So Don, as you know many NHS commissioners are considering changes
to how we pay for services.
There's a broad sense of dissatisfaction with our current systems,
in particular, fee for service
and commissioners are considering quite a range of alternative options
including capitation, returning to block grants, and so on.
What's your sense of what's gone
wrong with our current payment systems in the UK and in the US and what's
your advice to commissioners on what we could do differently? How do we go about reform?
A lot's gone wrong. I know more about the U.S.
Complexity is an enemy,
we've set up these complicated calculations about how to pay.
It really distracts the workforce and forces games into the system. It's bad.
Reductionism, you know, we want health and well-being
and we attach payment to what we can measure
when the variation and the measures and the real meaning is wrong.
The psychology is off base.
Most of the workforce, if we talk about individual payment, want to do well and
we treat them like, with carrots and sticks, it produces immense misunderstanding.
It's way off base.
I'd say, avoid complexity at all cost because it isn't going to help us.
So, do we just hand the money over to providers?
Here's how I think about it.
I think we need to get out of paying people
so that we provide incentives to do the right thing.
Yes, that's stupid. It doesn't work.
It's so well embedded in the second in the traditions of payment
and management that it's very hard to criticize it but I will tell you it is wrong.
We need to think about payment as a support system.
It's pay to support the activities we wish to emerge
The individual level to me that pretty well comes down, I think, to salaries.
Just pay people to come to work and then
use management and supervision and psychology to help them
do a better job and if they're screwing up, fire them, but don't let's
assume you can adjust these metrics so that people do the right thing
you will demoralize them.
At the organizational level
I favour aggregate budgets
where we turn over to organizations who will accept responsibility for populations,
an allocation that allows them
to take care of the population.
We watch closely because we don't want skimping,
we don't want nonsense, we want high quality.
All of that has to be watched.
But I think that the idea of a pool of funds,
which become a common or source for care of a population
is sort of the right way to think.
That's the structure of payment that's likely to work best.
Now of course we used to have block grants in the NHS
before we introduced payment for activity and there was a lot of concern
about those arrangements. There was concern that there was insufficient
motivation for providers to offer access to services and insufficient motivation
to improve the quality of individual services.
I think that I view that as a management issue, not an incentive issue.
It's the job of leaders to direct
people's attention in the workforce to what's really important, to help them
get that job done.
There will in any workforce be three populations.
There'll be people who are just not doing the job. That's a hard management job, they may
need to leave and a small number, but get about the job, get about that
because there are problems there. There'll be heroes, thank goodness, people
who will be creating a new future. They're not responding to incentives,
they're intrinsically motivated.
The rest of the people in the workforce,
they're like most people, they come to work every day, they do
their best they try, not as hard as you wish but not as little as you might
think, and they need to learn and be as supported and encouraged to do better
and that is leadership beginning to end.
And when you take incentives
as the primary way to work with that good-hearted middle,
you create consequences that you that aren't favorable; competition, jealousy, hiding,
dissimulation, niggling arguments.
Who has time for that?
Improvement, learning is the job.
So commissioners in the NHS have been
operating with a purchaser-provider split
with arms-length transacting relationships
with providers since the 1990s.
And, as you say, the sense that we
need to use financial levers and incentives to drive performance within
commissioning is really deeply rooted.
If commissioners aren't going to spend
their time and energy devising financial schemes,
what else should they be spending their time and money on?
Well first, the purchaser-purchaser provider split
should be reconsidered.
We need purchase provider partnership.
Both of you jointly serve the communities in which you are stewards.
You have to do that together and collegiality...works.
Can I tell you a story?
I've become bemused by the work at
Morecambe Bay on healthy children.
Dr. Andy Knox GP got the idea.
He thought he could help improve the well-being of the kids by bringing in
the daily mile, a mile a day run.
He went to his CCG, the commissioner and said, you know,
if you give me two days a week, just treat them.
I think I can get health
into our schools and they said, yes, we want to call it and send it.
Yeah, of course there was payment involved
but no, this was this is the release of energy and that's the
kind of partnering I think we need.
So I guess you're saying, Don, the best thing we can do
with our financing systems is is get rid of the obstacles we've created.
The obstacles that were a complexity, competition, demoralization,
scrutiny, as if as if it were the tool. It's a vast misunderstanding.
I will admit, you get nine, you know, ten experts on payment into the room with you
nine will disagree with me.
I just don't think they're right and I've seen
the evidence.
Don, thank you very much.
Thank you.