Does Size Matter?

The silent killer

Globally Britain already has one of the highest levels of obesity.  By the end of the decade it is predicted that one in three adults will be classified as obese.  The health consequences of such a rise are staggering, as obesity is directly correlated with a myriad of diseases.  The obese population are nine times as likely to suffer from Type 2 Diabetes, three times as likely to develop hypertension and twice as likely to have a heart attack; the incidence of these conditions is set to rise by 146%, 61% and 43% respectively between 2006 and 2050.  Deaths attributable to excess weight have increased from 8.7% in 2003, to 11% in 2011.  That is equivalent to over 2000 more deaths annually now than 8 years ago.

The Weighty Cost

The NHS footed a bill of over £2 billion for treating obesity and related consequences in 2007; this figure is expected to double by 2015, and triple by 2035.  Significant though these figures are, the major financial cost of obesity lies in the indirect costs.  Each year, overweight and obese full-time workers are estimated to cost the UK £14.5 billion in lost productivity through absenteeism.  Obese workers, for instance, with three or more chronic conditions, account for over 10% of the full-time workforce and report an average of 60 unhealthy days and 18 missed work days per year.  This compares to 4 unhealthy days and 1.5 missed work days a year for workers with normal weight and no chronic conditions.  Obese people live, on average, nine years less than their non-obese counterparts, and the lost output was estimated in 2002 to be over £1 billion.   These indirect consequences and are expected to reach £23 billion in 2015.

Adding together the direct health costs (treating obesity and obesity-related diseases) to the indirect costs (lost output due to attributable sickness and premature mortality) the combined obesity bill is set to rise from £16 billion in 2007 to £50 billion by 2050 .  That is equivalent to over £400 of additional costs per person in the UK. 

Lightening the load

There is, therefore, a compelling argument to tackle obesity. Three modes of treatments currently exist:

·        Community-based interventions,

·        Pharmacological interventions,

·        Surgical interventions.

Community-based interventions cover population based regulation and fiscal measures, health education and promotion, as well as more individual based therapies in primary care.  These are tend to be the most cost-effective interventions.

Pharmacology interventions include prescriptions for the anti-obesity drug Orlistat. Orlistat works by preventing fat absorption, however, the drug does has side effects and it is often not a permanent solution, as weight is frequently regained after the medication is stopped.

Surgical interventions aim to limit the amount of food eaten and digested by altering the digestive system’s anatomy.  This is done via bariatric surgery.  Surgical procedures have risen sharply, with an annual growth rate of 24% over the past 10 years (though from a very low base).  Publicly-funded surgical treatment is restricted to those with BMIs over 40 (or 35, with comorbidities), making it available to only a small subset of the obese population.  Unfortunately, access to bariatric surgery is very inconsistent across Primary Care Trusts (PCTs), and this has led to a ‘postcode lottery’ as to who gets offered this as a treatment option.

What can be done?

Nationally, the enormous costs associated with obesity mean that treatments represent a key ‘spend to save’ opportunity for the coalition government.   Following the 2011 NHS reforms, commissioners’ will focus attention on payment by outcomes and their effectiveness in reducing chronic disease makes obesity treatments a prime candidate for funding – especially in the community.  Pharmacological and surgical treatments will continue to be used, but perhaps in conjunction with more a more integrated care pathway.  Currently community obesity services vary significantly across the UK; this is very different from a more standardised treatment approach for anorexia nervosa. 

Here we suggest a unique opportunity for local areas to develop and deliver a community obesity treatment service (COTS).  Tailoring a specialist obesity service around the individual brings together the three disciplines of diet, exercise and psychological therapies all under one umbrella.  Currently GPs tend to make three separate referrals, so COTS would be a way of making community provision for obesity more joined up.  It would also allow for the various levels of talking therapy to be offered; stepping up from basic advice and counselling to more specialist forms of talking therapy for eating disorders such as Cognitive Behaviour Therapy (CBT), Cognitive Analytical Therapy (CAT) and Acceptance Commitment Therapy (ACT).  The estimated cost of such a service would be £64 per patient per month.  Although there is a start-up and delivery cost, it should not be forgotten that all three main political parties have already nailed their colours to the talking therapy community mast.  Labour Party leader Ed Miliband has pledged to make access to talking treatments a legal right under any Labour NHS Constitution.  Liberal Democrat Deputy Prime Minister Nick Clegg has said “..much more can be done, more usefully using personal services including counselling and group therapy” and Conservative Prime Minister David Cameron has targeted his parties efforts and has offered Government money to increase talking therapy availability.  COTS could also take advantage of having many different funding streams, sourcing income from the public, private and third sector.

