I remember reading an article that observed that systems of universal insurance – which need to put their energy into providing a “decent minimum” for the masses – must also offer a “safety valve for the wealthy disaffected.” Canada bans private insurance for basic hospital and medical care services. So, when affluent Canadians want “the best,” some of them pop across the border to Cleveland or Ann Arbor.
But from the time of its founding in 1948, the British National Health Service has allowed – and, depending on which party is in power, promoted – a private insurance market. Private insurance in a single payer, government run healthcare system is a funny animal: one part incest, one part conflict of interest, and three parts strange bedfellows. And it’s infinitely fascinating. Here’s how it works:
The insurance part isn’t too difficult to understand. People living in Britain can obtain private insurance, and about 10 percent of them do. About one-third of people with private insurance purchase it with their own money, while the rest receive it as a benefit of employment. Many of the big multinationals provide such insurance, either to all their employees or to senior executives. It’s considered a plum perk for everyone, and most expats coming to work in the UK consider it an essential benefit.
I’ve heard a lot of shocking things since arriving in England five months ago on my sabbatical. But nothing has had me more gobsmacked than when, earlier this month, I was chatting with James Morrow, a Cambridge-area general practitioner. We were talking about physicians’ salaries in the UK and he casually mentioned that he was the primary breadwinner in his family.
His wife, you see, is a surgeon.
This more than any other factoid captures the Alice in Wonderland world of GPs here in England. Yes—and it’s a good thing you’re sitting down—the average GP makes about 20% more than the average subspecialist (though the specialists sometimes earn more through private practice—more on this in a later blog). This is important in and of itself, but the pay is also a metaphor for a well-considered decision by the National Health Service (NHS) nearly a decade ago to nurture a contented, surprisingly independent primary care workforce with strong incentives to improve quality.
Appreciating the enormity of this decision and its relevance to the US healthcare system requires a little historical perspective.
As I mentioned in a previous blog, the British system cleaves the world of primary care and everything else much more starkly than we do in the States. All the specialists (the “ologists,” as they like to call them) are based in hospitals, where they have their outpatient practices, perform their procedures, and staff their specialty wards. Primary care in the community is delivered by GPs, who resemble our family practitioners in training and disposition, but also differ from them in many ways.
President Obama’s battle to get his healthcare bill through Congress was big news on this side of the Atlantic last year, not least for the way our own National Health Service (NHS) was used as a reference point in the debate. Now though, it is Britain’s (or, to be specific, England’s) turn to be consumed by arguments about healthcare reform, and if you were to listen to some critics, you’d imagine just as much was at stake. The reform in question is the British Government’s Health and Social Care Bill, which is currently the subject of some fairly furious wrangling in the House of Lords. The bill entered committee stage last week after the Government won a key Lords vote, but although it now looks almost certain to become law in some form, there’s still fierce debate about many of the details.
Depending on where you stand, the health bill will either drag Britain’s creaking NHS into the 21st century, or it marks the first stage in the dismantling of a national institution. Actually though, some of this rhetoric is a little overblown. The bill represents a wide-ranging and pretty dramatic package of reforms, but it’s still some way short of an Obama moment. One thing it does not do is challenge the fundamental tenet on which the NHS was founded, which is that everyone in Britain has access to universal healthcare ‘free at the point of use’, funded through taxation. That tenet is rather less perfectly applied than is sometimes admitted – many people do have to pay prescription charges, and NHS coverage of dentistry is pretty patchy – but it’s nevertheless an article of faith for the British public, and no mainstream political party would dare to challenge it (overtly at least).
Still, the bill does make two very substantial changes to the way the NHS is organised across England (although it has been brought by the UK government, it does not apply to Scotland, Wales or Northern Ireland, all of which have devolved powers for their own parts of the NHS). The two key changes are both designed to make the NHS more efficient in the face of Britain’s financial crisis, both could have far-reaching implications and both have been hugely controversial. Firstly, it abolishes a whole tier of NHS management and hands its powers instead to the family doctors at the frontline – the general practitioners, or GPs, as they are known here. Secondly, it loosens the constraints on the NHS’s internal market, providing scope for private companies to compete to run many more NHS services. The two reforms are intended to work together to drive efficiency across the health service, and the efficiencies required are pretty frightening – 4% a year for the next four years.
The latest issue of Health Affairs is devoted to racial and ethnic disparities in the consumption of health care. Naturally, they found some. Why are they there?
Let’s consider another necessity: food. Suppose you get a Double Quarter Pounder with cheese and a large order of fries, my favorite fast food indulgence when I put all considerations about healthy eating aside. Do you think your burger would have less cheese if you were a black customer? Would your fries be less crispy if you were Hispanic? Would the meat would be less juicy if you earned a poverty level wage?
