By Ruth Thorlby
10 September 2009
The NHS has been drawn into an explosive row over US health care reform. As President Barack Obama defends his proposals before Congress, Ruth Thorlby of the King’s Fund examines the issues at stake for both countries
The leaked report from the management consultancy McKinsey has set out a disturbing vision of potentially deep cuts in NHS staff and services in response to the financial crisis. Although the government has denied that it plans to implement these cuts, the report underlines the depth of the financial challenge now facing the health service.
It’s a sobering counterpoint to the outpouring of patriotic and sentimental support for the NHS that hit the headlines last month, after Britain’s health system took a bashing at the hands of the opponents of health reform in the US. But why did the NHS get dragged into this debate in the first place – and has it provoked any helpful or worthwhile questions for the UK to ponder?
President Barack Obama addressed a joint session of Congress on September 9 in an effort to rally political support for his faltering health reform plans but the issues are equally high up the policy agenda this side of the pond.
The US plans seemed to start so well. In the early spring there were smiling faces and messages of support at special White House forums from every conceivable stakeholder, even from the insurance companies that proved so deadly to former president Bill Clinton’s health reform efforts in 1993. But after months of slow, stuttering activity in Congress, the debate suddenly turned bellicose this August. It sucked in the NHS and provoked a transatlantic row as Britain’s political establishment scrambled to defend its esteemed health care system in the face of ill-informed vitriol from opponents of Obama’s plans, some of them senior Republicans.
If the prospect of elected politicians so badly informed about the NHS was shocking enough, then what followed was somewhat worse from the perspective of factual accuracy. The debate went local, with rival groups of citizens yelling at each other in town hall meetings, calling the plans ‘Nazi’, comparing Obama to Hitler and Stalin and accusing the administration of wanting to commit mass murder.
It is easy to recoil from all this and dismiss it as a pointless debate. Both sides have targeted the worst features of each other’s health systems and both systems are themselves big outliers in global terms. The US is the only developed country without comprehensive coverage and the UK is the only one with a publicly owned and (largely) publicly provided health system. It was mischievous of the US Right to target the NHS. None of the reform proposals in the US envisaged anything like an ‘NHS for America’. Few advocated a single payer system for the US, let alone a predominantly publicly provided system.
The timing of the row hinges on Congress having adjourned without producing a unified health reform Bill from both Houses, as they had been encouraged to do (only one full draft Bill has emerged so far from the House of Representatives). Members of Congress returned home to face voters without detailed proposals, which allowed opponents to take the initiative, a repeat of the problem that scuppered the Clinton reforms.
In 1993 it proved much easier to oppose reform than defend it. This was because a hugely long and complex reform proposal emerged from a rather secretive process led by Hillary Clinton, which had not involved Congress: no-one had thought hard enough about how to sell it to the public until it was too late.
Although Obama enjoys much higher levels of popularity, he has until now allowed Congress to make the running drafting a Bill, holding back from articulating his own detailed vision of reform. However, until recently he favoured the creation of a government-run insurance agency or ‘public plan’ and other features such as a mandate on citizens to get health insurance. These and other possible components of the US health reforms are shown in the box below.
This vagueness – combined with growing unease over the size of the US deficit (now projected to be $9trn), the government’s stimulus programme and bail-outs of the banking and motor industries – triggered a wave of public anxiety about the wider role of government in the US. Anti-NHS TV commercials had been around for a few months: now they had a ready audience. Demand then rose for more ‘information’ on the NHS. British Conservative MEP Daniel Hannan and Right-leaning US media and bloggers were happy to supply headlines, which could also be easily lifted from the British press: ‘Troubled UK health care: moms give birth in bathrooms, elevators’; ‘UK kids lose 1 million teeth in 1 year’. ‘Try putting the words “NHS” “hospitals” and “cockroaches” into Google,’ advised one blog.
