Public Health
Polisy Forum
Lessons from London: The British Are Reforming Their National Health Service 2,11,;
m
Arthur Vall-Spinosa, MD The British National Health Service (NHS) is undergoing a major reform. At the same time, many in this country believe that some sort of national health scheme (the popular choice would be one like Canada's or Germany's) could solve our own health care crisis, wherein outof-control costs are causing major limitations in access and a decrease in quality of care. United States policymakers should look carefully at a system that, in a country whose culture is very much like ours, (1) is popular with both providers and beneficiaries, (2) provides good health care if superior infant mortality and longevity statistics are any indication, and (3) costs approximately half as much as ours.' What can we learn from the NHS and its proposed reforms? The following observations are based on meetings with British physicians and lay people, British newspaper articles, professional journal articles,2,3 texts,1,4 and the experience of having lived and worked in Great Britain. Not surprisingly, perceptions of their own system vary among British general practitioners (GPs), specialists, emigres to the United States, physicians who practice in London and its environs, and physicians who practice in the rest of Great Britain. Thus, the following descriptions, opinions, conclusions, and "lessons," although as objective as possible, may be open to differing interpretations.
History The NHS was set up in 1948 on the premises that health care is a right and that socialized medicine is not incompatible with the individual accumulation ofwealth as long as some of the wealth is used for the common good. World War II brought
the poor health of many low-income draftees to the government's attention and it also leveled the class system, as rich and poor fought and died side by side, so the climate was right for such a move. One speaker at a recent meeting suggested that the British borrowed from our Bill of Rights and interpreted the statement "life, liberty, and the pursuit of happiness" to mean that it is the state's job to guarantee access to health care!5 The three fundamental principles of the NHS are availability to all, freedom from charges, and financing from taxes. Through the years the NHS has operated with the following objectives: 1. To offer health care to all, regardless of ability to pay 2. To nationalize the hospitals 3. To make hospital doctors salaried employees, but at the same time allow them to practice privately within NHS hospitals and in private offices 4. To allow general practitioners to be independent contractors 5. To allow citizens to purchase private insurance if they wish, but with no forgiveness of the taxes that support the NHS (i.e., with no credits or incentives) 6. To avoid linking the withholding of care to patients' income because such a practice could affect a physician's clinical judgment (this approach is opposite that of America's health maintenance organizations [HMOs]). The author is with the School of Medicine, University of New Mexico. Requests for reprints should be sent to Arthur Vall-Spinosa, MD, Clinical Associate, University of New Mexico School of Medicine, 201 Cedar SE, Suite 707, Albuquerque, NM 87106-4977. This paper was submitted to the journal November 28, 1990, and accepted with revisions July 23, 1991.
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British physicians, while agreeing with the main goal of health care for all, opposed the NHS because they did not like the idea of government as a monopolistic provider and employer. However, by using divide-and-rule tactics and "sticks" (such as threatening to take away certain benefits from physicians who would not participate) and "carrots" (such as providing good pay scales for specialists, allowing private practice, and allowing general practitioners to be independent contractors rather than state employees), the government won the physicians over. Forty years after opposing the formation of the NHS, these same physicians (or rather their children) are desperately trying to maintain the status quo and are fighting against the reforms, which consist of measures to encourage competition, entrepreneurship, and elements of privatization, and basically to emulate much of the US "system." What can be learned from all this? First, that in two generations a national health scheme can become very popular with physicians, and second, the obvious-that fear of change or the unknown causes anxiety in any group of people, especially physicians, whether British or American. This anxiety leads to the expenditure of a lot of energy to find reasons and rationalizations to resist the feared change.
The NHS System Postgraduate Training After medical school a young physician becomes a "houseman," which is the equivalent of an intern or junior resident; then, after a year or two, a "junior registrar;" and finally, a "senior registrar," the equivalent of a fellow in the United States. The British training system is a very steep pyramid; this is one of the aspects of the NHS the government says it wishes to change. The percentage of specialist physicians is much lower than in the United States. Young physicians who do not get the most prestigious house and junior registrar jobs know by their second or third postgraduate year that they will have to become general practitioners, or else emigrate to the United States, Canada, or Australia to become specialists. Senior registrar positions are limited and basically consist of an apprenticeship to a specific group of specialists for what often becomes a very long period of time. Some senior registrars spend several years in one position and then, unable to December 1991, Vol. 81, No. 12
obtain a consultancy, spend many more years training in an entirely different specialty. The current limits on the number of specialists are seen by some as anticompetitive and monopolistic, and as one cause of the long waits for hospital-based (mostly surgical) services. Clearly, fewer specialty training positions result in more physicians' opting for general practicecurrently over 50% of British medical school graduates are GPs-and the programs are well organized and oversubscribed. The obvious lessons are that postgraduate training opportunities determine a nation's physician mix and that, as seen in Canada, fewer specialists correlate with a less costly health care system.3 As America's HMOs already understand, the fact that British medicine is GP driven may be the major reason Great Britain spends half as much as the United States on health care.
