Tuesday, April 19, 2011

American vs British Health Care

Impressions from America Series - I've just spent the past two weeks in New York. Despite the fact I go to America three times a year, I can't say I feel at home in America. It definitely feels like a different country to England, so if you can forgive a little parochialism, I hope to write a few essays on the comparison between the UK and US. Also, these essays are often inspired by the small group of Americans I meet in New York (not representative of all of America by any means)

Universal Care vs Insurance The first thing that stands out is that quite a few people I know in the US don't have health insurance. I ask them what happens when they are ill; they kind of shrug their shoulders as if to say, well it's a bit inconvenient. They say some hospitals have a reputation for treating the uninsured and are not too officious on chasing up the bills afterwards. But, it hardly inspires confidence that health care is based on going to a hospital and running away before anyone notices.

At least one person I know indirectly, declared bankruptcy after a serious illness. In fact, health care costs are one of the biggest reasons for bankruptcy in the US. According to a study by Steffie Woolhandler, M.D., of the Harvard Medical School, in Cambridge, Mass, health care costs accounted for 60% of bankruptcy cases in the US. (CNN, link) One note is that even those who are insured often have only limited insurance.

One thing I find undeniable is that for many Americans, health care is a real and continuous worry. My friends say that to get a serious illness can be financially damaging. In the UK we may worry about not getting the best treatment, but the idea of going bankrupt from a serious illness just isn't there. Nor is there the same level of bureaucracy in getting a private insurance company to pay.

The UK model is far from perfect, they point to the waiting lists on the NHS and also the fact in the UK, doctors make judgements about the cost-benefit of certain treatments. In the US, this weighing up of whether to offer expensive treatments for marginal improvements in life quality, would likely be referred to as the highly emotive 'death panels'. Health care is certainly an emotive issue.

% of health care spending as % of GDPGovt spending as % of total health carePer Capita expenditure 2006 (PPP)Doctors per 10,000 populationNurses / midwives per 10,000Hospital beds per 10,000Life Expectancymale obesity

US health care costs were 7% of GDP in 1970. UK was 4% of GDP in 1970 (Runaway health care costs)

Relative costs of Health Care

The US spends 15% of GDP on health care. Yet, from these statistics, it is not clear the US gets value for money. In terms of numbers of doctors, nurses and hospital beds, the UK seems to come out slightly better.

Where does the Money in US go?

  • Profit margin to Private Health insurance companies
  • Profit margin to Drug companies
  • US has a much greater willingness to pay for expensive treatments. In the UK, doctors facing a tight budget have to make decisions and choose most cost-effective. In the US, someone else pays (i.e the insurance company and indirectly insurance premiums). US doctors might get sued for not giving best possible treatment, they won't get sued for suggesting most expensive treatments. Therefore if in doubt, pay the money
  • US doctors / nurses are paid better.
  • US has higher level of obesity so may have more health care related issues. (though I'm sure UK is trying its best to catch up with US obesity levels?
  • Advantages of Private Health Care
  • You could argue US health care is better because private health care has that profit incentive to be more efficient and offer best possible treatment. If you have full insurance you don't have to worry about waiting lists and being given inferior treatment.
Tax and Direct Provision

Americans hate tax. But, they pay for health care indirectly. What is health insurance if not a type of tax?

It is hard to make a case for the UK to adopt the US model of health care. It would be more expensive and leave people with uncertainty. It is said that the US has no chance of adopting a Western style free at the point of use system. Presumably vested interests have too much influence. (even in UK, the great Socialist Nye Bevan claimed he had to 'stuff the doctors pockets with gold' to make them accept the NHS)

Also, health care costs in America will be difficult to control in the future. It is rising health care which poses biggest long term danger to US budget.(free market and health care by Krugman)



csheehan said...

Folks really should read the new government white paper for the NHS, essentially it will be quite similar to medicare in the states where the government becomes the payer. A system I'm afraid while quite a good service is quite unsustainable from an economic perspective. The only saving grace maybe that GP's have developed a more practically approach to choosing how to treat patients i.e. not MRI a knee so quickly as they would in the states etc. This might help to keep costs down. We all need to be less emotive about healthcare and be practical which is what I think the NHS is. NICE will be a big loss, while not perfect at least it added a bit of sense/guidance when deciding to choose a certain treatment as well as providing good evidence based guidelines to clinicians. I see that you have noted life expectancy, I see this figure quoted quote a lot when evaluating health systems and think it does a poor job at reflecting the healthcare systems as their are multiple other factors to consider some of which you touched on e.g. obesity. I've experienced the US, Irish and UK healthcare systems which did I enjoy being a patient in the most? It was the UK and by a mile too. It was far more enjoyable not just from the lack of bankruptcy but the streamlined system. I also think people forget many of the economically unmeasurable aspects of such a system i.e. Doctors can ring up radiologists to follow up a patient rather than as in more private company situations which are piece meal and often done by a radiologist in Hungary, they can also likely see the chest x-ray in their practice, often not the case when the service is provided by multiple vendors etc. People should become more educated about the new white paper, lots of fine print changes and washing of hands if you compare to the original NHS 1940's & 70's acts. The NHS will be a quite different institution and a big loss with poorer services I'm afraid. All I can say is read it especially the BMJ (British Medical Journal) analysis of it, it breaks it up nicely in an unbiased fashion.

pratclif said...

Please clarify; I don't understand the second column of the table "Govt spending as % of total health care"

Tejvan Pettinger said...

Government spending as % of total health care basically shows how much health care is provided by government vs how much is provided by private sector.

For example, in US, the government provide 45% of all health care spending - a lower proportion than in Europe, where most health care spending comes from government.

Anonymous said...

Don't know much about economics but what I read about the NHS says it is the largest employer in Britain. Seems to me that health care must be the primary cause of their 176 billion budget deficit.

Anonymous said...

So the blog author censors any questioning of their reports. Interesting. The old, I am smarter than you so if I report it or think it it must be true. Great journalism.You should apply for a job with the US government as a Democrat