Financial incentives and prescribing behavior in primary care.

Many healthcare systems prohibit primary care physicians from dispensing the drugs they prescribe due to concerns that this encourages excessive, ineffective or unnecessarily costly prescribing. Using data from the English National Health Service for 2011-2018, we estimate the impact of physician dispensing rights on prescribing behavior at the extensive margin (comparing practices that dispense and those that do not) and the intensive margin (comparing practices with different proportions of patients to whom they dispense). We control for practices selecting into dispensing based on observable (OLS, entropy balancing) and unobservable practice characteristics (2SLS). We find that physician dispensing increases drug costs per patient by 3.1%, due to more, and more expensive, drugs being prescribed. Reimbursement is partly based on a fixed fee per package dispensed and we find that dispensing practices prescribe smaller packages. As the proportion of the practice population for whom they can dispense increases, dispensing practices behave more like non-dispensing practices.

Impact of prevention in primary care on costs in primary and secondary care for people with serious mental illness.

A largely unexplored part of the financial incentive for physicians to participate in preventive care is the degree to which they are the residual claimant from any resulting cost savings. We examine the impact of two preventive activities for people with serious mental illness (care plans and annual reviews of physical health) by English primary care practices on costs in these practices and in secondary care. Using panel two-part models to analyze patient-level data linked across primary and secondary care, we find that these preventive activities in the previous year are associated with cost reductions in the current quarter both in primary and secondary care. We estimate that there are large beneficial externalities for which the primary care physician is not the residual claimant: the cost savings in secondary care are 4.7 times larger than the cost savings in primary care. These activities are incentivized in the English National Health Service but the total financial incentives for primary care physicians to participate were considerably smaller than the total cost savings produced. This suggests that changes to the design of incentives to increase the marginal reward for conducting these preventive activities among patients with serious mental illness could have further increased welfare.

Patient Self-Reported Health, Clinical Quality, and Patient Satisfaction in English Primary Care: Practice-Level Longitudinal Observational Study.

OBJECTIVES: To examine the association of self-reported health of patients in general practices, as measured by the EQ-5D-5L, with practice clinical quality and patient-reported satisfaction with accessibility and consultations. METHODS: We used data from the General Practitioner (GP) Patient Survey to construct a practice-level EQ-5D-5L index as the health outcome. Key explanatories were patient-reported measures of satisfaction with access and consultations (also derived from the GP Patient Survey) and clinical quality measured by the achievement of clinical quality indicators reported in the Quality and Outcomes Framework. We estimated practice-level linear panel data models with random and fixed practice effects and practice and patient covariates using 2012/13 to 2016/17 data on more than 7500 English general practices. RESULTS: Bivariate correlations of the EQ-5D-5L index with quality measures were 0.048 for clinical quality, 0.071 for satisfaction with access, and 0.107 for satisfaction with GP consultations (all with P<.001). In both fixed effects regressions, which allow for unobserved time invariant practice characteristics, and random effects regressions which do not, the EQ-5D-5L index was positively associated with 1-year lags of patient satisfaction with access and GP consultations. Patient-reported health was positively associated with clinical quality in the fixed effects regressions. The implied effects were small in all cases. CONCLUSION: Practice-level EQ-5D-5L is positively associated with clinical quality and with 1-year lags of patient-reported satisfaction with access and GP consultations.

Does hospital competition improve efficiency? The effect of the patient choice reform in England.

We use the 2006 relaxation of constraints on patient choice of hospital in the English NHS to investigate the effect of hospital competition on dimensions of efficiency including indicators of resource management (admissions per bed, bed occupancy rate, proportion of day cases, and cancelled elective operations) and costs (reference cost index for overall and elective activity, cleaning services costs, laundry and linen costs). We employ a quasi differences-in-differences approach and estimate seemingly unrelated regressions and unconditional quantile regressions with data on hospital trusts from 2002/2003 to 2010/2011. Our findings suggest that increased competition had mixed effects on efficiency. An additional equivalent rival increased admissions per bed by 1.1%, admissions per doctor by 0.9% and the proportion of day cases by 0.38 percentage points, but it also increased the number of cancelled elective operations by 2.5%.

Choosing and booking-and attending? Impact of an electronic booking system on outpatient referrals and non-attendances.

