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The U.K Health System: A Rorschach Test For U.S. Reporting

March 31st, 2008

Editor’s Note: This post was written by several of the 2007-08 Commonwealth Fund Harkness Fellows. These fellowships allow mid-career health services researchers and practitioners from Australia, Germany, the Netherlands, New Zealand, and the United Kingdom to spend up to 12 months in the United States, conducting original research and working with leading U.S. health policy experts. The lead authors of the post are Richard Gleave and Geraint Lewis. Additional authors include Kalipso Chalkidou, Andreas Gerber, Ruth McDonald, and Rhema Vaithianathan.

A recent article in the New York Times (“Paying Patients Test British Health Care System,” 21 February 2008) demonstrated a bias in the reporting of an international health care issue. The article focused on the case of a terminally ill woman in England who was prevented from paying privately for a high-cost cancer drug (Avastin) whilst she was being treated by the National Health Service (NHS).

The article broached three separate issues: (1) access to expensive drugs and technologies; (2) cost-effectiveness evaluation of new drugs and technologies; and (3) private top-up within public health care provision [supplementing publicly provided services with private services paid for out of pocket]. Each of these topics is relevant to the health care reform debate in the United States, but the way in which the article confounded the three distorted the issues.

Access to expensive health care technologies. The article insinuates that the patient fared worse in the U.K. than she would have done in the U.S., but this inference is not justified. Almost exactly two years earlier, the same newspaper published an article highlighting the difficulties that many Americans face in trying to obtain the exact same drug (“A Cancer Drug Shows Promise, at a Price That Many Can’t Pay,”  15 February 2006). This earlier article reported warnings from American doctors that “some cancer patients are already being priced out of the Avastin market … because out-of-pocket co-payments for the drug could easily run $10,000 to $20,000 a year.”

Money is a far more significant barrier to receiving health care in the U.S. than it is in the U.K. A survey by the Commonwealth Fund published in Health Affairs in November 2007, Toward Higher-Performance Health Systems: Adults’ Health Care Experiences in Seven Countries, reported that 37 percent of U.S. adults were hindered from accessing health care due to financial reasons, compared to 8 percent in the U.K. The survey showed that 50 percent of adults in the U.K. had no out-of-pocket expenses in the past year, compared to 10 percent in the U.S.

A recent Kaiser Family Foundation survey showed that a high proportion of Americans faced particular financial problems in having access to prescription medicines. It reported that three in ten (29%) say that in the last two years, they have not filled a prescription because of the cost, and nearly a quarter (23%) say they have cut pills in half or skipped doses in order to make a medication last longer. Four in ten report at least one of these three problems (a serious problem paying for drugs, not filling a prescription because of cost, and/or skipping doses in the past two years).

In contrast, another February 2008 survey found that only 2 percent of Britons said that they failed to fill a prescription because of copayments. Many Americans have insurance policies that require large copayments or that limit coverage for certain conditions and treatments. The Commonwealth Fund survey found that 30 percent of patients in the U.S. had expenses of over $1,000, compared with 4 percent of patients in the U.K. (the latter being patients who chose to have private rather than NHS treatment).

Of course, the problem of access is worst of all among the 80 million Americans who go without insurance coverage at some point during each year. No patients in the U.K. are precluded from accessing essential health care on the basis of cost, since the NHS provides comprehensive free universal care.

Cost-effectiveness evaluation of new technologies. The second issue that the article raised is how to make decisions about the coverage of high-cost new health technologies. Unlike the U.S., the U.K. has adopted an objective and systematic approach to making these decisions. In England and Wales, new medical technologies are referred to the National Institute for Health and Clinical Effectiveness (NICE), which makes decisions on whether they should be recommended for use in the NHS based on their cost per quality-adjusted life-year (QALY) compared to the next-best alternative. Technologies costing more than £30,000 per QALY are usually deemed to be unaffordable within the NHS. This threshold is far too low (i.e., leads to too many rejections) according the pharmaceutical industry, and it is too high according to a recent House of Commons multiparty Health Select Committee enquiry. While the NICE value threshold is a matter for debate and further research, the New York Times article presented no evidence about the cost-effectiveness of Avastin compared to other alternatives. Nor did it mention the concept of “opportunity cost” — what else could be bought with the money that would otherwise be spent on Avastin? And what would be the health benefit forgone for other patients who would have to go without treatment if Avastin (a technology of unproven value for money — we can say that much) was to be covered by the NHS?

