With the Year of Care capitation tariff attracting global interest, capitation budgets are becoming a mainstream need for seamless care of patients with long term conditions. By Sir John Oldham and Jacquie White

John Oldham


John Oldham

The story starts with a visit to a car factory in 2010. There one of us saw a continuous process of producing a vehicle yet with multiple yet competing organisations contributing seamlessly to that process.

These organisations were tied in by a common quality specification for the whole process, and a contractual alignment of financial incentives (and disincentives).

At the time we were delivering the National Long Term Conditions (LTCs) Quality, Innovation, Productivity and Prevention programme around the three evidence based drivers of risk stratification of the target population, integrated teams at a local level delivering the care, and maximising the number of people who could contribute to co-management of their care. It was clear that if we wished to create more seamless care we had to tackle perverse incentives and barriers for joint working.

The need for change

Financial flows through the system based on episodic payments incentivised opposing behaviours, stimulated unhelpful key performance indicators, separate organisational contracts, and the fragmented style of service delivery, and consequently, inappropriate workforce planning. Much of this has to change if integrated care is to be a reality experienced by citizens.

As with any transformational change, the idea also challenged vested interests

Jacquie white

Jacquie White

Jacquie White

Our idea was to have a single capitated budget for the whole process, with a common quality specification that had to be owned and delivered by all organisations involved. The financial incentives would be aligned behind commissioner determined common outcomes.

The Year of Care capitated budget was our proposal.

Whilst the analysis of the issue was shared by national leads, the initial response to the solution from many quarters was that it was too complicated, couldn’t be done. As with any transformational change, the idea also challenged vested interests.

We respectfully disagreed that the task was impossible, and the LTC Year of Care Commissioning Programme was born. We gained enough senior support to fund eight pilot health and care economies across the country with a range of different geographic and socio economic characteristics deliberately selected to test the concept.

Eighty per cent of health and care economies responded to the invitation to be one of the eight.

Our initial plan was to develop the detailed mechanisms in the first year, hold a shadow year in the second, and be live in the third and fourth. The first year, starting in 2012, was an experimentation of methods to identify appropriate cohorts.

We gained enough senior support to fund eight pilot health and care economies across the country with a range of different geographic and socio economic characteristics deliberately selected to test the concept

At the time there was very little data available at a granular enough level so the sites collected their own to assess need, service utilisation, and cost and to help us build a collective picture at a population level, thereby starting to develop a population diagnostic for LTCs. The detailed analysis and regression equations soon proved that the number of LTCs is the most stable method of identifying and segmenting the population that would have most benefit from proactive preventative care.

Given the large number of interested health and care economies, we created 26 fast followers, buddied geographically with the eight pilots, and receiving the same information via webcasts, including webcasts specifically for CEOs/FDs.

In year two at the same time as the health and care reforms hit, the sites persevered and used this method to test its application on local populations and further understand the impact of multi-morbidity and current and future service models. This was supported using a simulation tool to model current and future delivery options.

The teams also undertook recovery, rehabilitation and reablement (RRR) clinical audits to identify following admission to an acute bed the point at which the individuals’ needs change and they could transition from acute care.

In year three momentum (and in reality 12 months) were lost due to the reforms, which included the transfer of the programme to another organisation who hadn’t been involved in the concept and development. Textbook how not to make change.

Sadly some of the teams were unable to continue due to extensive changes in their own organisations.

The remaining teams focussed on improving their data quality and linkage, building an integrated dataset of activity and cost (Barking and Dagenham, Havering and Redbridge (BHR), Leeds and Kent), developing dynamic dashboards to aid planning and delivery of care (Kent and Leeds), developing a shared care record (West Hampshire, BHR and Leeds) and whole population analysis which uncovered the crisis curve (where patients have high total annual cost of care in the year they were identified and lower total annual cost of care in the following years).

Information Governance

Whilst the impact of Information Governance (IG) restrictions severely hindered the pace at which sites could move forward and local solutions were found (Southend, Kent). Information governance “computer says no” mentality remains one of the largest hindrances to transformation.

Reports from the King’s Fund, Health Foundation and Commission for whole person care all support capitated budgets for people with multiple LTCs

Most citizens think those who care for them share necessary information anyhow. Many of the reasons given for not sharing data owe little to the legislation and guidance and more to the mindsets of interpretation.

Sorting this more generally is unfinished business.

Some teams started to re-design the delivery model (BHR), some planned new ways of jointly commissioning care between health and local authority (West Hampshire and Kent) and some started to shadow test budgets for locality teams (Southend).

The experiential learning supported capitated budgets for LTCs being included in the national pricing strategy, supported the development of the Integrated Personal Commissioning programme, offered new mechanisms for data linkage across health and care, created some solutions for IG at both a national and local level, and tested contract approaches. The national data has been used by the Health and Social Care Information Centre and in Commissioning for Value packs.

Reports from the King’s Fund, Health Foundation and Commission for whole person care all support capitated budgets for people with multiple LTCs. In other words, capitation budget has become a mainstream need, and the YoC solution is attracting global interest.

The learning has now been synthesized in a practical handbook for wider implementation. A future where more citizens with multiple conditions get the seamless care they desperately want and need.

Sir John Oldham is adjunct professor, Institute of Global Health Imperial College; and Jacquie White is deputy director, long term conditions, NHSE