NHS England chief executive Simon Stevens sets out the first steps for implementing his vision at the inaugural HSJ annual lecture, held in conjunction with advisory firm FTI Consulting.

HSJ Annual Lecture 2014

Simon Stevens gives the inaugural HSJ Annual Lecture, 8 December 2014

HSJ Annual Lecture 2014

It’s good to be here, in the shadow of St Bartholomew’s Hospital, debating changing care models in the NHS. I’m reminded of one such debate 15 years ago about the future of London’s hospitals. The then health secretary declared: “Over my dead body will there be a plaque on that building that says ‘Bart’s hospital –treated the wounded of Agincourt in 1415, closed by Frank Dobson in 1999’.”

So Bart’s withstands. And debates about the NHS roll on. Indeed this HSJ inaugural lecture comes over a century after this journal was established.

It began in 1892 when Alastair’s predecessor - in Rochdale - was the editor of the Poor Law Officers’ Journal – PLOJ. You can see why they changed the acronym. Then in 1930 they became PAJHHR - the Public Assistance Journal and Health and Hospital Review; not very tweetable. So in 1948 they changed the name to the Hospital and Social Service Journal, then in 1963 to the Hospital and Social Service Review, and then in 1973 to the Health and Social Service Journal. And finally in a burst of creativity, in 1986, it became the Health Service Journal.

Why a ‘forward view’?

So this is a timely moment for this lecture – coming just a few weeks on the heels of the NHS Five Year Forward View, which has successfully captured the imagination of many people around the health service, and helped frame the debate looking out to the next parliament. It has done so both by revealing a latent consensus and simultaneously helping to embed that consensus.

Why did we produce the forward view? And by “we” I’m referring to the six NHS national leadership bodies - Public Health England, the NHS Trust Development Authority, Monitor, NHS England, the Care Quality Commission and Health Education England.

One reason is that when we looked at the original draft five year plans that individual [clinical commissioning groups] and providers had been tasked with coming up with earlier this year, it was clear that the numbers didn’t stack - and couldn’t, given the funding assumptions people were being told to use.

‘The forward view is a compass, not a map’

It’s only exaggerating a bit to say that in some places, hospitals were assuming implausibly exponential growth in their patient numbers and incomes, at exactly the time CCGs were banking on demand reduction on a scale as to have practically required the elimination of illness itself. In most geographies these two sets of plans were not going to work on their own terms, let alone relative to each other.

They reminded me of the story told by Kenneth Arrow, a Nobel prize winning economist who started his career doing medium range weather forecasts for the US military. He came to see that these were in fact no better than random guesses, and brought this to the attention of his military superiors. The response was: “Yes we know they’re useless. But they’re essential for our planning. Please keep up the bad work.” 

That’s why the forward view is a compass not a map. Rather than merely relying on excel spreadsheets, the forward view is going to require action on a broad canvas, including new ways of sharing power with patients and engaging communities; new partnerships with local government, employers, voluntary organisations; and new approaches to prevention and demand moderation. 

But tonight Alastair has asked me to talk not about the totality of this agenda, but instead the work specifically to be undertaken on new care models. Now the danger when you talk about new care models - new ways of organising clinical services - is that the NHS sees these as ends in their own right. The next shiny thing or national imperative to chase after. So it’s vital that we start off by reminding ourselves why we are doing this, and what we’re seeking to achieve.

Confronting current realities

That’s a basic discipline in any large scale social change programme, which as we all know needs at least three principal ingredients:

  • a shared sense of why the status quo is suboptimal or unsustainable;
  • a compelling vision of an attractive and feasible future; and
  • a path to get us there that minimises the costs and discomfort along the way.

Taking the first of those - where are we now? How do we assess the status quo?

The summary answer is that patients generally say that the NHS is doing well, quality of care is generally high, and on some measures has been improving substantially in recent years. But we also know that services are under real pressure. [Accident and emergency] departments seeing 1.3 million more visits than in 2010. Emergency hospital admissions up between 4 and 5 per cent in a year.

Pressure on GPs from higher demand coupled with relative underinvestment over the past decade. Staff sometimes feeling that they succeed for their patients despite the system, not because of it. So my sense is that while people are rightfully proud of what the National Health Service is achieving, but because of the pressures they’re now willing to consider new things, new ways of working, that in earlier years would have been off the agenda.

‘People are proud of what the NHS is achieving, but because of the pressures they’re willing to consider new ways of working’

So what about the possibility of a better future for our patients and our staff?

