Private Healthcare: Better Value For Money?

Rather amusingly, we now have the think tank “Reform” advising the coalition government to push through their planned health bill regardless of the opposition, at the same time making it appear as though such advice is coming from a completely independent and non-aligned organisation that has no vested interest in the subject generally. Strange then that this same supposedly unconnected think tank (or should that really be lobby group?) continues to publicly refer to itself as independent and non-partisan, despite having been founded by Nick Herbert and Andrew Haldenby, both of whom are inextricably linked to the Conservative Party. Although they openly declare their mission to be the delivery of “better” public services through privatisation and de-regulation of such vital services, it is notable that their donors continue to include the likes of the General Healthcare Group, a “for profit” healthcare company and GlaxoSmithKline, a major commercial pharmaceuticals supplier, so quite how they have the nerve to declare themselves as independent or as non-aligned is a complete mystery to me?

There is no healthcare system on the planet that is perfect and I would challenge anyone to find one that delivers everything at minimal cost, largely because those two objectives are completely at odds with one another in terms of expectation and financial restraints. However, despite the proclamations of supposedly independent think tanks like “Reform”, the British National Health Service is still widely regarded as one of the better health models to follow and in terms of actual value for money certainly outperforms some of the more unproductive private systems that the coalition government would have us copy.

As part of their recent press release, or should that be public pronouncement, Reform was able to cite the case of one American healthcare company, Beacon Health Strategies, of Rhode Island, which managed to reduce costs and improve outcomes by concentrating certain operations and specialist services in a small number of “centres of excellence”. Well, “no shit Sherlock”, that’s brilliant!! Just give us a shout when they manage to do the same thing everywhere else in the US, instead of wasting trillions of dollars, as they do now.

Don’t you just get sick and tired of this rose-tinted view of the American healthcare model that proponents of the system keep raving about, but which when you look at it a bit more closely is little better than some of the world’s poorest banana republics. This will be the much vaunted private healthcare system that’s caused 51 million Americans to be without any sort of health insurance, about 17% of that country’s total population. This’ll be the private healthcare system that despite being the third highest expenditure in the world delivers some of the very worst outcomes; and regularly results in countless personal bankruptcies every single year. This is the private healthcare model that results in an increasing number of its citizens not being able to afford insurance, as year on year the costs of insuring themselves and their families gets higher and higher; and generally more unaffordable for the average man in the street.

Despite paying twice as much for healthcare as their modern day contemporaries elsewhere in the world, the US is reported to lag well behind other developed countries in terms of both infant mortality and whole life expectancy, conclusively exploding the myth that their particular private healthcare system is something that the rest of us should want, or even try to aspire to. Currently America is said to rank 42nd in the world in terms of life expectancy, even though it ranks highest both in terms of cost and responsiveness. In terms of overall performance, compared to any other developed country in the world, the US only ranks 37th, which is thought to contribute to the 18,000 unnecessary deaths that occur in America’s health service, each and every year. In a more recent study undertaken in the United States, it has been suggested that annually an estimated 45,000 Americans perish as a direct result of not having any sort of health insurance.

In comparison with of Europe’s leading economies, the United States is reported to spend twice as much of its total GDP on healthcare, 16% as opposed to the 8-9% spent in the likes of France, Spain and the UK, etc. However, because up to 70% of American health services are owned and operated by private companies (both for profit and non-profit organisations) there is a significant amount of waste and criminal fraud in the system that ensures less value for money in the US model than their European counterparts enjoy. According to some reports, in exceptional cases, healthcare costs in the United States can sometimes be billed to the private insurers at 10 times the basic cost of the medical procedures; such is the level of maladministration and fraud within the various systems. It has also been suggested that anything up to 50% of total health spending in America is accounted for by the top 5% of the population, indicating that healthcare there is rapidly becoming the province of the wealthiest members of society, with the poor and middle class increasingly disenfranchised by the commercially driven healthcare industries.

Interestingly, even though supporters and advocates of such wholly privatised health models point to the financial advantages that they are purported to bring, by way of efficiencies and savings, in actual fact a number of studies tend to suggest that even within these privatised systems there is extensive waste, with figures of up to 30% being quoted. Because commercial profit and/or future investment are deemed to be the driving forces behind such private healthcare services, typically monies made for providing such services tend to find their way into paying shareholder’s dividends, buying new equipment or buildings, improving staff salaries, or purchasing supplies, rather than directly into patient care itself. Notably, despite being one of the most expensive medical systems in the world, generally speaking American hospitals are thought to have fewer doctors and nurses per patient than does our often much maligned National Health Service, which delivers far better outcomes with much less financial investment.

