The Economics of
Clinical Governance
www.bradfordvts.co.uk
Brian Ferguson, Professor of Health
Economics, Nuffield Institute for Health,
University of Leeds;
and Head of Clinical Governance, North Yorkshire
Health Authority
Professors
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“a professor is a person who tells you
what you know already, but in a way
you cannot understand”
Principles underlying the approach to clinical
effectiveness (August 1997)
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co-operation between providers and local commissioning
groups, based on jointly agreed priorities;
recognise the need to develop effective links between clinical
audit, continuous professional development and local R&D
initiatives;
recognising the importance of culture is vital;
this is a long-term agenda: behavioural change takes time;
the focus should be upon improving health outcomes for
patients and the public in general;
there are limits to the evidence-based approach which if taken
too far can place a disproportionate emphasis upon
guidelines, protocols and a rational, mechanistic approach.
Some reflections
changing practice takes time
 what gets in the way?
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suspicion about motives
 perceived lack of resources
 structural change
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working across 1o and 2o care is
essential in bringing about changes
in patient care
One of the two great lies
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“I’m from the Health Authority and
I’m here to help......”
Clinical governance:
more than a new label
same elements as the previous label
(clinical effectiveness)
 a statutory duty for quality on all NHS
organisations
 explicit link to performance
 an opportunity for resources to follow
measurable improvements in quality
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Clinical Governance: what can
the ‘dismal science’ contribute?
Economics and theories
“A first-rate theory predicts, a
second-rate theory forbids and a
third-rate theory explains after the
event”
Important elements of
clinical governance
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identifying the best available evidence base on clinical and
cost-effectiveness
continuous professional development
clinical guidelines
clinical risk management
R&D
advice on clinically and cost-effective prescribing
clinical audit
performance assessment (of quality standards and
changes)
analysis and interpretation of information on current
practice
Some principles
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there are limits to guidelines and protocols
recognising the importance of culture is vital
McKee and Clarke (1995): “the most
enthusiastic advocates....may have paid
insufficient attention to the uncertainty
inherent in clinical practice, with the
imposition of a spurious rationality on a
sometimes inherently irrational process”
Service excellence in health care (1)
Mayer and Cates (1999)
Journal of the American Medical
Association, Volume 282, Number 13
Service excellence in health care (2)
patients want reports on both the quality
of clinical care and the quality of service
 patients’ perceptions of service
satisfaction have a clear impact on their
perceptions of quality of care
 technical expertise must be combined
with service excellence in health care, as
well as the patient’s perception of that
care, to improve clinical care overall
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Health care professionals’
distinctions between patients and
customers (Mayer and Cates, 1999)
Acutely ill or injured
Less severely ill
Dependent on physician
Independent
Power / control with physician Power / control with customer
Less choice
More choice
Technical expertise required
Service skills required
Higher satisfaction for clinician Lower satisfaction for clinician
High clarity of treatment
Less clarity of treatment
Time-dependent
Service-dependent
A less scientific distinction
between patients and customers
“the more horizontal they are, the
more they are a patient; the more
vertical they are, the more they are a
customer”
Improving process efficiency
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could patient details be recorded more
efficiently?
could information on the risks and
benefits of different care pathways be
provided more efficiently?
if ophthalmology services were
configured differently, could demand be
managed better?
Factors in effective clinical teams
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showing a positive attitude to patients
finding out what patients and colleagues think
about the quality of care delivered
assuming collective responsibility for
performance
showing leadership and competent management
having clear values and standards
demonstrating an enthusiasm to learn
communicating well
caring for each member of the team
Are Guidelines Following
Guidelines?: the methodological
quality of clinical practice
guidelines in the peer-reviewed
medical literature
Shaneyfelt, Mayo-Smith and
Rothwangl, JAMA, May 26, 1999
The cost of improving quality
Cost
MC
qmin
qm
qmax q* Quality
Measuring performance
“measurement alone does not hold the key
to improvement....measuring could be an
asset in improvement if and only if it
were connected to curiosity - were part of
a culture primarily of learning and
enquiry, not primarily of judgement and
contingency”
Berwick (1998)
Incentives
aligning financial and clinical
incentives to improve quality
 “money following quality”?