Patient non-attendance can lead to worse health outcomes and longer waiting times. In the English National Health Service, around 7% of patients who are referred by their general practice for a hospital outpatient appointment fail to attend. An electronic booking system (Choose and Book-C&B) for general practices making hospital outpatient appointments was introduced in England in 2005 and by 2009 accounted for 50% of appointments. It was intended, inter alia, to reduce the rate of non-attendance. Using a 2004-2009 panel with 7,900 English general practices, allowing for the relaxation of constraints on patient of hospital, and for the potential endogeneity of use of C&B, we estimate that the introduction of C&B reduced non-attendance by referred patients in 2009 by 72,160 (8.7%).

Hours worked by general practitioners and waiting times for primary care.

The decline in the working hours of general practitioners (GPs) is a key factor influencing access to health care in many countries. We investigate the effect of changes in hours worked by GPs on waiting times in primary care using the Medicine in Australia: Balancing Employment and Life longitudinal survey of Australian doctors. We estimate GP fixed effects models for waiting time and use family circumstances to instrument for GP's hours worked. We find that a 10% reduction in hours worked increases average patient waiting time by 12%. Our findings highlight the importance of GPs' labor supply at the intensive margin in determining the length of time patients must wait to see their doctor.

Do hospitals respond to rivals' quality and efficiency? A spatial panel econometric analysis.

We investigate whether hospitals in the English National Health Service change their quality or efficiency in response to changes in quality or efficiency of neighbouring hospitals. We first provide a theoretical model that predicts that a hospital will not respond to changes in the efficiency of its rivals but may change its quality or efficiency in response to changes in the quality of rivals, though the direction of the response is ambiguous. We use data on eight quality measures (including mortality, emergency readmissions, patient reported outcome, and patient satisfaction) and six efficiency measures (including bed occupancy, cancelled operations, and costs) for public hospitals between 2010/11 and 2013/14 to estimate both spatial cross-sectional and spatial fixed- and random-effects panel data models. We find that although quality and efficiency measures are unconditionally spatially correlated, the spatial regression models suggest that a hospital's quality or efficiency does not respond to its rivals' quality or efficiency, except for a hospital's overall mortality that is positively associated with that of its rivals. The results are robust to allowing for spatially correlated covariates and errors and to instrumenting rivals' quality and efficiency.

Location, quality and choice of hospital: Evidence from England 2002-2013.

We investigate (a) how patient choice of hospital for elective hip replacement is influenced by distance, quality and waiting times, (b) differences in choices between patients in urban and rural locations, (c) the relationship between hospitals' elasticities of demand to quality and the number of local rivals, and how these changed after relaxation of constraints on hospital choice in England in 2006. Using a data set on over 500,000 elective hip replacement patients over the period 2002 to 2013 we find that patients became more likely to travel to a provider with higher quality or lower waiting times, the proportion of patients bypassing their nearest provider increased from 25% to almost 50%, and hospital elasticity of demand with respect to own quality increased. By 2013 average hospital demand elasticity with respect to readmission rates and waiting times were - 0.2 and - 0.04. Providers facing more rivals had demand that was more elastic with respect to quality and waiting times. Patients from rural areas have smaller disutility from distance.

Testing the bed-blocking hypothesis: does nursing and care home supply reduce delayed hospital discharges?

Hospital bed-blocking occurs when hospital patients are ready to be discharged to a nursing home, but no place is available, so that hospital care acts as a more costly substitute for long-term care. We investigate the extent to which greater supply of nursing home beds or lower prices can reduce hospital bed-blocking using a new Local Authority (LA) level administrative data from England on hospital delayed discharges in 2009-2013. The results suggest that delayed discharges respond to the availability of care home beds, but the effect is modest: an increase in care home beds by 10% (250 additional beds per LA) would reduce social care delayed discharges by about 6-9%. We also find strong evidence of spillover effects across LAs: more care home beds or fewer patients aged over 65 years in nearby LAs are associated with fewer delayed discharges.

Determinants of hospital length of stay for people with serious mental illness in England and implications for payment systems: a regression analysis.

