Health Reform in the US Part 1: How American Healthcare Works (or not)

Thanks to my friend Faisal for inviting me to contribute to his excellent blog. My name’s Rob Ford, and I’m an academic working at the University of Manchester studying political science and sociology. I’m also an American Politics nut. So given Faisal’s interest in the current health care debate, I’m going to open with a little primer on health care in the US, a strange beast indeed.

In Britain, we all have a right to free health care paid for out of our taxes (specifically, out of national insurance), though we can opt to take out private insurance too if we want to. The doctors are all employees of the state, though they can opt to take on private patients too, and are played a flat wage based on seniority and specialisation. The government makes the decisions about what drugs and treatments to pay for, and how much, and through organisations like the National Institute of Clinical Excellence has proved to be a tough bargainer over drug prices.

Every aspect of this is different in the US. Most Americans do not get any health care free of charge – they have to pay a private insurance company to provide it. However, in most case it is not the individual who pays, but his employer, thanks to a massive government tax break which encourages all large American companies to offer health care benefits to their employees as part of their contract. However, employers are under no obligation to provide this benefit and many can, and do, refuse to insure their staff. Most Americans – probably two thirds – get their insurance through this system, either directly as the wage earner or indirectly through benefits also offered to spouses and kids. The insurance companies, however, are under no obligation to insure all illnesses, and they can (and do) impose charges for treating some diseases or people, or refuse to insure them altogether.

That’s not the end of the story, though. The American government, despite what the right wing Republicans say, is also heavily involved in the system. Two programmes enacted by Lyndon Johnson in the 1960s – Medicare and Medicaid – provide government funded health care to millions of Americans. Medicare gives every American over the age of 65 with free health insurance coverage – a sort of NHS for pensioners. Medicaid provides health insurance for the poor: although the coverage it offers is very limited and probably reaches only 40% of the American poor. On top of this, a more recent programme called S-CHIP provides free health insurance to the children of lower middle class parents too wealthy to qualify for Medicaid but too poor to afford private insurance.

What does all this add up to? A lot of money, for starters. America’s health care system is almost twice as large as any other rich country’s, consuming 16% of GDP. Every sixth dollar spent in America is spent on something connected to healthcare. The cost of providing health care to employees is an enormous burden for many American companies: it was a key factor in the bankruptcy of General Motors and Chrysler.

However, this money is spent very unequally. While wealthy and upper middle class Americans have world class health care, with no expense spared, those at the bottom have limited coverage or no coverage at all. About 15% of the poorest Americans have no health coverage at all. As most people get coverage through their jobs, they risk losing it (for them and their families) if they are made redundant. And if they get ill while in one job, then move to another, their new insurer can refuse to cover them or make them pay a lot more. As a result, health care costs are the number one cause of bankruptcy in America and unemployment is an even more scary and stressful business than it is here. Imagine if losing your job meant you, your wife and your kids can no longer get medical care if you get sick. Nice system, huh?

However, despite this injustice and insecurity , the performance of the US system is not that hot. America doesn’t rate very highly on most health care outcomes, and the mediocre performance they get comes at an enormous cost.

Its a complicated, inefficient, grossly unjust, massively expensive system that has been slowly bankrupting American companies and the American government for decades. Its pretty obvious to everyone that it doesn’t work. So what is Obama trying to do to fix it, and why is he finding it so hard? Tune in next time for the answers...

NHS reforms: equity and efficiency at no extra cost

Greetings readers,

How are we today? Looks like the weather has improved for the weekend. Nice. Well, from the picture above you will most probably have concluded that this will be a successive post about the NHS. Yes, I'm sure I can hear an audible groan. But wait! This is going to be a positive post based on some very encouraging research recently published by the LSE and Dr Foster Intelligence, a public-private partnership that aims to improve the quality and efficiency of health and social care through better use of information. My kind of organisation.

According to the LSE press release, a team of researchers led by Zack Cooper and Julian Le Grand (great name) retrospectively examined changes in waiting times for patients undergoing three key elective procedures in England between 1997 and 2007 (hip replacement, knee replacement and cataract repair). They then analysed the distribution of those changes between socioeconomic groups. The findings are published in BMJ.com.

