NHS finances in urgent need of accurate controls

NHS finances in urgent need of accurate controls

How many of us would pay a restaurant bill or a hotel bill without checking with being charged for what we had actually used? I would hazard a guess not many, particularly in these financially straitened times. This is, however, what is happening in most Clinical Commissioning Groups (CCGs) across the country. A recent Audit Commission Report ‘Right data, right payment,’ estimated the error rate in billing between hospitals and GP practices is £3.51 Billion per annum. The NHS needs to find ways to reconcile this vast sum – urgently.

Currently CCGs across the country are declaring deficits and scratching around for Quality, Innovation, Productivity and Prevention (QIPP) programs to make efficiency savings for next year whilst ignoring the most obvious way of balancing their budgets – validating their secondary care invoices. Invoice validation is not about removing money from secondary care. It is simply about making sure CCGs are getting what they are being charged for by secondary care. I would also argue that this is good, old fashioned corporate governance. 

The NHS efficiency drive to deliver better patient outcomes is being hindered by a vast amount of money being billed in error. Every episode of care undertaken in secondary care has a nationally set tariff so that effective control of budgets can be implemented. The new NHS structure which comprises 211 CCGs which are responsible for the 8,400 GP practices in England, have been allocated budgets according to the population size and health prevalence in their areas.

In essence GP practices and the CCGs are at the forefront of primary care with a mandate to deliver improvements in patient services and outcomes within a fixed budget which is part of the £90 billion spent annually by the NHS. Currently hospitals that provide general and acute care, A&E and maternity, account for £46.8bn. According to the Audit Commission the error rate in the bills sent from hospitals to the CCGs and GPs is 7.5%, which is a staggering £3.51bn, and equates to £417,857 for every practice in England!

These errors range from the same episode of care being billed twice to ‘male hysterectomy’ episodes. There is some undercharging but overall the two thirds of errors are in favour of the hospitals. The consequence of inaccurate control of finances is critical in maintaining the patient services which are under considerable pressure.

This is proven by an East Midlands CCG who recently found that from an annual budget of £155 million there were errors totalling £12,458,862. To put this in context these funds would pay for ALL the following episodes of care; 24,000 first outpatient appointments, 1,566 cataracts, 1,249 hernia repairs and 960 hip replacements.

Without accurate control of budgets it will be impossible to optimise the NHS plan to deliver improved patient outcomes from current budgets. Some CCGs (formally PCTs) are aware of the problem but continue to use invoice validation methods which only identify about 45% of the more obvious errors (male hysterectomies). These techniques, known as Automated Invoice Validation (AIV) and Service Level Agreement Management (SLAM), simply run a computer algorithm which does not reference the important information held in the GP clinical systems. GPs record detail of all referrals to hospital and subsequently enter the patient discharge results. This vital source of information is the only way to cross reference the accuracy of the bills from hospitals.

The CCG who identified over £12 million of errors used a combination of the traditional software, AIV & SLAM, and a new algorithm “iQV”, which does reference the information held in GP clinical systems to identify 95% of the errors and supports the practices with patient risk stratification.

Other important information is also available only by cross referencing the data in GP clinical systems; it has been identified, by using the iQV software, that patient discharge information from the hospital can be anywhere up to 2/3 weeks after the patient has been discharged. In consequence the GPs are unaware of subsequent changes to medicinal requirements and possible on-going support for the patient. Hence the iQV algorithm not only allows effective control over the accuracy of secondary billing but can also highlight shortcomings in timely communication from secondary care.

CCGs have one statutory duty – to deliver a 1% surplus at year end. Currently many CCGs already have already or are about to declare deficits of several million pounds. The question the governing bodies of CCGs should be asking is, ‘Given the magnitude of billing errors highlighted by The Audit Commission, are these deficits real or are they caused by overbilling from secondary care?’

Currently the majority of CCGs cannot accurately validate secondary invoices due to their use of outdated analysis software. Unfortunately, this situation is also compounded by staff in some CCG informatics and finance departments taking the attitude that the ‘old’ methods of validation are good enough. Can CCGs meet the challenges of: an aging population, increasing incidence of disease and increasing input cost inflation whilst ignoring a potential 4-7% drain on their budgets through overbilling? Invoice Validation is not a sexy solution to healthcare delivery – mainly because it is looking to managers to deliver the savings – but that does not mean that it can be ignored.

