COMMENTARIES
The Case for a National Health Service MILTON TERRIS, MD, PAUL B. CORNELY, MD, HENRY C. DANIELS, AND LORIN E. KERR, MD
The concepts of "national health insurance" and "national health service" are subject to a great deal of confusion and misunderstanding. Any discussion of their strengths and weaknesses will founder unless it is based on a clear delineation of their essential features and the basic differences between them.
Criteria of a National Health Service The crucial feature of a national health service is that all health workers are government employees, and that all care is provided in government hospitals and health centers. A national health service, by definition, covers the whole population. Although financing is mainly by general revenues, health insurance funds are also used in a number of countries.1 At this point we encounter a confusing fact. If health insurance funds can be used to help finance a national health service, then what is the difference between the two?
National Health Insurance in North America In Canada and the United States, the crucial feature of national health insurance is that the health providers, whether professional or institutional, are independent entrepreneurs who enter into a contractual arrangement with the government to provide services. Both in the national health insurance program operating in Canada, and in every national health insurance bill in the United States Congress, the right of physicians and other professionals to be paid by fee-forservice is assured. This is the dominant mode of payment in
Address reprint requests to Dr. Milton Terris, Professor and Chairman, Department of Community & Preventive Medicine, New York Medical College, Fifth Avenue at 106th Street, New York, NY 10029. Dr. Comely is with System Sciences, Inc.; Mr. Daniels is retired from the position of Administrative Officer, Health Services, UMWA Health & Retirement Funds; and Dr. Kerr is Director, Department of Occupational Health, UMWA. This paper was submitted to the Journal and accepted for publication on September 16, 1977.
AJPH December 1977, Vol. 67, No. 12
Canada, and will unquestionably be the dominant mode of payment in the United States. Furthermore, the mode of practice in Canada and the United States is primarily solo practice; this has not been changed in Canada by national health insurance. If the crucial feature of national health insurance is the relation of government to providers, and not the mode of financing, then we are not surprised to find that Canada's national health insurance program is financed primarily from general federal and provincial revenues.2 In the United States, the Kennedy-Corman Health Security Bill (H.R. 21 and S.3) divides the cost of the health insurance program equally between social security taxes and general reve-
nues.3
Other Health Insurance Patterns There are other national health insurance patterns that are the result of historical developments which are quite different from those of the United States and Canada. In the
Scandinavian countries, for example, public hospital services for the whole population have been provided through general revenues independently of national health insurance. It is characteristic of national health insurance that it uses the resources that are available; in these countries physicians' services outside the public hospitals have been purchased by the insurance program largely on a fee-for-service basis.
When there are very few resources available, as is common in non-industrialized countries, the national health insurance system has to create its own services, building hospitals and health centers and employing salaried physicians and other health personnel to serve the covered population. Spain, Portugal, Chile, Mexico, Costa Rica, and Turkey are among the countries with such programs. As a result, these countries are in an excellent position to move to a national health service for the whole population. In 1952, Chile took the first initiative in this direction by combining into a unified National Health Service the polyclinics and hospitals of the social security system for blue collar workers, the government hospitals and clinics for the needy, and the public health services of the Ministry of Health. 1183
COMMENTARIES
Partial National Health Services
care to leave the hospitals where they are badly needed and to develop highly lucrative private practices;
The term "National Health Service" is not always used accurately. Chile's NHS covers an estimated 70 to 75 per cent of the population; most of the remainder are in a fee-forservice insurance program for white collar workers. There can be little doubt that sooner or later the National Health Service of Chile will become truly unified and national. Great Britain has only a partial National Health Service. It does cover the entire population, but fails to meet the crucial criterion for a national health service, namely, that all health workers are government employees and all care is provided in government hospitals and health centers. In Great Britain this is largely true for the hospital services, but ambulatory care is given primarily by general practitioners working singly or in small partnerships in their own premises; there is a contractual rather than an employer-employee relationship, with payment by capitation fees instead of salaries. The British NHS nationalized the hospitals, but it took over almost intact the archaic national health insurance system for general practitioner services. It will not become a complete national health service until ambulatory care is thoroughly reorganized to have services provided in community health centers by salaried physicians and other salaried personnel who practice together as a team. It must be added, also, that it will not fulfill its promise as a national health service until the markedly subordinate role of occupational health services, screening for early detection of disease, and other aspects of preventive medicine is corrected.
