1

NOEL J STAUNTON (BSc, MRPharmS, MBA, Dip H.Econ)

Pharmaceutical Consultant-3i consultancy ltd

Work with Pharma companies (Pfizer, GSK, BI, Novartis, Flynn, Shire, Galderma, Stiefel, Solvay, Takeda, Lundbeck etc, etc)

Mob 07 980 148 711. E mail noel@3iconsultancy.com

2

TODAY

NHS reorganisation –Why?

PBR

PBC

WCC

3

TODAY

Darzi Polyclinics

Pharmacy White Paper

PCO levers

In July 2002 the WHO asked the UN Security Council:

“What, in your honest opinion, can we do to solve the problem of the shortage of food in the rest of the world?”

Remember, people interpret things

differently.

Didn’t work because:

East Europeans didn’t understand the word “honest”

Chinese didn’t understand – “opinion”

Middle Easterners didn’t understand – “solve”

South Americans didn’t understand – “problem”

Western Europeans didn’t understand – “shortage”

Africans didn’t understand – “food”

Americans didn’t understand – “rest of the world”

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NHS REORGANISATION - WHY?

We’re spending more £s per head on health than EU15 and EU27 countries but our outcomes are poor

0 300 600 900 1,200 1,500 1,800 2,100 2,400 2,700 3,000 3,300 3,600

Romania

Bulgaria

Latvia (2004)

Turkey

Lithuania (2004)

Estonia (2004)

Mexico

Poland

Slovak Republic

Hungary (2004)

Czech Republic

Korea, Republic of

Cyprus (2004)

Malta (2004)

Slovenia (2004)

Portugal

Spain

New Zealand

Greece

EU27

Italy

Finland

Japan (2004)

Australia (2004)

EU15

UK

OECD

Netherlands (2004)

Canada

Sweden

Germany

Belgium

Ireland

Austria

France

Denmark

Iceland

Switzerland

Norway

Luxembourg (2004)

USA

Total1 annual health care expenditure per capita (£ cash)

Notes: 1 Public and private spending. 2005 figures for Belgium, Cyprus, Denmark, Estonia, Japan, Latvia, Lithuania, Malta, Slovak Republic and Slovenia are WHO provisional estimates. Figures are dependent on exchange rates between national currencies and £ sterling over time. Figures for OECD, EU27 and EU15 are weighted averages.Sources: OECD Health Database (OECD). World Development Indicators (World Bank). World Health Report: Core Health Indicators (WHO). World Health Organisation National Health Accounts Series (WHO). For sources of UK data refer to Table 2.1.

Figure 2.6 Total1 annual health care expenditure per capita in OECD and EU countries, circa 2005

0 2 4 6 8 10 12 14 16 18 20

Iceland

Sweden

Luxembourg

Japan

Finland

Norway

Czech Republic

Portugal

France

Belgium

Greece

EU15

Germany

Ireland

Slovenia (2004)

Spain

Austria

Switzerland

Denmark (2004)

Italy

Netherlands

Australia

New Zealand

UK

Canada (2004)

Korea, Republic of (2002)

Malta (2004)

EU27

OECD

Estonia (2004)

Hungary

Poland

USA (2004)

Slovak Republic

Lithuania (2004)

Latvia (2004)

Bulgaria (2004)

Romania (2004)

Notes: 1 Deaths under 1 year per 1,000 live births. See Table 1.20 for rates for all available OECD/EU countries. EU15 as constituted before 1 May 2004. EU27 as constituted on 1st January 2007.Sources: OHE calculations based on data from WHO Mortality Database (WHO). OECD Health Database.

Figure 1.11 Infant mortality rates1 in selected OECD and EU countries, circa 2005

Infant mortality rate1

64 66 68 70 72 74 76 78 80 82 84

Estonia

Turkey

Romania

Latvia

Bulgaria

Lithuania

Hungary

Slovak Republic

Poland

Mexico

Czech Republic

Slovenia

Portugal

USA

Denmark

Korea, Republic of

Luxembourg

Ireland

Cyprus

Finland

Belgium

Germany

Malta

UK

Greece

Austria

Netherlands

New Zealand

Norway

Italy

Canada

France

Spain

Sweden

Australia

Switzerland

Iceland

Japan

Source: World Population Prospects (United Nations).

