DISCUSSION PAPER
The Development of Health Tourism in Portugal A discussion paper prepared by Strategic Healthcare Planning
November 2013
Introduction Health tourism is one of the government’s priorities, reported Portugal’s Minister of Health, Paulo Macedo, during the closing session of the third Health Cluster Portugal (HCP) Annual Conference which took place in Cascais in late November 2012. According to the minister, the government aims to create health tourism products, as well as further establishing Portugal as a destination of excellence for health tourism. Paulo Macedo also added that the government is committed to continuing to support the project ‘Healthy Portugal – Expanding the Market for Medical Care and Health Tourism in Portugal’, which is being jointly developed by HCP and the Portuguese Business Association . The event, which was attended by around 250 people, began with an opening speech by the Secretary of State for Tourism Cecília Meireles, who spoke about the country’s seasonality issues. According to Cecília Meireles, more than 54% of hotel beds are not used on an annual basis and health tourism might be a clever strategic solution to tackle the problem. In fact, the Secretary of State highlighted Portugal’s potential by saying that only 1.9% of tourists visit the country for its health tourism facilities, which means that there is still plenty of room to grow in this niche segment. Leading UK Healthcare Consultancy Strategic Healthcare Planning International Ltd has considered the potential impact of this drive by Paulo Macedo on the UK NHS and the extent to which hospitals within the UK might use such a system to address unacceptably long waiting lists and to provide patients with choice. Prior to doing this it is necessary to understand the structure of the NHS and the framework within which it operates in order to ascertain the acceptability of such a proposal politically, ethically and commercially. This paper therefore considers:
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The UK National Health Service its structure and funding arrangements The Portuguese Health System • The Health Sector as a vehicle for growth Healthcare Tourism for the UK -2-
Healthcare in the United Kingdom About the National Health Service (NHS) Since its launch in 1948, the NHS has grown to become the world’s largest publicly funded health service. It is also one of the most efficient, most egalitarian and most comprehensive. The NHS was born out of a long-held ideal that good healthcare should be available to all, regardless of wealth, a principle that remains at its core. With the exception of some charges, such as prescriptions and optical and dental services, the NHS remains free at the point of use for anyone who is resident in the UK.
Scale The NHS employs more than 1.7m people. Of those, just under half are clinically qualified, including, 39,780 general practitioners (GPs), 370,327 nurses, 18,687 ambulance staff and 105,711 hospital and community health service (HCHS) medical and dental staff. Only the Chinese People’s Liberation Army, the Wal-Mart supermarket chain and the Indian Railways directly employ more people. The NHS in England is the biggest part of the system by far, catering to a population of 53m and employing more than 1.35m people. The NHS deals with over 1 million patients every 36 hours.
Funding Funding for the NHS comes directly from taxation and is granted to the Department of Health by Parliament. When the NHS was launched in 1948 it had a budget of £437 million (roughly £9 billion at today’s value). For 2012/13 it is around £108.9 billion.
Structure The NHS in England is undergoing some big changes, most of which will take effect on April 1 2013. This will include the abolition of primary care trusts (PCTs) and strategic health authorities (SHAs) and the introduction of clinical commissioning groups (CCGs) and Healthwatch England. However, none of this will have an effect on how people access front-line services and the healthcare will remain free at the point of use.
Performance In the UK, life expectancy has been rising and infant mortality has been falling since the NHS was established. Both figures compare favourably with other nations. Surveys also show that patients are generally satisfied with the care they receive from the NHS. Importantly, people who have had recent direct experience of the NHS tend to report being more satisfied than people who have not.
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In 2010, the Commonwealth Fund declared that in comparison with the healthcare systems of six other countries (Australia, Canada, Germany, Netherlands, New Zealand and USA) the NHS was the second most impressive overall. The NHS was rated as the best system in terms of efficiency, effective care and cost-related problems. It was also ranked second for patient equality and safety.
