Moving the debate from cost to value by Jason Harries

The NHS is forecast to end the current financial year with a deficit of around £2.5bn which the political parties vying for election success have already started to address in their election manifestos.

However, the continued focus on cost rather than value is missing the point and is simply a sterile fiscal exercise. What we actually need is a transparent dialogue around the value of healthcare which will help to underpin the rationale for future investment.

This means being able to compare cost and quality for any given service and associated cohort of patients so we can assess the value of this investment. This ambition was reflected in Simon Stevens’ Five Year Forward View with the migration to outcome based commissioning and was one of the key drivers behind the Health and Social Care Act.

Recent analysis by CHKS using national HES and reference cost data and our own prototype value triangle tool found the relationship between costs and quality is complex.

The CHKS prototype illustrates the value perspective as it contains both financial and a wide range of quality of care information.  Comparisons are based on ten views of hospital costs, income, efficiency and quality. This means we can begin to explore the relationship between financial cost and outcome variables. It also means we can start to analyse within individual trusts, by HRG chapter.

For example, we have already found that within orthopaedic care many units providing elective work achieved higher tariff value for complications (due to HRG loading) when in fact many of these patients incurred a combination of potentially avoidable poor quality outcomes (such as post-op infections, misadventures and deep vein thrombosis).

In a further example based on non-elective patients admitted with endocrine, diabetic and metabolic disorders (these are often patients with long-term conditions) we chose to include ulcers and inappropriate discharges (i.e. those subsequently readmitted within 28 days) as the quality measure. We found that despite a three-fold variation (from under £1,000 to over £3,000) in spending per case, there was no discernible difference in the rate of ulcers and/or inappropriate discharges.

These were not isolated cases but examples of a more general finding from use of our value triangle analysis tool.  Where significant correlations (between quality and cost) do exist, they are in a linear direction suggesting that worsening quality costs more money, rather than the common fear that poor quality is the result of low spending.
Although these examples are interesting the real value is that we now have proof the data and metrics exist across the NHS to support a value debate which in turn requires swift action so we can progress the discussion.

By Jason Harries, Managing Director, Capita Health Insight
Our analysis contains HES data which is re-used with the permission of The Health & Social Care Information Centre. All rights reserved.The NHS is forecast to end the current financial year with a deficit of around £2.5bn which the political parties vying for election success have already started to address in their election manifestos.

However, the continued focus on cost rather than value is missing the point and is simply a sterile fiscal exercise. What we actually need is a transparent dialogue around the value of healthcare which will help to underpin the rationale for future investment.

This means being able to compare cost and quality for any given service and associated cohort of patients so we can assess the value of this investment. This ambition was reflected in Simon Stevens’ Five Year Forward View with the migration to outcome based commissioning and was one of the key drivers behind the Health and Social Care Act.

Recent analysis by CHKS using national HES and reference cost data and our own prototype value triangle tool found the relationship between costs and quality is complex.

The CHKS prototype illustrates the value perspective as it contains both financial and a wide range of quality of care information.  Comparisons are based on ten views of hospital costs, income, efficiency and quality. This means we can begin to explore the relationship between financial cost and outcome variables. It also means we can start to analyse within individual trusts, by HRG chapter.

For example, we have already found that within orthopaedic care many units providing elective work achieved higher tariff value for complications (due to HRG loading) when in fact many of these patients incurred a combination of potentially avoidable poor quality outcomes (such as post-op infections, misadventures and deep vein thrombosis).

In a further example based on non-elective patients admitted with endocrine, diabetic and metabolic disorders (these are often patients with long-term conditions) we chose to include ulcers and inappropriate discharges (i.e. those subsequently readmitted within 28 days) as the quality measure. We found that despite a three-fold variation (from under £1,000 to over £3,000) in spending per case, there was no discernible difference in the rate of ulcers and/or inappropriate discharges.

These were not isolated cases but examples of a more general finding from use of our value triangle analysis tool.  Where significant correlations (between quality and cost) do exist, they are in a linear direction suggesting that worsening quality costs more money, rather than the common fear that poor quality is the result of low spending.
Although these examples are interesting the real value is that we now have proof the data and metrics exist across the NHS to support a value debate which in turn requires swift action so we can progress the discussion.

By Jason Harries, Managing Director, Capita Health Insight
Our analysis contains HES data which is re-used with the permission of The Health & Social Care Information Centre. All rights reserved.The NHS is forecast to end the current financial year with a deficit of around £2.5bn which the political parties vying for election success have already started to address in their election manifestos.