OQganization of the NHS The NHS has two divisions, each with its own annual appropriation. The Family Health Service Authority (formerly the Family Practitioner Committee) organizes all the GPs, in addition to pharmacy, eye, and dental services; Regional Health Authorities oversee District Health Authorities, which manage the hospitals and the specialists, all of whom are hospital based and employed. All health care in Britain is GP driven. An English person rarely goes directly to a specialist, even to a specialist's private office, without first consulting a GP. Ninety-seven percent of the population have their own GPs, who are completely separate, organizationally and budgetwise, from the specialists. GPs can, and some do, have private patients; they are paid by a mixture of capitation fees, allowances, and item-of-service payments; they receive stipends for their office staffs; many of them have organized into group practices; they generally do not see patients in the hospital; and they can practice anywhere and in any manner they choose. There are no drug budgets or formularies, nor is there any form of negative financial incentive such as US physicians face in the form of socalled risk-withhold. There are no performance reviews. Overall, the GP has a comfortable life-style, no need to compete, and a reasonable base income that can be supplemented by private patients, night call, and meeting preventive medicine quotas. Currently, British GPs earn about $60 000 a year.
The reformed NHS will change all this. Patients will be encouraged to "shop around." GPs will receive more money if they treat more patients, and their lists won't be restricted to a set number. Groups of GPs with over 11 000 patients will be given the opportunity to run their own practice budgets (thus forming the equivalent of mini-HMOs). They will receive bonuses for practicing in the inner cities or certain rural areas, and for meeting new preventive medicine quotas (such as having 90% of their pediatric patients immunized, or 80% of women screened with Pap smears). There will be drug budgets, as there is a perception that British GPs prescnbe too many drugs, especially brand name drugs.4 On the kinder side, they will be paid more money if they take night calls. A specialist's (or consultant's) week is divided into 11 sessions (a session is typically 3½ hours long). Specialists contract with a hospital to work a certain number of sessions, and may spend the rest of the time in private practice. Many specialists make rounds on their private patients in the morning, and then perform their NHS hospital routine-patient care, operations, or research. After lunch, they might have a half day in the private office or work again in the hospital, and finish with rounds in the evening. The basic salary is said to be around $100 000 and is supplemented by private practice, plus merit pay, which, once granted, cannot be taken away. Because consultant positions are so difficult to obtain (a senior registrar may be 40 years old, with 10 years of apprenticeship, before becoming a consultant) and because consultants are competing for private referrals from the GPs, it is assumed that they are well qualified and will do a good job for the NHS patients. There is no formal peer review or quality assessment, and a British physician told me that upon receiving a consultancy, he was congratulated with words to the effect that "only the Queen can take your job away." Thus, it would appear that the established British specialist has more autonomy and freedom to do what he or she wishes than do US physicians. The system protects specialists from competition, accountability, and the need to please any constituency (patients, government, or administrators), except, perhaps, the group that passes judgment on their merit award applications. Like the comfortable life-style of the GPs, this situation will be changed. The government reforms propose more conAmerican Journal of Public Health 1567
PubWic Heath Poly Forum
sultant positions. Performance analyses and competition will be introduced. Specialists are expected to have more of a voice in planning the destinies of the hospitals. The working principle is to extend patient choice and secure the best value for money, rather than to give fixed annual budgets for each hospital. The idea is that a so-called internal market in which the money follows the patient will develop within the state system. As a fundamental part of the reforms, hospitals will now have a choice of "opting out" of the Regional Health Authority. They can supplement their government funding with private patients, bank loans, real estate transactions, and ventures into health-related, profit-making activities. The severely cash-limited hospital budgets have been seen as the cause of the shortcomings and rationing associated with the NHS; however, these limited budgets are the second major reason why British health care costs have been so low. Like their US counterparts, British hospitals will be encouraged to compete with other hospitals for contracts from local health authorities, GP groups, and even private insurance companies. To do this they will presumably add amenities they have never had before, such as waiting areas, televisions, and private rooms; begin to provide timely and accurate notification of lab test results; form specialized centers of excellence; and begin to market themselves.
