Tuesday, May 31, 2011

On Healthcare, expat tales of the NHS and the US Medical System

For a while I have missed opportunities to write on health care. I try to blog about a topic when it is in the news and fresh in the public mind. For healthcare, however, I kept avoiding posting on it.  This avoidance comes partially from the highly contentious nature of the topic.  People on both sides of the Pond have strong and often emotional views on the subject.  Furthermore, intellectually is a very involved and difficult topic. If I wrote everything that I wanted to write about healthcare, I could spend weeks, months even, doing the relevant research only to write an essay on the topic. 
I still want to write about though.  People who have lived under both types of medical systems, have a unique, a perspective not tied only to theory.  

Given the scope of the topic, I have broken it down into multiple posts.   I have touched on some of the misleading and misunderstood commonly published statistics (third item), which give the illusion that the US and UK medical schemes have common outcomes.   They don't.  (For more see The Tiger that Isn't, a book about numbers that uses the NHS stats as examples of statistical manipulation.)  This post will address the administrative ease for patients of the NHS.  Next, I will discuss the myth of free health care.  Later, I will discuss some of the inherent weaknesses of the NHS, most notably preventative care.  Then, I will turn to the strengths and weaknesses of the US health system.  Finally, if the law is still around, I’ll turn to Obamacare.   
The Deceptive Ease of Administration
When reading personal accounts of medical experiences in the US and UK, the relative ease of the UK’s NHS jumps out, or more accurately the difficulty of paying health care bills in the US--deductibles, co-pays, collection calls due to hospital bill confusion--shows.  Regardless of if money is tight, the process of paying health care bills in the US is not simple.  
With the NHS, one doesn’t need to even think about paying.  And therein lies the NHS’s greatest strength.   It is easy.
Three elements of the NHS make that perception.  First, NHS services seem free because the bill is never paid the day you visit the clinic.  It is paid though taxes, which are abnormally painless in the UK.  Second, since the NHS is a single payor system, one need not bother with choices about insurance or doctors in system.  With the NHS, you get what you get.  Third, the NHS has a centralized computer system, one that sounds good in theory but has not worked as planned.  I will take each point in turn.  
Healthcare is paid before and after clinic visits by income taxes, payroll taxes, and VAT.  Even though US tax rates are significantly lower, UK taxes are easier to pay.  The VAT is a flat 20% addition to most goods and services that is included in the price tag.  Sales taxes in the US are added at the till.  Few are more than 10%, and those are total rates, state, local, and in some cases reservation.  If you are buying something for 10 bucks in Texas, you will need $10.63 when you get to the till.  That is, even though the American pays little more than a ¼ of what the Brit paid, the American notices the 6% tax; he has to add it on, consciously think of it.  It feels like tipping every time you pay for goods.  
Similarly, the PAYE, Pay As You Earn, withholding system in the UK is more comprehensive and accurate than in the US.  As a result, few besides employers or the wealthy write checks to HM Revenue and Customs.  In short, many people do not feel like they are paying taxes.  Hence, when healthcare is not paid for at point of service, it feels free.  
Next, since the NHS is a single payer system, it is easy for people to use. When going to an NHS facility, you see whomever you see, provided your visit was routine or minor, you do what needs to be done, get whatever meds your doctor prescribed, and walk out--at least this is how it works in theory. Waiting times are a problem.  Prescriptions are a problem.  I found that you can only get a prescription written at the hospital filled at the hospital chemist.  At the eye hospital--I had a piece of metal in my eye--I did not want to wait in line for the hospital chemist.  It was a good hour plus long and I needed to get back to the children.  So I took the scrip to my local chemist.  I suspected I might have to pay more; I did not know that they weren’t supposed to fill it.  It was antibiotic eye creme that they had on hand, so they took pity on me, the newbie American expat, and filled it anyway, mumbling something about NHS kickbacks with meds.  
Getting to the hospital or specialist can be a problem too. If you need the ER, you can go directly, but for any other non-emergency problems, you are supposed to see your General Practitioner first.  Your GP then has to refer you to a specialist or the hospital.    So for instance, with my eye problem, I called the GP first.  He had to refer me.  You can’t think, “Oh, I have something in my eye, I will call an eye doctor.”  Except in an emergency, you need a referral.
So the system is simple if you have basic needs.  When your care gets the slightest bit complicated, so does the NHS.
There is a strange letter of introduction, exchange of test results, doctor letter writing dance that goes on with the GP system.  This is a bit strange because the UK has a reportedly stellar centralized healthcare computer system.  Why all the letter writing and referral dance if they have a database?  
Turns out that the health database sounds great, but it is not nearly as effective as advertised. To start, it is susceptible to privacy and accuracy concerns.  Ironically Brits seem less concerned with health care privacy issues than Americans* so the privacy issues haven’t killed the system.  Worse though, large portions of the database have been lost at least twice since I have been here in London, in 2009, 2007.  Here is a short Times summary of the database debacle including discussion of information uploaded without the doctors consent and a cost explosion from £2 billion to £12 billion.    UPDATE:  They are scrapping the integrated database.  
Then there is how the database plays out in an emergency.  It is and tad unnerving to arrive at the hospital with a child in visible breathing distress only to have the check in to verify your postcode before any triage.  Other than pulling up your centralized data, I am not sure why they ask up front.  It appears from the NHS site that an A&E couldn’t turn you away even if you were not standing in your local hospital.  Everyone is covered under the NHS, tourists and the like. I guess it is because your postcode determines your medical trust area, and every trust does not cover the same treatments or have the same standards of treatment.  Such is the postcode lotteryThe NHS isn’t exactly fair.  (The guy who exposed the lottery atlas recently died of cancer.)  
Next up, the Myth of Free Healthcare.  
*I find the relative lax attitude about healthcare privacy bizarre for a society otherwise fiercely protective of their privacy.  In my own experience, I’ve found that doctors will discuss patient care with someone not the patient, especially if you are paying the tab.  I don’t mean the doctor discussing care of my husband, I mean of other patients, unrelated to me.  In the A&E, I’ve seen consultations and treatments in the waiting room conducted at full volume so that everyone knows what everyone else is there for.  I can’t explain it. I’ve just noticed it.  


