The UK has one of the most equitable health care systems in the world. Here’s how.
By Ezra Klein
Vox, January 28, 2020
The UK spends barely half what we do, covers everyone, rarely lets cost prove a barrier for people seeking care, and boasts health outcomes better than ours.
Which raises the question: How does the UK do it?
“Britain spends a lot less than we do, yet in terms of broad culture, they have a similar value system to our own,” says Hank Aaron, a Brookings Institution health economist and co-author of two books about the British health care system. “Where do they economize? What do they do? How do they ration?”
Decisions of this sort can be made more or less bureaucratically, more or less transparently, and more or less equitably. But the American health care system is uniquely fractured, opaque, and cruel in its approach to saying no. It says no through prices — but not, as in most other countries, by limiting the prices pharmaceutical companies and hospitals can charge for treatments. Rather, it says no by letting them charge whatever prices they want and denying care to those who can’t afford the cost.
The paradox of the American health system, then, is that it poses as a system with no limits — there is no centralized authority rationing care or negotiating treatments — even as it turns tens of millions of people away from services they need. But the system works quite well for those who profit from it, or can afford all that it has to offer, and they can be mobilized powerfully to resist change. When reformers threaten the status quo, the health industry blankets airwaves with ads warning that under the new system, there will be someone who says no to you: the government.
The UK is the opposite of the US in how it says no. It has embraced the idea we fear most: rationing. There is, in the UK, a government agency that decides which treatments are worth covering, and for whom. It is an agency that has even decided, from the government’s perspective, how much a life is worth in hard currency. It has made the UK system uniquely centralized, transparent, and equitable. But it is built on a faith in government, and a political and social solidarity, that is hard to imagine in the US.
A NICE health care system
At the center of the UK system sits the National Health Service. Founded in 1948, the NHS goes beyond single-payer health care into truly socialized medicine: The government doesn’t just pay for services, it also runs hospitals and employs doctors. The system is financed through taxes, everyone is covered, and supplemental private insurance is rare.
In 1999, the British government set up the National Institute for Care Excellence, or NICE, to assess the cost-effectiveness of medications, procedures, and other treatments, and make recommendations to the National Health Service about what to cover and how. NICE has forced the NHS to become the anti-US: Rather than obscuring its judgments and saying no through countless individual acts of price discrimination, NICE makes the system’s values visible, and it says no, or yes, all at once, in full view of the public.
The political economy of rationing
A public health system is only as good as the government that creates, runs, and protects it. Saying no to treatments that people want to get, and that powerful corporations want to release into the market, will generate furious backlash. If the government isn’t trusted enough to win those fights, or if the politicians turn on the civil servants when they pick those fights, the structure collapses.
The late Uwe Reinhardt, the famed health economist who helped set up Taiwan’s single-payer system, once told me that he feared American politics was too captured to properly construct a single-payer system.
“I have not advocated the single-payer model here,” he said, “because our government is too corrupt. Medicare is a large insurance company whose board of directors — Ways and Means and Senate Finance — accept payments from vendors to the company. In the private market, that would get you into trouble.
“When you go to Taiwan or Canada,” he continued, “the kind of lobbying we have [in America] is illegal there. You can’t pay money to influence the party the same way. Therefore, the bureaucrats who run these systems are pretty much insulated from these pressures.”
Health systems need to be built first on a firm political foundation. It would be challenging, to say the least, for an NHS-like system to be designed in the face of the constant legal challenges, repeal efforts, and attempts at political sabotage that have pockmarked the Affordable Care Act.
Aaron, the Brookings economist, argues that the politics of the NHS is rooted in part in Britain’s post-World War II ethic of shared sacrifice. America, particularly at this moment in its political history, lacks such solidarity to fall back on. That, more than anything else, may be the central challenge that any effort to create a national health system in America must face.
It’s not that the political trade-offs of rationing are easy. It’s that, once well-implemented, they come to seem far better, and fairer, than the alternative. “The NHS is seen as a national treasure,” says Carol Propper, a health policy expert at the Imperial College of London. “Elections are fought and won on the basis of NHS funding.”
The most recent UK election is a case in point. One of the keys to Boris Johnson’s huge electoral win was his promise to increase funding for the NHS, which deprived Jeremy Corbyn’s Labour Party of a central issue. Johnson has even said that the NHS, not Brexit, will lead his agenda.
“I frankly urge everyone on either side of what was, after three and a half years, after all an increasingly arid argument, to find closure and to let the healing begin,” Johnson said in his post-election message. “Because I believe — in fact, I know, because I have heard it loud and clear from every corner of the country — that the overwhelming priority of the British people now is that we should focus above all on the NHS.”
This is the irony of comparing health politics in the UK and the US. In part because of the public and fair ways the UK says no, its health system has generated a form of social solidarity that cuts across political lines, that transcends party divisions. In the US, because of the opaque and unfair ways in which the system says no, health care deepens our political divisions, as the system’s current winners fear that reform could make them tomorrow’s losers.
By Don McCanne, M.D.
Although actual health care delivery is similar in the UK and the US, the financing is starkly different. The UK covers everyone, has better outcomes, and does it at half the cost. The people of the UK rightfully take great pride in their NHS. The way the nations contain costs certainly contributes to these differences.
The US rations through price discrimination in a fragmented financing system that is heavily market-based even if largely publicly funded. It simply makes health care unaffordable for tens of millions of individuals. The UK publicly funds health care and uses the National Institute for Care Excellence (NICE) to set fair prices or to deny coverage for care that does not provide adequate value (see the full article at the link for a discussion of QALY, etc.).
The UK system is thought to be underfunded which results in capacity constraints and thus excessive queues for non-urgent services. Boris Johnson, the head of the newly elected conservative government, acknowledges that “the overwhelming priority of the British people now is that we should focus above all on the NHS.” Because of greater social solidarity in the UK, a conservative is promising that the government will address the problem of queues.
In the US, political polarization, especially over the role of private markets versus the government, has prevented us from using our great financial resources to provide comprehensive health care services to everyone. We are turning our health care dollars over to private payers, especially the private insurance companies, which then use price discrimination to control spending by erecting unnecessary financial barriers to care (premiums, deductibles and other cost sharing). This is particularly ironic when 60 percent of health care dollars pass through our tax system.
Imagine if we had the egalitarianism and social solidarity of the UK. The people there are demanding that attention be paid to their NHS, and the conservative government says that it will do so. Here in the US, the media keep telling us that we are too politically polarized to ever have agreement on the most effective approach to ensuring high quality health care for everyone. But that’s not true. The majority of Americans do support Medicare for All. So why do so many of the conservative and neoliberal politicians continue to oppose it? Are they not listening to the people? And shouldn’t the people respond by demanding that their politicians support an improved Medicare for All?
If conservative Boris Johnson follows through and truly supports the NHS, can’t we move politics in the same direction here?
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