Appendix 2: Further case studies from around the world

Case study: Tower Hamlets Together vanguard and project activity [111] 

Tower Hamlets Together vanguard developed a new bottom-up approach to its multi-speciality community providers (MCP) budget, based on a population approach. The baseline budget for the integrated care cohort was calculated by linking patient-level data, such as Secondary Uses Service and provider-generated aggregate commissioning reports, to patient NHS numbers to assign activity and unit costs to each cohort and service line. It also aimed to consider demographic growth and projected unit cost and service utilisation. 

Tower Hamlets vanguard developed budget projections by analysing changing demand for different segments of the population. Activity for each service was split by service line and condition, and then subdivided by age. The base level of utilisation is created through the patient NHS number and compared to the projections.

Case study: Kaiser Permanente [112,113,114] 

Kaiser Permanente is the largest non-profit-making health maintenance organisation in the United States, serving 8.7 million people in eight regions. It is both payer and provider and acceptance of insured people is discretionary. Kaiser Permanente is a virtually integrated system in which the health plans, hospitals and medical groups in each region remain distinct organisations and co-operate closely using exclusive and interdependent contracts. The exclusivity of the contract means that the medical groups do not see patients from other health plans and members of the health plan generally obtain all their care from Permanente physicians. 

The Permanente Medical Groups receive a capitation payment to provide care to members in Kaiser facilities and, as such, take responsibility for clinical care, quality improvement, resource management, and the design and operation of care delivery in each region. The mutual interdependency of the three parts of the system means that no single part can afford to let the others fail; this acts as an incentive for partnership working. In all regions, there is an emphasis on keeping patients healthy, consistent with Kaiser’s mission as a health maintenance organisation. Kaiser’s model emphasises the integration of care, with Kaiser combining the roles of insurer and provider, and providing care both inside and outside hospitals. 

Kaiser Permanente is incentivised to make efforts to improve the ‘total health’ of the broader communities it serves. For example, to help improve the availability of healthy food, Kaiser Permanente supports food stores in deprived areas to stock fresh fruit and vegetables, sets up farmers’ markets at Kaiser Permanente facilities and in the community, and works with local schools to offer healthier food and drink options for pupils. It also provides financial support for food banks and other food assistance programmes. In schools and community centres, Kaiser Permanente runs a range of educational theatre programmes using music, comedy and drama to help educate children and adults about their health and wellbeing. These programmes have reached around 15 million children over the past 25 years.

Case Study: New York State Medicaid payment [115] 

Following the delivery of successful budget controlling policies in 2010, the State of New York looked to redesign its delivery system and payment mechanisms from 2014 onwards. Remaining challenges included: 

• Delivery system fragmentation – the delivery system was highly fragmented, with a clear focus on hospital settings and underinvestment in primary and community-based care. 
• Quality of care needed improvement – they remained in the bottom half of national rankings in many areas. 
• Uneven population distribution – roughly half of the six million beneficiaries resided in the New York City area, with the rest spread through areas of lower population density.
• Poor health outcomes – high rates of chronic illness, behavioural health and substance abuse. 

This model includes value-based payments across three levels: 

• Level 1 – fee for service with gain sharing 
• Level 2 – fee for service with risk sharing
• Level 3 – capitation or bundles (with outcome-based components). 

There are at least three key ingredients baked into the New York State Roadmap that characterises the payment reform approach: 

1. The roadmap does not present a one-size-fits-all approach to payment reform. 
2. Roadmap allows managed care organisations and providers to choose the level of risk involved are willing able assume.
3. The roadmap addresses the entirety of the Medicaid programme in a holistic fashion, rather than carving out pieces to focus on first.

Case study: Saudi Arabia Health Sector Transformation (Saudi Vision 2030) [116] 

As part of the Saudi Vision 2030, the Health Sector Transformation Programme was launched in 2021 to restructure the sector with a focus on integration. The programme aims to improve access, quality and value of health services, with the population of the Kingdom of Saudi Arabia expected to continue to grow significantly, particularly over the age of 60. Reform to payment mechanisms has been recognised as a key component in the delivery of transformation, as has its role in supporting new models of care and ensuring value at all levels. 

To deliver this, the implementation of capitation-based payments started with clusters in 2019, recognising that for some clusters data quality would need to be improved. This consisted of a mix of: 

• Full capitation: taking into account the full cost of the essential benefits package (including support costs, but not capital costs); and 
• Fractional capitation: taking into account the use of Ministry of Health facilities. 

The capitated payment was risk adjusted based on age, gender, deprivation etc while also taking into account seasonal variation. 

Additional funding was provided in the form of a Structural Adjustment Grant reflecting known system inefficiencies. These payments are planned to be tapered to zero by 2030 as systems deliver increasing efficiency.

Case study: Erasmus University Hospital – relieving the pressure on A&E [117]

 The Erasmus University Medical Centre in Rotterdam is the largest hospital in the Netherlands. It is about the same size as King’s College Hospital NHS Foundation Trust’s site at Denmark Hill, with over 1,000 beds, serving a population of over 3 million people. It demonstrates effective management in terms both of its internal operations and its broader health and care hinterland. For example, Erasmus has 100 attendances who all are treated within a couple of hours, avoiding the A&E department being overwhelmed with long waits for treatment. 

Its good performance is underpinned by better management both within the hospital and across the broader health and care setting, supported by unitary decision-making in clearly demarcated territories. There is one commissioner for all health and care services in the hinterland of 3 million people. The fragmentation that is so damaging to the UK system is greatly reduced in the Netherlands. 

The pressure on A&E is reduced by three key results of a more joined-up system. 

Primary care is required to operate polyclinics that are open 24/7/365 and provide urgent care. Moreover, GPs are financially penalised if they send patients inappropriately to A&E. Each patient attending A&E is audited to determine if attendance was necessary and this forms the basis of any recourse to the GP and builds an evidence base that is used for decisions on how to reconfigure services. 

The commissioner has brokered agreements between the six hospitals in the system to specialise on certain conditions. Erasmus is the major tertiary hospital, so common cases of, for instance, hip fractures are directed to sister hospitals so that Erasmus can concentrate on tertiary cases. 

The ambulance service is clear on which hospital they should take patients to, according to their diagnosis and also radio ahead to the A&E departments to alert clinicians of the initial which, allows specialist consultants to be present when the patient arrives.

All of this is complemented by efficient and well-resourced hospital management, with well-structured incentives, such as: 

• Rigorously managed triage at the front door of the A&E department is rigorously managed and specialist consultants penalised if they are not at the front door when the patient arrives. 
• Specialities have to contract each year for the amount of operating theatre time they will use and are penalised if they do not meet their commitments. Consequently, theatre utilisation is consistently high (well over 90 per cent). 

The chief executive highlighted that that these efficiencies, both within the hospital and more broadly, took some hard work. But they were more easily achieved through clear spans of control for management and executive authority to make the changes happen.