Feature / US study tour: The US challenge

The challenges in the US around healthcare reform are similar to those facing the NHS, writes Tony Whitfield. This is no surprise, given  we face the same drivers – post-war baby boom demographic timebomb, advances in science and a widening affordability gap. 

Through his healthcare reform, President Obama is attempting to create a system to deliver affordable healthcare for all – drawing both passionate support and opposition.

What is clear is that there is poor correlation in the US between government expenditure on health and patient outcomes. It appeared that where you lived mattered more than how much was spent. The reforms look to address this by creating a reimbursement system that is linked to outcomes rather than inputs. 

The US HFMA is engaging with its membership to create a consensus on how the political ambition can be realised in practice. There were a range of views at an HFMA congress in Washington DC. Some believe current arrangements do not adequately reimburse for the required quality standards. Others claim cost and quality are so entwined that the pursuit of quality should reduce costs. 

The US HFMA is trying to describe a value proposition for healthcare linked to existing work by leading academics such as Michael Porter, Don Berwick and Harvey Makadon.

The challenges in the US include:

• Misaligned financial incentives, with payments made on a cost-per-case basis rather than a population or outcome-based methodology. Patients share little of the financial burden.
  
• Institutions tend to operate largely in silos with an emphasis on many financial metrics that are often not linked to clinical care pathways or quality outcomes.
  
• Patients lack knowledge on where to seek care, often not understanding clinical outcomes, but vocal on service processes.
  
• There is a need for a fully integrated electronic patient record to support the optimum management of individual patients, but also using the data to make decisions around costs and quality on a population basis.

The leadership challenge for finance directors is to drive change that increases the value delivered for the payer.  Increasingly, the chief financial officer will be leading a clinical change by partnering with doctors. 

The Obama regime has made significant amounts of funding available to implement IT systems. The investment aims to ensure electronic patient records can enhance the reliability of care and offer clinicians a ‘guiding hand’ in management of individual patients – ensuring patients get the right treatment in the right order at the right time.

The investment also provides a huge efficiency opportunity. Existing systems have shown they can take out as much as 50% of marginal cost by avoiding duplication, and errors of omission and commission (not doing the right thing or doing the right thing wrongly). 

But the systems also enable payers to see they are only paying for healthcare delivered against agreed standards, and not paying for sub-optimal treatment. The transparency enables commissioners and providers to engage in a fact-based debate on delivering high-quality care at a fair price.

We have had similar goals in the NHS. What is different in the US is that standards are the domain of payers, solutions the responsibility of the industry. For all the four institutions we visited, an EPR was as essential as having piped oxygen or electricity. I am convinced the NHS finance function needs to spend serious time understanding how an EPR could provide the platform for improving quality and productivity.

• Tony Whitfield is deputy chief executive and executive director of finance at Salford Royal NHS FT