Defenders of the NHS, including politicians from all parties and a great many members of the public, leapt into action. There was some legitimate ‘fact correction’ to be done, particularly around waiting times, rationing and the role of the National Institute for Health and Clinical Excellence (Nice). But the image created of a vastly superior NHS system in terms of health outcomes is slightly misleading: the performance of the NHS is not better than the US health system on all measures. And, taken together, both look weak compared with some other health systems.
It is also difficult to compare the health systems accurately and both sides in the debate can find data to back up their respective arguments (see figures opposite). For example, the US spends nearly twice as much on health as the UK and, more alarmingly, spends almost as much public money covering only part of its population. But comparing how much health comes out of the system at the other end is tricky.
More substantively, those defending the NHS didn’t fully respond to a number of important themes thrown up. The first is the appropriate role of government in running a service such as health. Although the Right-wing opponents of health reform in the US have stolen much of the media attention, opinion polls suggest that at the start of the summer a majority of people supported a public or government administered health insurance plan. Experts point to an historical precedent here: public support for some sort of government action to reform health existed but was subsequently eroded, quite quickly, both in the late 1940s and in 1993, once details of the reform had been made public.
Accompanying this has been a long-term erosion of trust in the federal government’s actions. In 1964, 22% of the public thought that government in Washington could be trusted to do what is right only ‘some’ or ‘none’ of the time. By 1994, that percentage had risen to 77% and has been over 60% since (apart from a brief period after September 11, 2001, when it dropped to 39%).
It would be easy to dismiss this as a uniquely US phenomenon. According to the British Social Attitudes Survey, there has also been some erosion of trust – the percentage of people who trust British governments to put the needs of the nation above their own political party ‘always’ or ‘most of the time’ fell from 39% in 1974 to 16% in 2000. But the big difference with the US is the support for the idea that it is the government’s responsibility to provide health care for all (up from 84% in 1986 to 87% in 2000).
This still leaves open the question of how far that responsibility goes. In the English NHS, where a diversity of providers has been encouraged, both the current Labour government and opposition Conservative party avoid specifying what proportion of non-government providers of health care they would like to see. However, their rhetoric emphasises the clear benefits that non-government providers can bring.
What assumptions about government-run services is this belief based on? Was part of the support expressed for the NHS because services are still largely publicly provided? Regardless of who wins the next UK election, some clarification will be needed about the ideology and evidence base underlying the ‘mixed economy’, if only to define its limits at a local level. If Obama’s plans are pruned back because the public are sceptical about government involvement in health care, there is a lesson here too for the English NHS, albeit in reverse. In the most recent 2009 BSA survey, almost 60% of the public opposed the idea of private companies running NHS hospitals.
Another powerful theme thrown up by the debate was the role of government in rationing health care. Again, the statements from the US were often hopelessly inaccurate, but the underlying point was valid: governments or some other entities have to make decisions about what is effective and what treatments are covered if resources are finite. This is a highly sensitive area in the US and opponents of reform have been adept at frightening older people enrolled in Medicare into thinking that reform will mean losing something that they already have (and even worse, because of a decision by a ‘government bureaucrat’).
The irony here is that very few Americans enjoy unrationed health care. It does exist: some generous employers will foot all medical bills and use insurance companies only to administer the payments to providers. But most insured Americans face limits on what they are entitled to, both in the public and private systems (rationing decisions made by a private sector company appear to be less controversial than those made by the public sector).
As part of the US economic stimulus package, the Obama administration announced funds for an organisation to look at comparative effectiveness, but deciding what is cost-effective is still taboo.
In defence of the NHS, pride in the rationing mechanisms of the health service was less explicit. The years of funding growth and NHS expansion since 2000, the emphasis on choice and personalisation and the more recent ‘quality’ movement have tended to obscure the fact that resources still have to be rationed. When challenged over specific decisions, the leadership of Nice clearly articulates the underlying principle that some drugs or treatments might need to be limited for a few patients in order to protect access to other drugs for patients suffering from other, more common, conditions.
