Not long ago I sat down with Chris Smyth, a health journalist for The Times of London, who was traveling in the US to research American healthcare. Meanwhile, I have made several trips to the UK to report on the British system. So we had plenty to discuss.
When Smyth and I started talking, we realized that, regarding healthcare, there were points of difference between the two countries, but many similarities, too. Both struggle with increasing costs of care; both have embarked on programs to make care better; both have instituted reforms that keep within the boundaries of their systems—a national health service in Britain, in which everyone is covered as a matter of right, and a private healthcare market in the US, with reforms and subsidies meant to insure more Americans, though millions will still be without insurance. The following is part one of an edited version of our conversation (part two will run tomorrow).
The view from across the pond
Trudy Lieberman: Americans have a very bad image of British health care. They believe it’s rationed; people can’t get want they need or want. The British view of the American system, meanwhile, is like the American view of the English system, for very different reasons. Last year a woman in Blackpool told me, ‘We would never want to go to the American system, where you ration care and nobody gets what they need.’
Chris Smyth: That’s the thing that’s struck me when comparing the reform debates in the two different countries. In Britain, the only thing anyone can agree on is, ‘We don’t want to become like the American system—That’s awful.’ And in America, people agree, ‘We don’t want to be anything like the British system because that’s awful.’ Perhaps each side really doesn’t know much about the system they’re so scared of.
TL: People in America do not understand social insurance and what it is and does. They don’t understand that social insurance can mean a single payer or multiple payers, but that everyone pays into the system and everyone receives care. They like Social Security and Medicare—those programs are very popular—but it’s popularity without the real understanding that these are social insurance systems.
Is that the case in England, where the National Health Service (NHS) is popular, but people don’t understand it?
CS: Yes, but less so. The NHS is very popular, and at the moment the satisfaction levels are probably at the highest they’ve ever been. Although they don’t have a deep policy understanding, I do think people understand the basics of how it works, where the money goes, and what structure does what in the system, and how they fit into it. They also understand what they can expect from it and what they can’t.
Perhaps that is changing a bit. People’s expectations are rising and there are more treatments and drugs available, and less certainty about how they’re going to be paid for. People are not quite aware of that coming crunch.
TL: People’s expectations for healthcare are very high in the US. In fact, people want everything done—every treatment imaginable, even if it doesn’t work or is not cost effective. If the treatment is denied, it’s called rationing, and it’s something most people think we don’t do in this country. But we do. Americans don’t understand that medical care is already rationed—to poor people and others who don’t have insurance, or when doctors in some areas refuse to accept their insurance. Increasingly, we are seeing rationing in our Medicare program, where doctors say the reimbursements are too low—Medicare patients have complicated problems—and they claim they don’t get enough money to treat them. That’s not the case in the UK, is it?
TL: Why do people in Britain like the NHS so much?
CS: It’s something people interact with all the time, both in their daily and medical lives and when they think about politics. It is something people pay a lot of attention to. They do care about the NHS, not only because they rely on it for needs and such, but also—people are proud of it, and of Britain—as a sort of sign of social solidarity. Attempts to tinker with it, or change it, only work if people agree that there is a problem that needed solving.
TL: Americans love to say we have the best healthcare system in the world, but when you probe further, you find Americans deeply troubled by the system. It’s organized around private insurance companies and most Americans don’t like them. On the other hand, doctors work in private offices, or for private companies like HMOs, and people generally love their doctors.
The nub of our reforms was to bring more people under the umbrella of private insurance, by mandating that everyone carry insurance and requiring insurers to give coverage to everyone—even those who are very sick and not welcome by insurance companies today.
CS: The biggest difference you notice coming over here is that sense of fear that people have about how to pay for healthcare, and what happens if people get sick. If they lose their job, will they be covered? That’s the greatest thing the NHS does: people don’t have to worry about that. They know they’re going to get treatment, whatever happens. People like to complain about it, but I think fundamentally that is what is most valued about the NHS. Everyone, across the political spectrum really, appreciates that about it. It removes that worry from life.
Reform: British style and American style
TL: Tell us about the recent healthcare reforms in the UK.
CS: The funding mechanism will not change, it’ll all still be taxpayer funded. But what’s changing is how primary care doctors would be given money to spend on their patients. They would be able to buy services, like tests and X-rays, from NHS hospitals and clinics as they do now, but also increasingly from private companies, or charities, or cooperatives.
