based private insurance as norm Public programs for elderly Managed competition in individual and small-group and poor marketCanada Single-payer (SP) + mixed(Incremental) market (MM) SP for physician & hospital services MM for all other services
  7. 7. National Pre-Reform Ideal Type Post-Reform HybridExample (1980s) (2010)UK Beveridge: Internal market(Big-bang) Rule-based state hierarchy Purchaser-provider split Professional influence Hierarchical control through monitoring, evaluationNetherlands Bismarck Managed competition(Blueprint) Sickness funds Universal mandatory insurance Private insurance Comprehensive regulation of all insurers Coordination through intermediary associationsUS Residual Dual(Mosaic) Employer-based private Universal mandatory insurance insurance as norm Employer-based private insurance as norm Public programs for elderly Managed competition in individual and small-group and poor marketCanada Single-payer (SP) + mixed Single-payer (SP) + mixed market (MM)(Incremental) market (MM) Increased cross-provincial variation SP for physician & hospital SP for physician & hospital services – some changes services in organization & remuneration MM for all other services MM for all other services: some changes in eligibility esp. re drugs
  8. 8. Understanding Policy Change: Overview• Policy cycling is the norm in advanced health care states• Periodically, but rarely, external forces open a window of opportunity to establish a new framework• In those windows, different strategies of change are possible - large vs. small scale; rapid vs slow pace – depending on political and institutional conditions• Britain, the Netherlands and the US provide examples of different strategic decisions and their aftermath• Canada provides the “short story” – the default case of continuous policy cycling• Particular attention to be paid to the English case• Final speculations about Liberating the NHS
  9. 9. Policy Cycling – a Way of Life in Health Care
  10. 10. • A fundamental tension inherent to health care: – how to control the agency relationship between providers and recipients of care. “It all comes down to what happens in the operating room [office, surgery]” – Essential to achieving all other goals: access, cost, quality• Policy frameworks vary – in the weights assigned to hierarchy, market and peer control mechanisms of control – In the balance of power across the state, private finance and providers• These frameworks establish powerful and self-reinforcing logics – lines of accountability: to whom do decision-makers feel responsible, and for what – senior civil servants and politicians? managers of large pools of private capital? medical professionals? – flows of information: filtered up hierarchical channels? generated and disseminated through signals from multiple independent actors? telegraphed through professional networks?
  11. 11. • All of the mechanisms for controlling the agency relationship are flawed: – Hierarchies may distort information through filtering; fail or delay in response to local conditions – Markets may lead to inequities, depending on initial endowments – Both markets and hierarchies require a sophisticated and legitimate purchasing function – Peer control may reproduce the conflicts of interest that give rise to the need to control the agency relationship in the first place• Policy-makers therefore cycle through the repertoire established by the prevailing framework – Cycling reflects political, institutional and fiscal contexts: shifts in ideological complexion of government; ad hoc coalitions; economic climate – Centralization/decentralization; regulation/competition; collegiality vs autonomy – Budgetary constraint/largesse
  12. 12. Policy Cycling In Britain 1970s-1980s• Context: health-care agenda defined not by the growing cost pressures of health as in other nations, but by mounting criticisms of the effects of cost constraint.• Policy cycles involved re-organization of the NHS hierarchy, and altering the balance of influence between managers and professionals.• Two cycles of organizational reforms in regional hierarchy: 1974 and 1982 – centralized then decentralized the regional hierarchy, altered the boundaries and functions of regional authorities – These changes reflected the respective ideological tilts of the governments that instituted them. – Labour (1970s) more favourable to central state action, consolidated and rationalized the formerly tripartite structure of the NHS – Conservatives (1980s), more favourable to local discretion, abolished one regional layer and re-organized boundaries to allow for more localized entities.