Queues and Rationing While there is no question that long lines exist in clinics and physicians' offices and that the wait for elective surgery may be months long, the actual reason for this is controversial. It has been suggested that some hospital administrative staffs contrive to keep the lists artificially long so that funding will be increased the following year (just as any successful US Veterans' Administration hospital might do). Other explanations advanced include the idea that medical physicians fill up the beds (there is no waiting for patients with congestive heart failure or diabetic ketoacidosis), leaving no beds for surgical patients. It is also said that there are not enough operating rooms and ancillary staff, such as scrub nurses and technicians. Some cynics claim that British physicians do not work very hard on their NHS commitments because they are too busy with their private patients. Most British physicians do not apologize for the long waits for certain new tech1568 American Journal of Public Health
nology, such as coronary artery bypass. They point to studies that they believe show such procedures to be overutilized, controversial, and not really better or safer than medical therapy. When a hospital identifies an extremely long list of people needing a specific procedure (such as elective herniorrhaphy), a special project is mounted to get the list shortened. It has been suggested that a fee-forservice payment system for surgery would provide an incentive to shorten the waiting lists. Physicians I talked with felt that fee-for-service surgery would promote the performance of too many unnecessary operations. In support of this view, they cited the private hospital appendectomy rate, which is three times that for NHS hospitals. At any rate, they felt that physicians should not "get rich." (In fact, the appendectomies done in British private hospitals are performed by the very same surgeons who also work for the NHS!) Most ofthe hospital buildings are old, but, by and large, they are solid and clean. This is an area in which the NHS has saved the country millions of dollars, as it is not continually building new buildings and tearing down old ones. Low capitalexpenditure budgets and a shortage of specialists means there is de facto rationing of new technology. If there is no magnetic resonance imaging (MRI) scanner, then obviously no MRI scan will be done, and money is saved. In fact, if a physician truly feels that a patient needs some type of high-technology test or procedure, it will often be done in a neighboring hospital or even purchased from a local private hospital. This means that the ordering physician must feel very strongly about obtaining the procedure and that he or she does not order it as a routine diagnostic test or for defensive medical purposes. Since British health care statistics match those of the United States, the lesson here is that fancy buildings and equipment do not necessarily lead to better health care outcomes.
Although they have a reputation for being bureaucratic, the British actually run their hospitals with fewer middlelevel managers, laboratory and x-ray technicians, and nurses than are found in American hospitals, and with minimal medical records departments. British hospitals do not yet have the many extra departments involved in monitoring activities in the United States, such as Utilization Review and Quality Assurance. Only 5% of the NHS budget goes for ad-
ministrative costs, in comparison to the 20% to 25% estimated in the United States, and this can be seen as another major factor responsible for lower British health care costs. However, their lack of data collection has proved to be a drawback, because at this time they are unable to determine how much various procedures or illnesses actually cost, and they need this information in order to carry out the reforms.
Reasons for the Reform Why are the British reforming the NHS? The title of the white paper that outlines the reforms is Workig for Patients. Although Great Britain spends less of its GNP (5% to 6%) on health care than the United States does (11% to 12%), costs are rising, and many in government do not feel they are getting, as the British cliche goes, "value for money." The policymakers understand that these reforms will cause an increase in the percentage of the GNP being paid for health care, but the increase is expected to come from personal discretionary income and not from the national treasury. The reformers believe that there must be some slack in the system and that simply increasing the NHS appropriation without making changes would be throwing good money after bad. (It also irked the pro-free market Thatcher to see doctors, lawyers, and teachers screened from competition. Coincidentally, the legal and educational systems are also being threatened with reorganization, and some changes are already in place.) More specific reasons for the reform include government concern with the large variation between regions in cost and quality of care; that the system is seen as inefficient; that it has little in the way of information gathering systems (i.e., few computers, limited medical records); that there is very little involvement of specialists in hospital planning and decision-making; and that there is poor accountability by GPs as to how they spend their time and whether their high use of prescription drugs is justified. It is felt that encouraging privatization and competition will stimulate hospitals to respond to the problems of inadequate staff, crowded clinics, outdated facilities, long waiting lists for surgery, lack of consideration for patient preference, and frequent cancellations of planned surgical admissions. An interesting incidental reason for these reforms includes the need for Great Britain to become more like the rest of Europe. Mainland Europe is moving rapDecember 1991, Vol. 81, No. 12
Public Healh Policy Forum
idly toward a united social and economic community in which doctors and patients may eventually work or be treated in any country. Already British private hospitals are losing the sheiks, Greeks, and other newly wealthy people of the world to hospitals in Germany and France. The need to compete at the international level means British facilities must be upgraded.
Physician Reaction Most British physicians are opposing the reforms. General practitioners are upset because they don't like the idea of competing with each other for patients, of not being able to prescnbe the drugs they wish to prescribe, and of not being able to refer patients to specialists or hospitals of their choice. (In fact, under the new system most patients are likely to be referred to hospitals with which the District Health Authority or GP group has a contract-a practice that results in a restriction of everyone's choice!) They see the proposed changes as resulting in a lower standard of health care, and they bemoan the loss of their current autonomy. Specialists are concerned that the need to run the hospitals at a profit will undermine the ability to provide a full range of services at each institution; thus patients will be inconvenienced and forced to drive miles for care, and some hospitals will get all the private patients while others may go out of business. The reform will require hospitals to pay taxes. Predictably, one key stumbling block is deciding on the amount of subsidy for research and teaching.