scepticalexpat said...

Interesting perspective. As a Brit the comment that 'many people do not feel like they are paying taxes' feels wrong to me. People do feel they are paying taxes, but they don't have the same degree of either resentment or daily consciousness of it that Americans do. People know that they are paying taxes and are, on average, fairly comfortable with the idea that this gets them good public services.

And it's a hackneyed point, but US healthcare spending is twice the amount spent in Britain - 16% vs 8% - and this is partly because GPs act as gatekeepers, deciding who really needs a specialist referral and who doesn't, and weighing up whether tests etc are really necessary because the doctor and his/her employer is footing the bill, not just sending it off to a private company to be paid.

I agree that healthcare privacy seems to be a bigger concern in the US - I am quite flummoxed by the number of forms I have had to fill out saying it's OK for my doctor to discuss my healthcare problems with the hospital etc. I feel like saying: well, duh! And - though I may have this wrong - my impression is that there is more of a culture of private rooms in hospitals in America, where in Britain we are used to curtained off beds where you can eavesdrop on everything that's going on on the ward. It relieves the boredom.

The postcode thing is just an identifier, I believe, to be used alongside DOB - they used to do this in A&E back before local trusts were established. It's probably all a consequence of Britain not having national ID cards or social security numbers. If it's any consolation, in my experience ambulances do not ask you for your home postcode when they pick you up at a road accident.

AHLondon said...

Comment from Yasha:
You have a commenter who relies on the "8% of GDP in UK v 16% of GDP in US" statistic. It is a flawed comparison, for a bunch of reasons (not least of which is that it does not norm for PPP, ignores that there are supply constraints in the UK - i.e., US spends more because it can, and does not account for the fundamental differences in the market - i.e., healthcare prices are not directly subsidized while costs are - i.e., we can buy more because there is more to buy and we have limited incentive not to do so). Much of the data needed to illustrate why that comparison doesn't tell you much is here: http://www.kff.org/insurance/snapshot/OECD042111.cfm

I can do it, just not today.

Might ask Uncle Matt if he has something to hand on this.

AHLondon: Will do. Hey, Matt...

AHLondon said...

From Yasha again:
If you go further into the report, you will see a number of things which might begin to explain differences and/or minimize the difference when viewed in a particular way.

Example: spending on healthcare as a % of GDP rises as GDP rises, meaning, roughly, richer people spend more on their health care than poorer people because they have more discretionary income and choose to allocate that to healthcare rather than, say, leisure or wealth accumulation.

Example: the relative healthcare expenditure positions of the US and UK have been very consistent for over 40 years. The US spent about 2x as much per capita as a % of GDP as did the UK in 1970, roughly the same relationship as in 2010. That is long before all of the various issues to which the popular press likes to attribute the difference (tort lawyers, "rising healthcare prices", etc.). It is more supportive of the "rich spend more because they have more" hypothesis. It suggests some structural issues in the healthcare economy may be fundamentally different between the US and UK. In addition, it hints that there may be methodological differences in what is counted as "healthcare spending" - it may be hard to get a true read on what the UK spends, particularly as counting the opportunity costs associated with delays in receiving care.

It remains very difficult to compare the UK and US systems because of the enormous differences in the healthcare markets (e.g., the supply constraint in the UK, the wide access to private health insurance in the US and disconnect between prices and buying decisions) as well as the marked difference in national wealth.

I will need time to dig into it, but the conclusion that the UK is more efficient because it spends less as a % of GDP is almost certainly flawed.

AHLondon said...