Here in England specifically, on cancer services we have made huge progress over the course of 15 years, but the forward view estimates we could save 8000-10,000 more lives by 2020 if we can get earlier diagnoses and ensure everybody then gets consistently effective cancer care.

Investment in mental health services has lagged behind physical health services partly through a lack of the kinds of access standards and outcomes measurements that have been deployed in other parts of the health service.

On learning disabilities, the Winterbourne View scandal and Stephen Bubb report, both salutary reminders that in too many parts of the country people end up in institutional care, not because that is what they want or need but simply because that’s what is there. There is more to be done to support the compassionate and dignified care of frail and older patients.

New ways of accessing services demanded by younger people in their 20s and 30s for whom paper, appointments and waiting rooms can feel like interactions from a bygone age. We’ve got a major job of work on, to reinvent the way in which care is provided for different groups across society. So my thinking is that “better” is indeed possible. But how we do so will be shaped by some important wider influences.

Change drivers in healthcare

Two axes reshaping the geography of care

The interplay of two sets of forces pulling in opposite directions are going to influence the spatial distribution of health services across England.

On one axis is the push-pull between greater medical subspecialisation on the one hand, and the need in an era of chronic conditions and multimorbidity for more generalist and holistic care, on the other.

In some countries, in reaction to the clinical and service fragmentation of the medical “ologies” we’re seeing the invention of new generalist roles - the hospitalist, and of new types of service – so called “concierge care”. So that’s one axis – specialisation versus generalism in terms of the professional division of labour.

‘We’re likely to see an increase in the capital intensity of healthcare provision’

The other axis is what’s happening in technology. We’re likely to see an increase in the capital intensity of healthcare provision; in other words more technology, software and kit as a percentage of total cost. But that is also pulling in opposite directions.

For some services there will be continuing scale effects – for example, expensive fixed costs for large high end imaging capabilities pointing to greater regionalisation. But for other services, a combination of miniaturisation and digitisation is taking us in the opposite direction, with more localisation, not just to local hospitals and primary care settings, but to hand held technologies available to each of us in our own pockets.

I’d suggest no one can yet be certain what the net effect of those two dynamics is going to be on the geographical distribution of health services. But when we come to look back in 10 or 20 years’ time, it will partly be the interplay between them that will have framed our service configurations.

Three dimensions of care integration

Don Berwick famously talks about the “triple aim” - the idea that we should judge our success relative to population health improvement, quality for individual patients, and the wise stewardship of resources to ensure high value care.

One of my propositions tonight is that part of how we’ll achieve the “triple aim” is by using new care models to pursue what I might call the “triple integration” - the increasing integration of primary and specialist services, of physical and mental health services, and health and social care.

Four new dynamics

As we do so, we have four wider “game changers” we can exploit - not just in England but in all industrialised countries’ healthcare systems.

First, we have the opportunity to move away from care geared towards the “median” patient. For a number of conditions the combination of companion diagnostics linked to personal therapies will mean much greater tailoring of the individual treatments on offer. Second, and at the same time, we are going to have more standardisation in the way care is provided.

That will be driven by the fact that for the first time in history we’re drawing back the veil on unjustified variation, with a greater line of sight to the safety and the quality of care on offer by trusted health professionals. 

‘The test is the extent to which we can use new care models in the forward view’

Third, anticipatory care - moving away from healthcare systems that principally rely on people pitching up to see a health professional when they get sick - towards healthcare systems that are much better able at stratifying risk, identifying upstream care opportunities, and targeting interventions accordingly.

This has been going on in modest ways for some time - most GPs in this country now are stratifying their highest risk patients.

And fourth, getting real about co-production; recognising that it is often the “experts by experience” who bring the assets, insights and commitment that will reshape the way care is provided.

So personalisation, standardisation, anticipatory care and co-production, refracted through the push-pull of specialisation versus generalism, and scale effects versus digitisation and miniaturisation. All in pursuit of the “triple integration”. Arguably, as strategically relevant in England as in Germany, Canada, or Singapore. But the test for us is the extent to which we can use the new care models in the forward view to operationalise and exploit these opportunities.

New care models

I’m going to share more detail about two of the new care models we want to offer as new options for the local NHS. These are by no mean the only routes to success. In some areas the current ways of organising services will continue to work well.

Where change is deemed necessary, the forward view also lays out other new care model options over and above the two I’m going to focus on tonight. Nor are they mutually exclusive within an area. In some larger geographies more than one care model will doubtless operate.

Equally, what we are determined to avoid is the idea that people can just “re-spray” something they are already doing and hey presto, it emerges into the sunlight as one of these new things, capable of receiving accolades, visits, HSJ awards, and a bit of extra dough from NHS England. That ain’t going to cut it.