Public Perception and Private Medicine What does the British public think about the NHS and the reforms? It is said that, of all their institutions, the British people rate the NHS second only to the monarchy. They are always quick to defend it in conversation, and any news story about the NHS rates front-page headlines. Many feel that the only problem with the NHS is that it is being starved for funds. While there may not have been a national consensus calling for reform, the British now have a higher standard of living (higher salaries, better food, more cars, more vacations, more disposable income) than when the NHS was initiated, and the lack of nice facilities and the perceived inertia of the NHS has led to an increase in the number of citizens who go to private physicians and hospitals and who buy private medical insurance (this number is estimated at 5.5 million, out of a population of 68 million). December 1991, Vol. 81, No. 12
There are about 200 private hospitals in Britain; most are small, poorly equipped, and poorly staffed institutions, left over from pre-NHS days, and are called "nursing homes." A few for-profit hospitals exist (HCA and Humana), but most British private patients are cared for in the private wings of NHS hospitals. In fact, no new for-profit facilities have been built in 4 years, mainly because it is anticipated that the reforms will expand private practice within NHS facilities. Some NHS hospitals should benefit from the reform: they will receive income from private patients or be able to charge NHS patients a premium for more amenities, such as private rooms, and will use that income to modernize their facilities and purchase the high-tech equipment that ultimately benefits all patients. They will have discovered cost shifting! An interesting phenomenon (an example of what the British sometimes call "a fiddle") is the fact that many of those who see private physicians do not have private health insurance. They perceive that paying health insurance premiums is a waste of money, since, when the cost of their private care approaches what they would have paid in premiums, they merely switch back to the NHS. (Example: One might have a mastectomy for breast cancer in a private institution and chemotherapy in the NHS.)
Malpractice Lack of malpractice litigation, with its attendant high cost of defensive medical practices (ordering tests and performing procedures just to be sure nothing is overlooked), is the final major reason why Great Britain has lower health care costs than this country. However, malpractice is begiining to concern British physicians. The accountability and competition advocated in the reforms, coupled with a streamlined legal system, may lead to increased attention to physician liability. The British legal system as currently constructed is very bureaucratic and expensive; apparently, this fact alone discourages many potential malpractice suits. A newspaper article did note that obstetricians are leaving that specialty because of an increase in lawsuits.8 Currently, ombudsmen deal with hospital and servicerelated complaints, while independent professional review committees handle "problems of clinical judgment"; there is probably much that we could learn from the British in this area, as similar programs are being proposed as solutions to high malpractice costs in America.
Condwion In conclusion, what can we learn from the NHS experience? First, that we are facing the same problems-rising costs attendant on the rapid increases in the aged and chronically ill populations and in high technology; the high expectations and demands of our patients; too many (and maldistributed) physicians; and large national budget deficits. Perhaps not surprisingly, considering the character of our national leaders, both the United States and Great Britain have resorted to treating health care as a business, and have limited or reduced public funding. Since we are prisoners of our past and have to proceed from where we are today, the solution for these health care issues will obviously be peculiar to each country. Nevertheless, Great Britain and the United States appear to be converging on a point at which our health care systems may look very similar. Since the primary problem with health care in the United States is its high cost (of which reduced access and quality are consequences), policymakers would be well advised to study the British system closely. One of the major lessons from the NHS experience, and one that successful HMOs in this country have learned, is that requiring everyone to enlist with a primary care physician keeps costs down. More important than low capital budgets and limited numbers of specialists, the fact that British medicine is GP driven may be the major reason the British spend half as much of their GNP as we do on health care. Other important reasons include low administrative costs (which will certainly go up as data collection and accountability become important) and lack of concern over malpractice litigation, which in the United States has resulted in expensive defensive medical practices and passed-on insurance premium costs. This country could also learn from the British sense offair play. Although the British believe that health care is a right, they also feel that physicians and hospitals should be paid when they take care of patients. Charity is demeaning to both patient and provider and leads to cost shifting, which is unfair to those who do pay. The British believe that top physicians should be able to earn more, that onerous duty such as night call deserves a higher reimbursement, and that schemes that reward the withholding of services from the patient are very wrong.
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Pubic Health Pdoy Forum
Finally, the most important lesson to be learned from London is that basic, humanistic health care is a rghgt but that some high-technology services have to be rationed, because even the richest countries cannot afford to be all things to all people. The corollaxy is that, while every physician must be his or her patient's advocate against the limits of the third-party payer (whether it is the state or an insurance company), no physician should have to apologize if certain diagnostic or therapeutic strategies are simply not available. Only recently has the United States begun to acknowledge this truth.
The extent of the current NHS reforms could be construed as an admission ofthe system's failure, but should be seen as a move by the pragmatic British to keep up with the changing needs of a more affluent society. Furthermore, Great Britain's adoption of some aspects of the US health care system seems to validate our system and some of the reform efforts under way in this country. There will probably never be a national health service in the United States, but we can learn a lot from the British system, just as the British are learning from ours. Cl
References 1. Aaron HJ, Schwarz WB. The Painfid Prescnption. Washington, DC: The Brookings Institute; 1984. 2. London MD. The National Health Service reforms. JAM4. 1989;262:3112-3121. 3. Fuchs VR, Hahn AB. How does Canada do it? New EngIJMed. 1990;323:884-890. 4. Coleman V. The health scandal. Mandarin 1988. 5. Lessons to be learned from the British health care system-public and private. Presented at the Medical Group Management Association Conference; May 1-6, 1989; London. 6. Manchester Guardian Weekly. September 10, 1989. 7. Amencan Medical News. April 7, 1989. 8. The SundzyLondon Times. March 12,1989.