  13. 13. • Another pattern of cycling re organization at the centre: the degree of autonomy of NHS headquarters within the Department of Health. – Conservatives (1980s and 1990s): NHS given progressively greater institutional autonomy, epitomized by physical move to Leeds (Jarman and Greer 2010). – Labour after 1997: new cycle: re-integration of functions, epitomized by combining the roles of the NHS Chief Executive and departmental Permanent Secretary – 2006: roles were split apart again and a debate about greater NHS independence was rekindled
  14. 14. Policy cycling in the Netherlands, 1970s-1980s• Context: ongoing tension between solidarity and subsidiarity in Dutch political culture; fiscal pressures of health cost increases• Dutch healthcare policy has sought to balance strong roles for intermediary associations, notably insurers, vs. the state as regulator and subsidizer of the system.• In 1970s -1980s, solidarity was threatened as private insurers abandoned voluntary community-rating under pressure of cost increases• Produced cycles of price and supply constraint; increased/decreased state weight within corporatist structures; stop-gap measures e.g. high-risk pool
  15. 15. Policy cycling in the US, 1970s-2000s• Context: “veto-ridden” institutional structure and highly adversarial politics; persistent strain of distrust of government, especially federal• 1970s-1980s: Cycles of regulation/deregulation: HMOs, PSROs/PROs, HSAs• 1980s-1990s: Cycles of tightening and relaxing constraints on payments to providers under Medicare• 1990s-2000s: incremental increases/decreases in eligibility for coverage: welfare reform; SCHIP; Medicare prescription drug coverage• State-level experimentation and variety, largely in insurance regulation and Medicaid• Reactive to developments in private market and practicalities of ad hoc coalition-building, largely within budgetary process
  16. 16. Policy cycling in Canada, 1970s-2000s• Context: federal system with strong provinces; single-payer system for physician and hospital services; tight accommodation between medical profession and state at provincial level• 1970s-1990s: progressive reduction of federal transfers to provinces – Provincial cycles of horizontal reorganization in hospital sector: numerous changes in numbers/boundaries of regional bodies; election/appointment of directors – Real reduction (~8%) in per capita public spending on health 1992-1996 – Budget caps and supply constraints• 2000s: progressive increases in federal transfers to provinces – Continuing reorganization in hospital sector – Increases in physician pay, both FFS pot and targeted at new forms of organization and remuneration
  17. 17. Windows of Opportunity for Major Change: Introducing New Principles and Logics
  18. 18. • Embedded investments in existing system (acquisition of resources, establishment of information channels) make it extremely unlikely that change will be generated from within the health care system• Change requires intersection of two factors in the broader political system – Mobilizing of authority • Depends on political institutions: more difficult (but not impossible) as veto points increase – e.g. congressional systems, federalism – Political will to address health care as central to broader agenda • Depends on political and partisan climate• Strategic options: – Scale of change: extent of change in institutional mix or structural balance or both – Pace of change: simultaneous vs gradual• Major change means large scale or rapid pace or both• Three cases of major change (GBR, NLD, USA) and one default case (CAN)
  19. 19. Strategies of Change – Four Domains BLUEPRINT BIG-BANG•consensus on an overall framework within •large-scale change in a singlewhich each element is to be enacted over comprehensive sweep. Largetime •new institutions supplant previous•new institutions supplant previous institutionsinstitutions •typical where actors have consolidated•typical where at least some parties can authority but face competitive pressure – e.g. SCALEreasonably expect to be in a position of Westminster system with competitive partiesinfluence over time – e.g. systems withestablished traditions of coalition government Gradual PACE Simultaneous •multiple simultaneous adjustments to existing•gradual piecemeal adjustments to existing institutional arrangementsinstitutional arrangements •new institutions may co-exist with established; may•new institutions may co-exist with established or may not introduce new organizing principles•default category: where neither condition for •typical where one party is well-enough positioned tomajor change is met – i.e. “ordinary” times in all build a minimum winning coalition within a relativelysystems and typical in veto-ridden systems brief window of time - e.g. supermajorities in veto- Small ridden systems INCREMENTAL MOSAIC
