Healthcare—reform in Great Britain vs. the USA:
part two

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

CS: In the UK, people know they are getting healthcare, and they are paying for it through taxes. They know those things have to be weighed somehow. They want to know their taxes are well spent. The National Institute for Clinical Excellence, or NICE, which studies medical evidence and makes recommendations to doctors, is quite well accepted now as the best way to do this.

I find it interesting that there is nothing similar in the US. Not necessarily a statutory body like NICE but any kind of independent body that says, ‘This is best practice; this is cost-effective and this isn’t.’

TL: NICE is relatively new isn’t it?

CS: It’s been going since 2000. The essential point in our system is to balance the two sides of citizen engagement with the NHS—the patient side and the taxpayer side. That’s why NICE has been accepted. It’s sort of an equation: How much treatment are you going to give versus the interest of the taxpayer, and not paying through the nose for stuff that doesn’t work. NICE has gone though more or less every NHS treatment, usually two or three times, and is able to say, ‘This is the gold standard of care you should get.’

TL: Then they decide how much it costs to keep someone healthy?

CS: In the early days they sort of solved this. They had these concepts of “quality-adjusted life year.” In other words, What is your life worth per year if you’re healthy; how much less if you’re in a certain amount of pain; and even less if you’re in chronic pain all the time. The method for figuring that out is well established, and experts understand it and think it’s a robust model.

I don’t think the public has any idea how they calculate it. But they do understand the figure they’ve picked out—30,000 pounds [nearly $50,000 at current exchange rates] is what the government will pay for one year of good quality life. And I think people widely accept that. It’s an arbitrary number, but it’s a large number to an average person, and people don’t see it as stingy as far as I can tell. If a treatment comes in under that, then NICE will recommend it, and if it doesn’t, they won’t.

TL: I’ve heard that’s sometimes controversial.

CS: This obviously leads to intense discussions with drug manufacturers whenever there’s a new drug, and the drug companies desperately try to make sure it comes in under the threshold. If treatment is calculated to cost more, they claim ‘you haven’t you looked at this fact or that fact.’ That’s always a protracted process. But I think fundamentally people feel that it works, to determine the best and most cost-effective treatment.

TL: I remember some very negative and sensational press coverage when NICE began.

CS: When NICE was set up, there was a standard genre of story—you found a lovely family, made a nice picture; they want this life-saving drug and the bureaucrats have said, ‘No.’ You could always find tough margin calls, but those stories have dried up a bit now. Not many newspapers do them anymore because the public has accepted that sometimes there are hard cases, but that generally this process does work.

TL: The American press hasn’t really covered NICE and it’s decisions much. A case in point: When cost-effectiveness and clinical effectiveness for new treatments was being discussed during the health reform debate, I did an interview with Andrew Dillon, who heads NICE, hoping to encourage reporters here to look at NICE. There was no interest. Yet at the time there was considerable talk in Congress about how we could not have any government body doing cost-benefit analysis on drugs and other therapies. Congress set up an apparatus to consider clinical effectiveness but not cost, under the Affordable Care Act, that’s just getting started. NICE is very different. The very thought of a government body questioning medical treatments sparked our “death panel” debate. People still believe they exist.

CS: It’s important to note that what NICE has done is make it more likely someone will get treatment, because you will often find a treatment NICE has approved that is in fact not given locally because of these rationing decisions by local health boards. They might say it’s too expensive, we don’t have the money here. But the fact that NICE exists and has said this is a cost-effective treatment means that people can say well, no, hang on a second. I should be getting that because it’s NICE-approved and therefore you should be giving it to me. It has given people the power to demand treatment that NICE has approved.

Reorganizing how care is delivered

TL: We’ve had a lot of talk about how care is delivered, and the Affordable Care Act has made money available for organizations that improve the way care is delivered.

CS: The thing policy people in the NHS talk about the most is the need to reorganize the system. They want to reorganize the system away from the strict primary and secondary care division that was set up years ago in the old industrial-accident world, where people would get sick, come in and get better, and go away. They want a system and a way to manage people with longterm conditions. Those people account for two-thirds of the NHS spending. Their care is often done inefficiently, particularly for elderly people.

Theoretically it should be easy to improve healthcare at home in the community in a sort of top-down system. But in fact, it’s proven extremely difficult, because people are resistant to any sort of change in the way health systems are set up. The infrastructure for community care is not as good as it should be. Lots of efforts are being made to change that, so far, with limited success, really. Presumably those pressures exist in the US, and I’m wondering how dominant they are.