In 1997, those from more deprived areas waited longer for treatment than those from more affluent areas. But, by 2007, this phenomenon had disappeared. In fact, in some cases, patients from more deprived areas were waiting less time than patients from more affluent areas. Furthermore, in 1997, the poorest fifth of the country waited more than 3 weeks longer for a hip replacement than the wealthiest fifth. In 2007, the least advantaged got a knee replacement at exactly the same time as the wealthy.

So it seems as though the government's introduction of market-based reforms including patient choice and provider competition has not led to a rise in inequality for the least well-off patients. Far from this, it appears that there is real equity between the poorest and richest with regards to NHS waiting times. We should surely take this as a very positive sign that the government is doing something very right. Pat on the back for you, just this once.

Interestingly however, the LSE press release concludes that the research findings "cannot prove what policy mechanisms led to reductions in waiting times and improvements in equity". So either a complex and detailed piece of research needs to be commissioned to identify and delineate just what these mechanisms are, or we just accept the fact that things are improving in the NHS, and hope they continue to do so. The blind leading the blind perhaps?

Zack and Julian have also written an interesting and rather more political piece in the comments section of the Guardian online. In it, they describe how the NHS is improving on almost every indicator of quality; productivity is up, waiting times are down and patient satisfaction is at an all-time high. However, they partially dismiss these improved indicators as merely a function of increased spending, but to something more complex, linked to the government's recent market-led NHS reforms. Indeed, the argument seems to distance itself from McKinsey's recent proposal to cut the number of NHS jobs by 10% in order to increase efficiency.

The salient point here is that it is possible to reduce NHS spending without compromising the quality of health outcomes or the equitable distribution of care. This reminds me of the Time article I read whilst in the States earlier this year, citing the Mayo Clinic, as an examplar to be studied and followed. Indeed, as Zack and Julian both allude to, it will be interesting to see what further reforms will be implemented by the next political party in power. Whichever one it is, I sincerely hope that they have been paying attention to the encouraging research and indicators that show that 60 years on, the NHS is still doing its job, and doing it well.

Currently listening to "Saturdays= Youth" by M83, and in particular, "Couleurs". Synth-pop doesn't get much more epic than this. Incroyable....

Thank you for reading,

F.

Don't mess with our NHS (Pt II)

Greetings readers,

And how are we today? Hopefully the miserable weather has not been depressing you too much; it really feels like Autumn has arrived prematurely. Indian Summer this certainly ain't. Anyway, from the picture above you will no doubt have worked out that the subject of my soliloquy in this post is the NHS. Ah yes, our favourite topic of discourse (and of the Americans it seems) and debate on this grey isle

This morning, the Today programme featured a debate between Niall Dickinson, head of The King's Fund, an independent health care think-tank, and Carl Emmerson of the Institute of Fiscal Studies. The two men were discussing the government's recent rejection of advice by management consultants, McKinsey & Company. Given my brief foray into management consultancy, and my interest in health care, this certainly grabbed my attention.

Anyhow, it has transpired that the government commissioned McKinsey to look into ways to cut costs and increase efficiency in the NHS. And surprise surprise, what has McKinsey's advice been? To cut the NHS workforce in England by 10% over the next 5 years. This would involve closing 137,000 clinical and admin posts in order to save £20bn by 2014. What is particularly galling about this is the fact that no doubt the government spent a small fortune paying McKinsey for its professional services with taxpayers money in order to then be given the most abundantly obvious advice! This will no doubt propagate all the stereotypes about management consultants and launch a thousand more jokes about the profession. Quite a large part of me is now relieved I didn't get a job with A T Kearney!

In addition to staff cuts, McKinsey also advised that a recruitment freeze should start within two years and medical school places might have to be reduced. Now I am no politician, but were the government (and whoever in particular commissioned McK.) so myopic so as not to realise that spending a small fortune on consultancy would not offer them anything drastically new? And furthermore, surely McKinsey should have realised that suggesting significant NHS job cuts and a recruitment freeze of our beloved NHS, the third largest employer in the world, just wouldn't wash politically, nor carry any favour with the British public?! Sometimes you have to wonder whether some of these management consultants actually have any common sense whatsoever. My experience tells me otherwise, but McKinsey are certainly doing well to change my opinion on this.