Figure 1.7 Projected life expectancy at birth in OECD and EU countries, 2005 - 2010

Life expectancy (years)

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0

Korea, Republic of (2002)

Japan (2003)

Luxembourg

Mexico (2002)

Greece (2003)

Spain (2003)

Sweden (2002)

Finland

Malta

Portugal (2003)

Poland (2003)

Iceland (2003)

Norway (2003)

Austria

Australia (2002)

Switzerland (2002)

Slovak Republic (2002)

Canada (2002)

Italy (2002)

Czech Republic

Estonia (2003)

Germany

France (2002)

Lithuania

Slovenia (2003)

UK (2005)

Latvia

Ireland (2002)

Netherlands

New Zealand (2000)

Hungary (2003)

Denmark (2001)

Note: Year is 2004 unless stated otherwise.Sources: OHE calculations based on WHO Mortality Database (WHO). Mortality Statistics Series DH2 (ONS). Vital Events Reference Tables (General Register Office of Scotland). Demographic Statistics (Northern Ireland Statistics and Research Agency).

Figure 1.16 Age standardised mortality rates from breast cancer, women aged 15 - 74, in selected OECD and EU countries, circa 2004

Rate per 100,000 population

0 50 100 150 200 250 300 350

Japan (2003)

Korea, Republic of (2002)

France (2002)

Netherlands

Switzerland (2002)

Portugal (2003)

Italy (2002)

Spain (2003)

Luxembourg

Norway (2003)

Australia (2002)

Austria

Iceland (2003)

Denmark (2001)

Canada (2002)

Germany

Slovenia (2003)

Sweden (2002)

UK (2005)

Greece (2003)

Mexico (2002)

Malta

New Zealand (2000)

Finland

Ireland (2002)

Poland (2003)

Czech Republic

Slovak Republic (2002)

Hungary (2003)

Lithuania

Estonia (2003)

Latvia

Females

Males

Note: Year is 2004 unless stated otherwise.Sources: OHE calculations based on WHO Mortality Database (WHO). Mortality Statistics Series DH2 (ONS). Vital Events Reference Tables (General Register Office of Scotland). Demographic Statistics (Northern Ireland Statistics and Research Agency).

Figure 1.13 Age standardised mortality rates from coronary heart disease, men and women aged 15 - 74, in selected OECD and EU countries, circa 2004

Rate per 100,000 population

0% 10% 20% 30% 40% 50% 60% 70%

Portugal

Korea, Republic of

Spain

USA

Czech Republic

Slovak Republic

Canada

Mexico

Hungary (2004)

New Zealand

Poland

Denmark

Sweden

Germany

Finland

Netherlands (2002)

Luxembourg (2004)

Australia (2004)

UK

Japan (2004)

Austria

Norway

France

Italy

Switzerland

Iceland

Hospital expenditure as a percentage of total health spending

Notes: Year is 2005 unless stated otherwise. Figures at end of bars relate to hospital expenditure per capita in £ (money of the day). Cross-country comparison should be carried out with caution as figures may be based on different definitions.Sources: OECD Health Database. UK figure see Table 3.1 and Table 2.2.

1,6607

1,448

664

913

1,324

729

655

1,254

603

561

694

80

93

128

932

299

838

Figure 3.3 Hospital expenditure as a percentage of total health spending and hospital expenditure per capita (£) in selected OECD countries, circa 2005

309

712

624

131

386

617

129

73

536

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MOST (ALL?) NHS CHANGES REVOLVE AROUND SPENDING MORE IN PRIMARY CARE AND LESS IN SECONDARY CARE

PBR

PBC

World Class Commissioning

GP contract, Community Pharmacy contract, Consultants contract

Nurse and Pharmacist Prescribing

Managing long term conditions

Etc, Etc, Etc

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PBR

Old system - block contracts PAY FOR WHOLE POPULATION Don’t know how much hospital care costs Can’t disinvest from secondary care

New system - PBR PAY FOR EACH INDIVIDUAL PATIENT National tariff CAN DISINVEST FROM HOSPITALS

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PBR

England only (but Celtic nations eventually)

Copy of US system which DOES reduce hospital stay (Ref HSJ,

9th Dec 04, P 16)

International phenomenon DRGs first in the USA -Medicare

France uses US DRGs

Italy uses modified version of US DRG system

Germany & Netherlands from 2003

England, Australia, Norway, Austria, Finland, Sweden, Japan and Canada have own case mix tools

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A 55 year old man with a history of heart disease is admitted to coronary care with an MI. His condition is complicated by heart failure. He is discharged after 32 days.

PBR - example acute MI

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Patient is discharged from hospital.