TL: In the US, if you ask people where they want to be cared for, it’s in the community. And yet our financial payment structure is not set up to support that. People go to nursing homes because federal and state dollars are directed toward nursing homes rather than toward home and community care.

This is going to be a big issue going forward—especially since states can now decide if they want to expand their Medicaid programs. States are really balking at spending much more on Medicaid.

CS: Who does pay for residential and nursing home care?

TL: Medicaid pays for about half of all nursing home stays. Private long-term care insurance pays for a small portion, and families pay the rest.

There hasn’t been much attention to long-term care in the press here. I tried to urge the press to cover it during the debate, but few reporters did. It’s like it’s not that interesting— and yet it’s going to be very interesting as time goes on, as America gets older and the costs of care outstrips what families can afford to pay.

CS: It’s been a big political issue in Britain lately. Essentially two things came together. There’s the fact that a lot of social care is underfunded and lots of people didn’t like that, and the fact that many people would find that if they had to go to a nursing home, they have to sell their home. What they wanted to pass onto their heirs would be gone very quickly. That kind of thing causes political waves in Britain.

TL: What happens in the US is that if a person goes to a nursing home, the spouse remains in the home. But after he or she dies, the home is fair game for Medicaid in something called “estate recovery.” Medicaid can come in and sell the house and use the proceeds to defray the costs of the owner’s nursing home stay that the state paid for.

CS: That’s interesting.

TL: That’s not very well known in the US, and you don’t hear many people talking about it. It’s a shame, really. We’re focused on bad nursing homes and have been for four decades now. So the stories you see—and some are legitimate stories—are about poor care given in nursing homes, and there’s a lot of it. But you don’t see a lot of reporting on the financial side of long-term care, and there should be.

Press coverage

TL: As we wrap up, let’s talk some about press coverage—especially about coverage of your reforms and ours.

CS: I think a lot of debate in Britain over our new health reforms was driven—sometimes for good, sometimes for bad—by the press coverage that the reforms got, and by the government’s presentations about reform. At first the government spun them as being a big, bold, radical proposal revolutionizing the NHS. In fact, they could have been easily spun as a cautious, evolutionary change from the approach being pursued by labor. Both are probably fair descriptions. They chose to sell it as a radical one and they very much later regretted that.

People didn’t want radical change in the NHS. The government hadn’t really talked about it before the election, so people were very suspicious and mistrusted the conservatives. That was a theme of a lot of press coverage.

TL: I covered the Affordable Care Act from the beginning, and constantly urged the media to explain what this act was all about, and that never happened. The lack of coverage partly explains why the Act is so unpopular today. People really didn’t know much about the individual mandate. It was never explained, nor was the issue of whether the subsidies people will get to buy coverage will be adequate. It’s a huge question—a very important political question, but it’s not being discussed.

CS: Do you blame the Obama administration for not finding the language or words or ability to sell that, or was it something to do with the media?

TL: It was both. The administration did not really articulate what they were doing, why they were doing it, and why it was necessary to have this kind of system. A lot of people thought we were getting something different—actually a national health system like you have. The Democrats said they had to pass a bill so people can find out what’s in it. That kind of tells you where they were at in terms of communicating what they had done.

The nature of the US media, to some extent, is to follow what the politicians are saying. So if the politicians are not explaining it, then they’re not explaining it either. There was a whole lot of education of the press done by liberal advocacy groups, which was helping to shape what was getting in the media. But they were not interested in talking much about the individual mandate either.

CS: I have a similar problem. It’s hard to look into a competing set of claims about what will happen in the future. You can’t go out and independently verify them because they haven’t happened yet. So how do you work out which one you give priority to?

TL: You really can’t. There’s a willingness on the part of the press to accept what they’re told, without weighing claims and seeing if one claim is more meritorious than another. We have this cult of balance, and it’s a problem.

In the US, you need to remember one thing; what was passed was basically a Republican plan. The ideas had been in the academic literature for years, and they were ideas Republicans would be totally comfortable with. But instead, the Republicans have run against their own plan, so to speak. And when the press fell down on the job of bringing the people along, it made it easy for Republicans to move on this strategy.

CS: In Britain, aspects of this reform were done by a coalition, which we are not used to. It had elements from both parties, which didn’t necessarily fit together well. Once it became controversial in the press, liberal Democrats forced a series of changes onto the bill to address some of the fears that the media had raised. What they did made a coherent piece of legislation a total mess.

TL: I guess we have some similarities here. We’re not really sure how the Affordable Care Act will play out, and you’re not really sure how the NHS reforms are going to play out. We’ll find out!

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