News / News analysis: Making an exit

Moving care out of hospitals and into the community is an idea that’s been discussed in the NHS for at least 25 years. Whether patients are in their own homes or residential or nursing homes, it is widely believed (and supported by some clinical evidence) that they will get better more quickly there than they would in hospital.

It is also said that without the hospital’s fixed costs, the care could be cheaper. Finance staff, think-tanks and researchers have always been a little sceptical about this, believing savings will only be released in the long term – a belief now backed by Monitor.

Last month, the regulator published guidance for providers and commissioners to help them make evidence-based decisions on the benefits of moving healthcare closer to home against the cost of four models for achieving this aim. It found that it was unlikely that even well-designed schemes would break even over five years.

However, the report – Moving healthcare closer to home – concluded that well designed and implemented schemes could help manage capacity and avoid costs in the long term.

Ahead of the spending review next month, is this a blow to the aspirations – both in terms of savings and care quality – set out in the Five-year forward view?

The 100-page plus report said that more evidence was needed about the impact on quality of care, despite generally good or equal outcomes for patients receiving care in community settings. There were few studies on impacts and these tended to be with small cohorts. There was a risk of publication bias – only those that are well run are written about. And if existing services are meeting patient needs, a new scheme may not deliver additional benefits.

The report had more evidence on financial impacts. It looked at four types of scheme – telehealth; advanced step up; rapid response and early supported discharge; and reablement (see box).

Monitor said that rather than achieving cost savings for local health economies, these schemes are more likely to reduce the rate of expenditure growth by substituting for, or delaying, the need for investment in new hospital facilities. These are known as savings against the counterfactual.

Some schemes offered greater flexibility as fixed costs made up a smaller proportion of overall costs than the equivalent care in an acute hospital. However, it noted schemes that aim to avoid admission can increase the number of patients treated, as some would not otherwise have received acute care. This would lead to extra costs, though these patients would benefit.

Closing capacity

Closing capacity was one of the biggest obstacles for providers and commissioners in the short term, the report said. To make closing capacity feasible, large numbers of beds need to be taken out consistently by the new care models. And as demand rises, providers and commissioners must be sure the new services can absorb new demand before they could begin to consider them a substitute for acute capacity.

It concluded: ‘Taking this into account, we find it is unlikely that even well-designed schemes will be able to break even in five years.’

Despite this, out-of-hospital schemes were important because they had potential to meet growing demand in the long-term and to avoid or postpone future capital costs.

‘Moving more patient care into community settings may be the right thing to do, but it is a difficult thing to do,’ said NHS Providers head of analysis Siva Anandaciva.

‘It requires strong leadership at management, clinical and regulatory levels if we are to make these changes in a cohesive, timely way with the appropriate funding and strategic planning in place. We need a payment system that reflects and rewards activity moving into the community where clinically appropriate, a regulatory regime that underpins integration of services, and greater guidance and support for those local health economies that are striving to provide more patient-centred care.’

One reading of the report is that there are two key messages – in redesigning services to provide more out of hospital, making savings is secondary to improving care; and these schemes can make savings, but don’t expect them to be realised soon.

‘You can attach a desire to make savings, but the key objective has to be improving quality. That is reflected well in the Monitor report,’ said Adam Roberts, senior economics fellow at the Health Foundation. The Monitor report was ‘valuable and timely’, backing up much of what the foundation and the King’s Fund said in their July report calling for a transformation fund.

The report has particular relevance for the vanguard sites, an initiative Mr Roberts supports.

‘There is a danger you will try to do too much, too quickly, then people get frustrated so you lose impetus. There may be the same danger if you ask for too much in financial savings in an unrealistic timescale. The evidence of the Monitor report is that if you measure the vanguards against the ability to make financial savings in the next five years, all will fail against that criteria.’

Health secretary Jeremy Hunt recently told the Commons Health Committee that 20% of the £22bn forward view savings would come from new models of care. ‘If you are expecting the vanguards to deliver savings of £4.5bn in five years, the evidence suggests this is going to be difficult to achieve,’ said Mr Roberts.

Mr Anandaciva added that it was important the new care models are not seen as a panacea for the financial problems the sector is facing. ‘Cost savings to the system as a whole may be higher through schemes that reduce acute capacity, but the reality is that care models in both acute and community settings will have to adapt to their proportion of patients with higher care needs, and parallel funding for dual running of services will often be needed during periods of transition,’ he said.

While looking to the long term, Mr Roberts believes the NHS must address the financial problems it faces. ‘We haven’t seen enough on how to solve the deficit, which could be £2bn by the end of the financial year. The £22bn in savings must also be made by 2021. Mr Hunt has said the Department of Health is developing a plan, but so far we have only seen the Carter savings of £5bn, so that leaves £17bn to find. If the vanguards are going to save 20%, we are still waiting for a plan for half of the £22bn.’

Support will be required, as well as a plan.

Mr Roberts says many trusts will not have the time or the skills needed to identify potential savings and develop and implement a plan to realise these savings. A transformation fund could support change, both in the short and long term if adopted as a recurrent element of NHS funding.

Social care priority

He does not believe the NHS should get first call on additional funding, should the chancellor be willing to increase care spending in the spending review. ‘What’s more pressing is the situation for social care, which has seen its funding fall and is likely to fall further. In the last five years the number of people receiving publicly funded social care has fallen by 25%. Before we start to talk about extra money for the NHS, any extra money must go first to social care.’

The Monitor report both clarifies and muddies the waters: out of hospital care can be better and save money in the long run, but it is unlikely to break even, never mind contribute to savings before the Five-year forward view period has ended. It also has questions over the clinical impact of moving care to the community.

The service will be hoping that the plan Mr Hunt is due to produce after the spending review will hold at least some of the answers.