Britain's NHS: An American view

By David U. Himmelstein and Steffie Woolhandler
The Lancet (U.K.), July 4, 1998

Demons are useful. The NHS as Lucifer used to lurk at the fringe of US health policy, shielding us from the evil of "socialised medicine". Even an American physician whose list of British prime ministers would stop after Churchill could recite chapter and verse of NHS horrors: no-one over 50 could be dialysed, hospitals had long since crumbled, doctors were nearly starving, government dictated examining-room decisions, and the waiting-list for obstetric care stretched to 10 months.

Today it is hard to sustain this Manichean view. By most measures Britain's health outcomes have surpassed those of the United States; hence the curiously widespread endorsement by US physicians of Thomas McKeown's thesis that good medical care has no perceptible impact on health. British colleagues commonly encountered, widely respected, and apparently well-fed-seem oddly reluctant to renounce the NHS and convert to the American worship of market-driven care. And US examining rooms have been invaded by bureaucrats sent not by government but by corporate "big brothers".

Lately, the madness of our medical market has driven even solidly Republican US physicians to question antigovernment dogma and Wall Street's greed-is-good approach to health reform. Physicians face pressure to shun the sick, who have been made unprofitable by new financial arrangements that penalise their doctors (and the hospitals and clinics which employ them). A university hospital chief has admonished faculty: "[We can] no longer tolerate patients with complex and expensive-to-treat conditions being encouraged to transfer to our group". In one health maintenance organisation the "primary care physician of the month" for July, 1997, had been fired by the autumn after he accumulated sick and expensive patients.

20 years ago doctors' hallway conversations turned to interesting cases, recent journals, or football. Now financial matters dominate discussion. Financial acumen is the main criterion for clinical leadership. Office practice is conducted amidst a blizzard of HMO paperwork. Physicians pine for a kinder and simpler practice, unencumbered by business. Income aside, life in the NHS no longer looks bad.

Meanwhile, US news media feature a torrent of patients' complaints of care denied or delayed. The main outcry now emanates, not from the 42 million medically uninsured, but from the middle and upper classes whose insurers refuse payment, citing loopholes in contracts. Remote executives close vital community health services, devoting the savings not to more pressing health needs but to shareholders' profits. Hospital chains' profits reach $100 per patient per day, and one HMO entrepreneur has netted $990 million in a takeover deal.

Even the vaunted efficiencies of the market have failed to appear. Health costs and uninsurance are both on the rise again even as bureaucracy mushrooms, recalling Charles Dickens' tale of six poor travellers relegated to outbuildings when the hostel built for them was fully occupied by its charitable administrators. ". . . a thirtieth part of the annual revenue was now expended on the purposes commemorated in the inscription over the door; the rest being handsomely laid out in Chancery, law expenses, collectorship, receivership, poundage, and other appendages of management." For-profit hospitals are more expensive and less efficient at most everything except billing and public relations. HMOs contracting with the government Medicare programme for the elderly have actually raised costs; plans compete to recruit healthy patients, who bring hefty premiums paid from the public purse, while avoiding (and even evicting) the sick.

Mired in our own market-driven health-policy disaster it is hard for Americans to fathom the recent British flirtation with market medicine. Margaret Thatcher's reliance on the health-policy advice of a Vietnam-era Pentagon war planner adds to our disquiet. Disclaimers that it would be just tiny doses of competition, not US toxic levels, underestimate the market's erosive, self-expanding power. Predictably, the UK's first step was to hire legions of administrators charged with assembling a paper financial replica of medicine. This monetarisation of care is the precondition for turning care into a commodity, not for greater service efficiency. The reproduction of every clinical act in shadow form on paper creates the instrument needed for remote control of the clinical encounter. Separating medicine's brain from its hand, dividing concept and control from day-today work at the bedside, creates a recognisably corporate organisation. Public officials, under the umbrella of public accountability, claim the new executive prerogatives. The concepts of care, comfort, and collegiality appear fuzzy next to the seductively precise financial accounts. Soon, only quantities are allowed into management discourse; care must be reduced to throughput, comfort to QALYs, colleagues to their credentials. As one HMO chief put it, "It doesn't count unless you can count it". Once medicine is reorganised as a business, businessmen are the logical leadership. The splintering of the NHS into competing units creates bite-sized chunks amenable to sale.

Competition implies reward for winners (and punishment, even extinction, for losers), based on quantitative measures of success. Unfortunately, tying financial reward to good work is harder than theorists portray. Cheating is a sure winner when doctors and hospitals create the data that must be used to judge them. Too often, those who fail to cheat are driven from the market. For the largest hospital chain in the US, the secrets of success apparently included exaggerating the severity of patients' illnesses (thereby boosting revenues and creating the appearance of good outcomes), filling wards by rewarding doctors for referrals, and falsifying bills. The second largest virtually kidnapped psychiatric patients to fill beds. Venal hospices sign up non-terminal patients. Meanwhile, competition drives not-for-profit hospitals to curtail money-losers like research, teaching, and charity, or face bankruptcy. Can Britain's medical competition be immunised against such perverted incentives?

To us it looks like the NHS' main problem is a small budget, a disabling constraint despite the British knack for great accomplishment with sparse resources. (The Spice Girls, much admired by our schoolgirl daughters, perhaps exemplify this knack, having manufactured extravagant success from meagre talent.) The $1300 (English pound 800) spent per head in the UK on NHS medical services in 1996 was only one-third of US spending and not much more than the US dissipated for healthcare administration and profits alone. Such underfunding of the NHS is tolerated, even encouraged, because the affluent can exit to private care. A lifeboat shared by rich and poor is likely to be better maintained than one intended only for passengers in steerage.

Seen from New England, the NHS seems--despite many shortcomings--fundamentally efficient, competent and caring, a testament to the advantages of solidarity and cooperation. Marketeers offer tempting promises of effectiveness and efficiency but pave the path towards American-style Satanic vices.