The NHS Structure The NHS is undergoing major changes in its core structure. Most of the changes took effect on April 1 2013, though some were in place before then. It will be some time before all the changes are fully implemented. All vital NHS services will continue as usual during the transition period and beyond. These changes will have an effect on who makes decisions about NHS services, how these services are commissioned, and the way money is spent. NHS services will be opened up to competition from providers that meet NHS standards on price, quality and safety, with a new r e g u l a t o r ( M o n i t o r ) a n d a n expectation that the vast majority of hospitals and other NHS trusts will become Foundation Trusts by 2014. In addition, local authorities will take on a bigger role, assuming responsibility for budgets for public health. Health and Wellbeing Boards will have duties to encourage integrated working between commissioners of services across health, social care, public health and children’s services, involving democratically elected representatives of local people. Local authorities are expected to work more closely with other health and care providers, community groups and agencies, using their knowledge of local communities to tackle challenges such as smoking, alcohol and drug misuse and obesity. However, none of these changes will affect how people will access NHS services in England. The way one books a GP appointment, get a prescription, or are referred to a specialist will not change. Healthcare will remain free at the point of use, funded from taxation, and based on need and not the ability to pay.
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The Secretary of State for Health The Secretary of State for Health has ultimate responsibility for the provision of a comprehensive health service in England and ensuring the whole system works together to respond to the priorities of communities and meet the needs of patients.
The Department of Health The Department of Health (DH) will be responsible for strategic leadership of both the health and social care systems, but will no longer be the headquarters of the NHS, nor will it directly manage any NHS organisations..
NHS England Formerly established as the NHS Commissioning Board in October 2012, NHS England is an independent body, at arm’s length to the government. It's main role is to improve health outcomes for people in England. It will: ▪ ▪ ▪ ▪
provide national leadership for improving outcomes and driving up the quality of care oversee the operation of clinical commissioning groups allocate resources to clinical commissioning groups commission primary care and specialist services
Clinical commissioning groups (CCGs) Primary care trusts (PCTs) used to commission most NHS services and controlled 80% of the NHS budget. On April 1 2013, PCTs were abolished and replaced with clinical commissioning groups (CCGs). CCGs have taken on many of the functions of PCTs and in addition some functions previously undertaken by the Department of Health. All GP practices belong now to a CCG and the groups also include other health professionals, such as nurses. CCGs commission most services, including: ▪ ▪ ▪ ▪ ▪
planned hospital care rehabilitative care urgent and emergency care (including out-of-hours) most community health services mental health and learning disability services
CCGs can commission any service provider that meets NHS standards and costs. These can be NHS hospitals, social enterprises, charities, or private sector providers. However, they must be assured of the quality of services they commission, taking into account both National Institute for Health and Care Excellence (NICE) guidelines and the Care Quality Commission's (CQC) data about service providers. ▪ increase democratic input into strategic decisions about health and wellbeing services ▪ strengthen working relationships between health and social care ▪ encourage integrated commissioning of health and social care services -5-
Public Health England A new Organisation is also being created; Public Health England (PHE) will provide national leadership and expert services to support public health and will also work with local government and the NHS to respond to emergencies. PHE will: ▪ ▪ ▪ ▪ ▪
coordinate a national public health service and deliver some elements of this build an evidence base to support local public health services support the public to make healthier choices provide leadership to the public health delivery system support the development of the public health workforce
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Healthcare in Portugal
The health care system in Portugal has come a very long way after the government reforms back in 2002 wherein the system has been made more efficient and effective compared with previous years. The Portuguese health care system is basically available to all the eligible populace in Portugal and efficiently works in the same manner as it does to other European Union states. The current system in Portugal has three coexisting systems namely the National Health Service, the health sub-systems which is a specialized social health insurance scheme and the voluntary private health insurance. The NHS provides universal coverage although they have recently implemented measures to ensure the sustainability of the service, for example, the implementation of user fees that are paid at the end of the treatments. In addition, about 25% of the population is covered by the health subsystems, 10% by private insurance schemes and another 7% by mutual funds. The Ministry of Health is responsible for developing health policy as well as managing the NHS. Five regional health administrations are in charge of implementing the national health policy objectives, developing guidelines and protocols and supervising health care delivery. Decentralization efforts have aimed at shifting financial and management responsibility to the regional level. In practice, however, the autonomy of regional health administrations over budget setting and spending has been limited to primary care. The NHS is predominantly funded through general taxation.