Multispecialty Community Providers (MCPs)

The FTI survey published tonight reveals great interest in the idea of MCPs. This is the idea that primary, community, and specialist care might come together, but minus responsibility for an acute hospital asset, though perhaps including mental health services and some social care.

So to be clear: this is not just a federation of GP practices and it is not just a relabelled care trust. Anybody that thinks they’re already an MCP or that becoming one will be easy, doesn’t understand it.

Nobody in the NHS is doing this right now and it’s not going to be easy. The work we’ve been doing, and successful examples of the model in other countries, suggest at least nine essential characteristics of an MCP:

  • An MCP needs to blend primary medical services and at least some specialist i.e. consultant medical services in a single organisational unit. Either by employing or partnering with consultants, physicians, geriatricians, psychiatrists, paediatricians. We’ve got to blur the primary/specialist divide for at least some parts of the population that we are serving.
  • An MCP needs an expanded multidisciplinary team that will include pharmacists, social workers, nurse leaders, therapists and others. I mention in passing the paradox of great pressures on GPs at a time when higher education has apparently been dramatically expanding the number of pharmacy graduates.
  • MCPs are going to need sophisticated risk stratification and patient population segmentation. And then offering bespoke services matched to patients with different needs. For example, focusing a subset of their medical practitioners and their multidisciplinary teams on the top five or six per cent of most complex patients so that not everybody is attempting to do everything for everybody. Equally providing new ways of accessing services for the patient groups that we described earlier; whether it is 20-30-year-olds seeking quick episodic care or others.
  • As they do so, the MCP needs to be doing in-reach into other settings such as home visits, care homes and community hospitals. In probably rare circumstances, a “maximalist” version of an MCP could even take on responsibility for managing the acute medical take of a [district general hospital]. If the MCP has got GPs, has got physicians, senior nurses and therapists, and then you’ve got hospitalists providing some of the continuity of care including at nights inside the DGH, then it is possible to imagine the MCP being the medical group taking responsibility for that part of a hospital. That’s what happens in some other countries, and it builds on and extends some of the thoughtful work of the Royal Colleges of Physicians’ Future Hospital project. 
  • They are going to need a shared EMR, and actionable information in the hands of patients and clinical decision makers. In part, MCPs succeed or fail to the extent they can properly align information, decision rights and incentives, and cascade them appropriately to staff and patients throughout the organisation.
  • They are going to need integrated out of hours, 111, urgent care, primary care extended access. They are going to be the places where the out of hospital elements of our newly integrated urgent and emergency care pathways quickly come to fruition.
  • They are going to need a minimum population size, probably of at least 50,000. You could argue a little less and typically rather more if we want them to also be able to take their population budget.
  • They are likely to take on the delegated population budget for their registered list.
  • Finally, they are going to need a clear set of metrics and reporting. Increasingly these will be patient driven and outcome focused. Measuring changes in the stock of population health not just the flow of healthcare usage. As for managing utilisation, their new operational benchmarks will increasingly focus on hospital bed days per thousand population (as against hospital episodes), and on per person per month costs of care, broken down by category of spend - a near real time programme budget, if you like.

These are some of the defining characteristics which we’ll be working on with those in the local NHS interested in moving in this direction - to experiment, to test, to prove the hypothesis that doing so can improve the quality of care, patient experience and make smart use of resources. 

Primary and Acute Care Systems (PACS)

The second model that I’m going to talk about is the new option of creating vertically integrated primary community and acute care organisations. The FTI survey finds hospitals particularly interested in this option, but with a desire by GPs for safeguards to ensure this model wouldn’t inadvertently misdirect resources out of primary and community services.

We envisage two sets of circumstances under which we would be looking to authorise PACs type models. The first of these, the default test, is that a PACS would have to be a partnership of equals between the hospitals, the community services and the GPs in the area. A genuine desire to re-invent the hospital, not to balkanize primary care. To use the organisational strength and sophistication of the provider unit to help redesign care.

Even then there are risks that have to be mitigated.

If these become monopoly providers in a particular geography, then we need to ensure that we don’t end up with a “like it or lump it” style unresponsive service. International experience also warns of the risk of supply induced demand under these circumstances, unless the integrated provider is also managing the population budget for the people that it is serving.

The international experience shows hospitals sometimes underestimate the complexity of doing so, and forget that at the moment they are typically only managing between 35-50 pence on the pound of the total resource use for the people whom they are currently serving. 

