Abstract
Tragic events in hospitals in Mid-Staffordshire and Morecambe Bay, together with another round of structural ‘re-disorganization’ have fuelled speculation about the long-term viability of the National Health Service (NHS).
Elected to have no ‘top down’ reform of the NHS the coalition government has implemented radical evidence-free reforms focused on the creation of a quango, NHS England, with responsibility for strategic system management and the commissioning of specialist services. One hundred and fifty-two primary care trusts have been replaced by 210 clinical commissioning groups managed by general practitioners transmogrified into managers of 60% of the NHS budget.
The legislation underpinning these changes is complex and has created speculation that healthcare provision and perhaps its finance may be privatized. Privatization is likely to sustain the inefficiencies of the NHS, with potentially much greater inequity in access to patient care. Let's compare the actual performance of each system, while bearing in mind the ideals of each of the protagonists. 1 In both the provision and finance of healthcare, public and private systems often have common failings.
Common failings of public and private healthcare provider systems
Public and private healthcare systems of provision exhibit similar deficiencies. In the USA, there are large variations in clinical practice, i.e. patients with similar characteristics and healthcare needs get very different levels of care. Some argue that publically funded and privately provided medicare could be delivered with a 40% savings if safe conservative practices were adopted nationally. 2 In England, a 2010 report by McKinsey and Co., commissioned by the government, asserted that reductions in clinical practice variations made it possible to save £20 billion of NHS expenditure: the so-called Nicholson challenge. 3
In the private healthcare delivery systems of the USA there is over-diagnosis and over-treatment of patients. The progressive lowering of intervention thresholds in diabetes, hypertension, hyperlipidaemia, osteoporosis and some cancers creates considerable increases in healthcare expenditure for relatively few health gains. 4 This inefficiency deprives other patients of care from which they could benefit and defrauds taxpayers and insurance subscribers.
Public and private healthcare systems produce avoidable morbidity and mortality. A report by the US Institute of Medicine report, ‘To Err is Human’, re-awakened international concerns about the avoidable damage to patients. It showed that medical errors killed more Americans than breast cancer, HIV-AIDS and road accidents. 5 This and related studies in the English NHS 6 led to an international consensus that patients faced a one in ten chance of being damaged by medical care.
These common problems have been evident in public and private healthcare systems for decades.7 They have led to largely fruitless public and private ‘reforms’. In the USA these have taken the form of supply side ‘innovations’ when the democrats are in power, such as Health Maintenance Organizations and the emerging accountable care organizations. Republican administrations have responded with demand side policies such as enhanced use of co-payments and deductibles. All to little avail!
The English are addicted to evidence-free ‘redisorganizations’ of healthcare structures. Hospital structures have migrated though ‘trusts’ to ‘foundation trusts’ with little observable benefit. 8 The purchasers of healthcare have evolved from ‘health authorities’ to ‘primary care trusts’ and now to clinical commissioning groups. All to little avail!
Common failings of private and public healthcare funding systems
The private insurance industry in Europe and the United States is inefficient. In healthcare markets, internationally there is an imbalance of power between those who fund healthcare and those who provide it. Private insurers, just like NHS commissioners, are price and quality takers rather than price and quality makers. They act as ‘bank clerks’ paying bills from doctors and hospitals with little critical appraisal of the appropriateness of care and whether it improves patient health. In common with public payers, like the NHS and Medicare in the USA, they have been slow to monitor and performance manage medical errors and improvements in health, e.g. mortality rates and patient reported outcome measures (PROMs).
Private insurance generally restricts access to care on the basis of patients' ability to pay thereby creating inequality in access to care. Insurers pass on expenditure inflation to consumers rather than act as efficient controllers of expenditure. This is in part a product of their passivity as healthcare purchasers and in part due to incentives. Reducing the real cost of insurance premiums by tax allowances enables those ideologically inclined to favour such funders to defend and expand private activity. This policy has been very successful in expanding the private insurance sector in Australia. The nice issue is whether the opportunity cost of these subsidies, often given to relatively affluent tax payers, is efficient and equitable. 9 Would this money produce more patient health gains if spent in Australian Medicare?
Improving the performance of the NHS
Efforts to improve the performance of both public and private healthcare systems are usually evidence-free in design and not evaluated when implemented. This unscientific approach ensures the preservation of fallacies and the advocacy of faith-based ‘solutions’. These problems are epitomized by the current NHS reforms which ignore the fundamental and well-known problems of all healthcare systems. The current NHS organizational reform is a nice example of ‘jumping on the spot’!
The expensive quagmire in which healthcare systems are trapped is maintained by inadequate performance management of and by healthcare professions, particularly the medical profession, with restrictive practices preserved by perverse incentives and by the challenge that the path to greater efficiency will redistribute power and incomes.
Four fundamental factors should inform all healthcare reform:
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Market economies do not use the market mechanism to control their healthcare systems. Market forces are to be used cautiously and when it is safe to do so. The allocation of healthcare funds is not left to the market in any country, even the USA. ‘Competition’ and ‘markets’ are means to an end, not ends in themselves. Such policies are subordinate to the primary healthcare objectives of efficiency, equity and expenditure control. Any insurance system should be public (like the NHS, US and Australian Medicare, and social insurance in continental Europe) or very tightly regulated. Emulation of lightly regulated commercial insurance, as in the USA, guarantees inefficiency, inequity and cost inflation. Commissioners of care, not providers, should collaboratively determine the prices and quality of healthcare provision.
The NHS provides good quality care for the vast majority of patients and offers universal access free at the point of use, at a manageable cost. Such attributes make it an invaluable social asset which prolongs the life of many (including this author). It can and should do better. But beware of simplistic advocacy of evidence-free alternatives from government and privatizers.