24
3.4 Failure of incentives
To recap, in the words of one interviewee: "We have a system designed to
cope with demand when it happens, not prevent demand - probably more
than two-thirds of those in hospitals are there with long-term conditions, most of
which could be managed much more effectively in the community if you had
neighbourhood and community based/social support systems. The evidence is
there."
But the system is conditioned to look to hospital provision for all the solutions.
And one of the main reasons that is proving hard to shift towards meaningful
integration, according to our survey of local health leaders, are perverse
financial incentives, named by 61 per cent. Norman Lamb agrees, saying:
"We incentivise acute hospitals to do more and don't incentivise the system to
prevent ill health or a deterioration of health. There needs to be a fundamental
shift."71
This echoed concerns articulated by a large proportion of the local health leaders
that we surveyed and interviewed as part of this report. Many interviewees
were firmly of the view that there was a built-in incentive for acute trusts to keep
patients in hospital for longer than was strictly necessary, with one director of
public health suggesting that: "hospitals need to keep people in their beds in
order to survive [financially]." Where there is spare bed capacity in a trust, the
trust is incentivised through the tariff system to ensure that those beds are filled,
they argued. In 2006-7 the Government introduced a system called Payment by
Results (PbR). PbR governs transactions between commissioners and secondary
healthcare providers representing more than 60 per cent of income for the
average acute hospital.72 The intention for PbR was for it to align payment for
work done by delivering on the promise that 'money will follow the patient'.73
However, several of our interviewees felt that the scheme was not working as
planned, with one calling it an 'unmitigated disaster'. These interviewees all
agreed that, contrary to its name, PbR was not paying for results (i.e. making
people to get better) but was instead paying for activity.
Indeed protection of individual service budgets was the number one answer
in our survey when asked what was holding back health and social care
integration, with one interviewee adding: "[Hospital] Trusts are currently the
main beneficiaries of this model and are thereby disincentivised to work in a
more joined up way."
That said, the cost profile is also more complex than is often cited, as one
interviewee explained that: "non-elected admissions for older people who do
not actually need to be in hospital are funded at a 30 per cent rate of the
normal tariff". But 30 per cent is still more than zero per cent.
Again and again the subject of financial incentives came up. One of the top
issues that interviewees cited when asked if they could reverse one disincentive
towards more integrated care was financial incentives. And nearly half (46 per
cent) thought that the lack of adequate incentives in the system were one of the
specific underlying causes of delayed transfer of care (see figure 2).
71 Peters, D, "Lamb roars against
'ridiculous' health and social
care divide" The MJ (31 October
2014)
72 Department of Health, A simple
guide to Payment by Results
(2012)
73 Department of Health, A simple
guide to Payment by Results
(2012)