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Public Health (2008) 122, 84 91

www.elsevierhealth.com/journals/pubh

Public Health Practice

Clinical-outcome-based demand management in health services

C. Brogana,b, D. Lawrencec,d,, L. Mayhewc,e
a

Public Health Action Support Team, WeLReN (West London Research Network), Imperial College, London, UK b University College London, London, UK c Brent Primary Care Trust, London, UK d London School of Hygiene and Tropical Medicine, London, UK e Cass Business School, City University, London, UK
Received 17 March 2006; received in revised form 31 January 2007; accepted 3 April 2007 Available online 30 July 2007

KEYWORDS
Demand management; Healthcare systems; Treatment thresholds; Clinical outcomes

Summary The problem of managing demand: Most healthcare systems have third-party payers who face the problem of keeping within budgets despite pressures to increase resources due to the ageing population, new technologies and patient demands to lower thresholds for care. This paper uses the UK National Health Service as a case study to suggest techniques for system-based demand management, which aims to control demand and costs whilst maintaining the costeffectiveness of the system. Technique for managing demand: The technique for managing demand in primary, elective and urgent care consists of managing treatment thresholds for appropriate care, using a whole-systems approach and costing the care elements in the system. It is important to analyse activity in relation to capacity and demand. Examples of using these techniques in practice are given. Conclusion: The practical effects of using such techniques need evaluation. If these techniques are not used, managing demand and limiting healthcare expenditure will be at the expense of clinical outcomes and unmet need, which will perpetuate nancial crises. & 2007 The Royal Institute of Public Health. Published by Elsevier Ltd. All rights reserved.

Corresponding author. London School of Hygiene and Tropical Medicine, Keppel Street, London WC1E 7HT, UK.

Tel.: +44 20 7436 5816; fax: +44 20 7580 8183. E-mail address: david.lawrence@lshtm.ac.uk (D. Lawrence). 0033-3506/$ - see front matter & 2007 The Royal Institute of Public Health. Published by Elsevier Ltd. All rights reserved. doi:10.1016/j.puhe.2007.04.013

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Clinical-outcome-based demand management in health services 85

Need
Clinical decision by patient

Demand

Activity
Clinical decision by clinician together with patient

Outcomes

Variation in effectiveness

Resources

Figure 1 Needdemandactivityoutcome-based health service model.

Demand management in health and social services

Most health services have problems staying within given budgets due to the seemingly limitless pressure of clinical demand.1 This paper examines ways of limiting healthcare activity by appropriately managing demand. Principles underpinning a needdemandactivityoutcome-based approach to demand management will be presented. Subsequently, techniques based on these principles will be used in case studies drawn from health services research evidence, some of it original, to illustrate specic management strategies that aim to improve system cost-effectiveness over the funding cycle, rather than just arbitrarily trying to reduce activity or budgets. These case studies use examples from the UK National Health Service (NHS), but they are applicable to most healthcare systems.

 

programme subsystem level, e.g. eye care pathways, chronic disease management or older peoples services; organization level, e.g. hospital (admission protocols, thresholds, delayed discharge), primary care level (GP referral practices, prescribing practices); and organization subsystem level, e.g. day-to-day (operational) management of an accident and emergency (A&E) department.

Principle 2: analyse the effect of managing demand using the needdemandactivity outcome model of health care
This essential conceptual framework for analysing health- and social-care systems is shown in Figure 1. It indicates that levels of demand and activity depend on crucial decision-making points: the needdemand and demandactivity decision points. This paper will show how the demandactivity decision point is important in managing demand and health service activity.

Principles of demand management

Principle 1: manage health and social care as an economic inputoutput system Health and social care work as a system2. Any strategy to manage demand and activity in one part of a system must consider the effects on other parts of the system.3 Demand managementa is applicable at different system levels:

Principle 3: adjust treatment thresholds at the demandactivity decision point to be appropriate so as to keep activity within budget
Both of the following conditions need to be met in order to achieve appropriate treatment thresholds for optimal demand and activity within a specic budget:

whole-system (geographical area) level for resource allocation, priority setting, commissioning and planning, e.g. small town;

 

a The term demand management can also refer to managing patients decisions to demand health care (Tom Granatir, personal communication). In this paper, it is used in relation to managing healthcare activity.

healthcare demand at the patient level must full the criterion for appropriate demand, as dened in Box 1; and system treatment thresholds, as dened in Box 2, must be monitored and varied to keep

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86 C. Brogan et al. Box 1 Appropriate demand at the demandactivity decision point. At the individual patient level, demand for (and use of) health care is appropriate where the patient threshold for treatment is severe enough for the health benet from a treatment to be greater than its harms and costs. Greater means to an extent that the patient and clinician would choose the treatment if they knew its true harms, costs and benets.