The answer to these questions is obvious. Just about anybody in America can have the same fast food dinner anyone else in America is having — usually with very little inconvenience. If there is any disparity in this market, it is due solely to individual preference and choice.
So what makes health care different? I am happy to report that increasingly, it isn’t different. MinuteClinics, RediClinics and other walk-in establishments around the country offer standardized services that are comparable to the market for cheeseburgers and fries. In fact, almost one of every five people who got a flu shot last year got it at a supermarket or a drugstore. At a walk-in clinic, your flu shot costs the same as my flu shot. Your allergy prescription is just as inexpensive and just as accessible as mine. If there is any difference between us it is solely due to differences in needs and preferences. Nothing more.Continue reading…
The National Audit Office (NAO) in the UK has recently published a report evaluating the status of “The National Programme for IT in the NHS” (NPfIT). The program is a very ambitious top down initiative to deploy Health Information Technology across all NHS facilities in an attempt to provide an electronic care record for every patient in the UK. The blunt conclusion of the report states that “The original vision for the National Programme for IT in the NHS will not be realized” and “This is yet another example of a department fundamentally underestimating the scale and complexity of a major IT-enabled change programme”. Is this gloom ridden report in any way pertinent to our own quest for an EHR for every patient by 2014? Of course not. We don’t have a Socialist system where the government can decide on a particular EHR product, buy it, contract billions of dollars in services, and force all hospitals and doctors to install it and use it in their facilities on a government dictated schedule.
Instead, the United States Government is building a National EHR, and I find the business model fascinating. No, the Feds did not hire a team of software developers, did not set up a business entity and didn’t even hire a defense contractor to do all these things. Instead, they legislate and engage in a flurry of rule makings which are then applied in quick succession, like giant levers, to the delivery side of our health care system. This is nothing short of brilliant.Continue reading…
These two lines at the end of the album track ‘Kite’ earned U2 a place in a recent list of suspect popular song lyrics. Some Health 2.0 vendors are also struggling to get ‘social media’ to rhyme with ‘healthcare’ but will no doubt carrying on trying to do so. With Goldman Sachs throwing $1.5 billion in Facebook’s direction it makes sense for anyone in the online health business to position themselves as close to the social media company as possible, on the off chance that they will be able to pan a few nuggets out of the fast flowing stream of cash.
While no doubt some of the funds the bank is putting together will be used for healthcare related applications it is not immediately obvious what Facebook can do that Google and Microsoft have not already tried. Both these companies are trying to sell to healthcare providers whose business models if they do exist are confused and, in some cases failing. One way to gain a better understanding of the healthcare market is to view it as a mathematical equations that can be solved by eliminating one variable at a time.
So What If The UK’s National Health Service Did Not Exist?
You log on to NHS.uk and are greeted with a message saying “Sorry, this service has been discontinued. The UK government can no longer afford to provide you with healthcare.” And that is it, apart one last piece on advice. “Please take care.” This presumably aimed at Darwin Award candidates who were hoping to break the land speed record using fireworks and a skateboard and fully expect the local hospital to fix any resulting damage. Also perhaps directed at anyone with a grumbling appendix thinking of entering a baked bean-eating contest. (More about these people later.)
So what difference would it make if there were no healthcare provider? For a start everyone in the UK, apart from the 1.3-million ex-NHS workers, would be £1600 a year better off. A young person leaving school would have saved enough to pay for their university education. A young couple in their mid twenties would have saved enough to put a down payment on their first house. OK average life expectancy would fall and the last couple of years (or most likely months) of a person’s life would probably be more unpleasant, but the proceeding sixty five or so years would be a lot better. There, two of the government’s major economic headaches eliminated in a stroke – an unfortunate turn of phrase in this case. With an extra £100 billion per annum sloshing around in the economy most of the 1.3 million former NHS employees would be able to find new jobs.Continue reading…
The NHS white paper is the government’s roadmap for a market based healthcare system, which is designed to encourage increasing roles for the private and third sectors, whilst diminishing the role of the public sector in the England. The NHS is going to be dismantled by using the market forces of ‘creative destruction’. This will have profound effects on the medical profession with attacks on T+Cs, pensions, medical training, professionalism. More importantly, the knock on effects for patient care will be devastating.
The key policy levers enabling this to happen are:
1. The purchaser provider split, with GP commissioning consortia taking the leading role on the purchaser side of the divide.
2. Patient Choice.
3. Competition between a plurality of ‘any willing providers’.
4. Payment by Results with price competition.
5. Patient held budgets.
6. Foundation trusts becoming social enterprises and the abolition of the cap on their private income.
These policies are mutually reinforcing and this is how they will work:
GPs will be formed into GP consortia and will control 80% (£80bn) of the NHS budget to buy in services for their patients from a variety of providers (including FTs, private hospitals and third sector organisations) competing against each other in competitive healthcare market. Market competition will be enforced by applying EU competition law and overseen by the economic regulator, Monitor, as well as the new National Commissioning Board. Money will follow the patients via the Payment by Results (PbR) system. This has traditionally been a fixed pricing system, but the tariffs will now be opened up to price competition (I’ll come back to this).
