The big question

Which do we change first – the care model or the financial flows and contracts? Traditionally we focus on describing a new care model and changing finances and contracts come later. Would we be better off the other way round?

In a paper summarising the results of a survey of health providers in USA about their experience of risk based contracts, The Advisory Board Company describe two strategic paths to whole system health management.

  1. Care Transformation – innovating on care delivery across episodes of care and ongoing care management; and
  2. Payment Transformation – aligning contract terms across payers and new payment incentives

This resonated with me. They acknowledge that you need both and suggest providers do them at the same time. This is true for providers but when advising commissioners in the UK, I am not so sure. How much should commissioners be involved in describing care models? Many a transformation programme gets bogged down when discussions about changing care gets blocked by consideration about our payment methods and vice versa. Recent experience shows that even when the two elements are separated but run simultaneously, it does not always work out. So the question for me is: Which comes first?

The ‘purist’ alliance contract view is to tackle the latter on the basis that this then unleashes new relationships and energy which will change the former. The logic (and the experience from other sectors) is that you:

  • choose a group of people who really get collaboration and innovation
  • tell them the outcomes that matter to you and your customers/public/users of service
  • create a commercial framework that means that the only way they can each make significant profit/surplus/margin (chose which of these pertains to your context) is to hit outstanding performance on the outcomes.

If you get this right then those people come up with ideas you never thought of or thought possible, implement them and you get those outstanding outcomes.

However, my experience in health care is that commissioners and providers want the care pathways or model described before they will sign up to any change. They want to know ‘what is in it for me?’. This is natural, normal and I am not saying it against anyone. It is how we have always done things – describe the change, consult on it, write the business plan and the cost benefit analysis first. To agree to a financial and contract change without doing this feels counter intuitive and risky.

The trouble is that even if the vision is to do the right thing and the overall business case stacks up, if one or more party perceives that it will be a loser then, as night follows day, progress will stall or stop somewhere down the track. Again, not surprising or wrong – it is human nature.

Maybe this is why our traditional ‘describe the care model first’ way has not led to major transformation.

I am fortunate to be able to work with innovators who want to try something different. Some of the public sector commissioners I am working with are redefining how they want to commission and how they want their providers to work together. They are clear on their values and how these translate into the system that they create and fund. We help them create the environment (strategic, governance and commercial) in which providers can sign up to collaboration and are trusted to transform the care model or service offer.

Maybe doing 2 rather than continuing to rely predominantly on 1 is what is needed.

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