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Polisy Forum
Lessons from London: The British Are Reforming Their National Health Service 2,11,;
m
Arthur Vall-Spinosa, MD The British National Health Service (NHS) is undergoing a major reform. At the same time, many in this country believe that some sort of national health scheme (the popular choice would be one like Canada's or Germany's) could solve our own health care crisis, wherein outof-control costs are causing major limitations in access and a decrease in quality of care. United States policymakers should look carefully at a system that, in a country whose culture is very much like ours, (1) is popular with both providers and beneficiaries, (2) provides good health care if superior infant mortality and longevity statistics are any indication, and (3) costs approximately half as much as ours.' What can we learn from the NHS and its proposed reforms? The following observations are based on meetings with British physicians and lay people, British newspaper articles, professional journal articles,2,3 texts,1,4 and the experience of having lived and worked in Great Britain. Not surprisingly, perceptions of their own system vary among British general practitioners (GPs), specialists, emigres to the United States, physicians who practice in London and its environs, and physicians who practice in the rest of Great Britain. Thus, the following descriptions, opinions, conclusions, and "lessons," although as objective as possible, may be open to differing interpretations.
History The NHS was set up in 1948 on the premises that health care is a right and that socialized medicine is not incompatible with the individual accumulation ofwealth as long as some of the wealth is used for the common good. World War II brought
the poor health of many low-income draftees to the government's attention and it also leveled the class system, as rich and poor fought and died side by side, so the climate was right for such a move. One speaker at a recent meeting suggested that the British borrowed from our Bill of Rights and interpreted the statement "life, liberty, and the pursuit of happiness" to mean that it is the state's job to guarantee access to health care!5 The three fundamental principles of the NHS are availability to all, freedom from charges, and financing from taxes. Through the years the NHS has operated with the following objectives: 1. To offer health care to all, regardless of ability to pay 2. To nationalize the hospitals 3. To make hospital doctors salaried employees, but at the same time allow them to practice privately within NHS hospitals and in private offices 4. To allow general practitioners to be independent contractors 5. To allow citizens to purchase private insurance if they wish, but with no forgiveness of the taxes that support the NHS (i.e., with no credits or incentives) 6. To avoid linking the withholding of care to patients' income because such a practice could affect a physician's clinical judgment (this approach is opposite that of America's health maintenance organizations [HMOs]). The author is with the School of Medicine, University of New Mexico. Requests for reprints should be sent to Arthur Vall-Spinosa, MD, Clinical Associate, University of New Mexico School of Medicine, 201 Cedar SE, Suite 707, Albuquerque, NM 87106-4977. This paper was submitted to the journal November 28, 1990, and accepted with revisions July 23, 1991.
December 1991, Vol. 81, No. 12
Publc Heal Polky Forum
British physicians, while agreeing with the main goal of health care for all, opposed the NHS because they did not like the idea of government as a monopolistic provider and employer. However, by using divide-and-rule tactics and "sticks" (such as threatening to take away certain benefits from physicians who would not participate) and "carrots" (such as providing good pay scales for specialists, allowing private practice, and allowing general practitioners to be independent contractors rather than state employees), the government won the physicians over. Forty years after opposing the formation of the NHS, these same physicians (or rather their children) are desperately trying to maintain the status quo and are fighting against the reforms, which consist of measures to encourage competition, entrepreneurship, and elements of privatization, and basically to emulate much of the US "system." What can be learned from all this? First, that in two generations a national health scheme can become very popular with physicians, and second, the obvious-that fear of change or the unknown causes anxiety in any group of people, especially physicians, whether British or American. This anxiety leads to the expenditure of a lot of energy to find reasons and rationalizations to resist the feared change.
The NHS System Postgraduate Training After medical school a young physician becomes a "houseman," which is the equivalent of an intern or junior resident; then, after a year or two, a "junior registrar;" and finally, a "senior registrar," the equivalent of a fellow in the United States. The British training system is a very steep pyramid; this is one of the aspects of the NHS the government says it wishes to change. The percentage of specialist physicians is much lower than in the United States. Young physicians who do not get the most prestigious house and junior registrar jobs know by their second or third postgraduate year that they will have to become general practitioners, or else emigrate to the United States, Canada, or Australia to become specialists. Senior registrar positions are limited and basically consist of an apprenticeship to a specific group of specialists for what often becomes a very long period of time. Some senior registrars spend several years in one position and then, unable to December 1991, Vol. 81, No. 12
obtain a consultancy, spend many more years training in an entirely different specialty. The current limits on the number of specialists are seen by some as anticompetitive and monopolistic, and as one cause of the long waits for hospital-based (mostly surgical) services. Clearly, fewer specialty training positions result in more physicians' opting for general practicecurrently over 50% of British medical school graduates are GPs-and the programs are well organized and oversubscribed. The obvious lessons are that postgraduate training opportunities determine a nation's physician mix and that, as seen in Canada, fewer specialists correlate with a less costly health care system.3 As America's HMOs already understand, the fact that British medicine is GP driven may be the major reason Great Britain spends half as much as the United States on health care.