BACKGROUND: Serious mental illness (SMI), which encompasses a set of chronic conditions such as schizophrenia, bipolar disorder and other psychoses, accounts for 3.4 m (7 %) total bed days in the English NHS. The introduction of prospective payment to reimburse hospitals makes an understanding of the key drivers of length of stay (LOS) imperative. Existing evidence, based on mainly small scale and cross-sectional studies, is mixed. Our study is the first to use large-scale national routine data to track English hospitals' LOS for patients with a main diagnosis of SMI over time to examine the patient and local area factors influencing LOS and quantify the provider level effects to draw out the implications for payment systems. METHODS: We analysed variation in LOS for all SMI admissions to English hospitals from 2006 to 2010 using Hospital Episodes Statistics (HES). We considered patients with a LOS of up to 180 days and estimated Poisson regression models with hospital fixed effects, separately for admissions with one of three main diagnoses: schizophrenia; psychotic and schizoaffective disorder; and bipolar affective disorder. We analysed the independent contribution of potential determinants of LOS including clinical and socioeconomic characteristics of the patient, access to and quality of primary care, and local area characteristics. We examined the degree of unexplained variation in provider LOS. RESULTS: Most risk factors did not have a differential effect on LOS for different diagnostic sub-groups, however we did find some heterogeneity in the effects. Shorter LOS in the pooled model was associated with co-morbid substance or alcohol misuse (4 days), and personality disorder (8 days). Longer LOS was associated with older age (up to 19 days), black ethnicity (4 days), and formal detention (16 days). Gender was not a significant predictor. Patients who self-discharged had shorter LOS (20 days). No association was found between higher primary care quality and LOS. We found large differences between providers in unexplained variation in LOS. CONCLUSIONS: By identifying key determinants of LOS our results contribute to a better understanding of the implications of case-mix to ensure prospective payment systems reflect accurately the resource use within sub-groups of patients with SMI.

Does a hospital's quality depend on the quality of other hospitals? A spatial econometrics approach.

We examine whether a hospital's quality is affected by the quality provided by other hospitals in the same market. We first sketch a theoretical model with regulated prices and derive conditions on demand and cost functions which determine whether a hospital will increase its quality if its rivals increase their quality. We then apply spatial econometric methods to a sample of English hospitals in 2009-10 and a set of 16 quality measures including mortality rates, readmission, revision and redo rates, and three patient reported indicators, to examine the relationship between the quality of hospitals. We find that a hospital's quality is positively associated with the quality of its rivals for seven out of the sixteen quality measures. There are no statistically significant negative associations. In those cases where there is a significant positive association, an increase in rivals' quality by 10% increases a hospital's quality by 1.7% to 2.9%. The finding suggests that for some quality measures a policy which improves the quality in one hospital will have positive spillover effects on the quality in other hospitals.

Patient choice, mobility and competition among health care providers.

Policymakers are increasingly designing policies that encourage patient choice and therefore mobility across providers. Since prices are regulated (fixed) in most countries, providers need to compete on quality to attract patients. This chapter reviews the current theoretical and empirical literature on patient choice and quality competition in health markets. The theoretical literature identifies key factors affecting incentives to provide quality. These include: altruistic motives, cost structure, number of providers, demand responsiveness, GP gatekeeping, degree of specialization, profit constraints and soft budgets. We also review the theoretical literature on choice across different countries (e.g. within the EU) or regions within the same countries. The chapter reviews selected empirical studies that investigate whether demand responds to quality and waiting times, the role of patient's mobility and the effect of competition on quality.

Measuring the overall performance of mental healthcare providers.

To date there have been no attempts to construct composite measures of healthcare provider performance which reflect preferences for health and non-health benefits, as well as costs. Health and non-health benefits matter to patients, healthcare providers and the general public. We develop a novel provider performance measurement framework that combines health gain, non-health benefit, and cost and illustrate it with an application to 54 English mental health providers. We apply estimates from a discrete choice experiment eliciting the UK general population's valuation of non-health benefits relative to health gains, to administrative and patient survey data for years 2013-2015 to calculate equivalent health benefit (eHB) for providers. We measure costs as forgone health and quantify the relative performance of providers in terms of equivalent net health benefit (eNHB): the value of the health and non-health benefits minus the forgone benefit equivalent of cost. We compare rankings of providers by eHB, eNHB, and by the rankings produced by the hospital sector regulator. We find that taking account of the non-health benefits in the eNHB measure makes a substantial difference to the evaluation of provider performance. Our study demonstrates that the provider performance evaluation space can be extended beyond measures of health gain and cost, and that this matters for comparison of providers.

