Over the next 2 years many NHS Hospitals will be replacing electronic health record (EHR) systems as the contracts born out of the national program for IT (NPfIT) come to an end. They are doing so amid a noisy revolution in healthcare informatics – which is demanding that we completely reframe not just our ideas about the EPR itself but also the nature of healthcare delivery and the traditional medical model.

I have previously talked about the cumbersome desk bound IT systems that have been as much an impediment to the process of care as a source of misery for the users of these systems. Why is there such a mismatch in expectations of healthcare staff and the developers of the tools supposedly there to help them? I don’t believe we can blame the developers of the systems – or for that matter the users of them. I believe that it has come about because we have all failed to understand the true nature of modern medicine and it has taken the social media revolution to wake us up to the fact.

Transactional Healthcare

All our current systems – IT, contracting, measuring, counting and operational delivery – are designed around the notion that healthcare is a series of individual transactions, each transaction taking place under the auspices of an individual clinician (e.g. the finished consultant episode – FCE). The overriding assumption of this model is that healthcare is episodic, that between episodes we have no contact and no need for contact with the healthcare system and that each episode is presided over by a clinician that has, if not control, then at least knowledge of what is happening. It also assumes that of the information required to manage an episode of care only a proportion of it is of relevance to future episodes – and that episodes of care have largely self contained information needs.

Notwithstanding this, what a typical patient might consider a single episode of healthcare actually consists of large numbers of individual transactions often with several different organisations and several different parts of the same organisation (GP, Outpatient department, Radiology, Pathology etc.). The ‘system’ has fragmented itself – for its own purposes – and has at the same time failed to provide a reliable mechanism for the sufficient sharing of information between its different parts to give any sense of continuity – let alone impression of competence – to the hapless patient.

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The NHS far from being a single organisation is an aggregation of large and small institutions, thrown together in a pseudo-market notionally in competition with each other – with strict rules that prevent them from collaborating (competition law) and sharing information (data protection). It is designed to fail to meet the continuity challenge and the expectations of patients. It is also unsafe – with manifold opportunities for vital information communication failure, a common root cause of critical incidents and serious complaints.

This transactional model has developed out of the medical model that assumes patients have singular diagnosable diseases that are amenable to technological intervention (pharmaceutical or surgical) and that life long cure is the outcome. This is certainly the case in a proportion of healthcare interactions – but medicine and patients are changing. The vast majority (in excess of 70%) of healthcare delivery is for the multiply co-morbid patient with conditions that they will live with for the rest of their lives. There may indeed be episodic deteriorations in their condition, that result in (expensive) episodes of highly technological healthcare – these are however often both predictable and avoidable manifestations of a long term condition for which there is a continuous healthcare need.

Social Healthcare

A new medical model – that fits the needs of 21st century patients – is emerging in the era of social networking. Social Healthcare – this model assumes that the patient has a continuous need for health intervention and that this is delivered by a network of providers that the patient invites in to their ‘health space’. A long term condition demands a multitude of interactions over a sustained period of time with many providers. Our current system fails to ensure that those providers interact with each other over the same patient using the same information as it cannot guarantee that they ever have access to the same information (or even know that they are looking after the same patient). In the social healthcare model the patient is the guardian of all information about themselves. Their information sits in ‘the cloud’ but they hold the key to its access. Over time they build a personalised health care team who have access to their cloud data and can ‘talk’ to each other about the patient through his or her ‘health space’. The patient can source information about their condition, ask advice or consult through the portal to their health space at any time of day or night. The portal allows for direct consultation through a skype like interface. Even more powerfully the patient can consult with other patients who have the same conditions. A self supporting community emerges that can provide advice, support and shared experience – on a continuous basis. “It’s like having a waiting room conversation with 1000 other people – just like me”.

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This new model has the potential to have a powerful enabling impact on patients. It subverts the traditional hierarchy in the health transaction, puts all providers on an equal footing below that of the patient – who becomes the master of their own information. Networks of expert patients start to generate new kinds of knowledge about the nature of disease and the impact of interventions – crowd sourced evidence creating medicine. Patients have the power to choose who contributes to their health space – based on the value they add to them as individuals.

Preparing to be part of the Crowd contributing to the Cloud

What does this mean for providers of health care that are in the process of renewing their informatics systems? What does this mean for me as an individual doctor? The truth is the system described above doesn’t yet exist – there is nothing yet that will force me as a doctor to change my clinical practice in such a way as to make myself available through the cloud to individual or groups of patients on a continuous basis. There is nothing yet that will force the hospital that I work for to make available all the information it holds about patients to patients through a cloud portal – or share that information with other providers of that patient’s choosing. Nothing yet – but it is coming…

Third party providers of patient centred health portals are are emerging – from a variety of premises and care models – but are converging on something that looks similar to the ‘social healthcare’ system. Patients like me, Patients Know Best, Health Fabric and Skype Health are all examples of emerging technologies that will deliver the vision. And they are selling their wares not to doctors, healthcare institutions or commissioners – they are selling them to patients.