If the iQV algorithm delivers as promised, one CCG that recently announced an estimated £5.9-11 million year end deficit (based on £20million secondary care contract over-performance) could have turned that worst case £11million deficit into an £11 million surplus. You can buy a lot of healthcare for £11 million!

Health Tourism in the NHS

Health Tourism in the NHS

Earlier this year the Department of Health issued a guideline that GPs should provide free healthcare to any overseas visitor requesting treatment. The guidance GPs have received was displayed on the NHS Choices Website.  It read as follows:

GP services

If you need to see a doctor during your stay in the UK then you can register with a GP (general practitioner) practice as an NHS patient. You can register as a temporary patient with a GP practice when you are in the area for more than 24 hours and less than three months. It is up to the GP practice to decide whether to accept new patients or not. Treatment will be free of charge.

When these guidelines were published it produced a firestorm of e-mail traffic from GP practice managers in Buckinghamshire, Berkshire and Oxfordshire. In response to the concerns of my practice manager colleagues, I contacted my local MP, Sir Tony Baldry,  to advise him of the concern the new guidelines had caused. I received a ministerial response informing me that the matter was being looked into but, other than that, not saying very much. I was, however, pleased to hear the Health Secretary, Jeremy Hunt, discuss the subject on Radio 4’s Today program on 3rd of July 2013… http://www.bbc.co.uk/programmes/p01c7pst . Later that day the following question was asked at Prime Minister’s Question Time .

Q14. [162816] Dr Phillip Lee (Bracknell) (Con): As a doctor who once had to listen incredulously to a patient explain, via a translator, that she only discovered she was nine months’ pregnant on arrival at terminal 3 at Heathrow, I was pleased to hear the statement from the Secretary of State for Health today on health tourism. Does the Prime Minister agree that although the savings are modest, the principle matters? The health service should be national, not international.

The Prime Minister: My hon. Friend makes a very important point. This is a national health service, not an international health service. British families pay about £5,000 a year in taxes for our NHS. It is right to ensure that those people who do not have a right to use our NHS are properly charged for it…..

Source – Hansard

Despite all the rhetoric and hyperbole in the debate surrounding the question of health tourism, very little has changed apart from the tone of the NHS Choices website.  The previous guidelines have been removed and had been replaced with the following text:

Non-UK residents will also be charged for hospital treatments. If you are an overseas visitor to the UK you may be charged for some treatments and, depending on how urgent it is, you will usually have to pay in advance….

The NHS is a residence-based healthcare system. If you are planning to live and work in England you’ll have to register with a general practitioner (GP). GPs are the first point of contact for nearly all NHS patients. They can direct you to other NHS services, and are experts in family medicine, preventative care, health education and treating people with multiple and long-term conditions.

You can also register as a temporary patient with a GP practice when you are in the area for more than 24 hours and less than three months. It is up to the GP practice to decide whether to accept new patients or not. Treatment will be free of charge.

I don’t have a problem with GPs providing a one-off GP consultation free of charge. The real problem, however, is that in order to register and treat overseas patients, GP practices will have to issue them with an NHS Number. Once the patient has an NHS Number they will, de facto, be eligible for NHS prescriptions, treatments and referrals. It becomes a lot easier for them to slip through the net to acquire free NHS hospital treatment.

The Solution

I offer the following suggestion as to how screening for entitlement to free NHS treatment can be achieved without turning GP surgery staff into NHS Border Guards.  The current NHS Number is in the format 999-999-9999.  I propose that this format should only be available to patients currently registered with a UK GP surgery.  When an overseas patient presents to register at a GP surgery, they will be asked where they are currently registered.  If they are not currently registered with the UK surgery, they will be issued with an NHS Number in the following format X99-999-9999. This would indicate that the patient is not necessarily entitled to free treatment under the NHS.

Patients who are issued such an NHS Number would still be eligible for free GP consultations.  However, any prescriptions, treatments or referrals recommended by the GP would have to be paid at the market rate, in advance, to pharmacies, treatment centres and hospitals.  The onus would be on the patient to prove their entitlement.  The GP surgery would have no role in either checking or policing the entitlement.

I fully accept that what, on the face of it, sounds like a simple idea would have significant logistical problems in implementation.  One of the problems would be that current clinical systems are designed to recognise the NHS number in its existing format.  This is not an insuperable problem and should not be used as an excuse not to take this forward. In this time of austerity, I am in full agreement with the Prime Minister when he says

‘This is a national health service, not an international health service. … It is right to ensure that those people who do not have a right to use our NHS are properly charged for it.’