Private top-up of public provision. The third issue tackled by the article is whether people should be allowed to pay privately to supplement publicly funded health care provision. Again, this is a genuine issue for debate. The U.K. rules about top-ups are currently inconsistent and complicated, and whilst we are not defending this state of affairs, we argue that there are no easy answers to this dilemma.

U.S. health care, a high priority is placed on choice of treatments and providers, so out-of-pocket top-up payments for specific drugs are the norm. However, even amongst insured Americans, many patients cannot afford to make such choices because the cost of copayments is so high. In England there are no deductibles, nor are there any copayments for visits, diagnostics, inpatient spells, or treatments. Adults in England pay a fixed £6.75 per prescription for drugs (approx. $13.50), whilst children, the elderly, the poor, and patients with certain chronic conditions are exempt from such payments. English adults can alternatively choose to prepay £98.70 (approx. $200) for a certificate that exempts them from all prescription copayments for a twelve-month period.

Last year, the NHS in Wales scrapped all copayments for prescriptions, and in Scotland ministers have committed to ending them within four years.

The NHS places a priority on treating patients equitably. In the U.K., patients are prioritized according to their level of need rather than on their ability to pay. By choosing to be treated by the NHS (as opposed to opting for private care — approximately 10 percent of the population), patients agree to accept NHS principles and its rules regarding equity and efficiency. Top-up out-of-pocket payments conflict with the principle of equity because they create perverse priorities. Until recently, for example, waiting times for magnetic resonance imaging (MRI) for nonurgent conditions were often very long in the NHS. At first glance, it would seem reasonable to allow NHS patients the option of choosing to pay privately for an MRI scan to avoid a long wait. A problem arises, however, when these patients take back the results of their scan to the NHS. With their MRI results in hand, such patients could obtain an NHS operation earlier than patients who did not pay for an MRI. In other words, the patients who pay are being prioritized for an NHS operation not on the basis of urgency or necessity, but simply on their ability and willingness to pay for an MRI.

Another concern is that allowing top-ups will result in inflated prices across the board, by crowding out “essential” treatments from the core NHS package and by making top-ups the norm rather than the exception. This might risk transforming the NHS from a universal national health care system to a safety net for the poor — a transformation that British society apparently does not wish to make: According to an annual national survey, more than three-quarters of the British public believe that “the NHS is crucial to British society and [we] must do everything to maintain it.”

Other countries with universal health care have approached this same problem differently. For example, in New Zealand, patients face no restrictions on topping-up public provision with private care if they wish to have quicker access than provided by the public system. A patient in New Zealand can see a specialist for an initial private out patient appointment, then be put on the public waiting list for a diagnostic procedure or operation, and then return to specialist afterwards. Whilst this does undermine equity, the costs involved are fairly minimal. Also, if the person is a beneficiary (e.g., receives disability benefit or is a solo parent), he or she can ask for a top-up from the benefit system for the extra medical expenditure.

The issue of top-ups is unresolved and contentious in many countries that have universal health care. We would urge the media to address this dilemma head-on rather than clouding it with other issues.

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3 Trackbacks for “The U.K Health System: A Rorschach Test For U.S. Reporting”

  1. Farmanux News
    April 10th, 2008 at 6:04 pm
  2. Farmanux News
    April 1st, 2008 at 10:02 am
  3. Farmanux News
    April 1st, 2008 at 2:04 am

2 Responses to “The U.K Health System: A Rorschach Test For U.S. Reporting”

  1. Teodor Todhe Says:

    Few years ago (it must have been late May) I received a call from a woman speaking in my native language telling me that her husband was having hip replacement at Mount Sinai medical center in NYC. At that time I was working as analyst in the Heath Policy Department of that institution. They asked me to help them with translating and filling out few paperwork. We met the next day. I learned that the patient, 55, an electric engineer by profession, had suffered from hip arthrosis for years and could walk only few yards with a cane. They could not afford to pay for surgery in their or other neighboring countries. They told me they were in US since January of that year as permanent residents in view of a lottery visa program. Few weeks after arrival here they had applied for Medicaid and eventually got coverage. The PCP referred them to an orthopedist who recommended hip replacement at Mount Sinai Hospital. The Medicaid office of the hospital asked them to meet and go over some preparatory work during which they would be explained about the procedure and would have lab work and the clearance visit done. They needed my help to navigate that part of the system and also understand correctly what they were being told. Few days later the surgery was successful. Few months later the women called again and told me that her husband was doing very well and had found a job and she had quit her job at a McDonald and started some kind of school.