5. The archaic system of fee-for-service solo practice and independent hospitals has been strengthened by the influx of public funds. There has been not the slightest change toward an organized system of health services based on regional networks of hospitals and health centers; 6. Administration has been by a public-private partnership between the Social Security Administration and private health insurance agencies. Local, state and federal health departments have been excluded because Medicare is considered to be a financing program instead of a health program. This is consistent with the inherent emphasis in national health insurance on paying bills rather than providing services.
The intrinsic flaws in national health insurance of the North American type cannot, in our opinion, be eliminated by tinkering. Government regulation, designed to bring some order out of the chaos, has proved ineffective in containing costs while increasing paperwork and bureaucracy. Health Systems Agencies with powerful representation of the providers can hardly be expected to plan effectively against providers' interests. The gentle pressure for group practice exerted in the Health Security Bill through financial incentives appears inadequate to the task. None of these approaches get to the heart of the matter, namely the need for reorganizing the nation's health services to meet the needs of the public instead of the providers. The only way this can be done, we are convinced, is by establishing a national health service.
National Health Insurance in the United States A National Health Service In any discussion of perspectives in the United States, it must be recognized that the national health insurance system that is being offered-and this is true of every health insurance bill before the Congress-is one in which fee-forservice solo practice will be dominant and hospitals will remain independent. As supporters of national health insurance for the past 40 years, the authors have become convinced that such a system will not be effective in meeting the nation's health needs. This conclusion does not result from theoretical or academic considerations, but from the disillusioning experience with voluntary health insurance and with more than a decade of national health insurance for the aged, namely Medicare. The Medicare program has a number of fatal flaws, all of which are inherent in fee-for-service national health insurance: 1. There has been a rapid escalation of costs, accompanied by extraordinarily high incomes of practitioners; 2. Concomitantly, the aged have suffered larger premiums, cuts in covered services, and greater out-of-pocket costs. In 1975, Medicare covered only about two-fifths of the total medical costs of the aged;4 3. There has been a further commercialization and corruption of the medical profession;5 4. Members of other health professions, such as physical and occupational therapists, have been enabled by Medi1 184
The entire population of the United States will be included in a national health service. All health services for prevention, diagnosis, treatment, and rehabilitation will be phased into the program in an orderly fashion. In order to make up for the deficiencies caused by past and present neglect, considerable emphasis will be placed on preventive, dental, mental, and long-term services. Care will be given primarily in community health centers providing team practice by salaried general and specialist physicians, dentists, nurses, laboratory workers, nutritionists, psychologists, public health nurses, and other members of the health care team. These centers will be established in all communities and neighborhoods, with first priorities going to underserved rural and urban areas. They will be linked to hospitals and medical schools in regional networks which will not only provide for referral of patients to the major medical centers but also for extensive educational and technical assistance by the latter to the smaller centers. Regionalization will become a reality instead of a hope. Administration throughout will be by health departments responsible for all preventive and therapeutic services. There will be a federal Department of Health with cabinet status, working through its regional offices with the state health departments. The latter, in turn, will have regional AJPH December 1977, Vol. 67, No. 12
COMMENTARIES
