In order to address the issue of where the NHS reforms may lead, and qualify the argument of the status quo of implicit priority setting of care combined with the Health and Social Care Act reforms, an increased integration with market mechanisms through greater use of private sector services, and the already existing financial pressure that the NHS is under will lead to care being rationed within the NHS, it is useful to use the example of the Oregon Health Plan, where prominence was given to the priority setting of care. Whilst the demographics are different, as is the political system, as a process of formulating healthcare policy, the Oregon Health Plan has many lessons that can be taken away, especially for the NHS.

Whilst it has been argued that the Oregon Health Plan, created in 1994 to address the state’s Medicaid bill, was an attempt to explicitly prioritise care, and then use rationing processes for such care, it is important to consider that such rationing does not appear to have actually occurred. As will become clearer, this is a key example for the difference between priority setting and rationing, which does not appear to be widely discussed in the debate. There are two uses for the Oregon Health Plan in this discussion: firstly, a system in which priority setting was made public (with the theoretical end result being rationing of care); and secondly, the formation of a policy that had wide public involvement.

What is the Oregon Health Plan? – Background

The Oregon Health Plan (OHP) was the state of Oregon’s Medicaid programme pioneered by John Kitzhaber and approved by the Clinton administration to be implemented in 1994. The policy sparked a debate around healthcare both within the state and nationally, and preceded reform in other states. The explicit priority setting that occurred resulted in 10,000 medical procedures being categorized  and then each respective condition being ‘paired’ with a treatment, of which there were 709 ‘condition/treatment pairs’. Up to this stage, this is priority setting. Where the (explicit) rationing, in theory, took place was that the Oregon legislature placed a line on the list, where the state would cover all condition/treatments above the line, and not fund those below the line.

Rankings of the 17 service categories in the Oregon Health Plan.

Rankings of the 17 service categories in the Oregon Health Plan.

The idea behind such a policy was to expand the number of people who were eligible for Medicaid, and therefore reduce the number of uninsured people, by reducing the number of services that would be covered; more people would be insured, but less services offered. The OHP brought coverage to an additional 100,000 people (an increase in the Medicaid population of 39%), as well as the existing 250,000 people who qualified for Medicaid.

The formulation of the list incorporated a cost-benefit analysis, Quality of Well Being (QWB) scale, as well as taking into account public opinion on the value of healthcare. Such public consultations took place through “professionally conducted town hall meetings and public opinion surveys”, which, due to their popularity, received consistent media coverage. A wider debate also took place in an attempt to define what should be contained within healthcare provision for the state as a whole, as well as making public the rationing processes already used to prevent uninsured and underinsured people getting care.

Given that most hospitals have a legal obligation to treat uninsured patients in an emergency, leading to instances where the provider does not receive payment, the OHP had the support of hospitals, as a way to reduce this financial burden, as well as attempting to prevent “inappropriate visits” to emergency facilities. Funding for the policy was continued in 1996 with a 30-cent rise in tobacco tax, allowing further expansion of the policy. The Health Evidence Review Commission is still responsible for maintaining the prioritized list of services.

Analysis of Oregon Health Plan from literature – Did it work?

The significant talk of rationing did not actually turn out to be the end result, as there was no widespread rationing of care, and it has been argued that the outcome was less than what the policy makers had envisioned. For instance, it has been stated that the current system has become more substantial than before the OHP, especially for mental health services, and dental care – which can be seen as more generous than private insurance. Additionally, transplant coverage – one alleged rationing target – was more generous after the rationing, than before.

Interestingly, the original Bill that contained the OHP also stipulated for an employer mandate, similar to the Patient Protection and Affordable Care Act 2010, in a bid to reach universal coverage in the state, but this was not allowed under federal law and no exemption was made from the Employee Retirement Security Act (ERISA). Such inaction for an exemption led to 340,000 remaining uninsured in 1996.

Although critics of the OHP highlighted the rationing element, many who were involved in the policy making process appear to have “championed” the process, as well as the positive outcome for the expansion of healthcare provision.  There are also wider economic lessons that can be taken, as the OHP policymakers initially looked at using cost per quality adjusted life years (QALYs), but did not find the data conclusive.

Whilst people have questioned the fairness of focusing on Medicaid patients for the prioritisation of care, the OHP and its explicit list of care has been useful as a process of defining what healthcare is available, and due to the public involvement, was testament to such public debate.