But public attitudes towards such forms of rationing are ambiguous and the government’s position is not immutable, as shown by the U-turn on NHS treatment for people paying privately for drugs. There are those who seize on the periodic outbursts of protest at Nice decisions to argue for more fundamental change to the funding system as a way out of rationing. Mostly this takes the form of calling for more co-payments or more private sources of money into the NHS. The argument against this has mostly centered on equity. Many politicians assume that the public’s support for the principles of social solidarity underpinning the NHS is unwavering. A period of financial retrenchment might see that support challenged, particularly if services are cut and the public has grown accustomed to choice and personalised services.
There have also been those, such as the British Medical Association, who have accused the government of trying to ‘Americanise’ the NHS. There is actually no chance of the UK becoming like the US. But there are voices calling for a shift to something closer to other European systems, where larger incomes can buy individuals more services than their poorer compatriots, by supplementing their basic entitlements. Inequality is now tolerated in many other areas of public life but is still considered unacceptable for the NHS. It will be interesting to see how long this value will endure: if the evidence from this brief transatlantic spat is anything to go by, it is still alive and kicking.
Ruth Thorlby is a fellow in health policy at the King’s Fund. She has recently returned from spending 12 months in the US on a Harkness Fellowship sponsored by the Commonwealth Fund and the Health Foundation
www.kingsfund.org.uk
10 September 2009
The NHS has been drawn into an explosive row over US health care reform. As President Barack Obama defends his proposals before Congress, Ruth Thorlby of the King’s Fund examines the issues at stake for both countries
The leaked report from the management consultancy McKinsey has set out a disturbing vision of potentially deep cuts in NHS staff and services in response to the financial crisis. Although the government has denied that it plans to implement these cuts, the report underlines the depth of the financial challenge now facing the health service.
It’s a sobering counterpoint to the outpouring of patriotic and sentimental support for the NHS that hit the headlines last month, after Britain’s health system took a bashing at the hands of the opponents of health reform in the US. But why did the NHS get dragged into this debate in the first place – and has it provoked any helpful or worthwhile questions for the UK to ponder?
President Barack Obama addressed a joint session of Congress on September 9 in an effort to rally political support for his faltering health reform plans but the issues are equally high up the policy agenda this side of the pond.
The US plans seemed to start so well. In the early spring there were smiling faces and messages of support at special White House forums from every conceivable stakeholder, even from the insurance companies that proved so deadly to former president Bill Clinton’s health reform efforts in 1993. But after months of slow, stuttering activity in Congress, the debate suddenly turned bellicose this August. It sucked in the NHS and provoked a transatlantic row as Britain’s political establishment scrambled to defend its esteemed health care system in the face of ill-informed vitriol from opponents of Obama’s plans, some of them senior Republicans.
If the prospect of elected politicians so badly informed about the NHS was shocking enough, then what followed was somewhat worse from the perspective of factual accuracy. The debate went local, with rival groups of citizens yelling at each other in town hall meetings, calling the plans ‘Nazi’, comparing Obama to Hitler and Stalin and accusing the administration of wanting to commit mass murder.
It is easy to recoil from all this and dismiss it as a pointless debate. Both sides have targeted the worst features of each other’s health systems and both systems are themselves big outliers in global terms. The US is the only developed country without comprehensive coverage and the UK is the only one with a publicly owned and (largely) publicly provided health system. It was mischievous of the US Right to target the NHS. None of the reform proposals in the US envisaged anything like an ‘NHS for America’. Few advocated a single payer system for the US, let alone a predominantly publicly provided system.
The timing of the row hinges on Congress having adjourned without producing a unified health reform Bill from both Houses, as they had been encouraged to do (only one full draft Bill has emerged so far from the House of Representatives). Members of Congress returned home to face voters without detailed proposals, which allowed opponents to take the initiative, a repeat of the problem that scuppered the Clinton reforms.