and district health departments. Democratic control of the health services will be augmented by the provision that every health department and health facility will be responsible to a governing board of which two-thirds represent the people being served and one-third represents the health workers providing the service. The quality of services will be greatly improved by team practice, regional coordination, peer review, a vast expansion of continuing education, and the development of a spirit of service to the people of the community and responsibility for maintaining their health. As the Committee for a National Health Service has pointed out,6 "The keystone of the national health service will be the promotion of health and prevention of disease. At every level there will be strong divisions of disease prevention in the health departments which will take all available measures for the prevention and control of infectious diseases; noninfectious diseases such as heart disease, high blood pressure, cancer, stroke, chronic bronchitis, cirrhosis of the liver, and dental caries; and occupational and environmental disease and injuries. The community health centers will promote health by educating people about the need for adequate sleep, rest, recreation, exercise, and nutrition. They will develop strong preventive programs, including: (1) all recommended immunization procedures; (2) health education on smoking, drinking, and other injurious habits as well as occupational and other environmental hazards; and (3) screening using blood pressure, Pap smears, breast examinations, and other methods for early detection of treatable disease, with thorough follow-up to make certain that the needed treatment is taken. Priority in research will be given to prevention, with special attention to community, occupational, and other environmental causes of disease and injury. "
'regressive' in that they extract a higher percentage of total income from individuals who can least afford it. "8 The vaunted stability of social security financing3 appears to be illusory. As the Times stated in May of this year, "The Social Security system is well on its way to going broke. Payments to beneficiaries have exceeded revenues since 1975, and this year the deficit may reach $5.6 billion. According to recent estimates, reserves set aside to pay disability claims will be exhausted in two years; reserves for old age retirement will be gone in six.' 8 There is perhaps some truth in the concept that health insurance payments earn entitlement to benefits as a right. Under the Health Security Bill, however, the worker will earn only 15 per cent of his benefits as a right for which he has paid through social security taxes; he earns the rest by paying general taxes (50 percent), and by paying increased prices or receiving lower wages to cover employer contributions (35 percent).3 In any case, shouldn't it be possible for individuals to earn their entitlement by paying more equitable taxes based on ability to pay?
Conclusion
Financing
The United States cannot afford the luxury of adopting the antiquated nineteenth-century European health insurance schemes as the model for its health services. Experience with voluntary insurance and with Medicare has demonstrated that fee-for-service health insurance is incompatible with reasonable cost, improved quality, and rational organization of health services, or even with the effective avoidance of financial hardship due to illness. Only a national health service, equitably financed, can take full advantage of the tremendous medical resources of our nation, make comprehensive health centers, regionalization, and the primacy of prevention fully realizable, and raise to new heights the quality of our health services and the level of the people's health.
The methods of financing a national health service-or, for that matter, national health insurance-are in fact a secondary issue. It is not uncommon for national health services to use social insurance as well as other tax funds, although in only two countries (Great Britain and the German Democratic Republic) are there employee contributions. Also, the fact that Canada, at the very inception of national health insurance, chose to use primarily general revenues, indicates that a variety of approaches to financing is possible in either health insurance or a health service. There are disadvantages in social security financing, and this is why supporters of the Health Security Bill insisted on increasing the share of general revenues to 50 percent. Social Security is, as one writer has stated, starkly regressive; a wage earner with an annual income of $16,500 or less pays a tax of 5.85 per cent, while the tax for an executive earning $100,000 amounts to less than 1 per cent of total earnings.7 As The New York Times has editorialized, "Payroll taxes are
1. Kaser, M. Health Care in the Soviet Union and Eastern Europe. Boulder, CO: Westview Press, 1976. 2. U.S. Dept. of Health, Education, and Welfare, Social Security Administration. Social Security Programs throughout the World, 1975. Washington, DC: U.S. Govt. Printing Office, 1975. 3. Roemer, M. I. and Axelrod, S. J. A national health service and social security. Commentary, Am. J. Public Health 67:462-465, 1977. 4. Gornick, M. Ten years of Medicare: Impact on the covered population. Soc. Sec. Bull. 39:3-21, 1976. 5. Holles, E. R. Coast Doctors Facing Medicare-Fraud Indictments. New York Times, Dec. 16, 1976. 6. Committee for a National Health Service. A National Health Service: Why? How? G.P.O. Box 2125, New York, NY 10001, June 1977. 7. Letter to the Editor, New York Times, from Jack M. Elkin, senior vice president and chief actuary, Martin E. Segal Company, May 17, 1977. 8. Patching up Social Security, New York Times editorial, May 15, 1977.
