A while back Trudy Lieberman sat down with Chris Smyth, the health correspondent for The Times of London, who was visiting America to learn more about the US health system, and who has covered the debate over reforms in his nation. What follows is Part two of their conversation about healthcare reform in the US and Great Britain. Part one of the conversation is here.

Rationing care

Trudy Lieberman: I want to discuss rationing a bit more. You told me that doctors will have more authority over treatment under the recent healthcare reforms. In the US, Americans constantly hear from the press that Britain rations care. That people are dying on the streets.

Chris Smyth: In Britain the fact is, care is often rationed, because there isn’t enough money, but it’s done by the managers, and often on flimsy clinical grounds. So the theory under our new reforms is to give power to make decisions on clinical grounds rather than on arbitrary rules.

The positive feature of the current system is the doctor can say ‘my only interest is looking out for my patients, and I will demand they get this treatment.’ When the manager says ‘No,’ the patient doesn’t blame the doctor. When the doctors make the decisions, however, it could affect the relationship with their patients. They might say to patients ‘yes I could give you this care, but I don’t want to pay for it.’

TL: We ration care in America. There’s rationing in every system I’ve looked at. It depends on who is the target of rationing, and how you do it. We do it by price. If you don’t have money to pay for a service, you don’t get care. We have rationing in our insurance system, too. If people have no money, they don’t buy insurance. The Affordable Care Act is designed to ease this a bit. But the question is: Will government subsidies be sufficient, or will they lead to a kind of self-rationing, where people will forego treatment because their insurance doesn’t cover so much.

CS: Do insurance companies deny care?

TL: Yes, that’s done a lot, but now they cannot deny care to someone who has a preexisting condition. They can, however, deny care, if a policy—say one chosen by an employer—does not cover it. Care denial usually provokes outrage, like it did in the late 1990s when they refused to pay for bone marrow transplants to treat breast cancer because it was not cost or clinically effective.

CS: If you have an insurance policy and you say, ‘I want this’ and your doctor says ‘I want this,’ you’ll get it? Or does the insurance company say, ‘We’ll pay some of it and you’ll have to pay some of it yourself?’

TL: It depends on the policy, and, in fairness to insurers, it’s employers who set the terms of the policy. It’s not necessarily the insurer. This has been a very hard concept to get across to consumers. This part of the American system has not been well understood and not talked about. Employers generally control the system here. In the run-up to the Affordable Care Act, you didn’t hear much discussion about what employers were up to.

CS: So it only becomes a nasty shock when they find they need a certain type of treatment and they don’t get it and they blame the insurance companies.

TL: Exactly.

CS: I’ve heard some people on the right say the Act is a cave-in to the insurance companies, and they are going to make huge amounts of money, because they’ll be getting subsidized tax dollars. Others say no, no, they’ll be forced to do things they wouldn’t otherwise do.

TL: The insurance companies, at least the big ones, will do very well. We essentially have four big insurance companies and they are well positioned for the new customers they will get as a result of the Affordable Care Act. They will also figure out a way to deal with risk selection, choosing those least likely to generate claims. The smaller carriers, the so-called niche carriers, may have a harder time.

We may see more consolidation, too. It’s possible that the big fish will swallow up some carriers that have a harder time competing. If we have a few mega carriers as market leaders, just imagine what might happen to prices. It’s going to be easy for them to set prices as high as the market will bear. You don’t have to deal with any of this in England, right?

CS: Right.

How decisions get made in Britain

Trudy Lieberman is a fellow at the Center for Advancing Health and a longtime contributing editor to the Columbia Journalism Review. She is the lead writer for The Second Opinion, CJR’s healthcare desk, which is part of our United States Project on the coverage of politics and policy. Follow her on Twitter @Trudy_Lieberman.