What do you do if you’re overspent by £100 million? That’s the position many Integrated Care Boards (ICBs) currently find themselves in and it’s a situation I’m coming across more and more in my work.
With a budget position that horrendous, many of them do the worse thing possible. Absolutely nothing.
They sit there almost paralysed, their view being: “We’re having to sit tight, we’ve got no money to invest.”
The danger with this approach is that the same input leads to the same outcome. The amount their budget deficit went up last year will be the same amount – if not more – as their budget deficit goes up next year – unless they make a change.
There are opportunities in their budgets, particularly in prescribing. But for most ICBs, they’ve gone back to the Dark Ages. Medicine optimisation teams are just cost-cutters who look at the acquisition cost of the drug and never the acquisition cost of the outcome.
Budget can be freed up without damaging patient outcomes
I’ve written before that the most expensive drug in the world is the one that doesn’t work because it leads to unnecessary appointments, referrals and admissions. Non-elective admissions to hospital are the real problem because they cost the NHS a fortune.
I’ve got examples in my work now where people are having kidney dialysis at a cost of £23,000 a year. The majority of those people are type 2 diabetics and so much money could have been saved if they’d had treatment costing £50 a month earlier on.
Improving patient outcomes and reducing the amount of unnecessary appointments, referrals and admissions by spending drug budgets wisely should be the priority.
There are opportunities out there to free up budget without detrimental effects on patient outcomes.
Just in the last two or three weeks I’ve spotted opportunities where an ICB could save £4-£5million but nothing’s happened. The problem is, there is an expectation that general practices will manage the situation but – with the best will in the world – that’s simply not happening in practice.
There are however, many opportunities to adopt a gain-sharing approach. In other words, if general practice carries out the patient review work via the Primary Care Network (PCN) (or perhaps a GP Federation) and delivers the changes necessary to save that cash, 50% of the saving goes to them and the rest goes to the ICB. Read my blog here on how a GP practice could take on 8,000 new patients without buckling.
Financial incentives required to compel NHS change
It would need that type of incentive because this is not core general practice work so a gain share is a great way to do it. Because if you do the work, you get 50% of something rather than not doing the work and getting 100% of nothing.
Of the 50% paid to the federation or the PCN, I’d say give 20% of that to the practices to say thanks for doing the work. The other 30% then has to be ploughed back into either services or developing the PCN itself.
A plan could even be devised up front – the PCN or federation could identify where they would spend their share and then the whole thing could be signed off as one package. The ICB could then spend its 50% share of the savings on whatever it wants.
Pre-pandemic drugs and treatments are not the most effective now
This gain share approach would work best in areas where you’ve got sub-optimal treatment leading to unnecessary appointments, referrals and admissions. And there are a significant number of these.
Now, to be absolutely clear, I’m not for a minute suggesting anybody would set out to sub-optimally treat a patient. General practice is working under huge pressure, they’re delivering almost 20% more activity than they were pre-pandemic and still getting a hard time.
But the reality is the treatment we viewed as the gold standard three or four years ago is sub-optimal today. Drugs have changed, guidelines have changed and NICE technology appraisals have delivered new products to market. So those older treatments would not be initiated today – yet we’ve still got millions of patients on them. And those patients deteriorate because long-term conditions by nature don’t get better. It’s a slow, steady decline.
People with diabetes for example, don’t get better unless they can completely reverse it. They experience a steady decline and they have a shorter life expectancy than somebody that doesn’t have type 2 diabetes.
But if we were to optimise the care of people with long-term conditions by investing the 50% the ICB will get back, how much more could be achieved?
As an example, I know of a Midlands-based ICB, where they spend £42 million a year on non-elective admissions to hospital related to diabetes. The average cost of each admission is £5,000. I’d like to see the medicines optimisation team work with those areas where we could get 50% of something rather than 100% of nothing and invest in improving some of the care and some of the outcomes to bring down those non-elective admissions.
If you’ve got a better idea, I’d love to hear it
So – either we are 100% happy with spending £42million a year on non-elective admissions to hospital or something is going to have to change.
There are many areas in the drug budget where we could put together an incentive or risk shared approach that says: “If you do the work, 50% of the savings are yours, 50% are ours.” Do that, and things could start to change.
If you have alternative views on this topic, please do message me on Linked In as I’d genuinely love to hear them.
Scott McKenzie helps GPs, PCNs and GP federations build sustainable and resilient practices and organisations that thrive. If you want to know how to double your revenue and reduce the overwhelm, Scott can share these processes with you too. Schedule a call today.