Even both services are so different to one another and proponents of the American model would have our National Health Service privatised in a heartbeat, it is interesting to note the causes for the wholesale failure of the supposedly “superior” US system. Firstly, there is the endemic over-treatment of patients, resulting in vital resources being used to either carry out procedures that are not medically necessary, or that do not substantively add to medical outcomes (e.g. prolonging a terminal patient’s life for no good reason). Secondly, the system is undermined by a lack of co-ordinated care, where different health and social agencies fail to liaise with one another, thereby causing hold-ups within the system (e.g. bed blocking, etc). Thirdly, the American health system suffers from administrative complexity, where different departments and administrators lack the will, equipment, record-keeping, or systems to streamline a patient’s ongoing care and oversight. The fourth major hurdle to making the system efficient are rules that prevent agencies and healthcare personnel being able to communicate and interact with one another in the best interests of the individual patient. Finally, the fifth problem associated with the privatised American model is that of fraud. It is interesting to note that the first four problems identified within the US system are also appropriate to our own Health Service, with structures and systems being the underlying problem and therefore proving beyond doubt that the both public and private health models are almost inevitably beset by such issues, so private is no better or worse than our current system. The major difference arises when money comes into the equation; and bearing in mind that fraud is a major problem within the American system should be a warning to all of us that a potential pot of £60 billion per years will almost inevitably lead to criminality and corruption within a newly privatised or part privatised National Health Service, if it doesn’t do so already.

It is perhaps particularly ironic that while advocates of healthcare privatisation are trying to alter the basis and ethos of the British National Health Service, most independent health experts believe that the American models would do better to copy it. It has been estimated that the United States could offer every single one of its citizens comprehensive healthcare for far less than is currently being spent to cover just 80% of its population. Unfortunately, the private health lobby is so inextricably entwined with the offices of government and personal selfishness so deeply embedded within the national psyche’, most Americans would be aghast at the idea of implementing any sort of national service that might benefit anyone but themselves, so would rather pay “through the nose” for what is widely recognised as a “second rate” health service. So from that point of view I don’t think we need to take any lessons on healthcare from across the Atlantic.

Another healthcare system which is often suggested as a possible model for England is the part-privatised systems currently operating in the likes of France and the Netherlands. Once again both nations are reported to spend around 8% of their GDP on health, although both require that citizens pay particular amounts of money out of their own pockets, in addition to that which is taken through general taxation. From what I can understand the French model operates on the basis of doctors appointments, etc being paid for by individual patient, who then claims about 70% of that cost back from the state, which is all very well if you happen to have the money available in the first place. The Dutch model is slightly different again, being a mix of payments from the state (which is raised from general taxation), plus an obligatory (i.e. compulsory or mandatory) private health insurance policy that on average costs each Dutch citizen around 100 Euros per month. Although low income earners are largely exempt from having to have the compulsory private healthcare insurance, citizens earning in excess of that threshold are required to purchase their own private cover.

The Dutch healthcare system, introduced in 2006 combines two mandatory elements, the first being general taxation and the other compulsory health insurance, although according to a number of international studies does produce some of the best health outcomes in the world. However, a report in 2008, produced by Duke’s University, noted that despite its benefits such a system it also had a number of potential problems, most notably those of controlling costs and the almost inevitable problem of rising insurance premiums, which might potentially exclude certain, less well of, citizens from such a healthcare system as time passes. There was also thought to be an inherent danger with such a public/private healthcare model that costs would rise to such an extent that eventually such a system would not provide good value for money.

It is also worth pointing out that under the Dutch system, routine medical visits, such as a GP’s appointment, clinic appointments, etc are not free, as they are in the UK, but are paid for by the individual’s private healthcare insurance. Only Geriatric care, terminal illness and mental illness is covered entirely by the state, although given that many of these same future patients will have paid something into the mandatory insurance schemes anyway, it seems likely that costs may eventually be shared by both public and private schemes, as opposed to just the public purse. More positively though, most Dutch hospitals and health providers run their businesses on a not for profit basis, although as in the case with care homes and other such organisations in the UK, ultimately potential profits can be realised through conventional corporate loans, takeovers, buyouts, etc, so clearly the purpose of such businesses are not entirely altruistic.

Regardless of what purported independent think tanks like “Reform” might say regarding the future of our National Health Service, part or full privatisation is clearly not the answer to creating an efficient, cost effective or rational healthcare system. Nobody in their right mind would wish the highly expensive, discriminatory and inefficient American model on another country, not even their worst enemies. Even if you look at other alternative systems, such as the French, the Dutch, the Spanish, or anyone else’s, almost inevitably you’re going to find a healthcare system that has its own unique set of problems, simply because you’re not only managing people’s day to day health, but also more importantly their expectations.

The National Health Service of today is a far cry from that which was launched in 1947, when people had few expectations, other than to live as long as possible and in the best way possible. Today though, we have sections of society who expect to be molly-coddled from the cradle to the grave, but who choose to take no responsibility for their own personal health, safe in the knowledge that we have essentially created a safety net for all of their bad habits, be that smoking, drinking, living dangerously or eating excessively. The NHS is not broken, it doesn’t need breaking up and rebuilding, it is simply acting in the way any large organisation does, when it becomes unwieldy, over bureaucratic and poorly led, as has the American model. Perhaps if ministers used their time more effectively by figuring out how we can stop over-treating people, to help co-ordinate the various agencies that are supposed to work together, to cut down on the administrative complexity and to reduce the amount of legislation that currently binds our hospitals and care-givers, perhaps then the NHS might be able to be the affordable service that everyone wants.