AJPH December 1977, Vol. 67, No. 12
REFERENCES
1185
The Case for a National Health Service MILTON TERRIS, MD, PAUL B. CORNELY, MD, HENRY C. DANIELS, AND LORIN E. KERR, MD
The concepts of "national health insurance" and "national health service" are subject to a great deal of confusion and misunderstanding. Any discussion of their strengths and weaknesses will founder unless it is based on a clear delineation of their essential features and the basic differences between them.
Criteria of a National Health Service The crucial feature of a national health service is that all health workers are government employees, and that all care is provided in government hospitals and health centers. A national health service, by definition, covers the whole population. Although financing is mainly by general revenues, health insurance funds are also used in a number of countries.1 At this point we encounter a confusing fact. If health insurance funds can be used to help finance a national health service, then what is the difference between the two?
National Health Insurance in North America In Canada and the United States, the crucial feature of national health insurance is that the health providers, whether professional or institutional, are independent entrepreneurs who enter into a contractual arrangement with the government to provide services. Both in the national health insurance program operating in Canada, and in every national health insurance bill in the United States Congress, the right of physicians and other professionals to be paid by fee-forservice is assured. This is the dominant mode of payment in
Address reprint requests to Dr. Milton Terris, Professor and Chairman, Department of Community & Preventive Medicine, New York Medical College, Fifth Avenue at 106th Street, New York, NY 10029. Dr. Comely is with System Sciences, Inc.; Mr. Daniels is retired from the position of Administrative Officer, Health Services, UMWA Health & Retirement Funds; and Dr. Kerr is Director, Department of Occupational Health, UMWA. This paper was submitted to the Journal and accepted for publication on September 16, 1977.
AJPH December 1977, Vol. 67, No. 12
Canada, and will unquestionably be the dominant mode of payment in the United States. Furthermore, the mode of practice in Canada and the United States is primarily solo practice; this has not been changed in Canada by national health insurance. If the crucial feature of national health insurance is the relation of government to providers, and not the mode of financing, then we are not surprised to find that Canada's national health insurance program is financed primarily from general federal and provincial revenues.2 In the United States, the Kennedy-Corman Health Security Bill (H.R. 21 and S.3) divides the cost of the health insurance program equally between social security taxes and general reve-
nues.3
Other Health Insurance Patterns There are other national health insurance patterns that are the result of historical developments which are quite different from those of the United States and Canada. In the
Scandinavian countries, for example, public hospital services for the whole population have been provided through general revenues independently of national health insurance. It is characteristic of national health insurance that it uses the resources that are available; in these countries physicians' services outside the public hospitals have been purchased by the insurance program largely on a fee-for-service basis.
When there are very few resources available, as is common in non-industrialized countries, the national health insurance system has to create its own services, building hospitals and health centers and employing salaried physicians and other health personnel to serve the covered population. Spain, Portugal, Chile, Mexico, Costa Rica, and Turkey are among the countries with such programs. As a result, these countries are in an excellent position to move to a national health service for the whole population. In 1952, Chile took the first initiative in this direction by combining into a unified National Health Service the polyclinics and hospitals of the social security system for blue collar workers, the government hospitals and clinics for the needy, and the public health services of the Ministry of Health. 1183
COMMENTARIES
Partial National Health Services
care to leave the hospitals where they are badly needed and to develop highly lucrative private practices;
The term "National Health Service" is not always used accurately. Chile's NHS covers an estimated 70 to 75 per cent of the population; most of the remainder are in a fee-forservice insurance program for white collar workers. There can be little doubt that sooner or later the National Health Service of Chile will become truly unified and national. Great Britain has only a partial National Health Service. It does cover the entire population, but fails to meet the crucial criterion for a national health service, namely, that all health workers are government employees and all care is provided in government hospitals and health centers. In Great Britain this is largely true for the hospital services, but ambulatory care is given primarily by general practitioners working singly or in small partnerships in their own premises; there is a contractual rather than an employer-employee relationship, with payment by capitation fees instead of salaries. The British NHS nationalized the hospitals, but it took over almost intact the archaic national health insurance system for general practitioner services. It will not become a complete national health service until ambulatory care is thoroughly reorganized to have services provided in community health centers by salaried physicians and other salaried personnel who practice together as a team. It must be added, also, that it will not fulfill its promise as a national health service until the markedly subordinate role of occupational health services, screening for early detection of disease, and other aspects of preventive medicine is corrected.
