02 April 1998 - 04 April 1998

The Reduction and Management of Demand for Healthcare

Chair: Sir Maurice Shock

The backdrop to our conference was a widespread awareness that healthcare absorbed, in all developed countries, a very substantial share of national wealth;  that in scarcely any country was there general public belief that the services provided fully matched demand in either volume or quality;  and that several factors looked likely to push demand still higher.  We knew that both systems of provision and resource allocations differed widely - for example a United Kingdom system seeking to make public provision for all absorbed some seven per cent of gross domestic product, whereas United States arrangements of more limited ambit took fourteen per cent;  yet satisfaction levels were by no means positively correlated with these resource differences.  We were not sure whether major changes in the GDP shares within countries were feasible in political and economic terms - opinions differed, for example, on whether the relatively low UK figure was really incapable of increase, given that most people regarded healthcare as a matter of special priority - but on any view demand pressures were likely to stretch existing systems.

Those pressures included the impact of ageing populations (for example in the requirement for long-term care) with possible inter-generational stresses lying ahead.  The proportionate effect of this varied across countries, and some participants argued that the prime cost-driver was the final six months of life irrespective of age.  But the demand interacted with and added to the effects of rising individual expectations;  of more extensive screening and periodic check irrespective of symptoms;  of greater public awareness, stimulated by health-promotion efforts and wider media coverage;  and of more professional specialisation and accelerated technical innovation, extending the scope of feasible intervention. Public attitudes tended increasingly to assume that if something in the healthcare field could be done, it should be;  and much good medicine was therefore increasing demand rather than satisfying it.

We knew that demand was not identical with need (and probably diverging more and more widely) but distinguishing between them was in practice neither objectively nor politically easy.  One or two sceptical voices, noting that the issue was in any event a rich-country one, wondered what exactly was the argument for seeking to constrain demand;  but most of us were minded to accept - whether on general affordability grounds, or because of the risk that healthcare costs might crowd out more fruitful expenditure on other routes to health - that there was a clear general case for managing and shaping future demand in better ways, even if not actually reducing it.

Any sound concept for managing-and-shaping ought to rest on relevant criteria for evaluating healthcare interventions, whether in terms of preventing premature death or of enhanced quality of life.  We recognised the problem that some interventions (such as transplants) might in the early stages of their development score poorly on the test of comparative value for money, and an over-narrow focus might then stultify innovation;  but it ought in general to be possible to assess average outcomes in terms of health-improvement benefit, cost and risk rather than just (as at present often happened) in subjective terms of expressed patient satisfaction.

Health-promoting measures, we knew, needed enhancement almost everywhere.  The prime limitation on their success was not imperfect scientific knowledge but inadequate levels of public acceptance.  Governments must sometimes take the lead, but public confidence in them was at best variable, and much of the persuasive effort needed therefore to come from health professionals and perhaps from non-governmental organisations.  We noted that the better-educated and more prosperous tended to respond more readily to health-promotion drives, whereas it was precisely in less-advantaged areas that need was greatest;  there was accordingly a case for extra effort in such areas, though it needed to be sensitively communicated so as to avoid seeming simply to impute guilt to individuals for their own poor health.  As this point illustrated, equity in outcomes and in real access, not just in formal opportunity, was for several of our countries a key consideration.  And better access, it was commented, did not necessarily increase demand - perceived denial of access was sometimes itself a driver of demand.

One of the strongest themes in our discussions was the importance of good information, effectively available to both providers and receivers and leading wherever possible to a more genuine sharing of decision-making than was customary amid paternalistic/passive habits of mind.  The limitations of medical knowledge and the non-zero risks of almost any medical intervention should be better communicated to healthcare receivers (though we heard pessimistic comment that publics generally had, in this as in several other fields, too little basic grasp of concepts of probability and risk).  Shared information leading to more intelligent discrimination would not necessarily increase demand, as for example attitudes to the option of prostatectomy might show.  We wondered whether the spread of world-wide-web or similar dissemination mechanisms could provide a valuable channel of help, though there might be need for some form of coordinated and responsible professional effort to ensure balance and true comprehensibility.

