Will current NHS cuts raise prices and lower quality?

 

Most, if not all economic and political decisions have two prime factors – price and quality. And this includes national healthcare. Decision making involves information. Most, if not all information can be placed on a continuum between the verifiable and the fake. (Ditto “News”!) Here are some verifiable items of information relevant to our NHS.

PRICE: Some national average healthcare costs/prices per person per year:

  • The British pay $3,364
  • The Japanese pay $3,713
  • The French pay $4,361
  • The Germans pay$4,920
  • The Americans pay $9,086

Source: OECD Health data 2013

QUALITY: Some healthcare rankings:

  • United Kingdom 18
  • Canada                 30
  • Japan                    10
  • Germany              25
  • France                    1
  • USA                      37
  • Cambodia          174

Source: The Patient Factor

For less than $1000 more per person per year than we pay, the French have the best national healthcare system in the World! Cambodians have low cost, low quality. Americans have a high cost, low quality service.

We use the “Beveridge Model”, by which the government provides and finances healthcare through tax payments, plus some private provision. NHS patients do not get healthcare bills. This model has low average costs per person because the government, as sole payer, controls services and charges.

The French use the “Bismark Model”, an insurance system, usually financed through pay deductions, to cover everybody. Unlike the US insurance industry, “Bismark” health insurance is on a “not for profit” basis. Although this is a multi-payer system, firm regulation gives the government much of the cost control of the Beveridge single payer model. In practice it is a single payer system.

Canada uses the “National Health Insurance Model”, a mix of the “Beveridge” and the “Bismark,” which uses private-sector providers but payment comes from a government –run insurance programme into which every citizen pays. This is a “not for profit” single payer system which keeps down costs through simplicity, control of services and the power to negotiate affordable prices.

The US has a unique “Hybrid Model” with many separate systems for different groups. For veterans it’s the “Beveridge”, for those on Medicare it’s the “National Health Insurance Model”, for working Americans with insurance it’s the “Bismark” and for the rest of the population (15%?) it’s the “Out-of- Pocket.” (See below)

Cambodia and other “Third World Countries” have the “Out-of-Pocket Model” whereby the rich get medical care, the poor stay sick and/or die and the inbetweeners get something in between, depending upon their finances at the time.

“Single Payer Systems” result in the best healthcare at the lowest prices.

Assuming that “Out-of- Pocket” is not a hidden planned option, we are left with the comparison and choice, between the “Single Payer” and the “Hybrid”. The “Single Payer”, of whichever type, much higher healthcare quality and much lower cost to the US Hybrid.

Why are we being persuaded that we cannot afford our lower cost, higher value NHS?

Is it relevant that in 2014/5, some 70 MPs had connections with private health-care businesses and by May 2016, 6 out of 9 ex-health ministers took jobs with private health purveyors?

Are there plans and moves for deep shifts from our single payer NHS towards the US Hybrid, which costs much more and is much less efficient and caring?

Find out for yourself and speak up!

* Steve Trevathan is chairperson of Lyme Regis and Marshwood Vale Liberal Democrats.

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19 Comments

  • Simon McGrath 20th Mar '17 - 6:41pm

    Its not clear what point you are trying to make -apart from engaging in 38 degrees style conspiracies theories about the Tories moving uis to a US type system ( they won’t: even Corbyn would beat them if they tried)

    There are definitely some question to be asked about quality – but you might have asked how it is that Italy and Spain score so much higher than the UK despite spending less per head.

    It was probably also be sensible when you are writing about ‘fake news’ not to says NHS spending is being cut -it isn’t – thought it isn’t being increased fast enough
    https://fullfact.org/health/spending-english-nhs/

  • Good stats Steve.

    We also have to remember that as the NHS succeeds in keeping us older for longer, and helping us to survive disease that used to finish us off, it costs more per person. Surviving cancer costs more than dying of it within weeks of diagnosis, and surviving long enough to get another serious illness means that each of will have to pay in more during the course of our working lives.