5. The archaic system of fee-for-service solo practice and independent hospitals has been strengthened by the influx of public funds. There has been not the slightest change toward an organized system of health services based on regional networks of hospitals and health centers; 6. Administration has been by a public-private partnership between the Social Security Administration and private health insurance agencies. Local, state and federal health departments have been excluded because Medicare is considered to be a financing program instead of a health program. This is consistent with the inherent emphasis in national health insurance on paying bills rather than providing services.
The intrinsic flaws in national health insurance of the North American type cannot, in our opinion, be eliminated by tinkering. Government regulation, designed to bring some order out of the chaos, has proved ineffective in containing costs while increasing paperwork and bureaucracy. Health Systems Agencies with powerful representation of the providers can hardly be expected to plan effectively against providers' interests. The gentle pressure for group practice exerted in the Health Security Bill through financial incentives appears inadequate to the task. None of these approaches get to the heart of the matter, namely the need for reorganizing the nation's health services to meet the needs of the public instead of the providers. The only way this can be done, we are convinced, is by establishing a national health service.
National Health Insurance in the United States A National Health Service In any discussion of perspectives in the United States, it must be recognized that the national health insurance system that is being offered-and this is true of every health insurance bill before the Congress-is one in which fee-forservice solo practice will be dominant and hospitals will remain independent. As supporters of national health insurance for the past 40 years, the authors have become convinced that such a system will not be effective in meeting the nation's health needs. This conclusion does not result from theoretical or academic considerations, but from the disillusioning experience with voluntary health insurance and with more than a decade of national health insurance for the aged, namely Medicare. The Medicare program has a number of fatal flaws, all of which are inherent in fee-for-service national health insurance: 1. There has been a rapid escalation of costs, accompanied by extraordinarily high incomes of practitioners; 2. Concomitantly, the aged have suffered larger premiums, cuts in covered services, and greater out-of-pocket costs. In 1975, Medicare covered only about two-fifths of the total medical costs of the aged;4 3. There has been a further commercialization and corruption of the medical profession;5 4. Members of other health professions, such as physical and occupational therapists, have been enabled by Medi1 184
The entire population of the United States will be included in a national health service. All health services for prevention, diagnosis, treatment, and rehabilitation will be phased into the program in an orderly fashion. In order to make up for the deficiencies caused by past and present neglect, considerable emphasis will be placed on preventive, dental, mental, and long-term services. Care will be given primarily in community health centers providing team practice by salaried general and specialist physicians, dentists, nurses, laboratory workers, nutritionists, psychologists, public health nurses, and other members of the health care team. These centers will be established in all communities and neighborhoods, with first priorities going to underserved rural and urban areas. They will be linked to hospitals and medical schools in regional networks which will not only provide for referral of patients to the major medical centers but also for extensive educational and technical assistance by the latter to the smaller centers. Regionalization will become a reality instead of a hope. Administration throughout will be by health departments responsible for all preventive and therapeutic services. There will be a federal Department of Health with cabinet status, working through its regional offices with the state health departments. The latter, in turn, will have regional AJPH December 1977, Vol. 67, No. 12
COMMENTARIES