@Skepticalexpat, you wrote: "People do feel they are paying taxes, but they don't have the same degree of either resentment or daily consciousness of it that Americans do." Exactly. I contend that the daily consciousness of taxes fuels the resentment of paying taxes, something which is already coded in our cultural DNA. Unlike Brits who are "on average, fairly comfortable with the idea that this gets them good public services." Americans are rarely comfortable with the idea anything public gets them good services. We are used to better. We expect better. We cannot countenance paying more for less. You've nailed the issue, I'm simply saying that it is orders of magnitude greater than you'd expect.
The privacy thing isn't your imagination either. Privacy rules have teeth. And in typical American fashion, we are more likely to easily tell our friend about our medical issues, but would go berserk if the doctor or insurance company or government did it. That individual choice thing again.
By the way, where does up the duff come from? M&M, my British expression correspondent is slacking. Actually she's on vacation now and probably won't see this. So please?

Matthew Ladner said...


I think you have laid out the issues quite well. My view on the 8% vs. 16% question is that there is no "correct" percent of GDP to spend on healthcare, especially in a deeply distorted health care market. The government has largely taken over the health care market in the UK, with a parallel private market tolerated. The U.S. government has profoundly distorted the health care market in the U.S. through the tax code and programs like Medicaid and Medicare.

The UK system is fraught with the problems of government rationing that you describe. The U.S. system sends everyone to the casino to play with poker chips paid for by someone else, and thus we suffer from health care hyperinflation.

These arguments usually get framed as "we either need a European style government system or we will continue to suffer under the flaws of the American free market in health care."

This of course is sophistry- but we cannot stay where we are with hyperinflation. We will either wind up going down the European path and have government ration care, or we must correct or health care market to allow the market mechanism to ration more of our care.

Either way, given that the demand for health care is effectively infinite, some kind of rationing is inevitable.

The great irony of the US situation is that by fostering this very strange system of third party payers and government subsidies, the American left has created a health care culture of "anything goes" on the cost side which makes their dream of a European system largely unobtainable.

All of this can be illustrated by a relative of mine who died on an American operating table at the age of 85 having quadruple bypass surgery. The European health care bureaucrats would have never ordered that surgery, to their credit. She also would not have had the surgery if she had to pay the bill for the surgery and the recovery.

The American left dreams of an Army of European bureaucrats at the ready to tell 85 year old women that they will die on the operating table, and that the government's health care resources are better spent elsewhere. Good luck with that- American Granny has never been told no.

I think the more dignified approach which shows greater respect for individual autonomy is to let someone go for quadruple bypass surgery at age 85, despite the insane risk, so long as they are footing the bill themselves.

Paul Tsongas once described America as "the only country where people think that death is optional." He was right, and it is an artifact of our health care policies.

scepticalexpat said...

I won't get into a long response on the GDP point because I know I'm coming from a diametrically opposite political viewpoint to your blog and probably most of its readers, so I doubt it would be particularly productive.

But on 'up the duff', the OED says its origin is uncertain, but probably related to the expressions 'a bun in the oven' and 'in the pudding club' (the latter of which I'm not sure I've ever heard). The idea is that a duff/ dumpling is growing in my belly, I think...

AHLondon said...

Matt, your point about playing with other people's poker chips ties in with a recurring point of mine about partial deregulation and its ilk. The UK papers today were full of the Southern Cross Healthcare crisis. The NHS switched from provider to buyer of elderly care, privatized part of the market. It isn't ending well. And your American Granny point ties in with the discussion at Scepticalecpat's place about American healthcare focusing so much on prevention that it imagines anything and everything can be prevented. (She's pregnant and dealing with the diet/risk insanity in the US. It isn't such an issue in the UK.) I've always thought it a result of the med mal environment. But you're right. We can do anything when someone else is paying. And telling American Granny 'no' won't work so well.
As for scepticalexpat, go for the long response. We don't bite. My viewpoint is different but you might be more in line with most of my readers. You are just an outlier because you commented. Most of my readers are lurkers.

Anonymous said...

Arguments about GDP and political persuasion aside, my family gets the same healthcare in this country as the homeless person on the street. That bit of human kindness has got to be worth something.

AHLondon said...

@Anon, you get right to my point about bumper sticker politics. The kindness is only kind if it, in this case, provides the healthcare. The arguments about GDP are facts illuminating whether or not the system works and if it can keep on working. What good will the "bit of human kindness" do if NHS collapses? Who is kinder, more compassionate, one who calls for a system that works or one that calls for one that is fair while it lasts?
The NHS is in crisis. Happy thoughts about kindness and fairness won't save it. Frank discussions about cost and benefit might. But it won't be fair. Reality rarely is.

This is one of the foundational differences between the right and left. The right believes that life isn't fair, and while they aim for fairness, don't harbor any illusions that they might achieve it and accept some unfairness as life in an imperfect world. The left thinks that fair is attainable. Not only that, they often think it is the ultimate good. So they will cap knees to get it. What are a few broken bits compared to the glory of true equality?

AHLondon said...

Just like thinking of a clever comeback the day after, forever I will think of a better way to say something after I post. This time the better came over mini blueberry muffins, for some strange reason.
Anyway, back to Anon, the kindness counts for something, just not nearly so much as people expect. That British society cares about kindness and fairness to the less fortunate is a wonderful thing. But kindness and fairness are guides, not the end goal. It does no one any good to disregard the facts and just focus on the system being fair. It'd also be fair if no one had any care.