‘There’s a number of geographies around the country where this may prove an attractive model’

There is a whole science around getting this right, so we are going to need to work intensively with those who are interested in these models to help them get there.

Nevertheless, I believe there are a number of geographies around the country where this may prove an attractive model for groups of GPs, community health services, mental health, local government, as well as specialist and acute providers to really reinvent what it means to be the National Health Service.

Is there a situation where a hospital could seek to become a PACS separate from the current GPs? Only under exceptional circumstances - say in some inner city areas where the inverse care law has persisted for years, you have an underdoctored area that is hard to recruit to, where perhaps there have been quality and access concerns, and where there was a wave of impending GP retirements.

In a way the parallel would be with the old Medical Practices Committee’s notion of “open areas” where you would say: “We need as much help as we can get for general practice in this area, and if the local hospital can provide some list based GP services to supplement all the other GP practices in the area, it would be doctrinaire to prevent them, and good for local residents to allow it.”

Next steps on care models

How are we, the six NHS leadership bodies, going to work with the NHS locally and with our wider partners on these new options?

We’ll be asking people to come forward by the end of January with a view to kicking off the detailed work from April. We’ll set out more detail on how this will work within the next few weeks.

One group of geographies we’ll be working with are those who would like to be in the vanguard. Specifically, we want to identify those parts of the country where the conditions for transformation are right. Where there is a high standard of current performance, high levels of patient and community engagement, mature relationships, the headroom for good leadership thinking, strong primary care, smart thinking around the use of physical assets and so on.

We will be inviting them to help us co-create some of these new models, using some of the resources made available to us in the autumn statement. In effect, we expect that this group will be able to get motoring as soon as a number of the obstacles that currently exist have been removed from their way.

‘There will be some tough messages in some geographies where plans are financially “under the water”’

The parallel is with Formula One drivers on the starting block. As soon as the red light switches they go pedal to the metal, without waiting for the green light.

At the other end of the spectrum, we know that there are a group of health economies that are under very substantial pressure, and which are struggling both financially and operationally under the current service constructs. For them we are going to be more directive in terms of the support that will be provided and the conditionality that will apply.

Rather than label this a failure process and all the demotivation and stigma that goes with that, this will be framed as a new “success regime”, bringing together the regulatory and funding flexibilities to enable locally shaped journeys to sustainability.

But there will be some tough messages in some of these geographies. Too many of the plans in places that are financially “under the water” include the notion that “we’ll build ourselves a new hospital to replace our current two”.

Yet the truth is that under any feasible outlook for NHS spending over the next five years, we are not going to be embarking on a massive hospital building programme across this country. And even if we were, the lead times mean that there couldn’t be the path to salvation for the rest of this decade.

New investment, new sources of efficiency

Now of course we have vigorously made the argument through the forward view that the National Health Service needs extra investment over the course of the next Parliament. 

To recap, we argued that if you assumed three implausible things - that the health service gets no real terms growth; that we made no efficiencies; and demand continues to rise at its historic rate - then there will be an annual £28bn funding gap by 2020-21.

So we need more funding. But funding growth of double what we’ve had in this Parliament would still leave £22bn demand and efficiency pressure to be managed - equal to about 2 per cent net across the sector for the next three years, and three thereafter. 

Do we have a choice? It’s worth taking a look at the latest work of the Institute for Fiscal Studies and the Office for Budgetary Responsibility. They both make crystal clear that under any realistic fiscal outlook, the public finances in the next Parliament mean we can’t just rely on funding increases to absolve us from the need for substantial further efficiencies. 

Even under different versions of what the public spending envelope might be in the next Parliament, you look at the opportunity costs for other parts of the public sector from higher NHS spending and you can see that there are going to be some very tough decisions there.

How should we think about tackling this efficiency challenge?

There are three zones of action: 

  • within individual provider organisations;
  • better whole system working between different parts of health and social care; and
  • wider action on public health and prevention to moderate the rate of demand increase.

Let’s take each in turn.

Efficiency within individual organisations

There is good empirical evidence that there are still efficiency opportunities at individual healthcare institutions across the National Health Service. The work that Deloitte did for Monitor estimated that there is a 5 to 5.6 per cent efficiency opportunity from “catch up” as less efficient providers move towards the position of the best.

Annualised, that equates to about 1 per cent net a year for the next five years. Then there is the so called “frontier shift” -  doing things in new ways, which the NHS has successfully been able to do to the tune of about 1.2-1.3 per cent a year in recent years. There is no reason to think that our ability to do things in news ways is going to dry up; if anything, we have to accelerate it.

