Posted on June 1, 2004

Feachem's Kaiser study not credible


Feachem’s Kaiser study not credible

British Journal of General Practice
June 2004
Questioning the claims from Kaiser
By Alison Talbot-Smith, Shamini Gnani, Allyson M Pollock and Denis Pereira Gray


Background: The article by Feachem et al, published in the BMJ in 2002, claimed to show that, compared with the United Kingdom (UK) National Health Service (NHS), the Kaiser Permanente healthcare system in the United States (US) has similar healthcare costs per capita, and performance that is considerably better in certain respects.

Aim: To assess the accuracy of Feachem et al’s comparison and conclusions.

Method: Detailed re-examination of the data and methods used and consideration of the 82 letters responding to the article.

Results: Analyses revealed four main areas in which Feachem et al’s methodology was flawed. Firstly, the populations of patients served by Kaiser Permanente and by the NHS are fundamentally different. Kaiser’s patients are mainly employed, significantly younger, and significantly less socially deprived and so are healthier. Feachem et al fail to adjust adequately for these factors. Secondly, Feachem et al have wrongly inflated NHS costs by omitting substantial user charges payable by Kaiser members for care, excluding the costs of marketing and administration, and deducting the surplus from Kaiser’s costs while underestimating the capital charge element of the NHS budget and other costs. They also used two methods of converting currency, the currency rate and a health purchasing power parity conversion. This is double counting. Feachem et al reported that NHS costs were 10% less per head than Kaiser. Correcting for the double currency conversion gives the NHS a 40% cost advantage such that per capita costs are $1161 and $1951 for the NHS and Kaiser, respectively. Thirdly, Feachem et al use non-standardised data for NHS bed days from the Organisation for Economic Cooperation and Development, rather than official Department of Health bed availability and activity statistics for England. Leaving aside the non-comparability of the population and lack of standardisation of the data, the result is to inflate NHS acute bed use and underestimate the efficiency of performance by at least 10%. Similar criticisms apply to their selective use of performance measures. Finally, Feachem et al claim that Kaiser is a more integrated system than the NHS. The NHS provides health care to around 60 million people free at the point of delivery, long-term and psychiatric care, and continuing care after 100 days whereas Kaiser provides care to 6 million people, mainly employed and privately insured. Important functions, such as health protection, education and training of healthcare professionals, and research and development are not included or properly costed in Feachem et al’s integrated model.

Conclusion: We have re-examined the statements made by Feachem et al and show that the claims are unsupported by the evidence. The NHS is not similar to Kaiser in coverage, costs or performance.

JAN. 17, 2002
NHS ‘worse value than US provider’

Professor Richard Feachem:

“If an NHS patient moved to Kaiser they would be delighted with the experience, and if a Kaiser patient moved to the NHS they would be horrified.”

Comment: The 2002 BMJ article by Richard Feachem et al has been cited frequently as proof that an American HMO is superior to the British National Health Service. 82 letters were published in response to the BMJ article, all challenging the validity of Feachem’s conclusions.

This article by Alison Talbot-Smith et al provides a definitive compilation and analysis of the criticisms of Feachem’s article. There is now absolutely no doubt that Feachem’s claims are not supported by the evidence.

The opponents of public models of reform likely will continue to cite Feachem’s work as proof that private HMOs are superior to publicly administered or publicly owned models of health care funding and delivery (even though this is an unwarranted extrapolation of his invalid conclusions). But with the publication of Talbot-Smith’s definitive critique, anyone who continues to use Feachem’s study to advance his or her arguments can be summarily dismissed as not being a credible voice in the debate.


Message: 2
Date: Sat, 29 May 2004 11:42:19 -0700
Subject: qotd: Judy Feder on single payer HealthCast
Policy Options To Expand Health Insurance Coverage Lauren Leroy: …a recent report that was published by the Institute of Medicine called “Insuring America’s Health” … set out a set of principals that any proposal or any policy that would be adopted to provide insurance coverage should meet. And those include coverage that is universal, continuous, affordable to individuals and society, sustainable, and offers access to high quality care. …which of the options of the proposals do you think best meet these criteria?

Judy Feder, dean of policy studies at Georgetown University: I think that the criteria that the Institute of Medicine has laid out are certainly the right ones for evaluating our health care system, but they are one mean feat for any kind of political proposal. And because Lauren asked me to keep the answers short, and because I am an honest woman, whatever one’s politics, the only thing that comes close to meeting all these criteria I would say would be a single payer system. It could be Medicare for all, but it would be substantially improved benefits than Medicare now offers evenwith the new drug benefit. So if you really are going to hold yourselves to those criteria, you don’t have a lot of choices…

And later…

Lauren Leroy:
…what have you learned about what are the critical messages that might convince the us, the 85% who are insured about the value of covering them, the 15%, to shift political will a bit?…

Judy Feder:
…What I believe is to start where the questioner asked about what is in it for me who has insurance. And we do need more stability. We do want lower costs. We do want to know that our coverage will be secure for us. And there are policy proposals that do make coverage more affordable and more secure for those of us who have it at the same time that we bring in other people. And I think being explicit about that is fine. I think that it is - and I am persuaded by others who have been making this argument longer than I - I think that we have to be willing to mobilize people around what’s the right thing to do. And what kind of a society do we want to live in? And I think that if we avoid that question and try to con people into “it’ll be okay,”

we’re not going to get from here to there. And so I would urge everybody, if you believe that, to start saying it and to say it loud and often and to tell elected officials you are willing to pool your resources to make that possible.

Comment: …start saying it and say it loud and often…