Box 2 System treatment thresholds. A system treatment threshold is the average level of severity of need at and above which patients in a particular system are treated, i.e. it is the average of individual treatment thresholds. An individual treatment threshold is the level of severity of need at which a patient is treated.

activity and expenditure within a specic budget. Whatever the level of the system treatment threshold, some patients below the system threshold are likely be treated and, however, low the threshold, some patients above the threshold are not likely to be treated. This is mainly due to variation in individual treatment thresholds of clinicians.4 For example, although there is unmet need for cataract surgery,5 it has been estimated that up to 30% of cataract operations are below thresholds of appropriateness based on clinician consensus.6

Techniques for demand management

Techniques for elective care demand management
One strategy for managing elective interventions is for commissioners (and, if necessary, providers) to check referrals for elective care and major diagnostics against protocols of appropriate care, such as the detailed Milliman care guidelines from the USA.7 Such protocols are usually based on clinician consensus.810 Ideally, protocols should be based on individual treatment thresholds in relation to outcomes, so that the protocol is based on evidence that a patient will obtain a minimum net benet from treatment. However, detailed, valid, quantitative outcome evidence for many interventions is lacking. Elective demand management techniques entail the following:

procedures should adhere to agreed clinical protocols.11 The crucial point is that protocols need to be based on evidence of the probability of a patient receiving at least a minimum net health gain, not only on clinical consensus evidence. This evidence is not yet available routinely, because relevant clinical and qualityof-life outcomes are not measured routinely in most healthcare systems. The private British provider, BUPA, does measure outcomes,12 and the English Department of Health is piloting instruments for the routine measurement of outcomes for use in treatment centers;13 Commissioners ensuring, as a condition of payment via contracts, that severity of need before surgery and outcomes after surgery should be measured routinely; and Commissioners, paying less to providers where the treatment did not produce an agreed minimum improvement in clinical outcomes and/or health-related quality of life.

Techniques for urgent care and chronic disease demand management

At the strategic level, there is evidence, both old14,15 and new,16,17 of inappropriate health service use, where many patients are treated in inappropriate settings, and the severity of need of admitted patients varies between hospitals.18 The techniques suggested here can be used to help to ensure that reduced bed numbers also reduce inappropriate admissions and length of stay, partly by reducing delayed discharge. However, most patients affected by such strategies will still need to be cared for, even if hospital admission and discharge thresholds are raised by a decrease in bed numbers. Use of the suggested techniques can help plan for this and estimate the likely net hospital savings, extra costs

contracts between commissioners and providers should contain the condition that all referrals for specic major diagnostic and treatment

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Clinical-outcome-based demand management in health services to out-of-hospital providers and the net saving to the NHS. Urgent care demand management techniques entail the following: 87

Table 1 Impact of bed availability and reduced length of hospital stay on the number of bed-days (care-days) needed for people aged 65 years or more. Hospital activity preAugust 2005 (a) Total beds Beds used by 65 years+ Length of stay 65 years+ Cases per week Bed-days per week Bed-days per week Savings per weeky Savings per year
y

 

monitoring thresholds of admission and discharge; surveying the extent of inappropriate use, e.g. using the Appropriateness Evaluation Protocol (AEP), amended for local use,19 although there are still validity and reliability problems in different cultures.20 Using the AEP will allow assessment of: o numbers of inappropriate admissions; o the likely need for out-of-hospital care for these patients; and o the lengths of stay at which patients are appropriate for discharge to intermediate and primary care at current discharge thresholds. estimating the proportion of acute care to rehabilitation care beds, using the methods developed at the Whittington Hospital in London. Patient case-mix and thresholds were measured using the AEP; and21 estimating the effects of reducing bed numbers on hospital and out-of-hospital costs, expected hospital admission reductions and increased outof-hospital use, using an extension of the method developed and used by the authors for planning intermediate care in North West London for the population aged 65 years and over.22

Planned hospital activity post 2005 (b) 214 100 10.6 days 66 700

Difference (ab)

249 134 12.6 days 74 938

35 34 2 8.4 238 223 64,756 3.37 m

Adjusted for deaths in hospital (6%).