I’ve just returned from a few days in London, scoping things out for a planned sabbatical next fall. In what may be a pale echo of the late Alistair Cooke’s always fascinating “Letters From America,” here are a few of my initial observations:
The dominant issue, of course, is the Cameron government’s new austerity program, with its planned deep cuts to government services and benefits. While the program (or programme, I guess I should say) has created some upheaval – witness the recent semi-violent demonstrations by university students, whose tuitions may treble – it has not torn apart the society, the way belt tightening of this magnitude undoubtedly would in America. My sense is that the relative acceptance (yes, I know Charles and Camilla had a frightfully awful limo ride to the West End the other night, but this was, er, theater rather than a defining moment) can be explained the Brits’ stronger trust in their government. It is this same trust that leads to near-universal support for the National Health Service, the UK’s tax-funded healthcare system. This wellspring of support gives the government a little leeway when it says, “We can’t afford to do all this anymore, folks, and we can’t just print money. We must cut programs and benefits.”
In the US, of course, there is no such trust today, nor harbingers of its return any time soon. In a recent issue of Time that outlined this past decade’s mega-trends, Nancy Gibbs observed that the cumulative effect of 9/11, Katrina, BP and the subprime crisis was to markedly shrink Americans’ already scanty faith that their government can do anything competently. So our response to the recent announcement that Chinese kids are shellacking us in educational achievement is hand wringing and statistical nitpicking, not the call for vigorous government action that characterized our nation in the Sputnik era.
“If you think healthcare is expensive now, wait until it is for free.” – PJ O’Rourke
On the eve of sweeping health reform legislation, it is hard not to notice the glowing skyline in Washington as policymakers ignite their torches, grab their pitch forks and race as a mob toward for-profit stakeholders who many feel have created, perpetuated and benefited from our highly uneven, inflationary and inconsistent system of healthcare in America.
Over a quarter century, I have consulted with and led employers, consumers, hospitals, physician groups, attorneys, pharmacuetical manufacturers and insurers. My personal epiphany prompting me to become more vocal about America’s need for systemic change did not spark in the middle of an inflammatory contract negotiation with a major hospital or flash during a heated employee meeting as we announced yet another deductible, co-pay and contribution increase. My burning bush occurred on a gurney in the hallway of British National Health Service (NHS) hospital where I lay for 20 hours deathly ill with pneumococcal pneumonia.
After moving to London with my young family, we decided to opt for public care. After all, I was curious to experience the NHS and with three kids under eight, we were constantly under siege with myriad colds, earaches and symptomless fevers. Best of all, it was free. Our neighborhood NHS family practice clinic was always crowded but convenient. Other than the occasional drug co-pay, we never received a bill. Yet, something was not quite right. My doctor always looked as if wild dogs or the Inland Revenue Service was pursuing him. I broke down during one examination and asked him how much he received from the National Trust for each patient to provide basic care. ” Not nearly enough, Mr. Turpin. Not nearly enough” He said absently while peering into my ear with a pen light.
In the bleak midwinter of our first English February, one of my kids came home with a nasty flu that raged through the house, flattening even my indefatigable wife who I considered indestructible. I was travelling on the Continent and needed to return early to play Florence Nightingale to the family influenza ward. As everyone slowly recovered, rising like Lazarus from the dead, I took ill and within one day, was coughing up blood and bedridden with a raging fever. After a brief visit with my GP, he called an ambulance and I was taken to casualty (Emergency) in a local NHS hospital. I was admitted and deposited on a gurney in a hallway alcove as I waited to be transferred to a hospital room. There was one problem. There were no beds available.
The ER was utter chaos with sick elderly and acute care victims in every conceivable location. The doctors were tireless and clearly dedicated but overwhelmed. Through the haze of illness, I watched the trauma triage go on for hours. My wife briefly appeared with the kids to visit.Continue reading…
One of the proposals for health care reform is to have a panel of medical experts oversee Medicare, in order to improve quality and reduce cost. Butfalse accusations permeating the debate have scared people into thinking that would mean a government bureaucrat deciding what treatments you should or shouldn’t have, and would ultimately deny your grandma her vital drugs. Like any debate involving the future, fear of the unknown is going to be used by those who want to maintain the status quo for their own self interest. But health panels are not unknown. They have been used in Britain for ten years, and have proven to work.
Health panels are a simple enough idea: experts look at the evidence out there and make sure it’s the best that is available. They then make recommendations based on analysing hundreds of studies and consulting numerous stakeholders. The recommendations suggest the best form of treatment and care for a particular condition, or advise on areas your doctor may be unsure about.Continue reading…