Are financial quality targets on the way?

A Californian scheme linking quality points to spending is attracting attention in the UK, writes Joe Lepper

This month GPs across California had a new indicator added to their quality framework, which for the first time measured their financial efficiency.

Statewide healthcare body the Integrated Healthcare Association (IHA), which represents a raft of healthcare groups including GPs and insurers, has developed this addition to its ‘pay for performance’ quality system, in a bid to reduce primary care costs.

It is also hoped the move will convince many drug firms to reduce their prices.

But while the sunny shores and mountains of California may seem a long way off, GPs in this country should be aware that the move is beginning to attract the interest of UK health policy experts, suggesting that ministers may one day consider it.

Among those interested in events in California is National Primary Care Research and Development Centre (NPCRDC) research fellow and former NHS finance manager  Dr Ruth McDonald, who is to spend a year in the US researching these financial targets from this summer.

Californian indicator
She will be monitoring how well it works, its effect on patient care, as well as healthcare professionals’ opinion.

Crucially she will look to see if it could work in this country, and before visiting the US she wants  to discuss her research further with senior officials at the DoH.

Dr McDonald said she was keeping ‘an open mind’ about whether the scheme could work in the UK, but said there were a number of similarities between the US and UK systems that make the idea of a UK version worth exploring.

For example, the UK is undergoing a similar financial efficiency drive, with primary care organisation (PCO) budgets already at stretching point and there are similar concerns in the UK about drugs prices.

Dr McDonald said: ‘They also already have a quality framework, although it has far fewer indicators, but nevertheless GPs in both California and here are used to having indicators.’

She said while the majority of Californian GPs are salaried she believed the UK’s system of GP contracts is becoming more complex and will increasingly involve private providers.

She pointed out that last month health secretary Patricia Hewitt announced plans to expand its APMS initiative with around 30 new contracts set to be put out to tender this year and opening the door to a raft of private providers.

‘There are parallels with the announcement last week and the model of salaried GPs in California. Soon more GPs could be employed by private providers over here,’ said Dr McDonald.

According to the IHA, the system in California involves the comparison of costs against an average in areas such as purchasing equipment and prescribing.

This is adjusted to take into account ‘disease severity and patient complexity’. The system is set to become more detailed by 2008, when it will also be broken down into clinical ones.

GP reported last month that the US system and its efficiency targets forced all practices to consider the cost of referrals and treatment, and could have a more immediate effect than practice-based commissioning (PBC) (GP, 2 March).

Clinical quality
Linking clinical quality to efficiency would be an opportunity to see whether practices were doing well on quality because they were spending more than average on disease areas.

Any perverse incentives to under-refer would be cancelled out by the impact this would have on clinical quality scores.

But GPC deputy chairman Dr Laurence Buckman said there was no evidence that any referral pattern was better than another.

Already many GPs in the US have welcomed the move, such as Dr Wells Shoemaker, medical director of the California Association of Physician Groups, who said: ‘We embrace the goal of delivering reliable, consistent, evidence-based clinical care at an affordable cost.’

However, the idea has received a less favourable reaction from UK GPs. GPC member and Essex LMC chief executive Dr Brian Balmer believed that indicators and targets for financial efficiency were unnecessary as practices and GPs already operated in a cost-effective way.

‘I think it is the other way round. The US should be looking to see how it can achieve what we have in terms of financial efficiency,’ he said. ‘We’ve been doing it for years and it is trying to catch up with this system of targets.’

Dr Michael Dixon, chairman of the NHS Alliance, also believed that such an indicator was not needed because UK GPs were already entrepreneurial.

Instead, he advocated ‘more help for practice managers in terms of financially efficiency.’

He added: ‘I don’t think there is any need for an indicator or target to promote efficiency. GPs in this country already look to being financially efficient and I think it is best for the quality framework to retain its focus on patient care.’

The NPCRDC’s Professor Martin Roland also agreed that targets were the wrong approach as he said that the emergence of PBC already sought to ensure greater financial efficiency.

Focus on efficiency
‘This focus on efficiency is already happening through PBC, so targets are not necessary.’

However Dr Balmer feared the government might ignore these concerns about adopting such a system in the UK, especially as it already had a track record of looking to California for inspiration on policy matters.

Research four years ago into work by Kaiser Permanente in California surrounding chronic disease management was a major influence on healthcare policies such as the community matrons scheme.

Dr Balmer said: ‘They get these ideas from abroad and then think they can just bring them in. It’s happened before and I’m sure they will do it again.’

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