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Health Authorities: the co-ordinators
of clinical governance arrangements
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PCGs’ commissioning decisions within HImP
framework
longer-term service agreements between HAs/PCGs
& Trusts need to reflect overall approach to quality
and performance assessment within the HImP
national guidelines will need to be implemented
consistently within and across PCGs and Trusts
CHI: HAs and providers will be expected to resolve
local difficulties but HA can trigger RO / CHI
involvement
Projects aimed at bringing about
evidence-based change in North
Yorkshire
cost-effectiveness of a one-stop
prostate assessment clinic
 improving the quality of information
on orthopaedic surgery
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One-stop prostate assessment clinic
at Airedale General Hospital
Objectives:
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to develop shared care guidelines, evidence-based
where possible
to evaluate the operational efficiency of the clinic
within established evidence on best practice
a joint project between Trust, HA and local
GPs
 clinic aims to provide a one-stop diagnosis for
patients with BPH and then to refer for
appropriate treatment and follow-up
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Operational efficiency assessment (1)
little published evidence on the efficiency of a
one-stop clinic but evidence of effectiveness
for the diagnostic steps carried out within the
clinic
 established a flow diagram of the different
paths patients visiting the clinic could take
 this revealed that for most patients the clinic
was not one-stop
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Operational efficiency assessment (2)
attached times and notional costs to the
extra visits patients made to the clinic
 identified the barriers to the clinic being
truly one-stop:
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ultrasound
 test results
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business case developed for providing the
clinic with the facilities to carry out
ultrasound testing on the same day as the
clinic
Evidence base
(Total Hip Replacement)
health needs assessment volume 1 (1994)
 Effective Health Care Bulletin (October 1996)
 Health Technology Assessment Report (1998):
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cemented designs show good 10-15 year + survival
results
 models with good comparable results include the
Stanmore, Howse, Lubinus, Exeter and Charnley
 economic model estimates total expected costs based
on Charnley survival data and actual hospital costs
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Evidence base
(Total Knee Replacement)
health needs assessment volume 1 (1994)
 the ‘gold standard’ knee prosthesis is not
clear from the literature and a consensus of
opinion is needed
 only five TKR implants on the UK market
have published survival analyses of 10
years or more [Liow and Murray, 1997]
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Issues for consideration
evidence-based (cost-effective) prosthesis
purchasing
 improving the quality of data
 measuring outcomes
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clinical measures
 patient outcome measures
 revision rates
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criteria for referral and prioritising
waiting lists
The role of N.I.C.E.
to “give a strong lead on clinical and cost
effectiveness, drawing up new guidelines and
ensuring they reach all parts of the health
service”
 to improve the quality of clinical services
across the NHS:
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by evaluating new drugs and new technologies to see if
they have a cost-effective role in the NHS;
 by formulating guidelines on numerous conditions for
doctors, carers and patients;
 by advising on methods of audit in relation to
guidelines.
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Why should clinical guidelines
matter to Health Authorities?
a quality assurance tool
 one means of ensuring equitable (access
to) health care
 an implicit or explicit aid to
prioritisation decisions
 a route to improving health outcomes
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Economic questions
if guidelines lead to greater centralisation
of services, what resources can be
expected to be released locally?
 fixed, semi-fixed and variable cost
elements
 what are the likely costs and benefits of
targeting different risk groups?
 marginal effects of targeting different
groups
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Some general (unresolved) issues
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designing appropriate incentive systems for developing
clinical governance & achieving measurable improvements
in quality of care
making the PCG clinical governance agenda the agenda of
all the constituent practices;
anticipating and tackling “poor clinical performance”
 reconciling independent contractor status and professional
self-regulation with clinical governance
accessing clinical data and improving data coding & quality;
establishing processes for supporting practices / individuals
where consistently ‘poor performance’ is identified;
ensuring a focus on clinical teams (relative performance is
frequently a reflection of system rather than individual
success or failure)
Some concluding points
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many of the issues of clinical governance are
economic in nature
aligning clinical and financial incentives will be
important
real co-operation across organisations and care
boundaries is essential
service quality and technical expertise should go
hand-in-hand with patients’ perceptions of care
Health Authorities and PCGs have a
responsibility to take the wider view to protect
the individual clinician / patient relationship