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What this means then is that the systems we purchase or develop will need to have the ability to talk to these providers, transfer information, support voice and video links. We will have to think through how the information outcomes of healthcare transactions will be recorded in a way that can meaningfully sit in a patient’s cloud – shareable with other providers and understandable by patients.

What this means for doctors is a shift from practicing intermittent transactional healthcare – to developing a personal online continuous relationship with our patients and being part of and interacting with the crowd of providers that are also caring for them.

Welcome to the future of medicine – are you ready?

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For as long as there has been healthcare we have struggled with developing economic models for its delivery. The variety of models that exist across the world – from the raw market seen in many developing countries; through various degrees of private / state sponsored insurance; to the pure state funded provision we enjoy in the NHS – attest to the fact that there is no ‘right answer’ to this conundrum.

The Funding Paradox of Healthcare

Most healthcare systems in one way or another attempt to resolve the inevitable paradox that in the majority of cases those in most need of healthcare are also the least likely to be able to pay for it. As a result most systems are a manifestation of a ‘collective bond’ between society and the individual – ‘We’ will pay for your healthcare when you need it as long as ‘you’ contribute what you can when you don’t.

Different systems manifest the bond in different way – Through direct taxation, private or state subsidised insurance. Even the least developed systems, that rely on direct payments for care have a degree of economic re-distribution built into them, with wealthier clients overpaying to subsidise the poor and charitable donations making up the difference.

Does the funding mechanism affect the amount of money the ‘collective’ is prepared to spend on healthcare? Interestingly it appears not to be the case – the biggest determinant on how much is spent is the wealth of nation, but the relationship is geometric one i.e. the wealthier a nation the greater the proportion of GDP is spent on healthcare. The graph looks like this:

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Justice and Equity

Where systems do differ significantly is ‘in what way’ and ‘on whom’ the money is spent. The lesson from international healthcare system comparisons is that, in general, the greater the involvement of the state the better are the measures of ‘Universality’ i.e. distributive justice and equality of access.

Universality is not the only outcome we want to achieve from our healthcare funding system though – there is no point in having universal access to a system that is no good. Universality is ultimately, like funding model, a policy decision. It is a decision by the collective on how it would like to distribute the healthcare funds it has decided it can afford – both are the product of culture, politics, history and national character. But neither universality nor funding model alone determine health outcomes. Changing either of these is unlikely to improve the quality of care or the cost of its provision.

Is the NHS Any Good?

So, the NHS is funded to the level we would expect for the size and wealth of the nation – it scores pretty well (one of the best) on universality, although we lose points because we do tend to ration care by putting people into queues (but that is part of our national character). How do we know if we are getting the healthcare we are paying for? How do we know if the NHS is Good Value? To answer this question we have to understand the notion of value in healthcare.

Value is a fundamental function of any free market economy – it is an equation all of us reconcile, either consciously or unconsciously, every time we part with money for goods or services. We all make a calculation as to whether a particular good or service is ‘worth’ the amount of money we are about to part with. The solution to the value equation is always a very personal one – it varies enormously between individuals and even within the same individual at different times and in different contexts (most of us are prepared to pay more for a glass of wine to accompany a meal in a restaurant than we are for one when watching TV at home). Value drives market economics – it drives quality up and costs down – it improves quality of life and increases wealth – it is the triumph of market capitalism. But – it only works as long as the reconciliation of value (Worth/Cost) takes place within the same individual or entity. You cannot reconcile value if you are spending someone else’s money.

Let me tell a story to illustrate the point…

A Bitter-Sweet Motoring Tale

Just over two years ago I finally got around to replacing our family car after 8 years of neglecting the task. Having not thought about it in all that time I was for a period gripped by a frenzied interest in the family car market. After browsing the internet, buying the magazines, and even stepping into a car show room for the odd test drive – I ultimately had to come to a decision between 3 car types (having already decided that I wanted a medium sized family estate). These types are essentially ‘Low-End’ (cheap and cheerful e.g. Citroen, Seat, Fiat), ‘Mid-Range’ (Popular Reliable e.g. Ford, VW, Skoda) and ‘High-End’ (Designer, Classy, Expensive e.g. BMW, Audi, Lexus). In terms of cost low-end were in the range £12K – £15K, mid-range approximately £5K more than that and high-end another £10K on top of that and in excess of twice the cost of low-end. Having previously experienced the catastrophic residual value loss associated with the low-end of the market and been persuaded (conscience and wife in equal measure) that I couldn’t afford to go down the high-end route I settled (like many do) for a mid-range model and became the proud owner of a Skoda Octavia Estate. My personal ‘value journey’ has resulted in a car I am delighted with at no more cost than I was prepared to spend, and I am pleased to say the residual seems to be holding up nicely! My delight has only been tempered by the extraordinary hike in the cost of insuring it compared to the old car…