This is discussed further in Health Investor magazine December 2012 and was written by myself and Gerald Templer, an analyst at Candesic’s London office.

Lord Owen on equitable trust

Will a Baby Boom Bust the NHS?

The following article was published in the Health Service Journal on 26th July 2012, which I co-wrote.  It considers how the NHS can financially cope with the increased demand expected in NHS IVF, especially following the new NICE guidelines:

The provision of NHS fertility treatment is set to become even more contentious with the 2012 update to the National Institute of Health and Clinical Excellence Guidelines currently under consultation.

A draft release of the new guidelines in May suggested that eligibility will be widened to encompass same sex couples, single women and clarify the definition of “full cycle”, which has previously been open to interpretation. In addition, the upper age limit for treatment is likely to rise to 42.

The original NICE guidelines on assessment and treatment of fertility problems in 2004 standardised the eligibility criteria for NHS-funded treatment nationally and recommended three cycles of IVF per patient, who were:

women in a stable, heterosexual relationship who had been actively trying to conceive for three years;
aged 25-37 at the start of treatment;
non-smokers;
and had a BMI of 23-29.

NICE guidelines are based on clinical evidence underlined by economic efficiency: three cycles allows the best chance of success (clinical effectiveness is unclear for subsequent treatment) and advocates argue this also offers the most attractive spend-to- success ratio.

As these guidelines are not mandatory, the English NHS developed significant variation of provision. Primary care trusts had been free to tailor the criteria and number of cycles offered to fit policy and resources, and as recent cuts have started to bite many commissioners have reduced the funding available to fertility, some suspending or cutting it completely.

When clinical commissioning groups take over from PCTs next year it will be up to them to decide how they allocate resources. But with 52 PCTs being dismantled to be replaced by over 200 CCGs, many believe that equality of access will decline further.

Fertility as a subject is highly emotive and the arguments for and against NHS-funded treatment provision are well rehearsed. Infertility is estimated to affect one in six couples in the UK, and for women is the second most common reason after pregnancy itself for seeing their GP. On an ideological level, if a citizen works hard and pays their taxes, why should they not receive the treatment they require?

On the flip side, although infertility is recognised by the World Health Organisation as a medical condition, it is not viewed as a matter of medical need by many who fund and commission treatment. It is neither life-threatening nor seriously injurious to physical well-being - even the staunchest supporters of NHS treatment admit gracefully that it is hardly on a par with cancer drugs or life-saving surgery.

This is reflected in the attitudes of many employers and clinicians: more often than not, women undergoing treatment are not allowed paid time away from work for appointments and a recent Infertility Network survey suggests that, for over half of patients surveyed, initial GP contact for suspected infertility is either ill-informed or unsympathetic.

However, in the 2011 survey of fertility services commissioners, most responded that the primary reason their PCT did not offer three full cycles was cost. So, should this inequality be addressed or accepted as an unavoidable result of today’s need to balance the books?

An even bigger issue on the table goes to the heart of what the NHS exists to do. Society and healthcare have been irrevocably transformed since the 1940s and the NHS must also evolve and offer treatments well beyond the scope of what it was conceived to deliver. While parenthood may not be an absolute right, where the technology exists, the pressure to prescribe follows.

However, away from the scaremongering headlines, most clinical and political leaders would agree that the gap between idealism and pragmatism must be addressed to prevent future ruin. If NICE does review the age range guidelines as expected, in addition to offering treatment to single women and same sex female couples, the demand for NHS treatment may sky rocket.

At present, one of the key drivers into the private market is age as women ineligible according to current guidelines have no option of NHS treatment. After changes to the rules on donorship and registration of births in 2009, same-sex women seeking treatment doubled on 2007.

Future challenges

So what is the answer? How can NHS managers tame both monsters: patient satisfaction and budgetary necessity?

