A fragmented system weighing us down

26 August 2016

Exercise regimes were put under the spotlight last week as the UK claimed second place in the Rio Olympics medal table and announced its long-awaited childhood-obesity plan. While Olympians won plaudits, ministers were rebuked as “weak” for not restricting junk-food advertisements and promotions, such as two-for-one offers.

Nearly a third of children aged 2–15 are overweight or obese. Obesity not only restricts what people can do in their day-to-day lives, it also increases risk of depression, heart disease, type 2 diabetes and some types of cancer. It cost the NHS an estimated £6.3 billion in 2015 and indirectly affects the wider economy through working days lost, social care costs and benefit payments (totalling an estimated £27 billion in 2015).

If the issue is to be tackled, a greater commitment to prevention is needed. McKinsey research emphasises that no single invention offers a silver bullet (see chart). Policymakers must use all the tools in their arsenal to tackle this problem: both from central government (through taxation and media restrictions) and NHS providers.

Cost and impact of interventions to reduce obesity

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It is provider-side intervention that government will struggle the most to incentivise. Taxes and banning advertisements may be politically distasteful for some, but they can be unilaterally implemented and enforced. Enabling GPs to prioritise obesity prevention and therefore avert secondary treatment is much more difficult.

The reason isn’t that GPs dispute the benefits of prevention. It is that they are not incentivised to prioritise it because of the current funding system (see chart).

NHS funding system

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Currently, different services are commissioned by separate bodies and have different funding streams. GP surgeries receive their funding per registered patient regardless of the number of interactions, whereas around two-thirds of hospital activity are covered through activity-based funding. This reduces GPs’ incentives to help patients control portions and manage weight (the first and fourth most effective remedies according to McKinsey) because they do not bear the cost of obesity down the line.

Instead of this fragmented approach, incentives must be aligned across an NHS that acts as one. This requires new, ‘population-health’ contracts which make providers responsible for the whole care pathways for patients. Across the globe, population-health providers, such as Kaiser Permanente in the USA and Ribera Salud in Spain, have reduced unhealthy habits, such as smoking, through providing services in primary care. This results in lower costs for the whole system – with Ribera Salud improving care for 26 per cent lower cost than its neighbouring providers. Population-health contracts can be held by single organisations, or by groups of organisations that divide labour but share responsibility for outcomes.

The cost of obesity is substantial and preventable. Taxation and media restrictions should play a role, but to enable NHS providers to take prevention to frontline primary care, policymakers must tackle the fragmentation of NHS funding. Integrated population-health contracts would make providers responsible for all segments of care within a population, thereby motivating the prevention of ill-health. This is the type of radical reform needed if the Government is serious about tackling the UK’s position as the “fat man of Europe”.

Elaine Fischer, Research Assistant, Reform



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