Politics of the Oregon Health Plan

Although the OHP appeared to be controversial initially, the fact that the policy was able to remain in place is telling of the public involvement that was utilized throughout the development of the policy. It can be argued, therefore, that a significant aspect of the policy was its very existence, especially when considering the toxic political environment that surrounds healthcare policy within the US. In addition, although it received the title of a “policy experiment”, the OHP was able to carry with it political momentum through using priority setting as a basis.

By sponsoring the original Bill, Kitzhaber took a calculated political risk, but he had a firm belief in increased coverage, as is telling in his response to being asked about the OHP appearing to ration healthcare for Medicaid patients, those with lower incomes (a claim that was dispelled within three years of the OHP), as he argued that the “‘Hippocratic Oath needs to be adapted to the 20th century’”, which has been interpreted to mean that a doctor is not simply there for the individual patient, but that there must be wider societal considerations taken into account also. The policy of combining health research and democratic participation was described as an “unusual marriage” between the two – continuing to highlight the innovativeness of the OHP.

A wider commitment made by the OHP and its development as a policy was that healthcare was seen as a process by which investment can be made into the wider economy, based upon the principle that healthier people will lead to a more productive population and economy.

Criticisms of the process

An obvious criticism of the detail of the OHP is the content of the prioritized list itself; it does not take a qualified doctor to be able to appreciate the complexities within healthcare and the ensuing difficulties that would be apparent if a limited list of treatments were to be created. The argument has therefore been made that setting out to produce such a list in itself is defying “common sense”. Other criticisms have related to the morality of prioritizing healthcare treatments in such a way, as well as there being other areas of healthcare that could be rationed, such as administrative processes.

cost-effectiveness process for the Oregon prioritised list

Evidence based assessment, and cost-effectiveness process for the prioritised list

Lessons for priority setting

As the objective of the OHP was to utilize priority setting in a way to increase coverage, it is useful to consider any lessons for priority setting as a whole that can be offered. For example, as was found in the OHP, once the line had been imposed so that the services below the line were to be rationed, there was opportunity for the system to be “gamed”, by doctors using conditions that were above the line, even if the patient has an illness that is below. It was also found that the OHP did not take out the decision of the doctor, as in certain circumstances care was authorized, even if the particular treatment fell below the line.  The main lesson from the OHP, I would argue, in terms of the debate around priority setting is that making the choices explicit and using a systematic process can have, in theory at least, a more desired outcome than using an unsystematic, inconsistent, “ad-hoc” approach.

Lessons for the NHS

There are strong arguments that the experience and processes used are of relevance to a “universal system such as the NHS.” For instance, a comparison made at the time relates to the North East Thames Regional Health Authority, where a list of services to be excluded from NHS treatment was produced, but with very little information made public about the process of making such a list – in stark contrast to the OHP therefore where the process was as open and transparent as the final list was.

Such a systematic process of understanding the priorities that society has for healthcare, as was followed in the OHP, has not yet led to a widespread debate in England, although there have been numerous attempts at increasing patient involvement within the NHS, with the latest being HealthWatch.

The NHS has numerous challenges, and arguments can be made that it is a very different system in 2013 than it was when it was created in 1948. What has remained consistent however, and what will remain consistent after the implementation of the HSCA is that treatment will be provided free at the point of use. Patients will not be sent a bill following treatment that they have carried out, and patients will not be met with questions about insurance before they are asked about their medical requirements.

National Health Service reforms and the Oregon Health Plan

“The astonishing fact is that Bevan’s vision has stood both the test of time and the test of change unimaginable in his day. At the centre of his vision was a National Health Service, and sixty years on his NHS – by surviving, growing and adapting to technological and demographic change – remains at the centre of the life of our nation as a uniquely British creation, and still a uniquely powerful engine of social justice.”

Gordon Brown

Analysis of the Health and Social Care Act and the Oregon Health Plan

The uniqueness of the NHS to England and the UK as a whole is an example of the relative difficulties associated with using lessons from healthcare systems that operate in one country, and applying them to another country. It is however useful to look at the OHP and take away any lessons, particularly in relation to priority setting that the NHS could benefit from.
It is therefore necessary to look at the OHP in a theoretical manner, as opposed to looking at the policy with a view to replicating such a policy in England. The example of the OHP therefore, where priority setting was used to prioritize publicly funded healthcare, the way in which it was completed, and crucially the line that was drawn on the list, is of real value to the debate around healthcare reform.

Had the results from the OHP turned out as was most feared, that those treatments under the line would be strictly rationed, this would have clearly been a negative outcome for some patients who have conditions on the lower end of the prioritised list, such as sexual dysfunction.