    IMO, this is part of the debate on retirement age as much as it is a debate on taxation rates, but neither are popular, and successive governments like to put off the necessary for as long as possible.

  • Tom Papworth 20th Mar '17 - 9:25pm

    Steve,

    You identify five models (Beveridge; Bismark; National Health Insurance; “Out-of-Pocket; Hybrid) and then go on to say “we are left with the comparison and choice, between the “Single Payer” and the “Hybrid”. That ignores the obvious question WHICH “single payer model” is superior.

    If, as you say, “the French have the best national healthcare system in the World”, why would we defend the “Beveridge” model when we could adopt the “Bismark” model and have the best healthcare in the world?

    What is certainly NOT the case is that there “Are… plans and moves for deep shifts from our single payer NHS towards the US Hybrid.” Labour have been making this claim for at least 40 years and it is no more true now than it was then.

  • Simon McGrath,
    The problem with raising the retirement age is that it only really impacts on lower earners without good pension plans. The French also have a lower retirement age than the UK. So not only do they have a better health service, but also younger retirees!
    The thing about the Tories is they like to chip away at lower earners, don’t like any kind of organised labour and sell low tax rates as beneficial to ordinary people when they’re really designed to benefit the wealthy.

  • Glenn,

    Find anyone with a good pension plan under the age of fifty, dammed few of them. Even the civil service plan now pays out at 67 for them. Its a myth it only affects the poor, all pension plans are pushing out the final retirement date and the Tories intend to make pensions cheaper for employers. If your over 50 you may still have a good pension; at least in theory.

  • @ Steve Trevethan
    “Why are we being persuaded that we cannot afford our lower cost, higher value NHS?”

    Hi Steve, I’m also not sure what your main point is here?
    You appear to be concluding that single payer = good, multi payer = bad, which I don’t disagree with?

    However, there is obviously big differences regarding the return on investment between different single payer models. To use your example:

    1. The French spend 30% more than us. This is an extremely significant difference!!

    2. There are a number of interesting questions to ask regarding the targeting of the money pumped into a single payer system and its implications for patient outcomes.
    It is interesting that our mortality figures, waiting times for elective surgery and number of doctors and beds are all significantly poorer than the French.
    That 30% difference is arguably significant, especially when you consider the French (and others) appear good at targeting those extra funds at earlier diagnosis, intervention, imaging equipment and uptake of new drugs. Their system is also very patient centric.

    3. The French also have a state of the art patient record system as opposed to a situation here where different GP practices don’t even run the same system as each other, never mind the knock on effect that has into secondary care.

    4. So, streamlined care pathways, a single IT system to ensure good communication of patent records between the different parts of the system, state of the art imaging equipment leading to earlier diagnosis, investment in key front line staff, more beds, shorter waiting times for elective surgery would all lead almost certainly to a decrease in morbidity and mortality, less inequality of service provision and generally better overall patient outcomes and experiences

    5.My main point being that It’s not just the payer model, but *how* that potential extra 30% is invested that will make the difference (regardless of the main political point I think you were trying to make)? That’s before we even start talking about social care.

    At least some food for thought in answer to your question:
    “Why are we being persuaded that we cannot afford our lower cost, higher value NHS?”

  • Note the Patient Factor healthcare ranking is sourced from “The world health report 2000 – Health systems: improving performance”, so after seventeen year’s should be taken to be indicative rather than absolute. Also I would want to be sure the measures used to derive the rankings are truely relevant ie. you can’t get a good ranking by simply having short waiting times, a high number of beds per capita etc.

  • @ Fiona
    “Surviving cancer costs more than dying of it within weeks of diagnosis,…………”
    Except that we have the worst cancer survival rates in Western Europe. On average around 20 years behind France, Austria, Germany and especially Scandinavia. Even in breast cancer where we have made excellent progress we are still behind.
    This is almost certainly down to a combination in inadequate screening and availability of imaging equipment leading to later diagnosis and therefore a much poorer prognosis.
    Same point as above, investing in prevention and early diagnosis is key to a good patient outcome and is much more cost effective in the long run than dealing with the complications and morbidity of long term chronic care

  • Frankie,
    True, but it was a short snap response to the article and it depends what you mean by lower earners. Note. I did not say anything specifically about the poor as I believe the problem extends beyond that.