OQganization of the NHS The NHS has two divisions, each with its own annual appropriation. The Family Health Service Authority (formerly the Family Practitioner Committee) organizes all the GPs, in addition to pharmacy, eye, and dental services; Regional Health Authorities oversee District Health Authorities, which manage the hospitals and the specialists, all of whom are hospital based and employed. All health care in Britain is GP driven. An English person rarely goes directly to a specialist, even to a specialist's private office, without first consulting a GP. Ninety-seven percent of the population have their own GPs, who are completely separate, organizationally and budgetwise, from the specialists. GPs can, and some do, have private patients; they are paid by a mixture of capitation fees, allowances, and item-of-service payments; they receive stipends for their office staffs; many of them have organized into group practices; they generally do not see patients in the hospital; and they can practice anywhere and in any manner they choose. There are no drug budgets or formularies, nor is there any form of negative financial incentive such as US physicians face in the form of socalled risk-withhold. There are no performance reviews. Overall, the GP has a comfortable life-style, no need to compete, and a reasonable base income that can be supplemented by private patients, night call, and meeting preventive medicine quotas. Currently, British GPs earn about $60 000 a year.
The reformed NHS will change all this. Patients will be encouraged to "shop around." GPs will receive more money if they treat more patients, and their lists won't be restricted to a set number. Groups of GPs with over 11 000 patients will be given the opportunity to run their own practice budgets (thus forming the equivalent of mini-HMOs). They will receive bonuses for practicing in the inner cities or certain rural areas, and for meeting new preventive medicine quotas (such as having 90% of their pediatric patients immunized, or 80% of women screened with Pap smears). There will be drug budgets, as there is a perception that British GPs prescnbe too many drugs, especially brand name drugs.4 On the kinder side, they will be paid more money if they take night calls. A specialist's (or consultant's) week is divided into 11 sessions (a session is typically 3½ hours long). Specialists contract with a hospital to work a certain number of sessions, and may spend the rest of the time in private practice. Many specialists make rounds on their private patients in the morning, and then perform their NHS hospital routine-patient care, operations, or research. After lunch, they might have a half day in the private office or work again in the hospital, and finish with rounds in the evening. The basic salary is said to be around $100 000 and is supplemented by private practice, plus merit pay, which, once granted, cannot be taken away. Because consultant positions are so difficult to obtain (a senior registrar may be 40 years old, with 10 years of apprenticeship, before becoming a consultant) and because consultants are competing for private referrals from the GPs, it is assumed that they are well qualified and will do a good job for the NHS patients. There is no formal peer review or quality assessment, and a British physician told me that upon receiving a consultancy, he was congratulated with words to the effect that "only the Queen can take your job away." Thus, it would appear that the established British specialist has more autonomy and freedom to do what he or she wishes than do US physicians. The system protects specialists from competition, accountability, and the need to please any constituency (patients, government, or administrators), except, perhaps, the group that passes judgment on their merit award applications. Like the comfortable life-style of the GPs, this situation will be changed. The government reforms propose more conAmerican Journal of Public Health 1567
PubWic Heath Poly Forum
sultant positions. Performance analyses and competition will be introduced. Specialists are expected to have more of a voice in planning the destinies of the hospitals. The working principle is to extend patient choice and secure the best value for money, rather than to give fixed annual budgets for each hospital. The idea is that a so-called internal market in which the money follows the patient will develop within the state system. As a fundamental part of the reforms, hospitals will now have a choice of "opting out" of the Regional Health Authority. They can supplement their government funding with private patients, bank loans, real estate transactions, and ventures into health-related, profit-making activities. The severely cash-limited hospital budgets have been seen as the cause of the shortcomings and rationing associated with the NHS; however, these limited budgets are the second major reason why British health care costs have been so low. Like their US counterparts, British hospitals will be encouraged to compete with other hospitals for contracts from local health authorities, GP groups, and even private insurance companies. To do this they will presumably add amenities they have never had before, such as waiting areas, televisions, and private rooms; begin to provide timely and accurate notification of lab test results; form specialized centers of excellence; and begin to market themselves.