I was, unfortunately, involved in a car accident not so long ago – no one injured thankfully – but the car was off the road for several weeks. My positive motoring experience continued though – the insurance company appeared eager to help me out, arranging immediate retrieval of the vehicle, replacement with a hire car personally delivered to my front door, insistence that I put forward any personal injury claim (there was none). My car was returned to me weeks later in an immaculate condition having undergone repairs approaching half the cost of the original purchase price. The whole ‘accident experience’ was really no inconvenience to me at all, and I am told that the quality of repairs these days means that it will have no impact on residual value either. All great – but at what cost?

The car insurance market in recent years has undergone phenomenal price inflation – at times exceeding background inflation by a factor of ten. The introduction of ‘claims management companies’ ‘Personal injuries claim farmers’ ‘Professional body shop repairers’ ‘Replacement car hire’ etc. – have inflated the cost of motoring accidents massively. Everyone involved in the car accident ‘value chain’ appears to to be exceptionally eager to please and also appear to be profiting handsomely – in fact the whole trade was recently investigated by the OFT for profiteering. How has this runaway inflation been allowed to happen? It is a consequence of the fact that the value equation has become ‘de-coupled’ – whilst benefit is experienced by the individual the cost is shared out amongst the pool of the insured. I have contributed a small amount to overall inflation in the cost of insuring cars against accidents – had I been paying directly for the consequences of my accident would I have chosen such a high cost route to resolution? The fact is the system is locked into an inevitable inflationary spiral as no-one is controlling costs.

The market in new cars is a healthy market – it has delivered incredible improvements in the quality of cars over many years and at the same time kept costs down – the value equation is always resolved by the purchaser. The car insurance market is broken – delivering runaway inflation and ever diminishing value.

Delivering Value in Health

I am sure you will have realised that I believe that healthcare ‘markets’ share more in common with car insurance than they do with car manufacturing. That is why marketisation of healthcare has failed to deliver value.

The value equation in healthcare is on the face of it simple but is nuanced and complex – it looks like this:

VALUE = (Quality + Outcome) / True Cost of Delivery

The equation is reconciled rather uneasily within the ‘triumvirate’ of Patient, Provider and Payer. The providers are profiting (in this context by profiting I mean existing) from being fragmented, with no incentive to prevent costs being passed along the ‘value chain’, and plenty of incentive to do more at more cost to the payers. The patient experiences the quality and the outcome (often at some significant distance in time from the transaction) but has no notion of the cost. The payers are faced with irreconcilable demands for increasing scope and quality, limited levers of control of costs and under-developed measures of quality and outcome. All of this fuelled by the easy altruism of the providers spending someone else’s money.

Marketising Integrated Care

How can we yield the incredible power of a well functioning market to deliver increasing quality at reducing cost but not at the same time create a runaway self inflating market? Where in the system can we bring together the quality and outcome (as experienced by the patient) with the true cost of delivery (as experienced by the payer) in order to create value?

The answer, ironically enough, is coming from the US healthcare system. This has experienced the kind of runaway inflation described above and led it to becoming the most expensive healthcare system that has ever existed delivering aggregated health outcomes little better than systems costing less than a quarter per head of population. Yet the payers (in this case private insurers) have spotted the flaws in the market – the fundamentally self inflating structures of healthcare that incentivise primary care to refer, secondary care to receive and over diagnose problems for which they profit from treating. Their solution has been for the payers to move into the provider space – creating integrated healthcare systems. In doing so they have incentivised ‘doing less earlier for a better outcome’ – incentivised prevention, incentivised early accurate diagnosis, incentivised the creation of ‘activated patients’ and incentivised best value treatment. ‘Payer-Provider’ healthcare systems in the US such as Kaiser Permanente, Veterans Affairs and others are profiting from integrated care. They are deconstructing traditional silos and re-building delivery systems organised around whole value-chains – delivering end-to-end care for dramatically less cost. The market is moving from a market of healthcare providers to a market in integrated care organisations – providing whole life cycle care.

Time for a New NHS?

We want a better value NHS – one that delivers more and higher quality care for the same or less cost. This is a reasonable objective. We won’t achieve it by meddling with funding model or universality – these are predetermined and would require a re-negotiation of the collective bond, and would not deliver better value. We won’t achieve it by fragmenting the provider market – that will create a runaway self inflating system of passing the cost up the value chain. We might achieve it by integrating providers around whole cycles of care. We have been talking about integration in various guises for years but have delivered little as we remain in a purchaser provider split and a primary secondary split all locked in self preserving stalemate. What has been missing is the incentive to integrate and that comes from integrating payers and providers. This is for the NHS the slightly awkward lesson coming to us from over the Atlantic.