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Risk, reward and outcomes – systems approaches

Tuesday 23rd February 2021

In this concluding article of Neil Stevenson’s series, Steven discusses outcomes as a tool to support system accountability and performance. 

Implicit within the move to integrated care system and place based delivery is the recognition that the contractual framework underpinning the NHS for over 20 years needs to change (if not actually dismantled). With the arrival of the White Paper on the NHS the paramountcy of collaboration has been confirmed and even though the demise of CCGs has been carried through, the proposal stops short of formally dismantling of the commissioner/provider split. Practically, for the wonks amongst us that mean contracts will be necessary as the formal mechanism to transfer resources between organisations. And as soon as you have this relationship you get into conversations around what are you buying.

Given that it’s been recognised that activity based contracts are not constructive to wider partnership working, outcomes have been touted as an alternative. After all what we are seeking is an improvement in the nation’s health (and wellbeing). However, there’s clear evidence that linking outcomes to funding ends up distorting relationships leading to poorer performance (see blog Ghosts of Future Past) and there are risks in assuming delivery is a simple logical approach as opposed to a challenge in dealing with complex, networked based issues (see blog Let’s go on a Journey!).

Within the North East we have had three health economies (North Cumbria, South Tyneside and Sunderland) who have been working through this type of issues; all had different starting positions, challenges and issues. Approaches vary but overall, they have ended up with very similar conclusions. Though there’s clear recognition that this is very much a work in progress, both South Tyneside and Sunderland are beginning to use outcomes as a tool to support decision making, whilst North Cumbria’s population/public health focus is now embedded with systems in place to monitor and manage.

There is commonality in that:

  • Each have significant health, economic and wider socio-economic factors to deal with
  • All three benefit from coterminosity with local authority and main providers, with mature relationships
  • Each were systems that faced significant challenges, financially and clinically

In addition, there was recognition that the historical approach (tariff and associated) was divisive, with the perception that:

  • It rewarded behaviours that were not beneficial to wider system health
  • Distorted priorities and focus on specific areas in the system at the expense of others
  • Did not support wider preventative and associated work.

As clichéd as it sounds, all three have been on a journey and each recognise that the journey is just as important as the actual destination. Central to this is that outcomes are not an end in themselves rather a product to support on the journey. They are a tool to help guide decision making and maintenance of focus on the wider system aspiration.


Given this all three have arrived at a position where they accept that linking financial reward to specific outcomes is both problematic and difficult:

  1. Each are moving towards working on a system accountability basis, therefore resources (whether directly owned by partners or shared) need to be managed and deployed on a collective basis. Assigning or weighting specific elements/outcomes to particular organisation prospectively reinforce the old commissioner/provider dichotomy, which conflicts with the aims and aspiration of integrated, co-ordinated and collective working.


  1. There is a recognition that the issues and problems these systems are dealing with are complex and multi-factorial. Assigning a specific organisational responsibility to a particular issue presents a number of problems:


  • In the majority of cases the lead/single organisation will not have the means to affect the issue it is trying to address. Therefore, they get rewarded or penalised for something that is not within their control
  • It shifts ownership from a system responsibility therefore organisations may step away from issues because they are not formally accountable
  • It potentially distorts resourcing, in that funding could be retained by organisations when it could be better utilised as a system.


  1. There is a risk that organisations focus on what they can count, and this distorts delivery


  1. There is a focus on process and a risk of ‘one size fits all’ rather than the development of learning and adaptable organisations, which are capable of responding to the specific needs presented.

All three have learnt and are learning this. For South Tyneside it is shown in that their focus has been around building relationships and collective responsibility and accountability, and only now are they beginning to focus on outcomes, with them seen as a tool to support and inform decision making. Sunderland building on its Vanguard initially viewed the solution through a lead provider arrangement but have recognised that a collective approach is needed and has therefore moved towards a network Alliance solution. Whilst North Cumbria have focused organisations on cross cutting, core population health ‘ask’.

Thinking about and using outcomes are critical to each of these approaches, however none are formally using this as a tool to support financial reward/risk. As a result, all three are much closer to the kind of network/relationship approach to outcomes than the simple linear model. Each are working on a bottom-up approach to use outcomes that make local sense. Critical to this is the ability to link differing data sources and bring them together in ways that decision makers can use.

The developing approach to outcomes reflects a view in each of the three areas that they key is the system and collective response. Following the simple logical model works where things are simple, however in the majority of cases health and care systems do not deal with simple issues and in the main, the solutions are not simple. Collective action requires that things (resources, support, aims etc) are held collectively. As Carolyn Gullery, (Executive Director for Funding and Planning, Canterbury District Health Board, New Zealand, which has formally adopted an alliance way of working) observes:

“One of the interesting things about transferring risk in these models is in fact you don’t. Ultimately the risk comes back to the health board. Because if that provider fails, who is going to pick it up? We’re not suddenly going to leave patients without care. So, if you step back and realise that this is about making sur e you’ve got care for patients, you move away from these approaches and you move to a collaborative approach.”

The development of outcomes are an important part of the journey to system success, but they are not an end in themselves nor do they lend themselves to financial reward models. The experience of three health systems described here show that they are not where you should start either, rather they are a product that needs developing as system working matures, with outcomes becoming a tool for the system to use to help manage that journey.