If more sophisticated understanding on the part of the healthcare receiver was to play a part in demand management, a particular responsibility fell upon the general practitioner, or other primary interface professional at the initial-care level, as intermediary and interpreter.  Receiver trust was a key factor in this.  Governments had limited levers, and perhaps even less command of trust;  and in the diverse models of managed healthcare in the United States there was often suspicion at present that advice or decision was mostly in the hands of managers of cost and risk rather than physicians.  We were reminded that if, as in Britain, the general practitioner was to be the key gatekeeper, proper resourcing was essential;  and this might increasingly include IT-based systems to support though not replace judgement of individual situations.

We recalled, at the same time, that to place added weight upon the role of medical professionals in deciding or advising on provision inescapably raised issues of resource accountability and stimuli to cost-effective practice.  Resources devoted to healthcare, noted a wary intervention, were employment and income to medical professionals, and a sound system needed inbuilt (not just externally-imposed) incentives for both providers and users against simply asking for more.  No country had found an ideal structure for achieving this.  Pure fee-for-service systems, quite aside from equity problems across populations as a whole, were often a temptation towards iatrogenic demand;  US managed-care experiments were seeking market-simulating ways round this, but with uneven results - managed care, one participant suggested, drifted into becoming simply managed price.  French experience (which provided highly interesting compare-and-contrast insights at numerous points in our discussion, for example in the fact of an over-supply of physicians needing to be managed downwards) had in recent reforms shifted a good deal of cost from the public to the private sector, but without material effect on overall volume.

If, as many participants thought desirable, good value-for-money management of healthcare was to be led in larger measure than at present by healthcare professionals, they needed will and competence as well as incentive to that end.  Misgiving was expressed about whether customary patterns of medical training paid enough attention to this, and also whether - partnering that issue - there was sufficient or indeed any significant acceptance that healthcare management could be an entirely valid career option for a trained doctor - yet if professionals wanted full influence they must be ready (like counterparts in other fields, such as the armed forces) to share responsibility for inescapable hard choices, not just to complain and demand.  We heard a good deal of comment - largely focused upon Britain, but not exclusive to that setting - that professional demarcations remained too rigid, flexibility and multi-skilling too rare and the sense of “all of one company” less deep-rooted than it ought to be;  for example, the potential of nurses (though social and educational change might in some respects have weakened quality and commitment) was not always fully exploited.  Vigorous opinion was heard that there was extensive scope, for example in hospital organisation, for determined process re-engineering to improve output, use costly investment more intensively and reduce the cultural barriers to adaptive change.  But we were fairly reminded that change - for example in the many-fold expansion of day-care for minor interventions - had in some areas already been extensive;  and IT possibilities might well accelerate it further, for example into monitored care at home or in the workplace.

Several aspects of our subject merited much more time than we were able to give them.  We could note only briefly the issue of health-product costs as a factor in overall resource demand;  we were not sure that markets in this regard were yet efficient enough, or true added value sufficiently aligned with cost.  We wrung our hands about the mounting impact of the threat and actuality of litigation in its impact both in increasing system costs and in damaging system behaviour - in the United States, it was suggested, one-third of total healthcare system cost was attributable to this (but, said a cynical aside, a lawyer-dominated Congress was unlikely to reverse matters).  The trend in other countries was similar though as yet less extreme;  and for all the undoubted disciplining value of the concept of professional liability, the fact that in Britain 87% of lawsuits failed did not inspire confidence in the value of present patterns.