Queues and Rationing While there is no question that long lines exist in clinics and physicians' offices and that the wait for elective surgery may be months long, the actual reason for this is controversial. It has been suggested that some hospital administrative staffs contrive to keep the lists artificially long so that funding will be increased the following year (just as any successful US Veterans' Administration hospital might do). Other explanations advanced include the idea that medical physicians fill up the beds (there is no waiting for patients with congestive heart failure or diabetic ketoacidosis), leaving no beds for surgical patients. It is also said that there are not enough operating rooms and ancillary staff, such as scrub nurses and technicians. Some cynics claim that British physicians do not work very hard on their NHS commitments because they are too busy with their private patients. Most British physicians do not apologize for the long waits for certain new tech1568 American Journal of Public Health
nology, such as coronary artery bypass. They point to studies that they believe show such procedures to be overutilized, controversial, and not really better or safer than medical therapy. When a hospital identifies an extremely long list of people needing a specific procedure (such as elective herniorrhaphy), a special project is mounted to get the list shortened. It has been suggested that a fee-forservice payment system for surgery would provide an incentive to shorten the waiting lists. Physicians I talked with felt that fee-for-service surgery would promote the performance of too many unnecessary operations. In support of this view, they cited the private hospital appendectomy rate, which is three times that for NHS hospitals. At any rate, they felt that physicians should not "get rich." (In fact, the appendectomies done in British private hospitals are performed by the very same surgeons who also work for the NHS!) Most ofthe hospital buildings are old, but, by and large, they are solid and clean. This is an area in which the NHS has saved the country millions of dollars, as it is not continually building new buildings and tearing down old ones. Low capitalexpenditure budgets and a shortage of specialists means there is de facto rationing of new technology. If there is no magnetic resonance imaging (MRI) scanner, then obviously no MRI scan will be done, and money is saved. In fact, if a physician truly feels that a patient needs some type of high-technology test or procedure, it will often be done in a neighboring hospital or even purchased from a local private hospital. This means that the ordering physician must feel very strongly about obtaining the procedure and that he or she does not order it as a routine diagnostic test or for defensive medical purposes. Since British health care statistics match those of the United States, the lesson here is that fancy buildings and equipment do not necessarily lead to better health care outcomes.
Although they have a reputation for being bureaucratic, the British actually run their hospitals with fewer middlelevel managers, laboratory and x-ray technicians, and nurses than are found in American hospitals, and with minimal medical records departments. British hospitals do not yet have the many extra departments involved in monitoring activities in the United States, such as Utilization Review and Quality Assurance. Only 5% of the NHS budget goes for ad-
ministrative costs, in comparison to the 20% to 25% estimated in the United States, and this can be seen as another major factor responsible for lower British health care costs. However, their lack of data collection has proved to be a drawback, because at this time they are unable to determine how much various procedures or illnesses actually cost, and they need this information in order to carry out the reforms.
Reasons for the Reform Why are the British reforming the NHS? The title of the white paper that outlines the reforms is Workig for Patients. Although Great Britain spends less of its GNP (5% to 6%) on health care than the United States does (11% to 12%), costs are rising, and many in government do not feel they are getting, as the British cliche goes, "value for money." The policymakers understand that these reforms will cause an increase in the percentage of the GNP being paid for health care, but the increase is expected to come from personal discretionary income and not from the national treasury. The reformers believe that there must be some slack in the system and that simply increasing the NHS appropriation without making changes would be throwing good money after bad. (It also irked the pro-free market Thatcher to see doctors, lawyers, and teachers screened from competition. Coincidentally, the legal and educational systems are also being threatened with reorganization, and some changes are already in place.) More specific reasons for the reform include government concern with the large variation between regions in cost and quality of care; that the system is seen as inefficient; that it has little in the way of information gathering systems (i.e., few computers, limited medical records); that there is very little involvement of specialists in hospital planning and decision-making; and that there is poor accountability by GPs as to how they spend their time and whether their high use of prescription drugs is justified. It is felt that encouraging privatization and competition will stimulate hospitals to respond to the problems of inadequate staff, crowded clinics, outdated facilities, long waiting lists for surgery, lack of consideration for patient preference, and frequent cancellations of planned surgical admissions. An interesting incidental reason for these reforms includes the need for Great Britain to become more like the rest of Europe. Mainland Europe is moving rapDecember 1991, Vol. 81, No. 12
Public Healh Policy Forum
idly toward a united social and economic community in which doctors and patients may eventually work or be treated in any country. Already British private hospitals are losing the sheiks, Greeks, and other newly wealthy people of the world to hospitals in Germany and France. The need to compete at the international level means British facilities must be upgraded.
Physician Reaction Most British physicians are opposing the reforms. General practitioners are upset because they don't like the idea of competing with each other for patients, of not being able to prescnbe the drugs they wish to prescribe, and of not being able to refer patients to specialists or hospitals of their choice. (In fact, under the new system most patients are likely to be referred to hospitals with which the District Health Authority or GP group has a contract-a practice that results in a restriction of everyone's choice!) They see the proposed changes as resulting in a lower standard of health care, and they bemoan the loss of their current autonomy. Specialists are concerned that the need to run the hospitals at a profit will undermine the ability to provide a full range of services at each institution; thus patients will be inconvenienced and forced to drive miles for care, and some hospitals will get all the private patients while others may go out of business. The reform will require hospitals to pay taxes. Predictably, one key stumbling block is deciding on the amount of subsidy for research and teaching.