In 1993 it proved much easier to oppose reform than defend it. This was because a hugely long and complex reform proposal emerged from a rather secretive process led by Hillary Clinton, which had not involved Congress: no-one had thought hard enough about how to sell it to the public until it was too late.
Although Obama enjoys much higher levels of popularity, he has until now allowed Congress to make the running drafting a Bill, holding back from articulating his own detailed vision of reform. However, until recently he favoured the creation of a government-run insurance agency or ‘public plan’ and other features such as a mandate on citizens to get health insurance. These and other possible components of the US health reforms are shown in the box below.
This vagueness – combined with growing unease over the size of the US deficit (now projected to be $9trn), the government’s stimulus programme and bail-outs of the banking and motor industries – triggered a wave of public anxiety about the wider role of government in the US. Anti-NHS TV commercials had been around for a few months: now they had a ready audience. Demand then rose for more ‘information’ on the NHS. British Conservative MEP Daniel Hannan and Right-leaning US media and bloggers were happy to supply headlines, which could also be easily lifted from the British press: ‘Troubled UK health care: moms give birth in bathrooms, elevators’; ‘UK kids lose 1 million teeth in 1 year’. ‘Try putting the words “NHS” “hospitals” and “cockroaches” into Google,’ advised one blog.
Defenders of the NHS, including politicians from all parties and a great many members of the public, leapt into action. There was some legitimate ‘fact correction’ to be done, particularly around waiting times, rationing and the role of the National Institute for Health and Clinical Excellence (Nice). But the image created of a vastly superior NHS system in terms of health outcomes is slightly misleading: the performance of the NHS is not better than the US health system on all measures. And, taken together, both look weak compared with some other health systems.
It is also difficult to compare the health systems accurately and both sides in the debate can find data to back up their respective arguments (see figures opposite). For example, the US spends nearly twice as much on health as the UK and, more alarmingly, spends almost as much public money covering only part of its population. But comparing how much health comes out of the system at the other end is tricky.
More substantively, those defending the NHS didn’t fully respond to a number of important themes thrown up. The first is the appropriate role of government in running a service such as health. Although the Right-wing opponents of health reform in the US have stolen much of the media attention, opinion polls suggest that at the start of the summer a majority of people supported a public or government administered health insurance plan. Experts point to an historical precedent here: public support for some sort of government action to reform health existed but was subsequently eroded, quite quickly, both in the late 1940s and in 1993, once details of the reform had been made public.
Accompanying this has been a long-term erosion of trust in the federal government’s actions. In 1964, 22% of the public thought that government in Washington could be trusted to do what is right only ‘some’ or ‘none’ of the time. By 1994, that percentage had risen to 77% and has been over 60% since (apart from a brief period after September 11, 2001, when it dropped to 39%).
It would be easy to dismiss this as a uniquely US phenomenon. According to the British Social Attitudes Survey, there has also been some erosion of trust – the percentage of people who trust British governments to put the needs of the nation above their own political party ‘always’ or ‘most of the time’ fell from 39% in 1974 to 16% in 2000. But the big difference with the US is the support for the idea that it is the government’s responsibility to provide health care for all (up from 84% in 1986 to 87% in 2000).
This still leaves open the question of how far that responsibility goes. In the English NHS, where a diversity of providers has been encouraged, both the current Labour government and opposition Conservative party avoid specifying what proportion of non-government providers of health care they would like to see. However, their rhetoric emphasises the clear benefits that non-government providers can bring.
What assumptions about government-run services is this belief based on? Was part of the support expressed for the NHS because services are still largely publicly provided? Regardless of who wins the next UK election, some clarification will be needed about the ideology and evidence base underlying the ‘mixed economy’, if only to define its limits at a local level. If Obama’s plans are pruned back because the public are sceptical about government involvement in health care, there is a lesson here too for the English NHS, albeit in reverse. In the most recent 2009 BSA survey, almost 60% of the public opposed the idea of private companies running NHS hospitals.