TL: But the public was upset about the reforms, right?
CS: Most of the substantive criticism of the NHS reforms is not really about privatization, but about the fact they were trying to address the wrong problem. The coalition supporting reform never really presented a problem to the public to which these reforms were the answer. Reform advocates sort of came out of nowhere as far as the average voter was concerned.
In the last election the government promised there would be no more pointless, top-down reorganization of the NHS. Then a few months after the election, a huge top-down reorganization of the NHS appears. As far as the average voter was concerned, here are the Tories, having promised not to reorganize the NHS, suddenly reorganizing the NHS! And that revived all sorts of suspicions from the 80s and 90s, in which the conservatives were seen as the privatizing party and were never really trusted on the NHS.
TL: My understanding of the UK reforms is that it involved the way doctors arranged for services, and it set up these so-called commissioning groups, which, as you say, open up the NHS to more privatized services.
CS: Primary care doctors would be given money to spend on their patients, as we discussed, and they would be able to buy services from NHS hospitals and clinics as they do now but also increasingly from private companies or charities, or cooperatives. The NHS has been moving in that direction for some time, and the government wants to sort of continue that. My own view is that it’s unlikely that the reforms themselves will lead to American-style healthcare. The NHS is still too different. That’s not, I think, what the government aimed to do. But it’s still an open question about how far increasing competition and private sector involvement will build up its own momentum
TL: What’s the problem that should be tackled?
CS: The NHS has had boatloads of cash flowing into it. Its funding has more than doubled over the last decade. Many people would justifiably argue this was a much-needed investment after years of neglect, but that’s meant it has been easy to solve problems with lots of money. The key problem going forward is that money, the cash increase, has now stopped and there will be years of flat funding and demands are increasing for reasons that are common to the whole developed world.
TL: So what you’re saying is that the health system has to do more with less. In some ways that sounds like the American system. Our reforms basically moved money around in the federal budget, with a little bit of new money coming from new taxes on the very wealthy and on insurance companies and makers of medical devices. The reform law is not wildly popular. The support is less than 50 percent depending on which poll you use, and that number hasn’t changed in two years. So it’s probably doubtful there is going to be a groundswell of popularity for this act, even when it’s implemented.
CS: What occurred to me might happen, is that once it is implemented and people see that they have coverage where they didn’t before, or they see that they’re not denied coverage for preexisting conditions, people will start to value it in a way that they didn’t before, and it’ll become like Medicare or Social Security. And then it will be much harder to take away.
And just to finish. In Britain, by comparison, these reforms will come into effect and no one will notice the difference because essentially, they are behind-the-scenes reforms. If the reforms do what they say they’re going to do, patients will notice a slight improvement. In fact, what might happen is that things carry on very much as they always have, which tends to be the pattern in NHS reorganizations.
TL: To come back to your point that the Act could become more popular as people see the benefits: Most Americans aren’t going to be affected by it. They will still maintain their employer-provided coverage, and that’s 150 to 160 million people.
What those people are going to see is insurance with higher and higher deductibles and more cost sharing and higher premiums. They are going to find that they’re paying a lot more for less coverage. That has been happening aside from the Affordable Care Act.
CS: Do you think the Affordable Care Act will worsen the problem?
TL: We don’t know, because it depends on the extent that employers stay in the game. A lot of employers may decide to give up health insurance and send their workers to the exchanges, those state-run shopping services where people can buy policies. Coverage in the exchanges is going to be expensive for some people, and, depending on what you buy, benefits may not cover much. It hasn’t been widely publicized that the so-called “bronze policy”—which will most likely be the lowest-priced policy in the state exchanges—is designed to cover only 60 percent of your costs. People may not be happy when they find they can only afford a bronze plan. Some people shopping in the exchanges may come to like it. Others may not. It all depends on what the insurance companies offer at that point.
CS: Some of the more optimistic, liberal supporters of the Affordable Care Act say it starts all these experiments on cost control and puts all these pilot schemes to work. And that may not solve the problem, but it will start a process by which the best practices will be more widely adopted and something will be done about costs. Is that a plausible or probable scenario?
TL: You’re right. Liberal supporters bet the family farm on it. They really do think that will happen. I think it’s an open question. But a lot of good thinkers here believe that probably won’t happen, and that the only thing that will really control costs is some government negotiation to push back on the power of providers, as you have in Britain. There’s no provision for that in the Affordable Care Act.