At an average cost per bed-day of 291 at then-current prices.

Table 2 Impact of additional non-hospital costs in primary care trusts (PCTs) areas, based on the replacement services that would need to be provided by different agencies to make up the shortfall. PCT1 PCT2 44 PCT3 14 Other PCTs 11

Case studies in demand management

Case study 1 whole-system level: estimating the effects of reducing hospital bed numbers
A spreadsheet model was used to estimate the effect on hospital bed-days and admissions and on community health and social services, of reducing the number of available beds in a specic hospital for patients aged 65 years and over (Table 1). In this case, the number of rehabilitation beds was reduced. Assuming that an average reduction in length of stay of 2 days is achievable, admissions will need to be reduced by eight per week to keep within the reduced available hospital bed-days. These calculations can also be applied to other age groups. It was estimated that these bed reductions would save 3.37 m per annum for the hospital (Table 1). However, this system view shows that there would be additional costs of 2.83 m to the non-acute hospital providers (Table 2), including non-NHS

Care-day 154 shortfall per week Summary of estimated additional costs Cost per 37,544 week Cost per 1.95 year (m)

10,695 0.56

3410 0.18

2634 0.14

Based on weighted average cost of 244 per day.

services (see Table 3, PCT1 only), giving a net saving to the system of 0.54 m overall. This shows that hospital bed closures might cause problems for community services unless there are income transfers. For the cost-saving function, average cost per day pricing was used for the hospital concerned,

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88
Table 3 Approximate breakdown of additional costs by care provider (PCT1 only). Provider for PCT1 patients Estimated annual increase in budget required (000 s) 29.3 456.4 1234.0 63.2 32.2 63.3 74.0 1952.3

C. Brogan et al. two studies have quantied these associations,28,29 attempting to predict from pre-operation characteristics which patients have a high probability of at least moderate improvement in visual ability, and which patients have a high probability of no improvement or even a decrease in visual ability. An example of a prototype decision support model30 was generated in which the model predicts the likely post-surgical increase in visual ability on inputting pre-operation data, including patient responses to a specic visual ability questionnaire.31 While the model is not validated to use as a decision support tool in a clinical setting, it can be used as the basis for a needoutcome-based referral guideline.

Primary care Social services Intermediate care Community care Hospital trust Voluntary services Households Total
PCT, primary care trust.

because a complete hospital rebuild was taking place. For hospitals where only marginal costsavings would accrue, lower hospital savings would be expected.

Case study 3 organization level: managing hospital demand in relation to capacity and performance
The factors involved are as follows:


Case study 2 programme subsystem level: managing thresholds for cataract surgery
In general, at recent system threshold levels of referral for cataract extraction, about 20% of patients do not benet from the operation when valid and reliable visual disability questionnaires are used to measure visual benet.23,24 This is not due to the lack of potential effectiveness of cataract surgery, but to suboptimal patient selection, i.e. some patients who are selected for surgery have a low probability of benet. This is usually because they have relatively little preoperative visual disability.25 As most cataracts are progressive, for the majority of patients, e.g. those without ocular co-morbidity, it is a matter of nding the appropriate threshold for surgery in terms of ability to benet, i.e. before the visual disability affects quality of life badly, but not too soon, when disability is so slight that the potential benets from surgery are less than the potential harms. A few schemes have suggested that priority for cataract surgery should adhere to specic guidelines, e.g. the Western Canada Waiting List Project,26 but they are based on consensus rather than the thresholds of pre-operation severity likely to produce a minimum agreed benet from the operation. It has been shown that specic pre-operation characteristics of patients are associated with better or worse likelihoods of benet.27 At least

demand on hospitals is greater where:  the hospital catchment population is larger;  the level of morbidity is higher;  the patient threshold of referral is lower (greater propensity to self-refer); and  the clinician threshold of admission is lower (some demand is supply-induced and shows itself in the lowering of the patient and clinician thresholds such that admissions rise to ll unused capacity); hospital capacity to manage this demand depends on:  resources available: beds, staff, equipment and plant;  clinical and managerial expertise and culture, e.g. collaboration between clinicians, managers and other professionals; and  effective joint working between hospitals, social services and primary care; and hospital performance depends on:  capacity in relation to demand; and  the effectiveness and efciency of hospital management.