Performance Portugal’s infant mortality rate has dropped sharply since the 1980s, when 24 of 1000 newborns died in the first year of life. It is now around 3 deaths per a 1000 newborns. This -7-
improvement was mainly due to the decrease in neonatal mortality, from 15.5 to 3.4 per 1000 live births. People are usually well informed about their health status, the positive and negative effects of their behaviour on their health and their use of health care services. Yet their perceptions of their health can differ from what administrative and examination-based data show about levels of illness within populations. Thus, survey results based on self-reporting at the household level complement other data on health status and the use of services. Only one third of adults rated their health as good or very good in Portugal. This is the lowest of the Eur-A countries reporting and reflects the relatively adverse situation of the country in terms of mortality and selected morbidity.
Rationalisation of the Healthcare System On 12th March 2013 the presentation of a study undertaken by Porto Business School and the Health Cluster Portugal on the proposed rationalisation of the Portuguese healthcare system was given in Lisbon. It considered that the discussion on the health sector in Portugal has to date been centred around two main areas: â–Ş â–Ş
Access to healthcare as an inalienable right, and; As a source of health spending growing to question sustainability of the system.
However, the sector of health sciences is one of the sectors with the most potential for growth in developed economies, one which receives more investment, more resources channelled towards innovation and development that has more potential to create jobs. Therefore, to limit the policy decisions and strategic options to control rising spending on healthcare, neglecting the importance of health sciences sector as vital to the growth of developed societies, is to reduce the development potential of the Portuguese economy. To create an internationally competitive industry is to ensure greater wealth generation, more efficiency in the sector, attracting investment, technological progress and job creation, which allows not only a boost to GDP, and thus the denominator of the ratio at the centre of all concerns, but also ensures that the numerator results from the best cost / benefit possible. The excellence of the health sciences sector will be a major contribution to the sustainability of the health system as a whole. While small-scale economy, but where flexibility and adaptability of enterprises and qualification of human resources are the main sources of competitiveness, Portugal has to focus on the development of areas that can effectively compete internationally, correcting a tendency to scatter and attempt to be competitive in all aspects of the industry. -8-
Selecting sub-clusters where to focus this effort is one of the main measures proposed in this report and will probably be the easiest to implement and that together with improving the quality of information and standardisation of processes, can provide more immediate results.
Health Sector as a vehicle for Growth – the 3PIE Over the last decade, Health Professionals in Portugal have built a system that works well and has a huge potential for future development. There are a number of health facilities providing generally good service to users, and there are some high quality hospitals. The proposal is to create entities known as 3PIE or Partnership Project for Innovation Expert whose goals are to develop facilities that will be recognised internationally as centres for research, diagnosis and treatment of high quality specialities. It is believed that these centres should attract overseas clients to Portuguese hospitals and it is a significant driver in the aim to boost income. There are 3 phases in the creation of a 3PIE: ▪
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The identification of the specific specialty or specialties that currently exist where they are of a high quality • These can be developed fairly quickly with the advantage that the resources already exist The creation of the organisational structure to deliver the clinical aspirations • There is a lack of senior healthcare management skills in the sector and the intention is to appoint a project leader to drive the 3PIE forward. The final phase is the implementation. • This will include funding
It is acknowledged that the success of the 3PIE will depend on the chosen leader and that if a suitable candidate is not found in Portugal than it will be necessary to recruit from overseas. The question that remains unanswered is whether the 3PIE should be based on a single specialty or to have a more multi-speciality setting.