    I remember that among other things I had told them that if they were English, or Dutch or Danish, or from New Zealand, they would have to wait months, if not years, to have that type of surgery. I also told them that the intervention was done in one of the finest hospitals of the world and free of charge, a privilege that not all the Americans are entitled to. I did not elaborate further because they were not interested and did not care on policy aspects of their case and the ramifications of policies in place. Interestingly enough, the day that my fellow countryman had surgery coincided with ground rounds in our department. That day the speaker eloquently talked about Medicaid Program Running in Place and falling short of expectations.
    My point in bringing up this story is that many times we argue about unimportant issues instead of addressing the core of the problem in health reform. The above case was a live case of how effective Medicaid program perhaps in many cases is. That person’s life changed for better. He became free of pain and independent again after years of suffering. He became again an active member of society and able to provide for his family. His quality of life improved tremendously. The program did not discriminate based on ethnic, nationality, race or other and was an example of perfect equal access. The Medicaid pays less (or at least closer to the cost incurred) than any commercial plan does, and this can also be considered as a gain in efficiency. On the other hand, I am pretty sure that that Medicaid, Medicare, CHIP programs or even the employer based health insurances have lots of problems and anyone can find arguments to make the case against them. All depends on the point of view and what is being achieved by discussing such issues. On the ground rounds that day I suppressed inside me the urge to contradict the speaker based on the case. Many times skilled presenters or speakers make their case by bringing up arguments and making them colorful and palatable to the audiences often being to general. I believe, that any time we consider and try to engage in policy analysis we ought to do it along keeping in mind the true policy problem and its recognition, identification of its causes (immediate and root causes), and what would be the appropriate policy measures to remove such causes.

    Although the authors comment on the NYT article about access to health care technology in UK and USA is correct and supported by solid data, I believe that it missed that target, too. It may be true that in US people incur higher costs than in UK when they seek health care services and that may deter the demand and access. However, lack of co-payments or coinsurances does not necessarily mean that access to health care services is better in UK. In all countries with nationalized health systems people may not pay any money but long waiting times for health care procedures denote poor access that ultimately affects health status and quality of life of people in similar way like co-payments or high deductibles do in US system. Again comparing which system generates higher welfare loss is difficult and arguable and at the moment not as important as recognizing it as a problem. It may be true that the resentment of Britons waiting months for hip replacements, cataract surgery, or other procedures for non-life threatening conditions and those for cardiac bypass or other procedures for life threatening conditions, whose miserable quality of life is prolonged by policies in place, may be less in magnitude than the resentment of 50 million Americans that go without health coverage for some time during the year. Or is it? Or it may be true that the man/woman months with disability and pain and suffering due to chronic diseases in the waiting lists compounded by suboptimal quality of life and lower productivity with negative economic repercussion per number of population in UK may be lower than the same indicator in US, but that does not mean that health reform in UK has been successful so far. My concern and worry relates to the fact that by engaging ourselves in such discussions we may lose focus and may add to the confusion in defining the real policy problems, identifying their cause, and selecting the proper policy alternatives. Nobody can deny that regardless the fact where the access is worse, the main policy problem generated by NHS in UK and health system in USA is the loss of population health stock in both countries due to limited access to care. Again, it is irrelevant in which country it is worse as long as both countries need serious revisions of their policies and radical changes in view of their reforms.
    The second issue I wanted to discuss relates to the use of concepts that policy analysts are so found of and use so frequently. QALY, cost-effectiveness, opportunity costs, etc., have are often used to justify some rules and regulations in the equally inefficient NHS as the US health system against the use of advanced medical technologies. From a public policy perspective, measures that tend to deprive population in need of advanced technological tools that have been proven to restore the health status of the sick or ease the physical and psychological pain of the subject or the family, remain counterintuitive, counterproductive, illogical, and impractical. The rich will aggressively pursue any advanced technological opportunity when it comes to saving or even improving the quality of their lives (justly, without any regard to costs effectiveness, opportunity costs, or QALY results). Experience tells us that the poor will also do the same but the effects will be detrimental for them.