The impact of COVID-19 on mental health service utilisation in England.

The COVID-19 pandemic has had a significant impact on population mental health and the need for mental health services in many countries, while also disrupting critical mental health services and capacity, as a response to the pandemic. Mental health providers were asked to reconfigure wards to accommodate patients with COVID-19, thereby reducing capacity to provide mental health services. This is likely to have widened the existing mismatch between demand and supply of mental health care in the English NHS. We quantify the impact of these rapid service reconfigurations on activity levels for mental health providers in England during the first thirteen months (March 2020-March 2021) of the COVID-19 pandemic. We use monthly mental health service utilisation data for a large subset of mental health providers in England from January 1, 2015 to March 31, 2021. We use multivariate regression to estimate the difference between observed and expected utilisation from the start of the pandemic in March 2020. Expected utilisation levels (i.e. the counterfactual) are estimated from trends in utilisation observed during the pre-pandemic period January 1, 2015 to February 31, 2020. We measure utilisation as the monthly number of inpatient admissions, discharges, net admissions (admissions less discharges), length of stay, bed days, number of occupied beds, patients with outpatient appointments, and total outpatient appointments. We also calculate the accumulated difference in utilisation from the start of the pandemic period. There was a sharp reduction in total inpatient admissions and net admissions at the beginning of the pandemic, followed by a return to pre-pandemic levels from September 2020. Shorter inpatient stays are observed over the whole period and bed days and occupied bed counts had not recovered to pre-pandemic levels by March 2021. There is also evidence of greater use of outpatient appointments, potentially as a substitute for inpatient care.

How do clinical quality and patient satisfaction vary with provider size in primary care? Evidence from English general practice panel data.

We examine the relationship between general practice list size and measures of clinical quality and patient satisfaction. Using data on all English practices from 2005/6 to 2016/17, we estimate practice level models with rich data on patient demographics, deprivation, and morbidity. We use lagged list size to allow for potential simultaneity bias from the effect of quality on list size. We compare results from three different estimation methods: pooled ordinary least squares, random practice effects, fixed practice effects. With all three estimation methods increased list size is associated with reductions in all four measures of patient satisfaction. Increases in list size are associated with worse performance on three clinical quality indicators and better performance on three, though the precision and size of the associations varies with the estimation method. The absolute values of the elasticities of the ten quality indicators with respect to list size are small: in all cases a 10% change in list size would change quality by less than 1%. The lack of evidence that large practices have markedly better quality suggests that encouraging practices to form larger, but looser, groupings, may not, in itself, improve their performance.

Exclusion of patients from pay-for-performance targets by English physicians.

BACKGROUND: In the English pay-for-performance program, physicians use a range of criteria to exclude individual patients from the quality calculations that determine their pay. This process, which is called exception reporting, is intended to safeguard patients against inappropriate treatment by physicians seeking to maximize their income. However, exception reporting may allow physicians to inappropriately exclude patients for whom targets have been missed (a practice known as gaming). METHODS: We analyzed data extracted automatically from clinical computing systems for 8105 family practices in England (96% of all practices), data from the U.K. Census, and data on practice characteristics from the U.K. Department of Health. We determined the rate of exception reporting for 65 clinical activities and the association between this rate and the characteristics of patients and medical practices. RESULTS: From April 2005 through March 2006, physicians excluded a median of 5.3% of patients (interquartile range, 4.0 to 6.9) from the quality calculations. Physicians were most likely to exclude patients from indicators that were related to providing treatments and achieving target levels of intermediate outcomes; they were least likely to exclude patients from indicators that were related to routine checks and measurements and to offers of treatment. The characteristics of patients and practices explained only 2.7% of the variance in exception reporting. We estimate that exception reporting accounted for approximately 1.5% of the cost of the pay-for-performance program. CONCLUSIONS: Exception reporting brings substantial benefits to pay-for-performance programs, providing that the process is used appropriately. In England, rates of exception reporting have generally been low, with little evidence of widespread gaming.

Discounting and decision making in the economic evaluation of health-care technologies.