Those are some of the numbers. More graphically, if you talk to just about any frontline ward nurse, junior doctor, patient or relative, they will identify for you opportunities for savings and efficiencies; they just might not be the usual ones we’ve been working on.

‘There’s no reason to think that our ability to do things in new ways is going to dry up’

We need to tackle huge increases in agency and temporary staff spending. More face time looking after patients - I spoke at the Queen’s Nursing Institute a few weeks ago and they said that some district nurses only get to spend a fifth their time in direct contact with patients.

That’s the equivalent of Mondays; if we could double that to Tuesdays that would have a huge impact. At a time when the London Ambulance Service is under pressure, look at the paper forms that paramedics are having to fill out as part of their handover to hospitals.

I was in Middlesbrough this week and a patient group for people with neurological conditions rightly complained that we can’t get podiatrists and for some reasons nurses are banned from cutting their toe nails.

Why? At a time of pressure on inpatient beds we have two-fold variations in emergency length of stay for older patients, partly based on in internal, clinical operational flow issues, nothing to do with the needs or choices of patients themselves.

How long ago was the Carter review of pathology services? Mostly unimplemented. Tim Briggs is doing a lot of work on the huge variation that exists in purchasing and spending on orthopaedic prosthetics. This is just a short list of the kind of examples that any one of us could find as we spend time on the frontline of NHS care.

Efficiencies from better cross-system working

Some of our biggest unexploited efficiencies are probably going to come from better coordination, linkage and hand-offs between organisations in different parts of the health service, and with housing, education and social care. The urgent and emergency care review is part of how we’ll redesign the “front end” of the NHS. Better connections with community and social care to cut avoidable admissions to care homes.

Type 2 diabetes and obesity - largely preventable, and according to a recent review, now costing more than the police, prisons and courts combined. Three-hundred and eighty thousand hospital admissions from people who have fallen - helped instead by working with the fire brigade when they’re doing home visits for fire safety.

‘We need more “joined upedness” rather than salami slicing’

These are just a small subset of the “opportunity rich environment” facing us if we start thinking about care systems not just individual institutions. More “joined upedness”  rather than salami slicing. Moderating the rate of increase in demand particularly from emergency hospital admissions, rather than a sole focus on reducing hospitals’ unit costs.

Which by the way is why there is room to disagree with part of the otherwise excellent Health Service Journal commission on hospital care for frail older people.

Because the point is not that we are in a zero sum situation when it comes to the number of emergency beds or emergency bed days. If we can instead just moderate the rate of increase over the next five or six that counts towards our efficiency requirement.

The Nuffield Trust has estimated that absent of anything else we would be needing another 17,000 inpatient beds over the course of the next five or six years, equivalent to building 34 new hospitals.

We know that we are not going to that. We haven’t actually responded in that way over the course of the last five or six years so we are certainly not going to respond over the next five or six years.

Concluding remarks

So people are proud of where we’ve got to in the NHS, but services are under pressure. They recognise the here and now is not sustainable over the longer term.

People can see the prospects of a better future, both given the particularities of our situation in England and the broader changes that are happening in medicine and health.

The question is, how do we get there? How are we going to bring this about?

To do so we’re going to need to support a broad condition for change, to support emerging local leadership, and give people space to make change.

‘People recognise the here and now isn’t sustainable over the longer term’

We’re also going to need a new and different set of national strategies on workforce, on technology, on infrastructure and on leadership.

And we’re going to need widely sophisticated implementation. Because as Nassim Nicholas Taleb says: “Just as we are fooled by randomness, so we are fooled into overestimating the role of good sounding ideas.”

These are not self-executing ideas; they are going to require the motivation, the energy, the leadership of clinicians, communities, patients right across the country. So this genuinely is an inflection point I think for the National Health Service.

A chance to bring about a vision partly articulated some time ago.

“Doctors and specialist will move freely from the hospitals to the health centres, to the maternity and child welfare clinics, and from them back to the hospitals and between the medical officers of health…This will be an essential feature of the whole service; between the local government, the specialists, and the hospitals, there must be absolute and complete cooperation, and no jealously between one and the other.

“They must be able to use each other’s services without any difficulty and hindrance, and the way in which it will be done…will be the right of the individual patient…to use of the  medical service wherever it is. The right of the individual will be the uniting principle in the whole service.” 

That was Nye Bevan in 1946. Sixty-eight years later, let’s give it a shot.

Simon Stevens is chief executive of NHS England

Video: Watch Simon Stevens give the first HSJ annual lecture