Fertility treatment is an easy target for financial cuts. The political health reforms complicate the situation further: how will IVF work in the world of increased patient choice, with outcomes and equality of access the mantra of the day?

Patients may exercise their right to choose. For example, if your GP tells you that your CCG does not procure IVF services, you could simply re-register with another GP, who is in an area that offers IVF treatment. Hence, passing the financial buck to another CCG. The consequence may be that commissioners find it increasingly difficult to balance supply and demand.

PCTs have so far been used to dealing with population analytics, but in this brave new world of patient choice and online access, the numerical analytics of what constitutes your local population base may look very different.

NICE currently has its hands full preparing revisions to guidelines, with the stress on quality and outcomes - success of treatment is measured against equality of access and may make the concept of a postcode lottery untenable, even unlawful.

So do the new fertility guidelines present emerging CCGs with just one more additional dilemma while they struggle with major reforms? How can the NHS be expected to increase fertility provision, while the government expects it to save £20bn a year?

Maybe the NHS must take a leaf out of the book of competitive, cost-conscious private providers by working smarter, not just harder. These are some of our suggestions:

Contracts and pricing Currently PCTs tend to spot-purchase IVF treatment, which often leaves the balance of power in the hands of the provider, who demands a high price for low-volume referrals. In some regions, PCTs have grouped together and asked the SHAs to purchase IVF treatment for an entire region - this has increased referral volume, but the SHAs have again frequently used spot purchasing.

In the future it may be that block/bulk buying is one way for the NHS to leverage its formidable purchasing power. To do this, CCGs would have to work together; as yet there is little evidence of this happening for IVF provision. If all CCGs decide to commission independently, the bulk buying power would be weakened. Also as there is no national tariff or suggested price guidelines regarding IVF, the private providers offering services back to the NHS are not incentivised to make their rates competitive or offer an NHS bulk-buy discounted rate.

In the future, a forward-thinking IVF provider may consider an NHS discounted rate for a large enough block contract although this would require greater private market consolidation to provide a player large enough.

Training costs With the public and private sector on an equal footing in the marketplace, commissioned contract prices should also take into account the cost to the NHS of training such highly specialised staff. Currently, the NHS bears the lion’s share of the training costs and training time, while private companies benefit from consultant-led services as clinicians develop in their careers and move into the private sector. In the future, commissioners may want to consider asking private companies to contribute to both training and research and development.

National Commissioning Board IVF services are currently not part of what will be commissioned at the National Commissioning Board level, but are to be commissioned by CCGs. This not only means that bulk purchasing benefits may be dispersed but that each CCG may independently consider evidence from NICE and commission with different interpretations. It may well make more sense for the board to consider the NICE guidelines and commission to end the postcode lottery of IVF interpretation.

In these austere times there is no bottomless pit of money and CCGs will be looking to make savings wherever possible. A single point of interpretation is more likely to result in women receiving the treatment they seek.

We need to start having these discussions now. The expansion of IVF treatment guidelines may well turn into a major political challenge, with a perfect storm on the horizon.

IVF puts the spotlight on the ethical question of who decides what services the NHS will deliver. After all, it is not mandatory for PCTs to deliver on NICE guidelines and there is no suggestion that CCGs will be in any different position. Also, the suggested expansion of IVF provision comes at a time of wholesale commissioning upheaval so these as yet untested CCGs will be asked to deliver more provision with reduced costs. It’s a big ask.

IVF has always been an emotive topic and with increased patient choice, the debate may be dominated by who shouts the loudest. These complex and challenging issues both financially and ethically are soon to be faced by either 212 CCGs or one NCB. Success may well be dependent on engaging with the already significant expertise held by fertility experts and patient groups to provide a benchmark for efficient commissioning. Failure would represent a significant missed opportunity.

Sarah Downes is a management consultant at Candesic and Dr Michelle Tempest is a liaison psychiatrist for the NHS and management consultant for Candesic.

Lecture by Mark Solms

Mark Solms asks “What is the mind?” from GIPCA@UCT on Vimeo.

A Banking Hare or Tortoise?