Essentially what Niall Dickinson and Carl Emmerson were saying was that there is no real necessity for job cuts, but that according to this BBC article, NHS employees "need to find new ways of working, being more productive and being more efficient". It always seems to go back to the NHS mantra of 'efficiency, efficiency, efficiency'.

Listen to the discussion from the Today programme here.

Interestingly, the BBC news article featured a graph showing the number of NHS staff over the last 12 years: there has been a steady increase year-on-year, particularly in terms of admin and support staff. Of course I am sure that McKinsey's advice was based on rigorous, robust and highly data-driven analysis. However, for all the energy expended in order to make these recommendations, the simple fact of the matter is that the NHS is a sacrosanct organisation which has helped millions of people in Britain over the last 60 years. Unfortunately this means that any suggestions to change the organisation at a macro-level are therefore invariably, also a political consideration.

Currently listening to Trentemøller's mix entitled "Harbour Boat Trips 01, Copenhagen" (again). A very good and eclectic mix indeed. Check it out here.

Thank you for reading,

F.

Parallel Trading renders UK Drug shortage

Greetings readers,

Unusually, only a day has passed since my last post, but felt compelled to share some of my thoughts on both BBC and HSJ articles I have just read relating to drug shortages in the UK. Yes, you read that correctly; pharmacists are warning that patients are suffering because of a shortage of some medicines.

Apparently, due to the weak pound, many pharmacists have been profiteering by buying in surplus amounts of drugs, and then selling them on to more attractive markets, where a quick profit can be made. This is known as "parallel trading" (or "skimming") in the industry where drug shortages are commonplace in less affluent European countries such as Spain or Greece. However, the pound is currently relatively weak compared to the Euro, meaning that many branded drugs are now worth more in places like Scandinavia and Germany than they are here in the UK. What a turn up for the books! It feels as if we are being relegated to second-class status within the European hierarchy!

The British Association of European Pharmaceutical Distributors secretary general, Richard Freudenberg, has said that parallel traders were generally only interested in importing drugs where there was a 20 percent difference between what they paid and what they could sell it for. But the pound has fallen by more than 20 percent in the last 12 months, wiping out much of that potential profit. Essentially, what this means is that the fall in the pound has made a lot of drugs "unviable for importation". This is definitely a concern, as the think-tank, the Office of Health Economics estimates parallel imports make up 12 percent of the UK pharmaceutical supply.

So not only are less drugs being imported into this country, but many of them are being exported into Europe to make a profit. In simple terms, we are being hit by a double whammy.

Accordingly to an article in the Health Service Journal, "drug manufacturers and wholesalers have begun rationing the amount of certain drugs each UK pharmacist, GP and hospital dispensary can buy. Pharmacists report that in some cases patients have had to wait days for their drugs". Indeed, individual pharmacies are now being monitored for "unusually large orders", suggesting they might be selling surplus drugs on to Europe.

Writing this article has really made me question the ethics behind the phenomenon of parallel trading. It seems as though in times of relative prosperity, we are happy to import drugs from poorer European countries, thereby rendering a drug shortage in those places (but getting our drugs cheaper). However, when the proverbial tables are turned, and we begin to suffer drug shortages, there is surprise surprise, an audible outcry.

Perhaps it is time we reviewed the practice of parallel trading, not just during the bad times, but in the good times too.

Thanks for reading,

F.

And the (now Transatlantic) health care debate rages on...

Dear oh dear - Cameron has had to step in and rebuke Daniel Hannan's NHS-bashing comments publicly. Whilst over the other side of the Atlantic, the health care debate continues to rage on with adjectives describing the NHS such as "Orwellian" and "evil" being bandied about. God those Americans are the masters of hyperbole and shameless rhetoric.

Listen to the feature from the Today programme from this morning. Apparently we have the "highest death rate and the lowest recovery rate in Europe". But have YOU actually verified any of these statistics? No, I thought not. Anecdotal right-wing fear-mongering is good enough for you I'm sure....