I think a different format of NHS Number for patients with an unclear entitlement to free treatment under the NHS would help, significantly, to stop health tourism.

What do you think?

The Existential Threat to the National Health Service.

I am not given to hyperbole but I honestly believe the NHS is facing an NHS Existential Threat. By this I mean that it is possible that, within four years, the NHS as we know it will have ceased to exist. When I say as we know it, I mean largely in public ownership, available to eligible patients on the basis of need, not the ability to pay and, accepting current exceptions, free at the point of delivery.

What is the nature of the existential threat?

Everyone involved in running or delivering the National Health Economy has heard of The Nicholson Challenge. In his Annual Report 2008-9, the Chief Executive of the NHS, Sir David Nicholson, announced a £15-20 Billion hole in future NHS funding. This can be found on page 47 of NHS Chief Executive’s annual report 2008/09. This states:

Looking ahead to the next Spending Review, we need to be planning for a much tighter financial environment than we have had in recent years. We need to start that work in earnest now.
We know that NHS investment will grow by 11 per cent over the next two
years. That growth will be locked in on a recurring basis, so we have a real opportunity to prepare for harder times. After those two years, we must be prepared for a range of scenarios, including the possibility that investment will be frozen for a time. We should also plan on  the assumption that we will need to release unprecedented levels of efficiency savings between 2011 and 2014 – between £15 billion and £20 billion across the service over the three years. This is so that we can deal with changing demographics, the implementation of the regional visions and cost pressures in the system. That level of productivity gain can only be realised through the kind of quality improvements and advances in innovation described earlier in this report.

So What?

This £15-20 billion of efficiency savings is from where the threat to the NHS comes. This blog will not favour one political party over another. It does, however, need to be realised that the Nicholson Challenge predates the last General Election and Andrew Lansley’s bottom-up Clinical Commissioning Health Reforms.

Not many people are aware that the new Clinical Commissioning Groups that replaced the old Primary Care Trusts have one statutory objective – to deliver a 1% surplus within an operating year. A large Clinical Commissioning Group, purchasing services for a population of around 720,000 could receive in the order of £700 million a year to purchase hip replacements, prescriptions, X Rays, Out of Hours Service, Cancer treatments etc. It’s only statutory obligation is, at the end of the year, to be left with £7 million in the bank.
That newly formed Clinical Commissioning Group, led by eager and dedicated GPs, is, however, likely to find that when it speaks to its Hospitals, Community Trusts, Ambulance Services, Mental Health Trusts etc that it will have calls upon its £700 million funding in excess of £730 million. The plan to meet the shortfall, very simplistically, is to strip activity out of the hospitals and to get GPs to do it for a fraction of the cost. This is called the Quality, Innovation, Prevention and Productivity programme or QIPP for short.
The frightening thing for me is that nothing is changing. We have the QIPP agenda and we attend regular meetings to monitor progress. All the right noises are being made but, when you put GPs on the spot and ask ‘Being aware, as you are,  of the problems that face the NHS, what are you doing differently when the consulting room door closes?’ The answer is overwhelmingly ‘Nothing different at all.’ This speaks volumes for the dedication of GPs in putting their patients first but the failure to act is posing an existential threat to the very NHS that they all love and support.
What will  happen when the new CCGs fail to deliver their commissioning plans within budget has not been made clear. The Department of Health has made clear that CCGs will deliver ‘or else’ (my words – hyperbole I know) . Failure to deliver is not an option according to the Department of Health.
What follows is my personal assessment of what will probably happen in the event of failure to deliver within budget:
Year 1. Chief Executive of CCG sacked.
Year 2. special Measures – Department of Health put Special Task Force into CCG
Year 3: CCG commissioning role put out to tender.

The Nuclear Option

This is the ‘nuclear option’. If the role of the CCG is put out to tender there are likely to be a number of private health companies and partnerships who would bid for that role. This has already happened in the running of Hospital Provider Trusts.  If and when this happens, the commissioning of high quality health services that are cost-effective, sustainable and reduce inequalities will become subordinate to a profit motive and the interests of shareholders and/or partners. At the this point, the NHS as I know it, and as the population at large know and love it, will have ceased to exist.

So what should we do? More anon……