International Recognition The creation of the common brand will bring about recognition of the quality it represents and with appropriate marketing will introduce the services Portugal has to offer to EU member states. The European Directive 2011/24/EU of the European Parliament and the European Council will open the door to the free movement of users within the European Market enabling greater demand to be created. Member states of the European Union can receive cross-border healthcare in each other’s states. -9-
It has been proposed that a pilot study be undertaken but the main questions are ‘what is the preferred service model’ and ‘where should it be located’?
The service model It is possible that the ultimate recommendation to the Health Minister is that there should be 2 pilot studies undertaken to test both the single specialty variation and the multi-specialty model. It may also be a pragmatic response to the limiting of public expenditure and the selection of an existing location with a well-established infrastructure as opposed to developing an independent location.
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Is medical tourism acceptable in the UK? In order to test whether the principle of medical tourism is acceptable to the UK market it is necessary to consider a range of factors: ▪ economic viability; ▪ demand; ▪ competition
Affordability Who will purchase services? There are different entities that could potentially purchase clinical services from Portugal: ▪ ▪ ▪
the private sector who will always exercise its right to choice whether funded by institutions or individually; newly formed Clinical Commissioning Groups (CCGs) who are the prime purchasing agencies in the UK, or; individual hospitals who could contract with other providers.
Private Sector Europeans in all countries are willing to pay a charge for some private healthcare, whether to avoid long queues, to access cosmetic surgery, or to avoid the perceived risk of infection in public-sector hospitals. This is not a small market. As most Europeans have access to public sector provision either through their mandatory social insurance fund or through taxes, private healthcare insurance remains a relatively small market, with levels typically in the range of 2%-8% of the population. Many consumers prefer to pay single fees as and when necessary. In addition, any occupational healthcare paid for by employers renders private healthcare insurance unnecessary. It is believed that in the UK the supply of service currently meets the demand and that there would need to be strong reasons why this group should seek their procedures to be undertaken in a different country when they are able to obtain a quality service close to home.
Clinical commissioning groups In the UK local clinicians have now been given the green light to take control of the NHS budget in more than three quarters of England’s local health communities.
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The NHS Commissioning Board has authorised 62 more clinical commissioning groups (CCGs) to commission healthcare services for their communities. The first 34 CCGs were authorised in December 2012; with a further 67 CCGs authorised in January 2013. A total of 211 CCGs will, from 1 April 2013, be responsible for £65 billion of the £95 billion NHS commissioning budget. The third wave of CCGs, which have all completed a rigorous assessment, will in total plan and commission hospital, community health and mental health services on behalf of more than 13 million people. The 163 CCGs authorised so far will serve a total of around 42 million people. Dame Barbara Hakin, the NHS Commissioning Board’s National Director: Commissioning Development, said: “The majority of CCGs are now authorised and up-and-running and we are moving at pace towards a clinically-led NHS that is focused on delivering improved health outcomes, quality, patient safety, innovation and public participation.” CCGs, set up by the Health and Social Care Act 2012, will from April 2013 replace the 152 primary care trusts that currently commission healthcare services. They are independent statutory bodies, led by their members: the GP practices in their area. All 8,000-plus GP practices in England will be members of a CCG, putting the majority of the NHS budget in the control of frontline clinicians for the first time. This new structure will provide 211 separate organisations with whom it will be necessary to put forward proposals for, and the negotiation for the delivery of service. Strategic Healthcare Planning International Ltd has yet to discuss the principle of medical tourism with any CCG from which to form an opinion however since it is their role to provide a speedy, safe, cost effective service to patients it is believed that they may be receptive to non-traditional solutions.
Hospital providers Hospitals in the NHS are continually reviewing their procedures and processes in order to maintain a cost effective service and to meet their year on year financial targets. One such review is concentrating on elective care. Elective care is pre-arranged, non-emergency care that includes scheduled operations and is provided by medical specialists in a hospital or other secondary care setting. Patients are usually referred from a primary care professional such as a GP.
