The Fight to Save Britain’s NHS: Luncheon address by Jacqueline Davis, M.D.

Physicians for a National Health Program
National Meeting, Washington, D.C., October 29, 2011

(Excerpts)

First I want to thank you for inviting me here. I bring greetings from the land of socialized medicine and death panels, to the land of “islands of excellence in a sea of misery.”

I’ve never been to this city before and when I told family and friends about my invitation to Washington they assumed I was off to meet the president. I told them it was much more important than that. But just in case he’s listening – I could be free for tea tomorrow….

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Of course the NHS faces the challenges that all health systems do, i.e. changing demographics, increased range and cost of treatments, rising patient expectation and the global financial crisis. But in the face of all these the NHS still manages to be one of the most cost-efficient and equitable health services in the world. And the public love it. At the end of the Labour government’s 13 years in power it had the highest satisfaction ratings ever, and it still is the most popular institution in the UK bar none, and that includes the royal family.

So if it’s so good, why are we having to fight for it? Because there’s another big challenge which all public services face and that is the neoliberal agenda which still has the upper hand despite its current manifest failures on a global scale.

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A successful public service is an affront to the free marketeers. They simply won’t let the facts get in their way. Despite all evidence to the contrary they continue to insist anything the public sector can do the private sector can do better and more cheaply, and no evidence to the contrary will persuade them otherwise.

So the politicians for ideological reasons, and the private sector for financial reasons, have had the NHS – traditionally publicly funded, publicly delivered and publicly accountable – in their sights for some time. They have acted together, beneath the radar, to turn the NHS from a cost-effective integrated public service into a kite mark attached to a ragbag of competing private providers.

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Up till now you trusted your GP to give advice on clinical grounds. But now – if your GP says no to treatment and/or referral is it because they want to pocket the money that is saved – which the bill allows them to do? Or if they refer you to Hips R Us down the road, is it because their wife has a financial interest in it? 25 percent of GPs already have a direct interest in the private sector. This suspicion will be very corrupting, and most GPs are worried about it.

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We fear NHS services being reduced to a core of poor services for poor people, with those who can afford it topping up their personal health budgets with insurance or out-of-pocket payments and those who can’t afford it going without.

And we really fear the arrival of the private companies, many of them from the U.S., whose behavior leaves much to be desired. They want to “cherry pick.” leaving the NHS to pick up the complex expensive patients as well as providing the expensive emergency care and the training that is not attractive to the private sector. We fear they will behave in a fraudulent way as they do already in the USA.

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Our organization was vociferous from day one, saying that the bill spelled the end of the NHS, and of course we were accused of shroud waving and gross exaggeration. But we stuck in there and joined together with other campaigning organizations and the pressure has built up over the last year. How did we do it?

We produced analyses and simple 10-point critiques of the bill in our regular campaign newspaper as well as special pamphlets and postcards. We wrote doggedly – all of us would take it in turns – to national and local papers and had a lot of articles and letters published.

We offered to do public talks, to our own groups and also to anyone from medical students to pensioners, and in fact those two groups turned into some of our most outspoken supporters. We helped organize online petitions. We put a lot of energy into lobbying politicians.

We have helped expose the scandals of the revolving door between government and the private sector and the infiltration of government by corporate interests. We have questioned the neutrality of so called think tanks and helped expose the strength of the health lobbying industry in Westminster.

We marched, we used social media to spread our message and some of us even got elected to the Council of the British Medical Association so that we could begin to change our union from within.

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The problem we have come to realize is that we aren’t just fighting the Tory government; we are fighting the global medical industrial complex with all its power, influence and money. And its cozy relationship with today’s politicians.

It’s easy to lose hope but we mustn’t. We have to take on this cozy configuration of politicians and giant corporations which have come to a “comfortable accommodation” at our expense. We must change the tone of the debate with these people who know the price of everything and the value of nothing.

We must say that the market should serve society rather than society serving the market, that there are public goods and goals for which the market is not suited and that what matters is not how affluent a country is but how unequal it is. We must collect evidence and use it to criticize and expose. We must create the strong voice of civil society and we doctors have a particular duty to be that voice and we must organize and use it.

Firstly because – and we must never lose sight of the fact – we are right. Secondly, we are the patients’ true advocates and our patients are depending on us. And finally Aneurin Bevan, the great founder of the NHS, said, “The NHS will last as long as there are folk left with the faith to fight for it.”

We must be those folk because, personally, I am not prepared to let him down.

(Dr. Jacqueline Davis is a consultant radiologist working in a hospital in London. She is co-chair of the NHS Consultants’ Association, a nationwide group of distinguished physicians representing all specialties, and a member of the Keep Our NHS Public campaign.)

(You may have to cut and paste this link for it to work.)
https://pnhp.org/news/2011/november/the-fight-to-save-britain’s-nhs

We share with the British concerns about the neoliberal attack on our health care services. In their case it is an attack on their public National Health Service, whereas in our case it is an attack on Medicare and other public programs and, even greater, a virtual blockade – a dysfunctional private financing construct that often uses public money – that prevents us from bringing comprehensive health care services to all of our people.

This luncheon address by Dr. Jacqueline Davis was a highlight of PNHP’s recent annual meeting in Washington, DC. You may want to take a moment this weekend to read the entire address, available at the link above, and then savor it. You’ll then understand clearly why we gave her a standing ovation, not to mention that it will reinforce your dedication to the cause of health care justice for all.

The Many Different Prices Paid To Providers And The Flawed Theory Of Cost Shifting: Is It Time For A More Rational All-Payer System?