Hospital finance clerk reads patient’s notes and types into her computer:

Primary diagnosis – MI Secondary diagnosis -CHF

PBR software spews out a code – HRG E11

PBR - example acute MI

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HRG E11 - non-elective spell = £4,787

2 extra days @ £183 =£366

Total charged to PCT =£5,153

HRG code

HRG name

Elective spell tariff (£)

Elective long stay trimpoint (days)

Non-elective spell tariff (£)

Non-elective long stay trimpoint (days)

Per day long stay payment (for days exceeding trimpoint)

Short stay (less than 2 days) emergency tariff (£)

E11

Acute Myocardial Infarction w cc 5,006 43 4,787 30 183 957

E12

Acute Myocardial Infarction w/o cc 2,908 19 3,017 14 191 603

PBR - example acute MI

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The tariff covers EVERYTHING that happens to the patient

whilst in hospital (drugs, tests etc)

Overseas PBR has stimulated primary care prescribing

(in order to prevent expensive hospital tariffs)

Overseas PBR has threatened secondary care

prescribing (the hospital earns the same amount regardless

of which drug they use) UNLESS the drug reduces length of

stay

Birth of real pharmaco economics in UK?

PBRPBR

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Fund holding DID change how many patients

went into hospital (unlike HAs, PCTs, and other

NHS changes) (Ref Health Foundation, Oct 04)

PBC born in England only (April ’05) and voluntary

Resuscitated in April ’06 through the GMS contract

PBC

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Practices meant to keep at least 70% of any freed up resources

This wasn’t happening so BMA said don’t do PBC UNLESS you get a written agreement (HSJ 19th April 07, P8).

Resources freed up may be spent on: Equipment; Training, clinical and non-clinical staff; Premises development with specific PCT board approval;

 Freed up resources can be shared across a wider group of practices

Practice Based Commissioning: achieving universal coverage Jan 06

PBC efficiency gains

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PBC Currently – results aren’t great

Audit Commission said: “We’ve not yet seen any real evidence of it (PBC)

leading to the redesign and transformation of services that was hoped”.

They blame PCTs and the way they have set PBC budgets. (Ref HSJ 22 Nov ’07, P 7).

However PBC is here for medium term at least NHS to use private firms to assist PC clusters with

business cases (Ref HSJ 24 July 08, P 6)

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World Class Commissioning

“Adding life to years and years to life”.

Commissioning Assurance Handbook, dated 4 June 2008. PCTs will be assessed against three elements – Outcomes, Competencies and Governance. PCTs need to complete a self assessment and submit materials by end October 2008.

PCTs to be ranked from 1 to 5 (5 = a WCC)

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DARZI-Polyclinics

Each PCT in England must have a new Polyclinic

Also over 100 new GP practices in “under-doctored” PCTs (mainly NE and NW England)

Contracts will be awarded Dec ‘08

Real reason for doing this is to introduce some fat into the fire of change

Many private companies bidding including Virgin, United Healthcare, BUPA. Virgin have had expressions of interest from 300 GP practices, Ref HSJ 22 May 08, P 11 but have now PULLED out of opening GP surgeries (Ref GP 26th Sep 08)

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DARZI - Polyclinics

Set-up costs met by DOH - £250-800m.

Winners will develop new services funded by start-up monies in competition with existing practices

Some existing practices may go bust

Practices will increasingly work in groups with shared approaches to medicines management

Practices won by United Health, Care UK, Virgin, will restrict access, employ GPs and look to widespread formularies and prescribing policies

Pharmacy White Paper

(Green paper, White Paper, Bill, Legislation)

White paper proposes that pharmacies will:

prescribe certain common medicines, be first port of call for minor ailments, saving every GP the equivalent of around one hour per day;

provide support for people with long-term conditions;

be able to screen for vascular disease and certain STDs, such as Chlamydia;

work much more closely with hospitals to provide seamless care;

play a bigger role in vaccination.

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Pharmacy White Paper

Let’s not forget:

Pharmacies currently only doing 85 MURs each (*allowed to do 400) (Ref PJ 2 Aug 08, P 121)

Lots of previous false dawns for pharmacy

PWSI announced 2 years ago but only 2 (yes 2) in England

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Some things are obvious

PCO LEVERS

PCOs are proven to influence prescribing National audit office survey of 2,000 GPs in ’07 Atorvastatin + Losartan in decline

Prescribing incentive scheme is main lever

PCOs reserve powerful levers for top priorities (normally big cost savings)

PCO LEVERS

Prescribing incentive schemes 5* lever, only for big savings (e.g. statins, sartans,

antidepressants etc)

Practice support pharmacists 5* lever, only for big savings

ScriptSwitch 3* lever, smaller cost savings and quality issues

Monthly Rx newsletters/Guidelines etc 2* lever, reinforce others

Guidelines 1* lever, let someone else waste time on these

31

NOEL J STAUNTON (BSc, MRPharmS, MBA, Dip H.Econ)

Pharmaceutical Consultant-3i consultancy ltd

Work with Pharma companies (Pfizer, GSK, BI, Novartis, Flynn, Shire, Galderma, Stiefel, Solvay, Takeda, Lundbeck etc, etc)

Mob 07 980 148 711. E mail noel@3iconsultancy.com