What can the US and England learn from each other’s health system reforms?

6 April 2018

While the US and English health systems are significantly different, both countries are currently working toward better integrating health services, improving population health and managing health care costs. And both countries are developing their own versions of accountable care organisations (ACOs) to help achieve these aims. In this blog, we outline some key opportunities for each country to learn from the other’s experiences, drawing on two articles we recently published in the BMJ and the JAMA.

In the United States, ACOs were established in 2010 under the Affordable Care Act as a way to hold health care providers accountable for care quality and costs. It was hoped that shifting away from fee-for-service payments and linking financial savings to care outcomes would encourage providers to improve quality and reduce costs.

Results so far have been mixed. While patient experience and some quality measures have improved, financial savings have been modest and there are limited data on health outcomes. ACOs are, however, promoting delivery system changes that may lead to better and more coordinated care – including increasing access to appointments, employing care coordinators and using data to target care management to complex patients.

Despite being a single-payer system with universal coverage, England also has longstanding divisions in how primary care, mental health care and hospital care are paid for and delivered. And there is further fragmentation as while such services fall under the English National Health Service (NHS), the provision of long-term care, social services and public health is the responsibility of local government.

To more closely integrate care around patients’ needs, the English NHS recently created 44 Sustainability and Transformation Partnerships (STPs) covering the entire country. These are ‘place-based’ partnerships of all the NHS organisations and local government departments that purchase and provide health and long-term care services for a geographically defined population. The idea is that organisations in STPs will work together to improve care and manage local budgets. Some local NHS payers are also considering US-style ACO contracting models to hold providers accountable for care quality and costs.

Lessons for policymakers in England

For policymakers in England, an important lesson from US ACOs is the need to be realistic about the potential benefits of STPs. Developing new care models is complex and takes time, and – as evidenced by the current experience of US ACOs, as well as past experience in the NHS – better care for patients may not necessarily mean lower costs or fewer hospital admissions. NHS leaders shouldn’t necessarily anticipate reductions in hospital use and costs from STPs.

Recent evidence also finds greater variation in quality and spending within different ACO types than between them (for example, integrated systems versus smaller physician-led ACOs), pointing toward differences in leadership, culture and management as potential alternative explanations for ACO performance. What might this mean for the NHS? Changes to organisational structures and payment systems – often the focus of NHS reformers – are unlikely to be sufficient in supporting care improvement. Other factors more to do with what happens inside organisations, such as the use of quality improvement methods, and leadership and management support for redesigning care, are likely to be just as – if not more – important.

US ACOs also indicate that multiple and conflicting accountability mechanisms due to having different payment contracts for different patient groups are detrimental to success. English STPs face their own mix of distinct and often conflicting accountabilities. Legislation may be needed to fix this problem, but rationalising the current mix of performance frameworks for the NHS, social care and public health would at least provide an outcomes framework for local health system performance.

Lessons for policymakers in the US

Currently, US health care organisations have mixed incentives, being paid both by fee-for-service and through value-based contracts. This can stifle care redesign. Taking inspiration from the NHS, a place-based global payment system involving all payers (such as with Vermont’s all-payer ACO) could eliminate such conflicts of interest and help shift funding toward primary care and preventive care.

Population health improvement in the United States is limited by ACO performance measures that focus predominantly on clinical outcomes of attributed patients, and don’t reflect the social, behavioural and environmental determinants of the health of the wider population. Accountable Health Communities and similar approaches are being developed in the US to help create better linkages between health care and social services. Broadening ACOs’ responsibility to include all residents of a community or region, like the English STPs, would create greater incentives for health care providers to work more closely with community organisations and potentially improve everyone’s health.

Finally, if alternative payment models do lead to improved patient outcomes, then continuing with a voluntary approach to reform will likely widen variations and exacerbate inequalities in the US. To affect more of the system, as an NHS reform would, the federal government could offer states waivers supporting mandatory change that could ensure that performance benefits are available to all residents outside of employer health plans. Exemptions of such plans from state legislation remains a significant barrier to wider reform.

Health system reforms in England and the United States are likely to take shape in different ways over the coming years. Yet, both countries’ reforms share common goals and both will be helped by their ongoing evaluation and the continued sharing of evidence.

This blog originally appeared as part of the Commonwealth Fund’s To the Point series on 30 March 2018. It was jointly authored by Harkness Fellows Adam Briggs (@ADMBriggs) and Hugh Alderwick (@hughalderwick), with Stephen M. Shortell and Elliott S. Fisher.

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