A significant difference between the OHP and the approach taken by the NHS  is that priority setting and rationing in the OHP was completed in an explicit manner, and the NHS in a more implicit manner. In terms of transparency therefore, there is clearly a difference between the two processes and the way in which each were completed.

rationing in the NHS

I am going to use the lessons from the OHP, and bring them together with the NHS reforms, to argue that assuming that the NHS maintains the status quo of implicit priority setting of care; combined with the HSCA reforms of an increased integration with market mechanisms and competition through greater use of private sector services; and the already existing financial pressure that the NHS is under, will lead to greater rationing of care within the NHS.

I will take each aspect in turn and assess why, when combined, these factors will lead to greater rationing within the NHS.

Implicit priority setting

The status quo of implicit priority setting within the NHS allows there also to be implicit rationing. If there is relatively little public awareness about the services that are rationed, then it is easier for such decisions to be made, out of the public domain. There are many priority setting policies in place within the NHS, but given the implicitness of these, there is very little awareness of what services are subject to rationing. Whilst there is an argument stating that currently within the NHS there is a mix of both priority setting, and rationing; it is the latter that creates the most cause for concern of healthcare provided within the NHS in England.

Health and Social Care Act reforms

Given the significant role of GPs on Clinical Commissioning Groups contained within the HSCA, a substantial concern is the lack of experience that GPs may have with the commissioning role within the NHS, and the potential that this has to negatively affect the commission of services.

Considering the introduction of AQP, as well as the increased role of market mechanisms and a rise in private providers within the NHS, it is likely that there will be lower levels of public accountability within the NHS. This is due largely to the levels of public accountability that have typically been found within private sector services being less than public sector services.
Whilst private involvement with the NHS is not inherently negative, in a controlled and regulated manner, having such an increase in the number of private providers will lead to less accountability. There is also a wider, deeper, issue here in relation to private companies and their involvement within healthcare. A public service such as the NHS is not the place for significant involvement of private companies that are susceptible to placing profit motivations, and shareholder interests, before public service.

The increased local autonomy that is contained within the HSCA, primarily through the role of GP commissioning is another contributory factor to greater rationing within the NHS. This is especially so when considering the possibilities that this opens up for GPs and ultimately there being a case where GPs on a CCG choose to commission services from a provider which they run themselves, on a private basis.

Nicholson Challenge / QIPP

The existing financial pressures that the NHS is facing, even before the HSCA reforms were passed, could theoretically contribute to a rationing of care due to the lower levels of funding available to the NHS for services. There is however the potential that if the savings are made through decreases in administrative – non “front-line” – aspects of the NHS, then this could not impact rationing of care. The overall financial pressure upon the NHS is however likely to have a negative impact upon services, and such an impact will not just be felt in the administration side of the NHS.

Why this means greater rationing within the NHS

An obvious counterargument to the above argument and there being a rise of rationing is that, especially in relation to the Nicholson Challenge, such efficiency savings may indeed be made to parts of the NHS that are not “front-line”, and may not necessarily amount to the rationing of care that people receive. There are however, only so many efficiencies that can be made on so-called back-office administration. Given the relative importance of such aspects of the NHS, for example the storage of patient records, making efficiencies in one area of the NHS is likely to impact upon another.

A counterargument in support of the HSCA reforms could be made on ideological grounds that the market will always prevail, and that the market knows best. Such a notion may indeed be the case within the motor industry, or the insurance industry for example. Whilst such a comparison might be useful in factors such as staff productivity, discussed earlier, there is very little comparison that can be made across different sectors. For example, if there is a decrease in the number of cars manufactured owing to efficiency savings within the supply chain, or within the factory; or less insurance products sold because of a reduction in sales staff, this will not have a detrimental impact upon the customer. In healthcare however, given its sensitivities, the impacts of rationing can lead to a decreased accessibility to healthcare, and therefore to a lower level of healthcare available to the customer; the patient.

How the HSCA leads the NHS in the direction of the Oregon Health Plan.

Following the argument that a maintenance of implicit priority setting, the HSCA reforms, and the Nicholson Challenge contributing to greater rationing within the NHS, it is useful at this point to relate such an argument to the OHP.
Such an argument would therefore state, taking the outcome of the OHP in a theoretical sense – that is, the explicit priority setting leading to widespread explicit rationing of care – this is not too dissimilar to where the future of the NHS might lie if the implicit priority setting, HSCA reforms, and the Nicholson Challenge are maintained.

Pressures leading to NHS rationing

Schematic diagram of the relationship between priority setting, HSCA reforms, and the Nicholson Challenge within the NHS, the outcome of rationing within the NHS, and the relationship with the OHP.

