Comment / American dream?

Bill Shields looks for lessons from Uncle Sam on how to put the brakes on rising international healthcare costs

Last month I attended the US HFMA ANI (annual national institute). This is the US equivalent of our annual conference; although our American cousins had the good sense to hold their event in summer on the west coast of the States, Seattle, this year and not in London in the winter.

The focus of the conference was healthcare reform – not surprising for a country that spends almost 16% of its gross domestic product on healthcare.  Current projections indicate that, if unchecked, expenditure will increase to 20% in the next five years. President Obama has vowed to tackle one key aspect of the system – to extend coverage to the uninsured.

Latest projections are that this could cost as much as $1 trillion, so the federal government has produced a 10-year savings package for the Medicaid (for people on low income) and Medicare (for the elderly) programmes. These savings will be delivered through cuts in wastage and reductions in remuneration for certain diagnosis-related groups (DRGs – the US equivalent of UK healthcare resource groups).

With such high expenditure on healthcare, the US might not be the obvious place to look for lessons in cutting costs while raising quality. But during the inexorable rise of US healthcare spending in the past 20 years, there have been two plateaus: in 1985 when DRGs were adopted and in 1992 with managed care.

Might these provide opportunities for the NHS?  It is clear the introduction of the national tariff in the English NHS has coincided not with a reduction in expenditure but an increase. It is hard to determine the impact of the tariff given the NHS simultaneously embarked on a programme to expand capacity and activity to deliver major improvements in access. However, it will not be straightforward to halt this trend, let alone reverse it.

So what of managed care? In the US, this involves health maintenance organisations (HMOs) dictating choice in treatment or provider. The most successful, such as Kaiser Permanente, have used significant vertical integration to manage these choices.

Managed care may offer potential in England – perhaps through our own take on vertical integration. But we have a different context for patient choice and the need to protect GPs’ gatekeeper role and their ability to refer appropriately in the best interests of the patient.

Are there other lessons from the US? We hear a lot about the Institute for Healthcare Improvement and Kaiser and often assume these are representative of US healthcare. The reality is much more patchy. If the presentations and discussions I heard at ANI are typical, we may soon find that with the introduction of quality accounts and CQUIN (commissioning for quality and innovation) we have a more aligned set of incentives capable of driving quality while keeping efficiency and productivity as a prime focus.

The key challenge for the next period for both systems is the same. How can we deliver high quality care, improved patient safety and improved value for money when there is no prospect of extra growth?

The answers are already there. In the US, everyone is looking to upper-quartile performance levels, reduction in treatments already known not to enhance patient benefit, and movement of care from expensive secondary care facilities into more cost-effective community-based environments. We don’t need any more analysis or knowhow to make these changes successful. We only need to be courageous.