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In England, under the NHS Constitution, patients ‘have the right to access services within maximum waiting times, or for the NHS to take all reasonable steps to offer a range of alternative providers if this is not possible’. So there exists within the NHS the right for a patient to receive care in an alternative setting should the correct circumstances exist. Currently various hospitals are considering the creation of elective care centres that focus on this specific activity in order to provide a speedy response and avoid patients exercising their right to choose alternative providers. Glen Burley, CEO of South Warwickshire Hospitals NHS Foundation Trust commented that “we are aware that our patients have the right of choice and it is our role to make us that provider of first choice. We are creating an elective care centre to enable us to more speedily respond to those needs”
Figure - the first warwick hospital
This proposal from South Warwickshire is a trend that is gathering momentum in the UK and were it to become the norm it will reduce the opportunity for the Portuguese market to attract the NHS Trusts to create formal links with their counterparts overseas.
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However David Loughton CBE, CEO of The Royal Wolverhampton NHS Trust, a major tertiary centre in the UK expressed the view that to him the proposal was totally unacceptable on all fronts, politically, ethically and morally. He considered he would be falling short in his duty to his patients if he was failing to the extent that he found the need for them to be treated by another organisation. Similarly discussion with Paul Chew Deputy Chief Finance Officer at Shropshire County Clinical Commissioning Group considered that there was potential for a forward looking hospital trust, in conjunction with a complementary organisation to provide its patient group with a speedy, cost effective solution that would be financially attractive to the NHS. It would however need to be undertaken in a controlled manner and meet the registration criteria of the Care Quality Commission. The consensus is that the response from the UK public sector may not be as encouraging as initially envisaged.
The Care Quality Commission The Care Quality Commission (CQC) is the independent regulator of all health and social care services in England. Its role is to make sure that care provided by hospitals, dentists, ambulances, care homes and services in people’s own homes and elsewhere meets government standards of quality and safety. If a provider carries on a ‘regulated activity’ as defined by the Government in section 8 of the Health and Social Care Act 2008 and the Health and Social Care Act 2008 (Regulated Activities) Regulations 2010, they are required to be registered by CQC. Information about regulated activities can be found in The scope of registration. This document is to help providers in deciding what activities they should register for. It is the responsibility of the provider to ensure that they are registered and CQC is unable to state which regulated activities a provider should apply for. The CQC only register and regulate providers who are carrying out regulated activities in England. They are required to have a provider address in England in order to register. This factor alone may have a significant impact upon the ability of Portuguese services from working alongside the UK NHS.
Cost Liaison with Portugal has presented their findings on the commercial aspect of their service delivery, albeit across a fairly limited range of procedures that put the cost of their services in a highly competitive light with those in the UK. They compared their costs against comparative costs within the UK Private Sector. If the desire is to provide services to the UK public sector providers the cost structure is predetermined by government via a tariff system called ‘Payment by Results’ and is the - 14 -
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framework within which any payments will be determined. This system provides a cost that the NHS will pay a registered provider for any procedure no matter where it is carried out The aim of Payment by Results (PbR) is to provide a transparent, rules-based system for paying trusts. It will reward efficiency, support patient choice and diversity and encourage activity for sustainable waiting time reductions. Payment will be linked to activity and adjusted for casemix. Importantly, this system ensures a fair and consistent basis for hospital funding rather than being reliant principally on historic budgets and the negotiating skills of individual managers. The table below indicates the tariff payments that the NHS would recognise for the procedures listed. Costs provided by Portugal
Cost from SHP
Procedure
Portugal provider
UK Private Sector
PbR Tariff
Notes
Total hip replacement
£3,300
£9,612
£5280
Rising to £8676 for higher levels of acuity
Lumbar arthrodesis
£5,800
£30,485
£5,878
Rising to £8,592 for higher levels of acuity
Complex Rhinoplasty
£1,900