  20. 20. Large BLUEPRINT BIG-BANG UK 1989-91 SCALE PACE SimultaneousGradual UK 1991-2010 INCREMENTAL MOSAIC Small
  21. 21. Large BLUEPRINT BIG-BANG UK 1989-91 Netherlands 1987-2006 SCALE PACE SimultaneousGradual UK 1991-2010 INCREMENTAL MOSAIC Small
  22. 22. Large BLUEPRINT BIG-BANG UK 1989-91 Netherlands 1987-2006 SCALE US 1993-94 (failed) PACE SimultaneousGradual UK 1991-2010 US 2009-10 US 1994-2008 INCREMENTAL MOSAIC Small
  23. 23. Large BLUEPRINT BIG-BANG UK 1989-91 Netherlands 1987-2006 SCALE US 1993-94 (failed) PACE SimultaneousGradual UK 1991-2010 US 2009-10 US 1994-2004 Canada 1987-2010 INCREMENTAL MOSAIC Small
  24. 24. Political Conditions: Four DomainsStrategy Type National Example Political ConditionsBig Bang UK (1990) US (1993-94)Blueprint Netherlands (1987- 2006)Mosaic US (2009-10)Incremental Canada (1987-2010)
  25. 25. Political Conditions: Four DomainsStrategy Type National Example Political ConditionsBig Bang UK (1990) Unitary parliamentary government structure Majority government in third successive mandate US (1993-94)Blueprint Netherlands (1987- 2006)Mosaic US (2009-10)Incremental Canada (1987-2010)
  26. 26. Political Conditions: Four DomainsStrategy Type National Example Political ConditionsBig Bang UK (1990) Unitary parliamentary government structure Majority government in third successive mandate US (1993-94) Bicameral congressional government structure Presidency and both Houses of Congress controlled by same party by narrow marginsBlueprint Netherlands (1987- 2006)Mosaic US (2009-10)Incremental Canada (1987-2010)
  27. 27. Political Conditions: Four DomainsStrategy Type National Example Political ConditionsBig Bang UK (1990) Unitary parliamentary government structure Majority government in third successive mandate US (1993-94) Bicameral congressional government structure Presidency and both Houses of Congress controlled by same party by narrow marginsBlueprint Netherlands (1987- Unitary parliamentary government structure 2006) Coalition governmentMosaic US (2009-10)Incremental Canada (1987-2010)
  28. 28. Political Conditions: Four DomainsStrategy Type National Example Political ConditionsBig Bang UK (1990) Unitary parliamentary government structure Majority government in third successive mandate US (1993-94) Bicameral congressional government structure Presidency and both Houses of Congress controlled by same party by narrow marginsBlueprint Netherlands (1987- Unitary parliamentary government structure 2006) Coalition governmentMosaic US (2009-10) Bicameral congressional government structure Presidency and both Houses of Congress controlled by same party by clear margins – supermajority in SenateIncremental Canada (1987-2010)
  29. 29. Political Conditions: Four DomainsStrategy Type National Example Political ConditionsBig Bang UK (1990) Unitary parliamentary government structure Majority government in third successive mandate US (1993-94) Bicameral congressional government structure Presidency and both Houses of Congress controlled by same party by narrow marginsBlueprint Netherlands (1987- Unitary parliamentary government structure 2006) Coalition governmentMosaic US (2009-10) Bicameral congressional government structure Presidency and both Houses of Congress controlled by same party by clear margins – supermajority in SenateIncremental Canada (1987-2010) Federal parliamentary government structure – poor climate of federal-provincial relations through 1990s Majority governments at national and provincial levels until 2006; minority government at federal level and briefly in Quebec thereafter
  30. 30. Strategic Vulnerabilities BLUEPRINT BIG-BANG Large•Each step in enactment process needs to •Conditions for successful use are especiallybe as balanced as overall framework rare SCALE Gradual PACE Simultaneous•Stickiness in response to changing •Complexity makes gaining popular support andcircumstances overcoming implementation vetoes particularly difficult Small INCREMENTAL MOSAIC
  31. 31. Implementation: the Role of Strategic AlliesNational Post-Reform Hybrid Entrepreneurial Allies inExample (2010) ImplementationUK Internal market(Big-bang) Purchaser-provider split Hierarchical control through monitoring, evaluationNetherlands Managed competition(Blueprint) Universal mandatory insurance Comprehensive regulation of all insurersUS Dual(Mosaic) Universal mandatory insurance Employer-based private insurance as norm Managed competition in individual and small-group marketCanada Single-payer (SP) + mixed market (MM)(Incremental) Increased cross-provincial variation SP for physician & hospital services – some changes in organization & remuneration MM for all other services: some changes in eligibility esp. re drugs