CS: It strikes me that if something can be done to bring costs under control, there’s a chance the Act will be successful. If it continues to push costs up or even if costs continue up irrespective of the act, then it’s at risk of failure and public rejection.
TL: What you have to realize is that one premise of the Act is to make patients shoulder some of the burden of reducing the cost of care. The hope is that if consumers use fewer services, that will push down the national health care tab. That’s what the bronze policy is designed to do, and that’s the trend in the employer insurance market as well. If you make people pay more of the cost sharing, with, say, a higher deductible—in some cases $10,000 or more—a family with a kid or two is going to think really hard before going to any kind of doctor as long as they have to pay those kinds of costs out of pocket.
CS: Do you think consumers will respond to that message? Will people weight those things rationally and say ‘I could have another MRI but it probably is not justified’ or ‘I could spend $10,000 on this treatment, but it’s only got a 60 percent chance of success.’
TL: Research has shown that people can’t discriminate between care that’s needed and care that’s not needed. Furthermore, people are not terribly engaged in their healthcare and still believe the doctor is king or queen, and they are very trusting and accepting. To some extent you have to trust your doctor. People will have a rude awakening when they find they may have to pay more out of pocket and that may deter them from getting care—some of which they might need. In the last year, people have not used as many services as they have in the past, and that has resulted in some downward pressure on prices.
CS: In other words, they may be forgoing care that they may need?
TL: It’s hard to know that. Unless someone reads a lot of studies and examines Pub Med and the stuff from NIH, how are you really going to know if something is necessary or unnecessary? The hope of both liberal and conservative policy makers is that people will be able to use marketplace approaches, that people will look at ratings and read up and do the things you do when you buy a car. But it may not work with healthcare. My view is that it won’t, because healthcare is fundamentally different from cereals and toothpaste.
Equity here, equity there
TL: Your system is more equitable than ours. Our system is not equitable, and it won’t be even when the Affordable Care Act is fully implemented. It may be equitable in the sense that, yeah, if you’re sick you can get insurance. But that doesn’t mean everyone will have the same insurance that will pay for all the care a person needs.
A bronze policy is probably going to be the most popular policy—it certainly is in Massachusetts, where some 52 percent of the people chose it, because the others are pretty darn expensive. That policy covers only 60 percent of your healthcare costs. The silver, gold, and platinum policies will cost more and cover more. Better coverage may give you better outcomes or better care. So in that sense, the system is far from equitable.
CS: How much do they cost?
TL: You can look at the website of the Massachusetts Connector and that will give you some ideas of the price variation between the bronze and the gold policies, for example. For example, a 56-year-old person in Cambridge, MA, could find a bronze policy for as cheap as $462 per month. That same person could buy the lowest-priced gold plan for $712. My guess is that the platinum policy, which will be available under the exchanges, will be very expensive relative to the bronze policy. A policy that gives you 90 percent coverage is close to good coverage. It’s my understanding that under the NHS you have 100 percent coverage for most things. People over age 60 get their drugs free. In our Medicare program, even with a drug benefit, seniors may pay very high co-payments and co-insurance for their medicines.
The rise of marketing in healthcare
TL: I was in Coventry a year ago and visited one of your privately financed hospitals, and saw how they compete in their area. Their marketing and PR people are beginning to develop the same methods for marketing as US hospitals. They compete for patients using all the tricks and techniques of advertising and marketing. It was a very large hospital, very modern, very much like some of ours. They use the press. Their communications folks brought out this whole book of press clippings. It was huge. They said they needed to get more patients who needed treatments with high reimbursements. That’s what American hospitals do.
CS: What sort of methods were they using? Were they marketing to consumers? I know a lot of special hospitals have teams to market to doctors.
TL: They were marketing to consumers and trying to use the press, the local health reporters in the area, just as hospitals do here. They bring reporters in so they’ll write stories about some new machine. And judging from the book of clippings, the press usually complies.
CS: That’s interesting because in England, that never used to exist. The idea was that you would be referred to your local hospital and that would be that. Now, with these elective procedures, people have a choice of any hospital, really. So the incentive does exist for the hospital to market. But it certainly hasn’t gone to the extent of having billboards by the side of the road and that kind of thing. If they did and I’m pretty sure—going back to that taxpayer thing—people would say ‘what on earth are you doing spending my tax dollars on a billboard like that?’
TL: We have a lot of billboards on the side of the road, and most Americans never question what they cost.