Public Perception and Private Medicine What does the British public think about the NHS and the reforms? It is said that, of all their institutions, the British people rate the NHS second only to the monarchy. They are always quick to defend it in conversation, and any news story about the NHS rates front-page headlines. Many feel that the only problem with the NHS is that it is being starved for funds. While there may not have been a national consensus calling for reform, the British now have a higher standard of living (higher salaries, better food, more cars, more vacations, more disposable income) than when the NHS was initiated, and the lack of nice facilities and the perceived inertia of the NHS has led to an increase in the number of citizens who go to private physicians and hospitals and who buy private medical insurance (this number is estimated at 5.5 million, out of a population of 68 million). December 1991, Vol. 81, No. 12
There are about 200 private hospitals in Britain; most are small, poorly equipped, and poorly staffed institutions, left over from pre-NHS days, and are called "nursing homes." A few for-profit hospitals exist (HCA and Humana), but most British private patients are cared for in the private wings of NHS hospitals. In fact, no new for-profit facilities have been built in 4 years, mainly because it is anticipated that the reforms will expand private practice within NHS facilities. Some NHS hospitals should benefit from the reform: they will receive income from private patients or be able to charge NHS patients a premium for more amenities, such as private rooms, and will use that income to modernize their facilities and purchase the high-tech equipment that ultimately benefits all patients. They will have discovered cost shifting! An interesting phenomenon (an example of what the British sometimes call "a fiddle") is the fact that many of those who see private physicians do not have private health insurance. They perceive that paying health insurance premiums is a waste of money, since, when the cost of their private care approaches what they would have paid in premiums, they merely switch back to the NHS. (Example: One might have a mastectomy for breast cancer in a private institution and chemotherapy in the NHS.)
Malpractice Lack of malpractice litigation, with its attendant high cost of defensive medical practices (ordering tests and performing procedures just to be sure nothing is overlooked), is the final major reason why Great Britain has lower health care costs than this country. However, malpractice is begiining to concern British physicians. The accountability and competition advocated in the reforms, coupled with a streamlined legal system, may lead to increased attention to physician liability. The British legal system as currently constructed is very bureaucratic and expensive; apparently, this fact alone discourages many potential malpractice suits. A newspaper article did note that obstetricians are leaving that specialty because of an increase in lawsuits.8 Currently, ombudsmen deal with hospital and servicerelated complaints, while independent professional review committees handle "problems of clinical judgment"; there is probably much that we could learn from the British in this area, as similar programs are being proposed as solutions to high malpractice costs in America.
Condwion In conclusion, what can we learn from the NHS experience? First, that we are facing the same problems-rising costs attendant on the rapid increases in the aged and chronically ill populations and in high technology; the high expectations and demands of our patients; too many (and maldistributed) physicians; and large national budget deficits. Perhaps not surprisingly, considering the character of our national leaders, both the United States and Great Britain have resorted to treating health care as a business, and have limited or reduced public funding. Since we are prisoners of our past and have to proceed from where we are today, the solution for these health care issues will obviously be peculiar to each country. Nevertheless, Great Britain and the United States appear to be converging on a point at which our health care systems may look very similar. Since the primary problem with health care in the United States is its high cost (of which reduced access and quality are consequences), policymakers would be well advised to study the British system closely. One of the major lessons from the NHS experience, and one that successful HMOs in this country have learned, is that requiring everyone to enlist with a primary care physician keeps costs down. More important than low capital budgets and limited numbers of specialists, the fact that British medicine is GP driven may be the major reason the British spend half as much of their GNP as we do on health care. Other important reasons include low administrative costs (which will certainly go up as data collection and accountability become important) and lack of concern over malpractice litigation, which in the United States has resulted in expensive defensive medical practices and passed-on insurance premium costs. This country could also learn from the British sense offair play. Although the British believe that health care is a right, they also feel that physicians and hospitals should be paid when they take care of patients. Charity is demeaning to both patient and provider and leads to cost shifting, which is unfair to those who do pay. The British believe that top physicians should be able to earn more, that onerous duty such as night call deserves a higher reimbursement, and that schemes that reward the withholding of services from the patient are very wrong.
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Finally, the most important lesson to be learned from London is that basic, humanistic health care is a rghgt but that some high-technology services have to be rationed, because even the richest countries cannot afford to be all things to all people. The corollaxy is that, while every physician must be his or her patient's advocate against the limits of the third-party payer (whether it is the state or an insurance company), no physician should have to apologize if certain diagnostic or therapeutic strategies are simply not available. Only recently has the United States begun to acknowledge this truth.
The extent of the current NHS reforms could be construed as an admission ofthe system's failure, but should be seen as a move by the pragmatic British to keep up with the changing needs of a more affluent society. Furthermore, Great Britain's adoption of some aspects of the US health care system seems to validate our system and some of the reform efforts under way in this country. There will probably never be a national health service in the United States, but we can learn a lot from the British system, just as the British are learning from ours. Cl
References 1. Aaron HJ, Schwarz WB. The Painfid Prescnption. Washington, DC: The Brookings Institute; 1984. 2. London MD. The National Health Service reforms. JAM4. 1989;262:3112-3121. 3. Fuchs VR, Hahn AB. How does Canada do it? New EngIJMed. 1990;323:884-890. 4. Coleman V. The health scandal. Mandarin 1988. 5. Lessons to be learned from the British health care system-public and private. Presented at the Medical Group Management Association Conference; May 1-6, 1989; London. 6. Manchester Guardian Weekly. September 10, 1989. 7. Amencan Medical News. April 7, 1989. 8. The SundzyLondon Times. March 12,1989.
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