Another powerful theme thrown up by the debate was the role of government in rationing health care. Again, the statements from the US were often hopelessly inaccurate, but the underlying point was valid: governments or some other entities have to make decisions about what is effective and what treatments are covered if resources are finite. This is a highly sensitive area in the US and opponents of reform have been adept at frightening older people enrolled in Medicare into thinking that reform will mean losing something that they already have (and even worse, because of a decision by a ‘government bureaucrat’).
The irony here is that very few Americans enjoy unrationed health care. It does exist: some generous employers will foot all medical bills and use insurance companies only to administer the payments to providers. But most insured Americans face limits on what they are entitled to, both in the public and private systems (rationing decisions made by a private sector company appear to be less controversial than those made by the public sector).
As part of the US economic stimulus package, the Obama administration announced funds for an organisation to look at comparative effectiveness, but deciding what is cost-effective is still taboo.
In defence of the NHS, pride in the rationing mechanisms of the health service was less explicit. The years of funding growth and NHS expansion since 2000, the emphasis on choice and personalisation and the more recent ‘quality’ movement have tended to obscure the fact that resources still have to be rationed. When challenged over specific decisions, the leadership of Nice clearly articulates the underlying principle that some drugs or treatments might need to be limited for a few patients in order to protect access to other drugs for patients suffering from other, more common, conditions.
But public attitudes towards such forms of rationing are ambiguous and the government’s position is not immutable, as shown by the U-turn on NHS treatment for people paying privately for drugs. There are those who seize on the periodic outbursts of protest at Nice decisions to argue for more fundamental change to the funding system as a way out of rationing. Mostly this takes the form of calling for more co-payments or more private sources of money into the NHS. The argument against this has mostly centered on equity. Many politicians assume that the public’s support for the principles of social solidarity underpinning the NHS is unwavering. A period of financial retrenchment might see that support challenged, particularly if services are cut and the public has grown accustomed to choice and personalised services.
There have also been those, such as the British Medical Association, who have accused the government of trying to ‘Americanise’ the NHS. There is actually no chance of the UK becoming like the US. But there are voices calling for a shift to something closer to other European systems, where larger incomes can buy individuals more services than their poorer compatriots, by supplementing their basic entitlements. Inequality is now tolerated in many other areas of public life but is still considered unacceptable for the NHS. It will be interesting to see how long this value will endure: if the evidence from this brief transatlantic spat is anything to go by, it is still alive and kicking.
US health reform: what might it contain?
- Individual mandate: everyone will be required to buy health insurance, like car insurance, with subsidies for the worst off. Still to be decided: how high up the income scale should the subsidies go? Should individuals be ‘fined’ via the tax system for non-compliance? Should employers also be required to provide insurance?
- Reform of private insurance: creating more choice for consumers via an ‘insurance exchange’, which will offer comparisons of costs and benefits; prohibiting insurance companies from excluding patients with pre-existing conditions; prohibiting insurance companies from setting annual or lifetime limits on how much people can claim
- Setting up a ‘public plan’ to compete with the private insurers. Still to be decided: whether it should exist at all. If so, should it be run by the government like Medicare or be run by an independent non-government/non-profit organisation?
- Cost-containment: a series of proposals, such as bundled payments for acute inpatient care, including post-acute care for 30 days after discharge; more investment in IT; creating a body to conduct and synthesise research on effectiveness of services and procedures; requiring hospitals to report preventable readmission rates
The major sticking point is cost. The cost of the only complete draft Bill to have emerged so far (from the House of Representatives) has been estimated at $1,042trn.
Ruth Thorlby is a fellow in health policy at the King’s Fund. She has recently returned from spending 12 months in the US on a Harkness Fellowship sponsored by the Commonwealth Fund and the Health Foundation
www.kingsfund.org.uk