  • @frankie re: “Find anyone with a good pension plan under the age of fifty, dammed few of them. Even the civil service plan now pays out at 67 for them.”

    Well, I suggest for a traditional 40/60 final salary scheme where you retire at 60~65, in the post-2008 financial-crisis investment climate, you (employee and employer combined contribution) really need to be between 20~25% of your annual salary, if you wish to retire at 60’ish on anything approaching 40/60 of your final salary.

    Given that for many schemes contributions are significantly below this and due to poorer investment performance and changes in both the investment and valuation rules, I would agree that there are few who are actually on track to achieving a good pension.

    However, I suspect your definition of a “good pension plan” is one where the combined contribution rate is/has been below 10% pa, yet is still expected to pay out the 40/60 final salary. It is hardly surprising that so many pension funds in deficit…

  • Roland,

    I’m in such a pension scheme. Combined employer/employee contribution is 51.1% and its still in deficit; they did take a long pension holiday in the 90’s though. Now they have closed it to new entrants and are trying to play catch up.

  • People should be aware of the big picture, which is that when it comes to the determinants of health, the healthcare system is a minor determinant. Lifestyle, choices, socio-economic factors and genetics play the bulk of the role, with public health interventions and primary care (GPs/community healthcare) dominating the determinants from the healthcare system.

    And yet in many people’s minds, the healthcare system is secondary and tertiary care (hospitals). Hospitals, beyond their rudimentary services, actually contribute a miniscule fraction of health determinants to the population, but suck in vast (and increasing) volumes of resources. It’s always dispiriting to see people cheering on the pissing away of more scarce resources into hospitals, when that same money could be used for far greater impact elsewhere within the healthcare system (public health and primary care), or in alternative public spending.

    The debate on this really needs to shift. The law of diminishing marginal returns means that incremental spending brings smaller and smaller returns. Spending more on healthcare inevitably means spending less on something else. There is a case to reduce spending on healthcare, and if that is too unpalatable, then at least reduce spending on hospitals which are spectacularly inefficient. And I am a hospital doctor so would feel the pinch of such reduced spending.

  • @Glenn
    “”””The French also have a lower retirement age than the UK. So not only do they have a better health service, but also younger retirees!””””

    Maybe the French need a better healthcare service given their lower retirement age.

    There is now an increasing body of evidence that retiring early is actually detrimental to your health.

  • @ James Pugh
    “Lifestyle, choices, socio-economic factors and genetics play the bulk of the role,”
    Hi James, all, your points are well made. So, I’ve a number of questions for you:
    1. Here you are talking of a cultural change & people taking more responsibility for their health, both of which need to happen. As for genetics – well what if you are one of the many who have not won the genetic lottery? What then?
    Whilst education and prevention are crucial, hospitals are always going to suck in a disproportionate amount of the resources because, as you know, apart from staffing, the biggest costs are inpatient costs. Enhanced recovery pathways and the like will reduce surgical inpatient time, but medical and long stay patients are a different matter. What is your suggestion here to reduce costs?
    2. A big part of the problem with hospital inefficiency is linked to the social care piece.
    A patient may be ready for discharge but there is nowhere to discharge them to (often). Hospitals become more inefficient as a result of patients staying longer than they need.
    3. Instead of GP-led primary care and consultant-delivered hospital services we are now witnessing ‘any willing providers’ picking up the most lucrative operations, with the NHS left to provide complex, costly care. So private providers milking the stuff (outpatient clinics too),they can make a profit on, leaving the hospitals to pick up the tab for the stuff they don’t want. Is this the way we want to go?
    4. Someone mentioned Italy being more efficient than us. Italians have healthier populations (and diets) and crucially a culture of families looking after their loved ones well into old age. I wonder if this ‘community support’ as well as our demographic trends have led to more time spend in hospital as well as contributing significantly to the social care/where do we discharge them too issue?
    4. Interested on your view around Early diagnosis (undoubtably primary care needs to get better here), but you’ll be well aware that early referral for imaging is crucial for prognosis. So, what do we do? It’s surely more efficient to invest in imaging and funnel patients through local MDT’s into the regional centre much faster than we do now in many areas?
    So in conclusion, yes the push towards community primary care and prevention has to be the way to go, but hospitals are always going to suck in a disproportionate amount of the resources due to long stay medical/chronic patients?