  32. 32. Implementation: the Role of Strategic AlliesNational Post-Reform Hybrid Entrepreneurial Allies inExample (2010) ImplementationUK Internal market(Big-bang) GP fundholders; executives Purchaser-provider split of hospital trusts; purchasing Hierarchical control through monitoring, evaluation expertsNetherlands Managed competition(Blueprint) Universal mandatory insurance Comprehensive regulation of all insurersUS Dual(Mosaic) Universal mandatory insurance Employer-based private insurance as norm Managed competition in individual and small-group marketCanada Single-payer (SP) + mixed market (MM)(Incremental) Increased cross-provincial variation SP for physician & hospital services – some changes in organization & remuneration MM for all other services: some changes in eligibility esp. re drugs
  33. 33. Implementation: the Role of Strategic AlliesNational Post-Reform Hybrid Entrepreneurial Allies inExample (2010) ImplementationUK Internal market(Big-bang) GP fundholders; executives Purchaser-provider split of hospital trusts; purchasing Hierarchical control through monitoring, evaluation expertsNetherlands Managed competition(Blueprint) Executives in sickness funds Universal mandatory insurance and provider organizations Comprehensive regulation of all insurersUS Dual(Mosaic) Universal mandatory insurance Employer-based private insurance as norm Managed competition in individual and small-group marketCanada Single-payer (SP) + mixed market (MM)(Incremental) Increased cross-provincial variation SP for physician & hospital services – some changes in organization & remuneration MM for all other services: some changes in eligibility esp. re drugs
  34. 34. Implementation: the Role of Strategic AlliesNational Post-Reform Hybrid Entrepreneurial Allies inExample (2010) ImplementationUK Internal market(Big-bang) GP fundholders; executives Purchaser-provider split of hospital trusts; purchasing Hierarchical control through monitoring, evaluation expertsNetherlands Managed competition(Blueprint) Executives in sickness funds Universal mandatory insurance and provider organizations Comprehensive regulation of all insurersUS Dual Management of exchanges(Mosaic) ??? Universal mandatory insurance Participants in pilot projects Employer-based private insurance as norm ???? Managed competition in individual and small-group Meso-level and arm’s-length market organizations ????Canada Single-payer (SP) + mixed market (MM)(Incremental) Increased cross-provincial variation SP for physician & hospital services – some changes in organization & remuneration MM for all other services: some changes in eligibility esp. re drugs
  35. 35. Implementation: the Role of Strategic AlliesNational Post-Reform Hybrid Entrepreneurial Allies inExample (2010) ImplementationUK Internal market(Big-bang) GP fundholders; executives Purchaser-provider split of hospital trusts; purchasing Hierarchical control through monitoring, evaluation expertsNetherlands Managed competition(Blueprint) Executives in sickness funds Universal mandatory insurance and provider organizations Comprehensive regulation of all insurersUS Dual Management of exchanges(Mosaic) ??? Universal mandatory insurance Participants in pilot projects Employer-based private insurance as norm ???? Managed competition in individual and small-group Meso-level organizations market ????Canada Single-payer (SP) + mixed market (MM)(Incremental) •Strategic alliances Increased cross-provincial variation constrained by bilateral SP for physician & hospital services – some changes monopoly, consolidated under in organization & remuneration retrenchment MM for all other services: some changes in eligibility esp. re drugs
  36. 36. Health Policy in England: the story of the 2000s
  37. 37. The Legacy of the Internal Market• Internal market reforms were rare example of a major shift in mix of control mechanisms – from hierarchy and professional networks to contractual arrangements among independent entities – Implied significant change in types and flows of information• Little change in balance of power across state, private finance and providers, but shifts within these categories• Reforms had a lasting impact on the system, but not before being absorbed and mediated by the logic of the existing system.• Relationships were re-styled as “contractual,” rather than “command-and- control,” but established networks persisted, due to: – Information costs – Local health care political economies
  38. 38. The Legacy of the Internal Market (cont’d)• Professional networks were reshaped with: – Emergence of GP fund-holding – Exercise of increased decision-making latitude by some hospital trusts• i.e. certain key strategic actors saw the reforms as to their advantage and began to drive them forward in particular ways• Neither of these developments involved much “competition”