With Europe in economic crisis, there is a feeling that the hare bankers have already left the problems behind, laughing all the way out of the bank. Let consider two traders of before the economic crisis - one called 'Mr Hare', and the other named 'Mr Tortoise'. Mr Tortoise makes his employing bank £10 Million a year for five years in a bull market, and receives a £1 Million yearly bonus. Mr Hare on the other hand is a legend on the trading floor of the same employing bank. Mr Hare makes £100 Million a year for four years (the good years), and a take home yearly bonus of £20 Million. The employing bank did not want their star to leave them to go to a Hedge Fund. But in his fifth year Mr Hare loses £500 Million and receives no bonus that year. Mr Hare has never had to repay his past bonuses, that money remains his.

In summary after five years:
Mr Tortoise made the bank £50 Million and was given £5 Million in total bonus.
Mr Hare lost the bank £100 Million, yet he was walked away with £80 Million bonus.

The Danes lead on the Bail-ins.

In the editor's letter in City AM by Allister Heath he warns: "IF you are tempted to celebrate Spain’s bailout, or if you agree with its football-mad PM that it was a “triumph”, a great European “victory”, I would urge you to reconsider. Sure, chucking at least €100bn at insolvent, incompetently managed second-tier Spanish banks will pour oil on stormy Eurozone waters. It will reduce the immediate threat of an explosive collapse. But far from solving Europe’s crisis, it will ensure that the ultimate denouement, when it eventually comes, will be even more painful. If one looks beyond the spin, what has been agreed is relatively simple. The Eurozone bailout fund – backed by taxpayers in Germany, France and elsewhere – will lend the money to Spain’s bailout fund at around three per cent, half the market interest rate. In return, Spanish taxpayers will guarantee the loan, which will be added to the Spanish government’s books. Spain’s national debt will thus increase massively; this is not a gift but a subsidised loan. Usually, when a country borrows a very large amount of money (even at three per cent) to nationalise and recapitalise insolvent local lenders, the markets worry – they do not celebrate. Deutsche Bank is predicting that Spain’s government debt will hit 97.2 per cent of GDP in 2014-15 if the bank bailout reaches €120bn, a level that economists such as Ken Rogoff have shown cripples GDP growth. Yet without a return to expansion, Spain will never be able to repay the debt – and it will take years before the nationalised banks will be ready for reprivatisation. That is what is so troubling about the events of the past few days. Nobody has learnt any lessons from the failed bailout culture of the past four years. No bank is being allowed to go bust. Bad debt is not being written off, it is being transferred from the private sector to the public sector. This is madness: eventually, even the stronger European countries could be overwhelmed. The recession and falling house prices mean that there will be hundreds of billions, if not trillions, of bad loans across the EU in the coming years, especially when assets begin to be priced more realistically – if all of this ends up on governments’ books, some sovereigns will go bankrupt. So why does the EU establishment still believe that every bank should always be bailed out? We are meant to be operating under capitalism, where successful firms do well and bad ones go bust. The kind of corporatism we are seeing in Spain – and before that, in Ireland – is inflicting untold reputational damage on the global financial services industry. The US, the G20, the FSA and even the European Commission have all endorsed plans to create new bankruptcy and resolution procedures to enable even the biggest banks to be wound down in a controlled manner, with bonds being turned into equity to allow bail-ins and protect taxpayers and depositors. Spain’s problems are with small institutions; it should have been relatively easy to wind them down. The Americans have shut well over a hundred small insolvent banks since the crisis, protecting insured deposits but wiping out everybody else. The Danes have been the best: they have actually implemented bail-ins already, most notably in the case of Amagerbanken, whose senior creditors suffered substantial losses but depositors were protected (regrettably, Denmark has since diluted its approach). But Spain – and Ireland before it – are still inanely protecting bondholders. This weekend’s sovereign bailout won’t be the last. Spain will need even more money – and so will other countries. Taxpayers are being pushed to the limit – at some point, they, and governments’ balance sheets, will finally crack."

Blind Folded in Accounting

Andy Haldane, executive director of financial stability has written in the Economia magazine suggesting that it has become so difficult to "provide point valuations of banks' assets" and liabilities, it is akin to trying to "pin the tail on a boisterous donkey." Risking a hit-and-miss evaluation of banks' solvency position.

A film about campaigning in the North East of England

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