Daniel Hannan on Fox News bemoaning the state of the NHS

Greetings readers,

Just a short blog post today as have suddenly become very busy with other commitments! So above lies a YouTube clip of Dan Hannan, a conservative MEP, on Fox News in April this year bemoaning the state of the NHS. Watching this for the first time has infuriated me to say the least: this gutless man has seemingly sided with the ignorant, scare-mongering, conservative, Republican political right in the States with a shameless and blatant attack on our beloved NHS. And to top it all, he chooses the disgustingly right-wing news network, Fox News, to promulgate his utter shite to the American people. Not only that, but he has the gumption to openly criticise our public health policy, our doctors and NICE whilst sycophantically brown-nosing the American public over their "superior" health care system. I dare you to come back here and repeat your earlier comments Dan Hannan! You are not even worthy of being sentenced to one of our so called "Death Panels"...

Unfortunately it seems that the majority of the American public do not understand the complexities of a health care system in which one in six of their own people do not possess medical health insurance. To make matters worse, Republicans like Sarah Palin are scare-mongering ordinary American citizens into imagining dystopian scenarios upon adopting "Obama-care", such as the sentencing of her own child with Down's Syndrome to "Death Panels". I have never heard such hyperbolic and shameful drivel in my entire life! Nonetheless I applaud you Sarah Palin, for adding the personal touch; am sure they taught you that in Politics 101. Obama was definitely right: you are a dumb "lipstick on a pig".

What spurred me to write this article was actually reading the BBC's recent article on how anti-reform campaigners in the US have been directing criticisms across the Atlantic at the NHS. Indeed it appears our very own Dan Hannan has been busy spouting his drivel on the Fox News airwaves once again. How very kind of him. I think perhaps the least we could do to repay our debt to him would be to strip him of his citizenship, post, assets and ship him back to America. No wait, he'd probably end up running for Congress.

Well, good riddance to you, we certainly don't need your sort round these parts.

If you would like to read a well balanced, informative blog post surrounding the ongoing health care debate written by an actual American, you could do worse than checking out Dr Steven Novella's recent blog entry (Dr Novella is an academic clinical neurologist at Yale University School of Medicine as well as president and co-founder of the New England Skeptical Society). Here he presents a reasoned argument for the most effective way of utilising resources from a clinician's perspective. Notice how I didn't use the word "rationing" once....

Anyway, will try and update soon with some more coherent thoughts. It's late in the day and my brain seems to have disintegrated somewhat.

Currently listening to Passion Pit's EP, "Chunk of Change". Wouldn't describe it as particularly amazing but it is fairly good as far as twee, synth heavy, indie-electro-pop bands go. Their track "Sleepyhead" grabbed my attention straight away, as I recognised it from the Fiver/Five USA adverts that have been on recently. Hot Chip are definitely better.

Thanks for reading,

F.

Obama's Health Care Reform: Is "Socialised Medicine" such a terrible prospect for Americans?

Greetings friends,

Thanks for tuning in once again to my blog (devotees - you know who you are!). OK, so for some reason I have decided to write yet another serious post. God knows, perhaps I am coming down with a bout of swine-flu; better get on the NHS swine-flu hotline and get my order of Tamiflu in! No, actually it's primarily because I am trying to keep my mind active and focussed towards the impending start of my new Masters course. And because whilst I was in the US for three weeks in June this year, I couldn't help but notice that Obama's proposals for US Health Care reform had completely divided the nation, and certainly captured my latent interest. So for anyone reading this you will have to excuse me for crystallising my own thoughts and understanding on this very topical of issues for Americans.

I have recently read some interesting and informative articles on the current US health care debate, notably in Time magazine, and an article written by Philippa Thomas for the BBC. In addition my eldest sister and brother-in-law, whom I recently visited in the States, work in regulatory and pricing & reimbursement at a senior level for a large biotech company in California, respectively. Having had several conversations with them also, I now feel that I am starting to understand the American psyche, and correspondingly, why so many Americans are opposed to the new bill that Obama is proposing at the moment.