and district health departments. Democratic control of the health services will be augmented by the provision that every health department and health facility will be responsible to a governing board of which two-thirds represent the people being served and one-third represents the health workers providing the service. The quality of services will be greatly improved by team practice, regional coordination, peer review, a vast expansion of continuing education, and the development of a spirit of service to the people of the community and responsibility for maintaining their health. As the Committee for a National Health Service has pointed out,6 "The keystone of the national health service will be the promotion of health and prevention of disease. At every level there will be strong divisions of disease prevention in the health departments which will take all available measures for the prevention and control of infectious diseases; noninfectious diseases such as heart disease, high blood pressure, cancer, stroke, chronic bronchitis, cirrhosis of the liver, and dental caries; and occupational and environmental disease and injuries. The community health centers will promote health by educating people about the need for adequate sleep, rest, recreation, exercise, and nutrition. They will develop strong preventive programs, including: (1) all recommended immunization procedures; (2) health education on smoking, drinking, and other injurious habits as well as occupational and other environmental hazards; and (3) screening using blood pressure, Pap smears, breast examinations, and other methods for early detection of treatable disease, with thorough follow-up to make certain that the needed treatment is taken. Priority in research will be given to prevention, with special attention to community, occupational, and other environmental causes of disease and injury. "
'regressive' in that they extract a higher percentage of total income from individuals who can least afford it. "8 The vaunted stability of social security financing3 appears to be illusory. As the Times stated in May of this year, "The Social Security system is well on its way to going broke. Payments to beneficiaries have exceeded revenues since 1975, and this year the deficit may reach $5.6 billion. According to recent estimates, reserves set aside to pay disability claims will be exhausted in two years; reserves for old age retirement will be gone in six.' 8 There is perhaps some truth in the concept that health insurance payments earn entitlement to benefits as a right. Under the Health Security Bill, however, the worker will earn only 15 per cent of his benefits as a right for which he has paid through social security taxes; he earns the rest by paying general taxes (50 percent), and by paying increased prices or receiving lower wages to cover employer contributions (35 percent).3 In any case, shouldn't it be possible for individuals to earn their entitlement by paying more equitable taxes based on ability to pay?
Conclusion
Financing
The United States cannot afford the luxury of adopting the antiquated nineteenth-century European health insurance schemes as the model for its health services. Experience with voluntary insurance and with Medicare has demonstrated that fee-for-service health insurance is incompatible with reasonable cost, improved quality, and rational organization of health services, or even with the effective avoidance of financial hardship due to illness. Only a national health service, equitably financed, can take full advantage of the tremendous medical resources of our nation, make comprehensive health centers, regionalization, and the primacy of prevention fully realizable, and raise to new heights the quality of our health services and the level of the people's health.
The methods of financing a national health service-or, for that matter, national health insurance-are in fact a secondary issue. It is not uncommon for national health services to use social insurance as well as other tax funds, although in only two countries (Great Britain and the German Democratic Republic) are there employee contributions. Also, the fact that Canada, at the very inception of national health insurance, chose to use primarily general revenues, indicates that a variety of approaches to financing is possible in either health insurance or a health service. There are disadvantages in social security financing, and this is why supporters of the Health Security Bill insisted on increasing the share of general revenues to 50 percent. Social Security is, as one writer has stated, starkly regressive; a wage earner with an annual income of $16,500 or less pays a tax of 5.85 per cent, while the tax for an executive earning $100,000 amounts to less than 1 per cent of total earnings.7 As The New York Times has editorialized, "Payroll taxes are
1. Kaser, M. Health Care in the Soviet Union and Eastern Europe. Boulder, CO: Westview Press, 1976. 2. U.S. Dept. of Health, Education, and Welfare, Social Security Administration. Social Security Programs throughout the World, 1975. Washington, DC: U.S. Govt. Printing Office, 1975. 3. Roemer, M. I. and Axelrod, S. J. A national health service and social security. Commentary, Am. J. Public Health 67:462-465, 1977. 4. Gornick, M. Ten years of Medicare: Impact on the covered population. Soc. Sec. Bull. 39:3-21, 1976. 5. Holles, E. R. Coast Doctors Facing Medicare-Fraud Indictments. New York Times, Dec. 16, 1976. 6. Committee for a National Health Service. A National Health Service: Why? How? G.P.O. Box 2125, New York, NY 10001, June 1977. 7. Letter to the Editor, New York Times, from Jack M. Elkin, senior vice president and chief actuary, Martin E. Segal Company, May 17, 1977. 8. Patching up Social Security, New York Times editorial, May 15, 1977.
AJPH December 1977, Vol. 67, No. 12
REFERENCES
1185
