HEALTHCARE AROUND THE WORLD: PART 6 UNITED KINGDOM
HEALTHCARE AROUND THE WORLD
PART 6: UNITED KINGDOM
In the election of 1945, the Labour Party was overwhelmingly swept into power. The Labour Party appointed Aneurin (Nye) Bevan, a member of Parliament from Wales, to be Minister of Health. It was Bevan whose task it was to push through legislation designed by Beveridge, which would establish the National Health Service (NHS). The NHS, which came into existence in 1948, is dedicated to the proposition that nobody should ever have to pay a medical bill. In the NHS there are no fees or copays whether you’re treated for a sore throat or undergo a triple bypass. There are private insurers in the UK, with approximately 9.5% of Britons buying private insurance.
There were compromises made when establishing the NHS. General practitioners were to remain, private operators, treating patients in their own offices but receiving their fee directly from the NHS. To win the backing of specialists, Bevan agreed that they could run a private practice on their own time and charge fees. NHS’s 30,000 specialists have had no cap on the amount of money they can earn from private practice, as long as they clock 40 hours a week for the Health Service (about one-fourth of which can be administrative and CME activities).
“The NHS provides medical care for everyone in the country, including visitors! “In theory, there is a charge for prescriptions (about $10-12); but since this fee is waived for children, anyone over 60, pregnant women and the chronically ill, about 85% of all drugs in Britain are dispensed for free.”
Everyone in the U.K. must register with a general practitioner. About 60% of British doctors are general practitioners. This compares to about 35% for the United States which is top-heavy with specialists. The GPs act as effective gatekeepers as you must see your GP for a specialist recommendation. GPs are independent and not government employees. They can have a private practice but rarely do so. The GPs are paid on a capitation basis and can increase income by increasing the number of patients seen in their office or clinic (called surgeries in G.B.). Because of this, there is little incentive to take on a private practice. It may be surprising to know that GPs in Britain make more money than specialists! The greatest boon to the income of GPs has been a payment for performance. Doctors are incentivized with money to treat patients successfully and most importantly keep them healthy. It is the most extensive system of its kind in the World. And because GPs are capitated, there is even more economic incentive to practice preventive medicine.
“The most notorious cost-control tool in Britain’s system is the dreaded “queue”-that is, the waiting list. Weeks or even months may pass before being seen by a specialist, even after referral by a GP. Of course, there is no queue for cancer patients or patients with acute cardiac problems. The other way that the NHS reduces cost is by controlling medicines, tests and procedures it will pay for. In the U.S., an insurance company makes this decision. A governmental office makes these decisions in G.B. This office is called the National Institute for Health and Clinical Excellence, known by the acronym NICE. Many Brits, half-jokingly, don’t think that they’re particularly NICE when they deny their 90-year-old father a total knee replacement.
Since there are no bills, insurance offices or bureaucracy required to review claims, “administrative costs are small-about one-fifth of those in the United States. “This, of course, doesn’t mean that there aren’t complexities in the British system.
One look at this YouTube video might convince you otherwise.
All this healthcare comes at a price. Aside from income tax, the Brits, as do all other countries in the European Union, pay a stiff value added tax (VAT). The general rate is 20% (New Orleans has a sales tax of 9.5%, Manhattan 8.9%). It is the 3rd largest revenue source in the U.K. after payroll and income taxes. Yet, some goods and services are subject to a reduced rate of 5%, such as domestic fuel and children’s car seats. There is a zero VAT for items such as food, children’s clothing, books and health services. Cookies (biscuits in the U.K.) are also exempt if they are not chocolate covered
Since 1950, in the post-war period, health care spending in the UK has increased dramatically in real terms (adjusted for inflation). As elsewhere, pharmaceuticals, and advances in medical technology account for much of this rise. Also to blame is an increase in life expectancy with the concomitant expansion of the elderly population and their inflated use of medical services. But despite the increase in real health spending, healthcare expenditures as a percentage of GDP has actually fallen.
Despite the lower cost of healthcare as a percentage of GDP, “Britain has lower child mortality, longer life spans and better recovery rates from most major diseases than does the U.S. Those in the United States consider the British system to be the evil “socialized medicine”. After all, the government owns the hospitals, pays the doctors and buys the medicines. Yet this is the identical model used to provide treatment for Native Americans, military, and veterans. Ultimately, Great Britain has made a bet, that focusing on preventive medicine will preserve the NHS for years to come.
Link to Part 1: HEALTHCARE AROUND THE WORLD
Link to Part 2: HEALTHCARE AROUND THE WORLD: PART 2 HEALTHCARE MODELS
Link to Part 3: HEALTHCARE AROUND THE WORLD: PART 3 FRANCE
Link to Part 4: HEALTHCARE AROUND THE WORLD: PART 4 GERMANY
Link to Part 5: HEALTHCARE AROUND THE WORLD: PART 5 JAPAN