By Uwe E. Reinhardt
Health Affairs, November 2011

Abstract

In developed nations that rely on multiple, competing health insurers — for example, Switzerland and Germany — the prices for health care services and products are subject to uniform price schedules that are either set by government or negotiated on a regional basis between associations of health insurers and associations of providers of health care. In the United States, some states — notably Maryland — have used such all-payer systems for hospitals only. Elsewhere in the United States, prices are negotiated between individual payers and providers. This situation has resulted in an opaque system in which payers with market power force weaker payers to cover disproportionate shares of providers’ fixed costs — a phenomenon sometimes termed cost shifting — or providers simply succeed in charging higher prices when they can. In this article I propose that this price-discriminatory system be replaced over time by an all-payer system as a means to better control costs and ensure equitable payment.

http://content.healthaffairs.org/content/30/11/2125.abstract

This is an important contribution to the health policy literature. It is intended to be a seminal paper designed to displace the useless discussion of cost shifting between public programs and private insurers with a discussion of reducing price discrimination (charging individuals, private insurers or government programs different prices for the same services) by shifting to an all-payer system that would better control costs and ensure equitable payment.

An all-payer system simply establishes “uniform price schedules that are either set by government or negotiated on a regional basis between associations of health insurers and associations of providers of health care.”(1) Why is this important?

Although there is considerable variation in prices throughout the health care system, high prices, on average, have been a major contributor to our very high per capita spending on health care.(2) As Uwe Reinhardt explains, much of this excessive pricing has resulted from private insurers, with a weak market presence, negotiating with health care providers, especially hospitals, that dominate their respective markets. The health care provider consolidation that is taking place can only compound the impact of this market distortion.

Although private insurers also are consolidating, competing plans are still not in a position to extract major price concessions from dominant health care providers. All-payer price setting through government or association negotiation is designed to displace the ineffectual private insurers as price negotiators while establishing both better cost control and more equitable payments for health care.

(In some areas, private insurers have been able to hold prices down at Medicare rates for physicians where the physicians have a very weak negotiating clout. This is less true of hospitals that have a weaker clout.)

Price discrimination – charging different prices for the same services – hits especially hard those who have the weakest bargaining power: individual patients who are now bearing more of the costs of health care. Contrary to widely held ideological beliefs, here it is price discrimination in the private insurance market and not the government that has created the perversity of rationing based on the ability to pay.

In his article, Reinhardt explains, “It should be recognized that the higher the fraction of health care spending that individuals and families must bear out of their own resources, the more heavily the model relies on rationing health care by price and the patient’s ability to pay — that is, rationing by income level. It may surprise some readers that anyone would associate markets with rationing. But as economists tell their students, free markets represent just one of many styles of rationing. Relying on price and ability to pay is precisely how markets in general manage to ration scarce resources among unlimited ends.”(1)

One of the reasons that this article on all-payer systems is so important is that we are at a crossroads in the reform process. He writes, “At this time, the US health system appears to stand at a clearly delineated crossroads. On one road, Americans would seek better control over national health spending through an all-payer system, such as the one operated by Maryland for the hospital sector. On the other road, Americans would seek better control of health care prices and national health spending through greater reliance on market forces for most of the health system. Depending on how that road is traveled, it could entail more pronounced rationing of health care by income class, meaning less health care for those who cannot afford it. The battle over US health policy in the coming decades is likely to be over which road to take.”(1)

Since an all-payer system would correct only a portion of the flaws in our health care financing, why shouldn’t we go full bore and enact a single payer system? Reinhardt brings up the political feasibility argument, as follows, “In any event, an all-payer system with multiple private insurers would be likely to be more broadly politically feasible than a government-run single-payer system, such as Canada’s provincial, government-run single-payer insurance systems. A single-payer system, of course, would be another alternative that would eliminate price discrimination and any cost shifting.”

Reinhardt discusses the effectiveness of all-payer for hospitals in the state of Maryland. In a previous response to the Maryland all-payer system, I stated, “If we can succeed in reestablishing a public service role for government, then wouldn’t it be reasonable to simply enact an all-payer system for hospitals? The problem is that it only makes one change in our fragmented, dysfunctional system of financing care, and not a complete change at that. Under all-payer, only the rates are controlled, but each service still must be accounted for and paid for independently, and the hospitals would still have multiple public and private payers with which they would have to interact.”(3)

So what about Switzerland? Reinhardt mentions it as having successfully applied an all-payer system. In another previous message on the OECD/WHO report on Switzerland, I stated, “It is not clear why so many in the U.S. are enamored of the Swiss health insurance system when this OECD/WHO report confirms that it is highly inefficient and fragmented, with profound administrative waste, inequitably funded, with regressive financing and with wide variations in premiums, has the highest out-of-pocket costs, has an increasing prevalence of managed care intrusions, and is controlled by a private insurance industry that has learned how to game risk selection at significant cost to those on the losing end.”(4)

Uwe Reinhardt is to be highly commended for moving us in the right direction, but…

We’ve said it before and we’ll say it again. If political feasibility is the barrier to enacting a single payer system, let’s not simply jettison single payer; let’s change the political feasibility instead! All-payer might be a modest incremental improvement (modest when compared to what needs to be done), but why settle for that when we can have it all through an improved and expanded Medicare for all?

(1) http://content.healthaffairs.org/content/30/11/2125.full

(2) https://pnhp.org/system/assets/drupal/docs/Its-The-Prices-Stupid.pdf

(3) https://pnhp.org/news/2011/september/hospitals-all-payer-or-global-budgets

(4) https://pnhp.org/news/2011/october/oecdwho-report-on-the-swiss-health-system