We found, sadly, even less time to consider the priorities of research (but do not leave them just to the researchers, we were warned) and the healthcare impact of advances in genetic knowledge - utterly transforming, said some;  merely substantial, said others.  Nor could we do more than acknowledge perfunctorily that many public policies beyond the customary ambit of healthcare, such as housing, bore heavily upon health standards.  Interestingly, two dogs that scarcely barked at all, at least in explicit terms, were rationing and waiting-lists.

t was not to be expected, amid the diversity of healthcare systems and national cultures represented among us, we would find overarching strategic prescriptions.   Indeed, a powerful strand of discussion doubted that any such were to be had, or would prove salutary.  On this view, there were many diverse practical steps of demonstrated benefit, like screening for cervical cancer;  and the best strategy was a pragmatic and experience-sharing pursuit of these on a concrete and deliverable basis, buttressing hope and seeking to start upward spirals through doing the undoubtedly doable.

This report reflects the Director’s personal impressions of the conference. No participant is in any way committed to its content or expression.

Chairman: Sir Maurice Shock
Member, General Medical Council 1989-94;  Chairman, Nuffield Provincial Hospitals Trust


Dr David Dodge
Visiting Professor and Distinguished Scholar in Residence, Faculty of Commerce, University of British Columbia
Professor Duncan Sinclair DVM MSA
Chair, Ontario Health Services Restructuring Commission
Dr Douglas Wright OC
President Emeritus, Davis Centre, University of Waterloo, Ontario

Monsieur Raoul Briet
Directeur Général de la Sécurité Sociale, Ministère de l’Emploi et de la Solidarité
Professor Jean-François Girard
Member, Conseil d’Etat;  Directeur Général de la Santé, 1986-97;  President, Executive Council, WHO

Professor Nick Black
Professor of Health Services Research, London School of Hygiene and Tropical Medicine
Dr Angela Coulter
Director of Policy and Development, King’s Fund
Baroness Denton of Wakefield CBE
Managing Director, Burson-Marsteller, Europe;  member, National Health Service Policy Board, 1990-91
Sir Christopher France GCB
Permanent Secretary, Department of Health and Social Security, subsequently Department of Health, 1987-92
Professor Pamela Gillies
Director of Research, Health Education Authority
Professor Rod Griffiths
Regional Director of Public Health, NHS Executive West Midlands
The Rt Hon Sir Archibald Hamilton MP
Conservative Member of Parliament;  Chairman, 1922 Executive
Sir Graham Hart KCB
Permanent Secretary, Department of Health, 1992-98
Mr Andrew Hudson
Head of Health Expenditure, HM Treasury
Mrs Joanna James
Director of Development, Radcliffe Medical Foundation
Ms Tessa Jowell MP
Minister of State for Public Health, Department of Health
Mr Jeremy Laurance
Health Editor, The Independent
Professor Alan Maynard
Professor, Health Economics Consortium, University of York
Dr Helen Van Oss
Principal in General Practice, Oxfordshire
Dr David Pencheon
Public Health Doctor, Institute of Public Health, Cambridge
Dr Rosemary Steward
Director, Oxford Health Care Management Institute
Mr Bryan Stoten
Chairman, Birmingham Health Authority
Dr Thomas Stuttaford OBE
Medical Columnist, The Times
Mr Nicholas Timmins
Public Policy Editor, The Financial Times

Dr Barbara A DeBuono
Commissioner, New York State Department of Health
Dr Gregory Eastwood
President, State University of New York, Health Science Center at Syracuse
Dr Norman H Edelman
Professor of Medicine and Dean, School of Medicine, State University of New York at Stony Brook
Dr Peter Levin
Health Policy Counsel to Senator Connie Mack
Mr Jerald C Newman                      
Chief Executive Officer, Nassau County Medical Center, East Meadow NY
Dr Roscose Ross Robinson
Vice Chancellor for Medical Affairs and Professor of Medicine, Vanderbilt University Medical Center, Nashville, Tennessee
Ms Marsha Tanner Wilson
Director, US Healthcare Practice, Burson-Marsteller, Washington DC