When hospitals start gaming with patients

I heard a fascinating anecdote yesterday about a senior doctor at one of the big London teaching hospitals, who joked that his patients left the hospital anaemic because they had gone through so many blood tests in his care.

I was at an inspiring conference in Oxford organised by the Centre for Sustainable Healthcare, so there were a lot of this kind of anecdote around.

The doctor was exaggerating, of course, but for NHS insiders it is always obvious what he was talking about. The NHS payments system is set up so that there are endless blood tests, each one charged to the local CCG, and none of the results shared with other hospital departments.

One of the recommendations of my Barriers to Choice Review was that the Department of Health needs to look more closely at how the payment system is gamed. The initial response by the government agreed that this needed to be investigated and promised to work with Monitor to look at it.  I hope they do.

Here is some of the gaming I’ve come across since then, and it goes way beyond just having blood tests over and over again:

• Patients who are sent back to GPs when hospital tests reveal some other problem, because first referrals can be charged more than secondary referrals from inside the hospital.

• Hospital doctors who are forbidden to talk informally to GPs in case it prevents chargeable appointments.

• Out-patients departments which refuse to do one-stop shops because they can charge more by making patients come back.

• Regular six-month follow up appointments with hospital consultants, which have to be carried out face to face, whether patients need them or not.

• Out-patients departments (I heard this about an opthamology department) which fills up slots with patients who don’t really need to be there, to provide them with the income to treat the patients who do.

My feeling is that all these need to be classed as anti-competitive behaviour – deliberately wasting people’s time and wasting NHS resources to game the system for individual institutions or departments – but this is just a stopgap solution.  

It is also unfairly condemnatory: the hospitals are responding to perverse signals by the payments system, and it is hard to blame them for that.

The real question is whether the NHS is being well served either by the split between primary and secondary care (which prevents integration) or by the split between purchasers and providers (which encourages gaming).

Most big corporations don t have internal markets like this because they know it wastes resources.  There are exceptions, and they are usually a disaster (see what happened when they tried it at Sears).

It leads to internal squabbling and major waste.  It also leads to a kind of accountancy arms race.  When foundation trusts employ coders at £1,000 a day to push up each coding to a higher tariff (and they do), it forces CCGs to employ their own coders to challenge them.

Personally, I think the days of the internal market – a money-wasting innovation by management consultants McKinsey – are over. I’m not sure what needs to replace it, but it will certainly include integration, personal budgets, local accountability and flexibility.

Whatever payment system we choose need to encourage health units to reach out upstream of the demand, and act to reduce the number of alcohol-related admissions. Or the weight of depression. Or poor diets, or all the other things that so affect their ability to succeed.  At the moment, they don't see this as their business, despite the huge impact it has on them.

In other words, we need an NHS that can look at the bigger picture intelligently, rather than acting like experimental rats in a maze. The coalition’s health and well-being boards may turn out to key to this at local level.  

It would be ironic if they turned out to be a game-changer after all, but I think they will.