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Thoughts on Universal Coverage from Across the Pond

Thoughts On Universal Coverage From Across The Pond

I am still vacationing in the United Kingdom for my daughter’s college graduation and coincidentally have been here during the 70th anniversary celebration of the National Health Service.

As many of you know, the UK has a form of socialized medicine. Well, partially so. The federal government finances it from a tax on wages with employer contributions as well (looks a bit like the Social Security tax we have in America.) It runs great swathes of the care system, while also contracting with private entities or physicians.

Universal Healthcare
On the anniversary, reports and editorials have been generally positive, but still mindful of the system’s shortcomings. One editorialist, Matthew Parris in the Times on July 7, probably said it best when he stated: “In comparison with America and the rest of the EU, British health provision survives on a well-below average income, and yields respectable if sub-optimal outcomes. We’re getting a second-rate health service for the price of a third-rate one. I see no other way. So happy 70th birthday, NHS.”

Parris, as well as others, recount the pros and cons of the last 70 years:

  • First and foremost, the UK guarantees universal coverage. Several models in the developed world guarantee access to all, including:
    • Socialized medicine
    • Universal payer (where the government finances but allows private entities to run the system)
    • Universal access through regulation (where coverage is mandated, provision is private, and the state usually provides some subsidies for lower incomes)
  • Despite its warts, there is a notable pride in the UK on both sides of the political spectrum with regard to the universal nature of healthcare. People live without fear of being unable to afford medical care when they need it. I hate to say it, but I personally benefited from the NHS and felt the pride, too. In Scotland, any person on a multi-year student visa is treated as a Scottish citizen and my daughter had access to free care over the entire course of her university studies. No ex-pat insurance that would have been necessary in other parts of the UK and in the rest of the EU.
  • The system survives largely on explicit and implicit rationing. The NHS covers set drug and medical services. It has only so much resource so that even those covered services are rationed through wait lists and lengthy times to obtain service (hours and days at a PCP and months for other services). The system has led to so-called “self-rationing,” where human behavior is such that medical care is proactively foregone due to the rationing, wait times and other hassle factors. In some ways, this is good; in America we seek out care often when it is not needed. In others, not so much (e.g., generally longer wait times for certain non-critical procedures than in profit-driven America). However, in many ways as Parris notes, time is a proxy where price or cost usually play a role. It serves as the lever against demand. Something must suppress supply in the NHS fixed-budget world.
  • The centralized system forces behavioral change at the micro and macro levels, thereby driving certain outcomes. While it is not without its shortcomings, the fact that the government plays a lead role in funding the system allows deliberate priorities to be set.
  • Generally speaking, countries with universal access models don’t suffer from lower health outcomes. Actually, compared to the U.S. average, prevention, treatment of chronic conditions, and various hospital use statistics are much better. Now, more goes into these statistics than the healthcare model and how much is spent, but it is clear that more money is not always better.
  • The UK and similar models spend well less than the U.S., on average (10 to 12% of gross domestic product on healthcare compared with 18% in the United States). At the same time, these countries increasingly face complex moral and financial decisions moving forward. The advent of technology means a plethora of new and expensive drugs and procedures. With rationing a key component of the system, how can the UK and others meet the demand for these life-saving and quality-of-life treatments without breaking the bank? Add in aging, and the strict budget control could go out the window. America has the same problem, but it might be more explosive elsewhere.

What does all of this mean for American healthcare?

  • There are less fragmented models out there that deliver higher quality outcomes without spending the exorbitant amount we do.
  • Universal access (again, not necessarily socialized medicine) is necessary to both control costs and drive quality.
  • A little rationing combined with using the lever of price may be just what the doctor ordered. There is no question that while under-utilization is a problem that needs to be remediated, over-utilization is also a major problem here. Case and disease management can play a role in addressing both.
  • The U.S. has started down the road of a national regulatory and quality regime for healthcare – Medicare reforms, the Medicaid mega-rule and the Affordable Care Act and Exchange policy direction. In our case, while the government does not play the lead role in funding all healthcare, the regulatory scheme can help focus attention on what is important in the future.

In the end, we are not convinced that the amount of money most developed nations spend on healthcare would be acceptable to Americans. But with concerted effort, an efficient system can be built over time.

For further details, see our earlier blog from May 22 HERE.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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