The Local Government Information Unit in cooperation with Westminster City Council has released Payment by results: The perfect storm of public sector finances. This think piece includes policy options for councils in the areas of health and welfare. This blog explores the suggested policy proposals in preventive health where councils have been given a new role by our coalition government.
Britain spent almost £100 billion on health care in 2010. This will increase as Britain’s population ages and becomes increasingly overweight. Two thirds of Britons are overweight and one quarter is obese. The proportion that is overweight is predicted to increase by 10 per cent over the next ten years. Around one fifth of the current UK population will reach age 100. Why is this problematic? We are living longer and eating too much. These are good problems to have but unfortunately it will lead to an increase in cases of dementia, diabetes and heart disease.
Dementia costs the UK an estimated £23 billion of which £10 billion relates to health and social care costs. Every individual with the ailment costs the economy an estimated £27,000 per annum. Dementia risk factors include high blood pressure, high cholesterol, diabetes, smoking and heavy alcohol use.
Diabetes costs are estimated at 10 per cent of NHS expenditure. Around nine in ten diabetes sufferers have type 2 diabetes. Risk factors include being overweight, having a sedentary lifestyle and eating an unbalanced diet. Overweight individuals are twelve times more likely to contract this ailment. The NHS spends around £9 billion per annum treating this condition. If left undetected it can cause blindness, heart disease and strokes.
Heart disease costs the NHS around £3.2 billion per annum. Cardiovascular diseases in general cost the NHS around £15 billion per annum. Hospital care costs account for 73 per cent of the costs to the NHS. Risk factors include high cholesterol, high blood pressure. We can delay or prevent the onset of many of these conditions through individuals changing lifestyle.
Each of these conditions can be tested for although dementia tests are in the experimental stage. Each of these conditions can be delayed or prevented by lifestyle changes. So why don’t we invest more in prevention?
The answer is that we have a national sickness service not a national health service. Government budgets are deployed in acute services. The economic benefits of prevention may not accrue to those initiating the preventive measures. If prevention schemes are untargeted it is difficult to prove any successful outcome was a product of the intervention. Without an agreed metric to return savings to programme initiators none of these initiatives will be set up.
Our model includes a pragmatic approach based on savings from council budgets alone. There is also a transformative approach if central government departments will agree to share cost savings.
Councils could spend their preventive health funding on screening citizens in age groups at risk of heart disease, dementia and diabetes.
A council could partner with a private provider that agreed to provide the service for free. Alternatively the council could pay private providers to perform the screening service. Those undertaking the screening could be paid a small sum for taking part. The initiative could be funded through a social impact bond, the general council budget or budgets assigned to preventive health. A social impact bond allows public services to access private capital for defined social impacts. Bondholders would be rewarded according to the number of residents screened. They could fail to be paid if the scheme were unsuccessful.
Health screenings are widespread, Tesco has conducted them since 2007, charging £10. They are available in all Tesco pharmacies. Customers blood pressure, cholesterol and susceptibility to diabetes is tested. PruHealth offers annual health checks to all its members for cholesterol, blood pressure and body mass. Westminster, Hammersmith and Fulham and Kensington and Chelsea offer residents aged 16-24 a £10 HMV voucher if they return a free chlamydia testing kit. US Medicare gives individuals free annual checks for Alzheimer’s. Residents become eligible for Medicare at age 65.
A condition of receiving a ‘free’ (council funded) health screening could be that the user agrees to share their susceptibility to these conditions with the council. We could then inform those at risk of how they can change their lifestyle to stave off these diseases. This prevention programme would be targeted at those in need. It would not lecture everyone on how they should live like a monk, as some preventive measures do.
Private providers could be selected to deploy preventive programmes. These providers would be paid on a payment by results basis. Payments for successful preventive providers would need to allow for the council to pay the initial social impact bondholders (if this funding option were chosen), pay those undertaking the tests, and for the council to achieve cost savings. Councils would need to decide if they would meet the subsistence costs of unsuccessful preventive programmes. They may wish to do this to allow smaller providers to bid or to stimulate greater interest. Preventive schemes would need to demonstrate and deliver savings within a defined time frame. Councils should commission such schemes with a view to the payoff period as well as the potential cost saving. Achieving some cost savings in a short period of time is very important.
The Government could also agree to refund cost savings to the council. There would be a clear test group to provide evidence of a programme’s success. If a local authority can prove that of one hundred persons susceptible to type 2 diabetes that were subject to a preventive programme only thirty went on to contract the ailment compared to say seventy in a hundred of those susceptible in the general population they could make a case to recover savings from the NHS (hypothecated example). This would allow a broader programme of prevention. It depends on central government agreeing to share savings. Without this agreement the council would need to proceed on the basis of savings to the council alone.
Councils should invest to help their citizens lead longer and more productive lives. It is up to citizens whether they change their lifestyles or not but an early warning system should cost less than corrective surgery. We could build a preventative health system that worked. If successful these proposals will create a bigger pensions problem but our citizens having longer healthier lives is a nice problem to have.
The views expressed above are my personal views and not those of my employer or any other organisation with which I am associated.