The steps for managing demand on a hospital in relation to capacity and performance include:

estimate the size of the population served by hospitals or other provider organizations. This entails measuring the catchment populationsb of

A hospital catchment population is the proportion of the total population in a health system notionally using (demanding care from) that hospital.

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Clinical-outcome-based demand management in health services all the hospitals in a healthcare system, using the proportional method or its equivalent;32,33 relate these catchment populations to the resources available to the hospitals, such as available beds, e.g. beds per 1000 catchment population, number of clinicians per bed and per 1000 population, budget per available bed, per admission and per throughput, etc; measure performance in relation to capacity and demand, such as lengths of stay, throughputdischarges per bed; measure thresholds of admission.16 Thresholds can be kept at an agreed level: if thresholds become lower (more people admitted at less severe morbidity), real-time utilization measurement can be undertaken and patients are only admitted when they full agreed admission criteria. Community-based services that can care appropriately for non-admitted patients must be in place; and measure hospital discharge thresholds routinely. Patients should be discharged when they meet agreed appropriate clinical discharge criteria. A demand management strategy based on arbitrarily forcing reduced length of stay without considering appropriate thresholds is simplistic. Community-based services that can care appropriately for these discharged patients must be in place. 89

 

anticipating peak periods, thus enabling an appropriate balance to be struck between improvements in service and the constraints of resource availability. The use of queuing techniques also highlighted bottlenecks (e.g. triage, blood tests) and areas of duplication in the patient pathway (e.g. patient information collection). This, in turn, led to changes in procedures. By appropriate use of resources throughout the 24 h cycle and changes in procedures over a period of time, it was possible to smooth out variations in queue length and completion times, and hence keep waiting rooms relatively free and uncongested. This, in turn, freed up space for other uses and thus resulted in higher efciency and capacity in terms of space utilization. The study established the relationship between average completion times and the target itself (based on 98% of patients completing their treatment within 4 h). It made the important point that targets must not only be challenging, but also practical. It showed that a target that is infeasible or too demanding will result in the achievement of the target becoming an end in itself, thereby leading to perverse management incentives with little patient benet.35

Conclusions
The NHS and other healthcare systems based on needs-determined demand and which are mainly free at the point of use have increasing demand pressures, sometimes with incentives for increasing activity, but limited budgets. The examples provided in this paper are just a few of the healthcare system management techniques that have been developed and rened over many years for tackling this situation,3638 but which have perhaps been neglected in the process of healthcare re-organizations. The key elements of these techniques are:

Case study 4 organization subsystem level: operational management of a hospital A&E department
A&E services are the main way in which NHS patients access urgently needed medical care. However, long waiting times have resulted in widespread criticism over a period of years, and were repeatedly the most important complaint in patient satisfaction surveys. In the NHS in England, there is a national target requiring that 98% of patients be discharged within 4 h of arrival in A&E, with the result that performance has improved greatly. A queuing model was used to quantify the relationship between throughput, completion times and achievement of the 4 h target.34 A statistical relationship was found between completion time and demand, such that as completion times increased or decreased, arrivals in A&E decreased or increased, suggesting that demand could be regulated. It was found that completion times could be altered signicantly, and therefore queues managed, by proling resources throughout the day by

  

monitoring and controlling severity thresholds of care; a whole-systems approach, not just focusing on reducing hospital expenditure; and cost-accounting of programmes.

By themselves, these techniques are not a sufcient condition for success. Other ingredients are also necessary, such as political will to leave providers to get on with the job, co-operation between commissioners and providers, especially clinicians, and good operational management, e.g. in elective care.39

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90 Managers want stability and certainty. Needsand outcomes-based demand management can help to achieve this by allowing commissioners to manage demand in relation to system capacity at the macro level, and through the greater control of thresholds, leading to improved clinical outcomes, and greater efciency and effectiveness. These techniques need to be tried and evaluated to determine how well they work in practice. Without them, the authors contend that demand management will not control expenditure without reducing clinical outcomes and increasing unmet need, and that the NHS and many other healthcare systems will stagger from crisis to crisis in the future as they have in the past. C. Brogan et al.
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9.

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13.

Acknowledgements
The authors wish to thank the former Brent and Harrow NHS Health Authority and Brent PCT for supporting the work, and the professionals and members of the local community who participated in workshops that helped to develop the planning models. Ethical approval None needed. Funding None. Competing interests None.

14. 15.

16. 17.

18.

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