So it appears that right now Obama is lobbying America's doctors, including what was apparently a rather blunt message at the annual conference of the American Medical Association (AMA). During this speech he made it clear that the AMA will bear much of the responsibility for reining in the huge cost of American health care. Currently, the system operates on a "fee-for-service" basis meaning that doctors receive a fee for each service they provide such as an office visit, test, procedure, or other health care service. Ultimately this means that the system is based on quantity, not quality, and it is my understanding that many Americans perceive more contact time with doctors and hospitals with a "better" standard of health care. However, as much as I have canonised doctors in the past (my father was a successful GP), it does appear that the model in the US "has taken the pursuit of medicine from a profession - a calling - to a business", as Obama put it. Essentially, like everything else in America, what should perhaps be a sacrosanct profession in one sense has been commoditised as a consequence of free-market economics. And surely this just ain't right. Right?

There are now apparently 47 million Americans with absolutely no health care insurance and a further 25 million with sub-standard insurance. That's roughy a quarter of the entire population of the United States. Quite simply, this statistic shocks me and (NHS) jibes aside, I am rather proud to be a citizen of a country with a "socialised" form of health care, as the Americans put it. Surely that is a mark of a truly civilised country, which takes responsibility for ALL of its citizens, and does not deny a significant proportion of its people access to vital health care! Do not get me wrong, I am not fundamentally opposed to free-market liberalism but am willing to pay higher taxes if it means that the old lady next door can get her hip replaced courtesy of the NHS.

I have also been rather interested to read articles on "Comparative Effectiveness" (CE) in the States. Essentially there is talk of developing some sort of regulatory body like the National Institute of Health & Clinical Excellence (NICE) like we have over here. Indeed, I read a rather informative Time article which went into some great depth highlighting the differentials in costs at the most prestigious teaching hospitals in the United States. The salient point was made with regards to the "Mayo Clinic" in Minnesota, which appeared to have siginicantly lower costs per patient (cannot remember any precise numbers) but essentially the same outcomes. Clearly this sort of data shows that quality health care CAN be provided for less. Indeed perhaps we should all look at the Mayo Clinic as an exemplary model.

I think perhaps America's fear of socialised medicine is incredibly deep rooted; in 1948 Truman's plans for health care reform faltered in the face of cynicism about "Russian-style communism". More recently, in 1994, the health care initiative sponsored by the then First Lady Hillary Clinton was by all accounts, an abject disaster. "The American Dream" seems to be a double-edged sword: on the one hand, it is possible to achieve anything if you put your back into it, but on the other, you better hope that life doesn't deal you a bad hand, because as sure as hell no one else is going to pick you up. That, in a nutshell, is the philosophy behind capitalism. I think (I have been listening to Professor Michael Sandel's Reith Lectures recently...).

America spends roughly 16% of its GDP on health care (double the average spending of OECD nations), roughly one sixth of GDP. This is big business. The American libertarian thinker, Michael Cannon, who heads health policy analysis ay Washington's Cato Institute thinks that big reform is needed - but reform that puts financial power into the hands of the individual consumers, not another vast government bureaucracy. He estimates that it will cost around $2tn to cover all of America's uninsured over the next 10 years. A staggering figure. This will clearly create a burden on various stakeholders: doctors and hospitals will probably be tasked with providing more with less funding, thereby bringing the debate of comparative effectiveness right to the fore. The burden might also fall on workers, if salaries fall as employers are required to provide broader health insurance. The burden might also fall on taxpayers, facing more or higher taxes. Ultimately, to make universal health care work, everyone is going to have to sacrifice. As Michael Cannon puts it, what the government is really doing now is "trying to find the path of least resistance".

To me, America seems to be an incredibly greedy, selfish and divided country. On the one hand you have the wealthy who can afford full, private health insurance and college fees, thus ensuring that they propagate good health, education and ultimately wealth. On the other hand, clearly an underclass who are barely literate, uninsured and with no hope of ever breaking their cycle of poverty. Now I am not saying that the situation here in the UK (and Europe) is perfect, but right now I would rather live in a country where it is perhaps more difficult to achieve affluence, but at least people can live in the comforting knowledge that there is at least a socialised health care safety blanket called the NHS. God bless it, and all its failings. Perhaps we should stop grumbling and be thankful for what we have. Now I've just gotta get my hand on some of that Tamiflu...

Thank you for reading.

Currently listening to a rather lovely deep and chilled live mix entitled "Lipse" by my old friend, Max Cooper.

Peace,

F.