Discounting costs and health benefits in cost-effectiveness analysis has been the subject of recent debate - some authors suggesting a common rate for both and others suggesting a lower rate for health. We show how these views turn on key judgments of fact and value: on whether the social objective is to maximise discounted health outcomes or the present consumption value of health; on whether the budget for health care is fixed; on the expected growth in the cost-effectiveness threshold; and on the expected growth in the consumption value of health. We demonstrate that if the budget for health care is fixed and decisions are based on incremental cost effectiveness ratios (ICERs), discounting costs and health gains at the same rate is correct only if the threshold remains constant. Expecting growth in the consumption value of health does not itself justify differential rates but implies a lower rate for both. However, whether one believes that the objective should be the maximisation of the present value of health or the present consumption value of health, adopting the social time preference rate for consumption as the discount rate for costs and health gains is valid only under strong and implausible assumptions about values and facts.

Determinants of general practitioners' wages in England.

We analyse the determinants of annual net income and wages (net income/hours) of general practitioners (GPs) using data for 2271 GPs in England recorded during Autumn 2008. The average GP had an annual net income of £97,500 and worked 43 h per week. The mean wage was £51 per h. Net income and wages depended on gender, experience, list size, partnership size, whether or not the GP worked in a dispensing practice, whether they were salaried of self-employed, whether they worked in a practice with a nationally or locally negotiated contract, and the characteristics of the local population (proportion from ethnic minorities, rurality, and income deprivation). The findings have implications for pay discrimination by GP gender and ethnicity, GP preferences for partnership size, incentives for competition for patients, and compensating differentials for local population characteristics. They also shed light on the attractiveness to GPs in England of locally negotiated (personal medical services) versus nationally negotiated (general medical services) contracts.

Impact of primary care funding on patient satisfaction: a retrospective longitudinal study of English general practice, 2013-2016.

BACKGROUND: Providing high-quality clinical care and good patient experience are priorities for most healthcare systems. AIM: To understand the relationship between general practice funding and patient-reported experience. DESIGN AND SETTING: Retrospective longitudinal study of English general practice-level data for the financial years 2013-2014 to 2016-2017. METHOD: Data for all general practices in England from the General and Personal Medical Services database were linked to patient experience data from the GP Patient Survey (GPPS). Panel data multivariate regression was used to estimate the impact of general practice funding (current or lagged 1 year) per patient on GPPS-reported patient experience of access, continuity of care, professionalism, and overall satisfaction. Confounding was controlled for by practice, demographic, and GPPS responder characteristics, and for year effects. RESULTS: Inflation-adjusted mean total annual funding per patient was £133.66 (standard deviation [SD] = £39.46). In all models, higher funding was associated with better patient experience. In the model with lagged funding and practice fixed effects (model 6), a 1 SD increase in funding was associated with increases in scores in the domains of access (1.18%; 95% confidence interval [CI] = 0.89 to 1.47), continuity (0.86%; 95% CI = 0.19 to 1.52), professionalism of GP (0.47%; 95% CI = 0.22 to 0.71), professionalism of nurse (0.51%; 95% CI = 0.24 to 0.77), professionalism of receptionist (0.51%; 95% CI = 0.24 to 0.78), and in overall satisfaction (0.88%; 95% CI = 0.52 to 1.24). CONCLUSION: Better-funded general practices were more likely to have higher reported patient experience ratings across a wide range of domains.

Optimal hospital payment rules under rationing by waiting.

We derive optimal rules for paying hospitals for non-emergency care when providers choose quality and capacity, and patient demand is rationed by waiting time. Waiting for treatment is costly for patients, so that hospital payment rules should take account of their effect on waiting time as well as on quality. Since deterministic waiting time models imply that profit maximising hospitals will never choose to have both positive quality and positive waiting time, we develop a stochastic model of rationing by waiting in which both quality and expected waiting are positive in equilibrium. We use it to show that, although a prospective output price gives hospitals an incentive to attract patients by raising quality and reducing waiting times, it must be supplemented by a price attached to hospital decisions on quality or capacity or to a performance indicator which depends on those decisions (such as average waiting time, or average length of stay). A prospective output price by itself can support the optimal quality and waiting time distribution only if the welfare function respects patient preferences over quality and waiting time, if patients' marginal rates of substitution between quality and waiting time are independent of income, and if waiting for treatment does not reduce the productivity of patients. If these conditions do not hold, supplementing the output price with a reward linked to the hospital's cost can increase welfare, though it is possible that costs should be taxed rather than subsidised.