    No one among high officials of the ministry of health in any country can tell to the families of severely ill people that they can’t get those new treatments because the cost-effectiveness studies show that they are not worth the money spent, or that with the money needed to treat their dear ones, the government would provide some primary care services that would improve the lives of some other people. It would be completely senseless. I personally have been in those shoes. I was working in the Ministry of Health of my country and was part of the group working on health policy development and reform implementation. The time could not be more interesting and challenging from a professional and life experience point of view. It was immediately after the fall of the communist regime and on into economic transition. Overzealously during those years, I have tried to assimilate the palatable concepts like cost-effectiveness, priorities, opportunity costs, importance of primary care versus hospital care, and other cliché teachings, all courtesy of World Bank, UNICEF or other UN branches, and other big donors’ consultants. Given the importance of the moment, our lack of exposure to such arguments and debates, the level of knowledge we coming from clinical field had in these matters, poor economic situations of the country and the pressures that come with it, we were in real danger of brain washing and subsequent indoctrination. Nevertheless, when it came to meet real people in pain and suffering, all those teachings meant nothing. I could not set myself free off the thoughts that for more than half a century people in my country, like in all ex-communist countries of Eastern and Central Europe, were deprived of the rights to make choices they wanted and had to accept what the government provided. The resentment of people enduring the consequences of having no choices was, perhaps, one of the factors that brought the demise of those systems. During those years, experience taught me a great lesson: the conclusions of some cost effectiveness or cost opportunity studies meant nothing unless policy analysis took into consideration the public welfare in all its dimensions. No matter how poor people are and what the costs will be, they will pay anything to have the best care possible when their life will be in serious danger.

    I still can’t say whether my past experience and teachings were worth or not. But certainly I feel very fortunate that I quickly realized that the scope of my work as a policy maker in the Ministry of Health of my country was making the best of health care services available and accessible to all, i.e. the opposite of what teachings were telling me. This was by intuition. Later on, after I moved to USA, I became convinced that it is an achievable goal. Just, you make the system efficient. Therefore I strongly I argue against the archaic ideas of rationing as pillars of health reforms.

    The third thing that I would like to discuss is that of rules or regulations within health systems that health policies can’t define in detail. Even in the ideal circumstances of a sound health policy and an efficient health system, there always will be some counterintuitive and counter productive rules and regulations conceived by inexperienced bureaucrats and/or politically motivated officials that will jeopardize the flow of patients and reform outcomes. Few years ago I read on the internet about the health policy to be adopted by Blair government (sometime during 1997 I believe) where the long waiting times of patients in UK were claimed as some sort of policy tools to make sure that surgeons will continue to have their job security. That excerpt from the NHS white paper (that I can not find anymore) shows the shortsightedness of bureaucrats who do not see public policies as serving the interests of the entire population against various powerful groups’ interests (surgeons for example who due to their knowledge and skills become powerful upon sick individuals). The case of the English lady needing Avastin in the NTY article falls in this category of issues. These issues are less important from a public policy perspective. Journalistic work, consumer associations, and other similar sources will reveal these problems and hopefully they will be solved.

    In conclusion, the core policy problem in UK or USA is the unmet demand of population for health care services (more specifically diagnostic and treatment services). Usually this is the case in all countries where health reforms have failed. In UK and USA such market shortages are not due to lack of capacity as it may be the case in low income and some developing countries. In fact, both UK and USA have excess capacities in place. Consequently, market shortages must be the result of a particular state of individual behavior reflected by demand and supply of health services. The question is what is that specific behavior that is causing the market shortage? What are the factors that sustain this behavior? Can these factors be removed? Where is that Governments in both countries are missing? Answers to these questions in that order will give clues on the immediate cause of policy problem generated by such health systems, the root causes of such problem, and the proper policy alternatives to make health reforms successful. These, I think, should be the main lines along which policy analysis discussions should be done.

  2. brucequinn Says:

    Many good points in this article. But regarding the House of Commons and NICE. As of April 4, the hotlink in mid-article to a House of Commons report is wrong; it has about six unnecessary letters at the end (“http” repeats at begin and end of hotlink). When you get to the page, it lists a couple dozen documents and it is uncertain which one the authors refer to. One main point of the fall 2007 House of Commons report, if I understand their intended referent, was not that the QALY line was too high (the authors’ claim in the blog) but rather than QALY calculations incorporated many uncertainties and that minor changes in the assumptions cause the resulting QALY value to shoot upward or downward.

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