Right Turn for British Health Care
Obama has never been shy about admitting his preference for the British single payer NHS system. The Brits though look ready to abandon the model.
When he was a Senator, President Obama was never shy about expressing his preference for a single payer healthcare plan, similar to that in Great Britain. Dr. Berwick, the administrator of the Medicare program, has also stated his admiration for the British system. Yet even as the Democrats look to push such ideas stateside, the Brits are getting ready to abandon that model.
Today we hear from Great Britain that (for the tenth or twelfth time in the last couple of decades) the National Health Service is undergoing a reform. This time, though it really sounds like the Brits are going to change.
In the past, I've pointed out that nations with a centralized, government controlled healthcare system are struggling with many of the same problems that the United States faces including rapidly escalating costs. Additionally, they also have some major quality issues including long waits, poor access to specialists, and, particularly in the case of Great Britain, truly terrible outcomes for conditions such as breast cancer.
This is not the first time the Brits have lurched to the right. In 2006, here is what the New England Journal of Medicine wrote about that year’s healthcare reform effort:
Their (new) trinitarian model — competition, patients' choice, and payment by results — is based on the assumption that the interaction of the three elements will produce the dynamism required for greater efficiency and responsiveness
That effort failed, mostly because it was still a centrally run government organization and despite what you have heard from our 111th Congress, that really does not work that well.
What is the new plan? Here is the view from Nicholas Timmins of the Financial Times:
It will, in effect, turn the NHS from what is still, broadly, a directly managed system of healthcare into something much more like a regulated industry of competing providers – and one over which the secretary of state will no longer have day-to-day control.
The goal of the new reform is to try to inject market forces into the National Health Service system. For example, if groups of primary care doctors, the new controllers of the system, are found to be inefficient or to have poor quality, they could become ineligible for further participation in the system.
“…. that also means they can fail,” Mr Nigel Edwards, acting chief executive of the NHS Confederation. says. “There will have to be an element of Joseph Schumpeter’s ‘creative destruction’.”
The lesson here is that those Americans who favor a single payer system like Medicare but transformed with more central controls, dictated treatment plans, and defined insurance coverage must realize that this model has failed miserably. Moreover, it is likely that the new British model will also fail to control costs and improve efficiency and quality. While they may be able to measure some aspects of outcome and somehow reimburse on that basis, because the new model does not put either physicians or patients at any economic risk, “market forces” will not really pertain. Whatever, the results of the latest iteration of reform, the dream of the single payer endgame is now a British nightmare and headed for the “dustbin of history”.
If there is one critical economic principle missing from Obamacare, it is any hint of competition between providers for patients’ allegiance and payments, or patients’ impetus to find the most cost effective care in return for their own money. Without these elements as central features of a healthcare system, our system will likely face the same fate as the National Health Service.
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