Could lessons from New York State’s Medicaid reforms help the NHS to improve population health?

Lessons from new york states medicaid

KPMG has issued a report that shows how we could improve patient outcomes in the NHS by drawing on experience from New York State’s Medicaid transformation programme.

Also on

• KPMG report suggests that patient outcomes in the NHS could be improved if we adopt learnings from New York’s Medicaid reforms 

• The outdated payment system that rewards volume, not patient outcomes, is one of the biggest issues facing NHS

• New York’s Medicaid reforms reward collaboration to improve quality of care and financial sustainability

• NHS providers need to focus on prevention to ensure patients get the right care, when they need it.


New Care Models: Learning from New York State’s Medicaid reforms examines how the state is rethinking how it pays for health services, using value-based incentives to encourage providers to work better together and improve the outcomes of patients. 

John Howard, partner in KPMG’s Health advisory team, says: “New York is showing that improving population health and the quality of clinical care are key to achieving financial sustainability. But, also that payment systems need to create the right incentives for people to collaborate.

“One of the biggest issues facing the NHS is an outdated payment system, and the Government needs to look at new ways of linking payment mechanisms to improved outcomes in a sustainable way. Although it’s great to see an emerging consensus that we should move away from an activity-driven payments system, there’s a risk that the pendulum will swing too far and everyone will rush to capitated budgets that create a different set of problems. 

“New York’s experience shows that one of the best ways to encourage provider collaboration and achieve better patient outcomes, is to combine a sensible use of capitation with other value-based payment structures, such as bundled payments and risk/reward contracts.

“Medicaid’s Director is making it clear that the state will reward providers for improving patient outcomes, not just doing lots of procedures. This shift is focusing providers on prevention and integrated care and means patients are getting the right care, when they need it and experiencing fewer complications and avoidable hospital stays.”

At the centre of the Medicaid reforms are 25 new provider networks. They work together to manage patients’ care across different settings with the aim of keeping people well and out of hospital. John adds, “Healthcare organisations in New York are working together for mutual benefit. They get paid for coordinating care and share in the rewards of better prevention, improved health and reduced complications, which also help reduce costs. For example, they're saying: ‘OK, how can we deliver better care for chronic conditions in a way that’s truly integrated and best for the patient and how can we share the rewards of making those improvements?’ They’re looking at patients’ needs across organisational boundaries and working with local communities to tackle social determinants of health, which is exactly what the NHS is aiming to do through new care models.” 

KPMG also reports that New York recognises that payment systems are just one piece of the jigsaw. John comments: “New York knows it needs to transform its workforce if it’s going to transform care. They’re working with higher education, staff groups and trade unions to develop accredited roles for care managers and to design the training and development needed to support career progression.

“They also know they need much better information if they’re going to be able to make the right decisions about how to change care. They’re investing heavily at a state-wide level to make sure that providers, commissioners and patients have access to the information they need to join all the pieces together.”

While recognising that US healthcare is very different, KPMG’s report urges NHS leaders to learn lessons from the approach New York is taking. John concludes: “While there is a lot that the NHS could teach the US about how to improve healthcare, there’s a lot we can learn from New York’s approach. They’re working to a five-year planning horizon with a clear, predictable plan for investment backed up by very sophisticated thinking about what needs to change with payments, workforce and analytics to make transformative change possible. That’s a great example that health systems around the world could follow.”



Notes to editors: 

KPMG’s report, New Care Models: Learning from New York State’s Medicaid reforms, is available to read here.


For more information, please contact:

Helen Jackson, corporate communications assistant manager

T: +44 (0)118 373 1479

M: +44 (0)790 111 5649



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