  39. 39. Blair Cycle 1, 1997-2000: “Third Way”• Ambiguity and increasing central direction• Elements of future directions signaled in December 1997 White Paper: – PCT commissioning: cash-limited budgets, including prescribing – National standards, not variation driven by competition in local markets: NICE, CHI – Clinical governance – Patient voice through surveys• Spending increased by ~4% annually, with focus on reducing obvious failures to deliver: – Waiting times – Mortality from cancer, heart & stroke
  40. 40. Blair Cycle 2, 2000-2002: Spending, centralization, targets• Increased expenditure: Blair commitment to European Union average, 2001 Budget, Wanless reports• Star-rating system under CHI• Re-design of services under Modernization Agency• Patient voice through forums in each Trust• i.e. recovery of hierarchy, but (in theory) not central prescription of rules of behaviour – Rather, focus on ends, leaving means to discretion of local agents – Trusts “compete” only with themselves – reward/punishment is related to performance against targets, not performance against competitors – In practice, much detailed central guidance
  41. 41. Blair-Brown Cycle 3, 2002-2010: Return to markets and competition• Delivering the NHS Plan: – Devolution within a strategic framework – Strategic Health Authorities replace HAs and NHS regional offices – Foundation Trusts (FTs) – NHS providers with greater independence under Independent regulator: Monitor – Independent Sector Treatment Centres (ISTCs) – Primary Care Trusts – strategic purchasers • Later: practice-based commissioning• The “Consumerist Wish:” patient choice through payment-by-results: – Patient is offered choice at point of referral – Money follows patient – fixed tariff: therefore non-price competition on quality and access (vs internal market)• Self-report and publicity vs targets – “Annual Health Check” replaces star-rating in 2005/2006
  42. 42. Ongoing centralization/decentralization tension• Proliferation and reorganization of central bodies, e.g: – CHI Healthcare Commission Care Quality Commission – Modernization Agency NHS Institute for Innovation and Improvement – NICE, Monitor – Various patient involvement mechanisms• Reorganization of regional structures, e.g: – 2006: PCTs reduced from 303 152
  43. 43. Ambivalence re Clinician Involvement• Abolition of “fund-holding” • PCGs PCTs PCTs+PBC: continuing thread of GP centrality• NICE clinical guidelines • Increased remuneration• Reorganization of graduate • Sir Ara Darzi report: clinician-led, education clinician endorsed (but BMA skeptical)• Increased lay control of GMC
  44. 44. “Liberating the NHS”
  45. 45. How to read?• “bold new vision?” “One of the biggest shake-ups in [NHS] history?”• Or Cycle 4 of internal market framework?
  46. 46. • Historic election opened window of opportunity: – unique (in peacetime) period of coalition government in the UK. – aftermath of a synchronous global recession opened up agenda• Neither a big-bang nor a blueprint strategy was likely: – coalition governments do not lend themselves to big-bang strategies, require multiple compromises – blueprint approach was not feasible in a precarious coalition• But a mosaic strategy of multiple novel adjustments and additions might have been expected – need to find support not only from both parties but across the left, right and centre components of each party – need for rapid action: one-term commitment• In fact, however, the proposed reforms are best understood as a fourth cycle of the internal market reforms, with a renewed emphasis on – clinical discretion and provider networks in the field – increased NHS independence at the centre.
  47. 47. Liberating the NHS as Cycle 4• fundamental logic of the purchaser-provider split was entirely consistent with the broad agenda of “deconcentration” around which the Conservatives and Liberal Democrats, could coalesce. – “state-funded but self-run ‘foundation’ hospitals and ‘academy’ schools appeal to an ancient Tory reverence for the local, the small and the independent” (The Economist 2010:20). – The decentralization motif also appealed to the Liberal Democrat leadership, representing the “centre-right, small-state liberalism [that] for much of the history of the Liberal Party, and then the Liberal Democrats, … has been able to coexist happily with centre-left social liberalism” (Grayson in New Statesman 2010).• All that was needed was to – redress the tilt toward the centre through monitoring and performance measurement under Labour (even in its most decentralist phases) – accelerate the emphasis on “choice” of the last cycle of Labour policy – resurrect and expand the role of GPs as key purchasers.
  48. 48. How will these changes now be absorbed by the logic of the established framework?• This will depend very much on the entrepreneurial allies of reform that emerge – Among GPs? – Among “experts” in purchasing/commissioning? – Among managements of Foundation Trusts? – Within central agencies?

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