£4,400
£1,141
Espohagoplasty
£4,700
£9,900
£5,444
Bilateral Breast Augmentation
£2,200
£4,240
£4,483
Cervicalfacial rhytiecomy
£2,800
£6,443
Total hysterectomy
£2,250
£5,300
£2,189
Cataract removal
£700
£1,859
£708
Brachytherapy
£5,400
£16,800
TURP
£1,900
£4,753
£1,795
£93,792
£26,918
Total £30,950
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Rising to £8,738
Not undertaken in the NHS
Rising to £3,939.Yeovil PP tariff £3,996
Local negotiation
This fairly simplistic view is of a limited range of procedures and therefore inconclusive as to the outcome. It will be necessary to undertake a more extensive study for it to be meaningful. Were the above figures to prove to be reflective of the overall position however it could be argued that the NHS is more cost effective and therefore unlikely to contract with a provider from Portugal. It is likely in a competitive market that there is the opportunity for negotiation. The judgement however is whether the marginal increase in cost is acceptable in reducing the wait times for UK patients As an example, a patient in the UK awaiting a routine gall bladder removal via laparoscopic procedures is required to wait up to 18 weeks whereas the private sector in Portugal could make arrangements for the operation within 2 weeks. To remove such pressures from the acute system has a value both real and political. A review undertaken by Dr Alyson Pollock recorded that analysis based on multiple data sources, including the International Passenger Survey, indicated that contrary to some popular media report the UK is a clear net exporter of patients. More UK residents currently choose to travel abroad for treatment than international patients travel to the UK to access treatment here (in the NHS and privately). Depending upon procedure there is the potential for these patients to have also saved the UK resources. Research based on freedom of information requests to NHS Foundation Trust hospitals also indicated that despite comparatively small numbers of international private patients being treated – 6 % across a sample of 28 hospitals - these are responsible for 35% of total private income in these Trusts. This indicates that private foreign patients may indeed be more lucrative than UK patients treated privately within the NHS.
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SHP Opinion There is a significant drive in the Portuguese health system to develop its services with a renewed focus on the supply of healthcare provisions to nationals from other countries and it is anticipated that this could be the catalyst for general systems reform. With the level of government support the proposal has, it will undoubtedly bring about a concentrated effort from an integrated supply whereby the public and private systems come together to satisfy a common goal. This unified approach, could however also bring with it internal competition that in itself could be counterproductive unless there is a commitment to a common vision by all participants. The drive will also be in competition with neighbouring countries that will similarly be seeking to attract the same group of transient patients and it is unclear how this will develop. It is considered however that this group of patients will represent those who express their freedom of choice by direct payment. The issue for consideration however is the motivations for seeking overseas care besides perceived higher quality or lower cost. These might be: ▪ ▪ ▪ ▪
to reduce waiting times • organ transplant patients who want to avoid long waiting lists seek experimental care or controversial care; • terminally ill patient desperate for care; convenience / privacy • gender reassignment seek care that is unavailable/unacceptable in the home country; • pregnant female seeking termination
The more significant opportunity however is to provide services to those patients who are not being adequately provided for by their own public systems and whose treatment could potentially be funded by those organisations. The SHP position is to further question: ▪ Is there a demand from the UK to use Portuguese services? ▪ Who will use those services? ▪ Who will pay for those services? ▪ Is it clinically acceptable? ▪ Is it politically acceptable? It is clear that further consultation is required with both patients and providers in order to arrive at a considered opinion that could be of value to our Portuguese colleagues.
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The role of the Strategic Healthcare Planning Members of Strategic Healthcare Planning have been involved in the delivery of major healthcare projects in the UK for over 30 years and therefore capable of assisting Portugal in the assessment of healthcare tourism between the 2 countries The Portuguese healthcare sector is invited to consider the contents of this paper and to determine the extent to which it would wish to explore the process further.
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! John B Clarke Strategic Healthcare Planning LLP November 2013
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