  • James Pugh.
    Life expectancy in France averages out at 82.4 years as opposed to 81 years in the UK. The main argument for raising the retirement age is that people are living longer, not that retiring shortens life expectancy. As the retirement age rises, then the age one counts as retiring early also rises with it. One of the major reason people retire early is ill-health which obviously impacts on life expectancy. People get older. As they age their health deteriorates

  • Steve Trevethan 21st Mar '17 - 6:46pm

    Thank you for such interesting and varied comments!
    The only direct points intended to be made are in the first paragraph and, especially, in the last sentence.
    The rest was written in the hope of receiving the thoughts and expertise of others. I have not been disappointed! Below are some further thoughts/questions/responses.

    S Mc G – Might a negative disparity between payment and service when the payer/tax base remains the same/increases be considered a cut?
    F – Matters relating to the creation, storage and distribution of money and/or wealth are crucial to considerations of healthcare and pensions. Might a move to Modern Monetary Theory help?
    TP- Might the “singe payer” facet trump the type of single payer?
    G – Pensions could be considered as a form of money storage. Do current economic theory and practice render savings by and for the modal person difficult to impossible?
    Might MMT help?
    TP – In which ways does the type of “single payer” matter? Might any form of well managed “single payer” approach be OK?
    MS – The French system is excellent and a world leader. Might it be a healthy aspiration for us to become a world leader in health as well as all the other areas of “world leader” aspiration, e g IT for tax gathering?
    R – Do you know of better info?

    Pensions are delayed payment for work. If people are paid enough, enough is stored/saved and that storage is secure/ honest and accurate actuarial data etc is used pension worries might be reduced. Perhaps we are back to the current, perhaps engineered, problems relating to not rich people getting a sufficient, reliable and regular income from all sorts of savings.

    JP – Thank you for drawing our attention to the bigger picture! Lifestyle attitudes and practices are crucial. The National Curriculum reduced physical activity! Perhaps making Dance a compulsory school subject might be a “sexy” start. The main stream medias [Infotainment and Entertainment] have a huge influence which could help us to live more healthily and productively. Maintenance is always better than repair! Alternative financial/economic theories and practices seem to be important parts of “the bigger picture too.”
    M S – Ditto!
    PS For an interesting look at the negative impacts of neo-con economic theory and practice, have a look at “J Is for Junk Economics” by M. Hudson!

  • @Mike S, I was talking about this country. I think your comparison with other countries is over-simplified, but that’s beside this particular point.

    In the UK, our survival rates are increasing, and as much as I agree that it’s cheaper to spot and treat cancer sooner than later, it’s still true that long-term cancer/stroke/heart treatment is more expensive than someone who gets ill and dies within a few days. And that’s one of the main reasons that our own health service costs more than it used to.

  • @Fiona – Agreed 🙂

  • R – Do you know of better info?

    No, I was surprised that the report seems to have been a one-off, seemingly without any follow-up either in the form of a review or update, or a feed into WHO policy to encourage better health service provision. Also, I admit to only having scan read the report, it is not clear where the division lines might fall ie. what is the real difference between the UK and Cambodia, because it seems that the differences between 1 through to circa 37 are more nuanced than fundamentals being overlooked.

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