Such an argument is based upon factors – implicit priority setting, HSCA reforms, Nicholson Challenge – that are actually happening within the NHS. To offer a perhaps more optimistic outlook, however, it is useful to refer back to the OHP, and the lessons that can be taken away, and used within the NHS.

Where the OHP values can help the NHS

Taking the complete approach from the OHP and replicating it in England will not work, nor would the vast majority of the processes that were used, as has been previously discussed. There are however two main elements that are of significant use for the NHS: explicit priority setting, and widespread public debate.

At present priority setting within the NHS is very much implicit with little information actually made public about the services that are provided by the NHS. Creating an explicit list of the services that the NHS funds could, therefore, be a step in the right direction for creating transparency within the NHS. Perhaps more importantly, such a list could also help to educate the public about what the NHS provides and would in theory make it more difficult for healthcare to be rationed because of the greater public accountability.

It would be counterproductive for there to be a line placed on such a list, as in the OHP case, as this can create an incentive for the private sector to provide services that the NHS will not cover. Having a list at each CCG would be a starting point, with a view to there being a national explicit list of the services provided by the NHS in England. Having different lists for each individual CCG is what was discussed earlier as the disparities found across the nation in terms of the postcode lottery. Whilst this is not preferable, having an explicit priority setting process for healthcare provided by the NHS would be beneficial as this would make rationing of care clearer. Therefore, once such clarity has been reached, there is a greater chance of there being a less widespread postcode lottery.

Following on from such an explicit list, as was an integral feature of the OHP, having a widespread public debate and consultation about the priorities that the public has for healthcare, and perhaps health in general, would benefit the NHS. Dependent upon the outcome of such a debate, this may place greater pressure on future governments to limit further reforms within the NHS.

The public involvement with the healthcare reforms of the OHP, in appearance at least, seems to have sparked a debate within Oregon as to what it is the public demand for their healthcare. Whilst the OHP was addressing Medicaid, and not the whole population, it is interesting to note that such a debate does not appear to have ensued in the UK with the HSCA. The debate that has been associated with the HSCA has been relatively complex and confused given the relative difficulty in understanding the HSCA reforms and amendments in the passage of the Bill. Additionally, any debate that has ensued has largely been related to what service should be provided by a so-called National Illness Service, as opposed to a wider debate about the health priorities of the country. Whilst the debate around the OHP appears to have also focused upon the role of healthcare from a similar perspective, it is positive to note that the OHP provoked such a debate within the public.

The future of the NHS

The increased local autonomy contained within the HSCA reforms, and the further integration of market mechanisms and competition make up some of the most significant aspects of the HSCA. In order to use the lessons taken from the OHP, and apply them in a constructive manner to the NHS, there is a case that can be made for the NHS adopting a more explicit priority setting process. This is especially so when considering that CCGs will likely face similar priority-setting issues; having such a list of national principles would therefore be beneficial.

Such a system could involve creating a list of principles that determines how money in the NHS is spent; or a list of treatments provided should be created, and prioritised, but – crucially – without the rationing line that the OHP had. The former appears more politically attractive given the public perception of the NHS, whilst the latter appears more radical, and therefore more politically challenging.

Although creating an explicit list would not “necessarily increase the public knowledge of entitlements”, it could however lead to a greater public debate, which would certainly be a positive development. There are suggestions that a negative list – what the NHS should not provide – could be adopted using existing NICE guidelines. Whilst this may indeed lead to a widening of the debate, if this were to be introduced there would be a greater incentive for the role of private companies to fill the gap – on the assumption that such treatments would be profitable.

An additional, perhaps more practical recommendation, is to use nudging to encourage providers and clinicians “towards clinical and cost-effective care” Such a dilemma can be described as politically paradoxical because of the potential progress that can be made, as was seen with the OHP, but also, and perhaps more relevant to the NHS, the clear political risk that creating an explicit list would require.

Given the maintenance of implicit priority setting within the NHS, as has been discussed, this acts to amplify the impact of the HSCA reforms and the impacts of the Nicholson Challenge upon the NHS. Addressing the status quo of implicit priority setting could therefore lead to a wider public debate, as was seen in Oregon, with the potential to lead to an even stronger NHS. Taking the public with them, politicians and policymakers therefore have an opportunity in which to create a widespread public debate about the NHS – which has the potential to benefit an NHS that maintains to be for the people.

Ian has been working with us for the last year and this is part of his undergraduate dissertation submitted to the University of Sheffield.

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