Nishma Manek and Alex Till on three secrets to the success of a publicly funded health system delivered in Spain by a private provider

The NHS is faced with an ageing population, a rising burden of chronic disease and no adequate increase in cash on the horizon. But we’re not unique in tackling these pressures – similar trends are mirrored internationally.

In May, as part of the National Medical Director’s Clinical Fellow Scheme, we visited the Spanish Alzira model. The approach to integrated healthcare in Valencia has long been cited as pioneering. As our language becomes increasingly littered with three-letter acronyms to define more collaborative systems, we decided to take a closer look.

What is the Alzira model?

Alzira is a publicly funded system delivered by a private provider, Ribera Salud. They receive a capitated budget (currently €750 per annum per inhabitant), from the regional government over a 15-year contract. For this amount, Ribera Salud must provide free healthcare for the 250k population they serve. In return, they retain profits up to 7.5 per cent of turnover, but anything above this is returned to the government.

They started out in 1999 only providing hospital services, but this led to unsustainable cost shifting between primary and secondary care. In 2003, they realised that the model had to encompass ‘all or nothing’, and the contract was extended to include primary care.

The Alzira mantra to improvement is: the money follows the patient. Patients can choose to be treated in a hospital outside the area, but if they do, the company must pay. They therefore have a clear incentive to maintain standards to inspire patient loyalty, and focus on disease prevention.

What have they achieved?

Following the incorporation of primary care, the results have been impressive. The hospital claims there has been a 20 per cent drop in emergency activity, shorter length of stays, a reduction in readmissions, and more procedures per day compared to neighbouring hospitals. But where Alzira really stands out is in its ability to control costs – spending approximately 25 per cent less than state run hospitals in the region.

What’s the secret to their success?

In addition to the payment model, we observed three key enablers to their success.

1) Clinical management. Hospital care is viewed as the final resort on a patient’s journey. This is reinforced with incentives across the pathway that are focused on prevention, and on delivering care in the most appropriate setting.

Some of the larger primary care centres also offer X-ray, A&E and outpatient facilities. A consultant physician, called a ‘medical link’, is attached to the centre to support GPs.

2) Staff. We were struck by the rigorous management culture embedded in the system. Hospital doctors and many GPs are employed by the company in a salaried model. Between 10-20 per cent of their salaries are performance related, and dependent on individual, team and company goals negotiated between the clinicians and the board. Clinicians can access their scores, as well as benchmarks against their peers.

3) Technology. A success story in itself, there’s a strong emphasis on using technology to support high quality care. It felt a world away from the NHS.

Alzira were the first Spanish organisation to develop a fully integrated care record, with real time medical notes, test results and imaging. It’s available to all primary and secondary care clinicians- and patients too.

It’s not all rosy

For now, the Valencian government appear satisfied with their achievement of improving outcomes whilst maintaining cost. Similar contracts have been extended to cover 20 per cent of the region, and it’s also being used in Madrid.

But the biggest risk to their expansion, unsurprisingly, comes down to politics. The conservative Popular Party, which supported a diverse provision of public services, has lost power to parties opposing privatisation.

The long-term sustainability of the model is also in question. A 25 per cent reduction in costs is remarkable, but the potential to squeeze out further efficiency gains may have plateaued. Falling profits, combined with reduced increases in capitation budgets, would suggest that there’s unlikely to be sufficient future cash-flow to pay back the original investment.

What can the UK learn from Valencia?

There are clearly some limitations to consider when exploring its applicability to the English NHS.

To start with, we felt there was much less scope for the commissioner to direct the provider in detail than the approach usually taken here. It’s also worth noting that Ribera Salud was partly owned by national banks, so benefited from preferential lending rates.

The lack of a legacy of an expensive and unsuitable estate is another undoubted advantage. In all but one case, the Alzira model has been associated with a new build hospital and hiring of new staff. As salaried employees, it was likely also easier to incorporate GPs into an integrated model.

Conclusion

It was impressive to learn how a fully integrated provider can seemingly deliver Don Berwick’s triple aim: better patient outcomes and better patient experience at lower cost. It would be reasonable to assume that some of this is the result of integration, and the focus on cost-effectiveness that comes from capitation.

The Alzira model shows what can be achieved with the right ingredients: a strong management culture, aligned incentives, empowered staff, an integrated IT system, and sufficient time for it to all come together. The strength of working from the patient first, wrapping primary care around them, and then integrating specialist care was clear. And all sectors are viewed as equal players.

We’re on our own journey here, and disentangling the levers to their success is difficult. But while STPs are perhaps the embryos of true ACOs, it may take significant changes- particularly in relation to regulation and governance- before we can truly imagine them emerging from their chrysalis.

One thing is clear: the challenges we’re facing are not unique. And if we want to move forward faster, and avoid inadvertent involution, it’s worth scanning our horizons to look at the strides being made elsewhere.

Nish Manek (GP trainee) and Alex Till (psychiatry trainee), national medical director’s clinical fellows