First seen in Independent Practitioner Today
Yes, independent practitioners can adapt to new surroundings, Peter Connor assesses the impact of the Competition and Markets Authority's final report for consultants.
MUCH ATTENTION has focused on divestiture of hospitals in London but the repercussions of the report are not just for the big beasts of the private healthcare. From the private doctors' perspective, the crackdown on hospital incentive payments and the drive to make more information available about consultant fees and performance are likely to have a considerable impact. And their ability to respond positively to new challenges will determine their success.
In banning direct incentive schemes provided by private hospital operators to clinicians the CMA acknowledged that the major hospital groups have already ended cash-based payments to doctors for referring patients. It is concluded that indirect incentives such as equity participation schemes were acceptable - subject to certain conditions - as were the provision of certain ‘low value’ benefits, including basic workplace amenities, general hospital marketing and services that are integral to the hospital’s operations, such as administration systems and billing where the consultant’s fee is part of a package price.
However, it said higher value services, such as “the provision of consulting rooms, secretarial and administrative services and contributions to indemnity insurance [for] private patients”, should be charged at their fair market value and made available to all clinicians with practising rights rather than allocated selectively. The market cost of providing a secretarial service would be based on the full cost to the hospital operator of employing the secretary, together with any overheads such as IT costs. Hospitals will be expected to publish these services and the prices charged for each on their website.
While the CMA accepted this decision would “increase costs to clinicians” who had previously benefited from free or subsidised service, this consideration was outweighed by the benefit of removing the potential influence on referral behaviour. It also refused to allow any exception for schemes which offered free or discounted consulting rooms to new consultants for a limited period.
Of course, the impact of this remedy is likely to depend on whether you had been eligible for these subsidised services, but I believe a level playing field benefits everyone in the long term. Undoubtedly, many independent practitioners will continue to use the secretarial services available at their hospital, but at least there is now an incentive to shop around for administrative services or practice management software which meets their needs. In taking a more active approach to procurement, consultants might therefore find ways to manage their own practice more efficiently and cost-effectively.
In reality, the writing has been on the wall for direct incentive schemes for some time, because doctors have an existing ethical duty not to “ask for or accept – from patients, colleagues or others – any inducement, gift or hospitality that may affect or be seen to affect the way you prescribe for, treat or refer patients or commission services for patients” (paragraph 80, Good Medical Practice, 2013). The CMA warns that it will notify the GMC of any incentives that it believes are incompatible with ethical guidance.
The information age
Everyone in private health provision accepts the pressing need for comprehensive data about quality and treatment outcomes. In fact, the sector was once a pioneer in this area: patient-reported outcome measures (PROMs) were actually introduced in the private sector in 1998 and did not appear in the NHS until 2009. More recently, Healthcode has worked with the Private Healthcare Information Network (PHIN) to collect hospital episode statistics for an industry-wide project which gives patients an online resource to search for local independent hospitals which perform particular procedures and view information such as average length of stay.
There is still much to be done to allow patients to exercise effective choice.But the information remedies set out in the report provide useful direction and momentum, not least the creation of an Information Organisation (IO) responsible for providing appropriate guidance; verifying data; and processing and publishing it in a meaningful way, including risk-adjustment where necessary. The CMA has indicated that PHIN would be a suitable IO, subject to certain conditions.
In the report, the onus is on hospital operators to disclose the necessary information about the volumes of inpatient procedures, average lengths of stay, mortality rates, patient feedback (set out in paragraphs 11.570 and 11.571 of the final report). Much of this data will be provided in coded and the CMA’s remedy means providers will need to use multiple coding systems (see box below).
But, independent practitioners have an important part to play in recording sufficient detail about patients’ diagnosis, co-morbidities and treatment, so the hospital can submit correctly coded data to the Information Organisation. They are also directly affected because the data provided by hospitals about each patient episode is expected to include the responsible consultant’s GMC number. The CMA envisages that data will be comparable with that collected by the NHS so the IO can report performance measures across the whole of the consultant’s NHS and private practice.
In addition, consultants will now be responsible for providing written fee information to patients before they attend an outpatient consultation using a standard template letter provided by their hospital. They will also be required to publish their current list prices on the IO’s website - allowing for legitimate variation. Again, this requirement is in line with the GMC’s latest ethical standards which state: 'If you charge fees you must:
a) Tell patients about your fees, if possible before seeking their consent to treatment and;
b) Tell patients if any part of the fee goes to another healthcare professional' (paragraph 4, Financial and commercial arrangements and conflicts of interest, 2013). For their part, hospital operators must ensure patients treated at their facilities are fully informed of the consultants’ fees.
CODING COMPLICATIONS AND MAPPING
The CMA remedy means that private hospitals will have to record their treatment using multiple systems of clinical coding:
The CMA recognises that there will be an administrative cost to consultants who are not currently providing written fee information but it added this would be minimal given the introduction of template letters and assuming secretarial support. Besides publishing their list prices on the IO website, we expect consultants will choose to make their list prices available to patients on their own website, that of their hospital and other online directories, but they will need to ensure this is consistent and up-to-date. To reduce the administrative burden involved, Healthcode is developing a solution which will enable consultants to take control of their published list prices.
A greater worry might be that encouraging patients to shop around on the basis of price as well as quality could exert downward pressure on fees, while some insured patients could be deterred from choosing a consultant if their prices exceeded the amount that would be reimbursed by their insurer. Research carried out for the Competition Commission and quoted in the CMA’s final report suggests 29% of patients considered the likelihood of their PMI covering a consultant’s fees to be an important reason for choosing a consultant.
However, it’s doubtful that price considerations are more important for most patients than the quality of the treatment provided. Perhaps more reassuringly, 36% said they had discussed the reputation of the consultant with their GP and 29% said quality of care was one of the most important reasons for choosing a particular hospital. For high-achieving practitioners the use of risk adjusted performance measures should help them build their reputation and their practice. And more broadly, it will give consumers a real insight into the excellent care available, helping to improve the status of private sector provision.
It’s also true that the availability of more detailed information about quality and outcomes will further drive up standards by encouraging practitioners to reflect and stimulating competition. It should also give useful insights into the risks and benefits of different treatments, perhaps even providing an evidence base for new procedures.
A five-year plan
While there remains the possibility of legal action on its divestiture remedies, the CMA expects the statutory orders implementing its final proposals to be made by October 2014. The requirement for consultants to provide patients with fee information and the ban on direct incentives will then come into effect immediately. But, the CMA has recommended a deadline of April 2015 for other benefit schemes to be modified to meet its criteria. It also recognises that the collection of performance data will take time, calling for this to be published in stages over three years following publication of its report with all data available from April 2017. It is committed to reviewing the situation again in April 2019.
CONSULTANT'S 'TO DO' LIST
You may think you have plentry of time, but I strongly encourage you to acclimatise yourself to the new private healthcare landscape rather than stand on the sidelines until the CMA's remedies are implemented. For example, those now benefiting from subsidised administrative services could check what arrangements their hospital is going to make and research the alternatives.
Also review your fees now to see how they compare with others in your specialty. Collate fee information and contact details for the specialists you work with such as anesthetists and radiologists - if these are charged separately.
Work with the hospitals where you have practicising privileges to understand exactly what will be involved in gathering performance data for the IO. This issue directly affects clinicians and it is important you are involved in delivering the solution.
I have long believed the lack of meaningful information about quality and outcomes is one of the greatest challenges facing the private health sector. It is a challenge for the NHS too. Healthcode has already developed a number of tools which can help providers submit data in the correct format without the need for expensive system overhauls and we want to play our part in helping independent practitioners adapt to their changing surroundings.