A report from the Partnership for Better Health project

by Anthony Browne & Matthew Young

Presented 11 April 2002

ADAM SMITH INSTITUTE, 23 Great Smith Street, London, SW1P 3B www.adamsmith.org.uk

This paper crystallizes a part of the work of the Adam Smith Institute over the past two years in the Partnership for Better Health project – developing early, practicable reform of the NHS.

The aim of the project is to create a blueprint for maximising health outcomes from a given resource.  The vantage point is that of the general public and the goal is to identify and define the key areas in healthcare – funding, management and provision – where practical innovation and implementation will deliver easier access to higher-quality services and substantial improvements in health outcomes.

In a wide-ranging research and discussion program involving key figures in healthcare in the public and private sectors, in the UK and overseas, a range of options have been calibrated for their political and commercial practicability as a preliminary to a wider public debate. 

This is the perfect time to be putting forward new ideas to re-think the future of public healthcare in the UK.  The NHS is in crisis, public opinion is ready for change and the government has made clear its determination to modernize public services.  And yet there has been no consensus on the essential reforms.  We must aid the development of consensus by defining the best options for reform as the essential preliminary to opening the way to fundamental and systematic reform of the NHS.

The project team has been led by Dr Eamonn Butler (Director-General) and Matthew Young (Projects Director).

Foreword

Summary

Comments

Report                Introduction

                        The Symptoms

                        The Diagnosis

                        Successes of the NHS

                        The Treatment

                        How to get there  

The NHS is in crisis, leading to tens of thousands of unnecessary deaths each year. Both more money, and fundamental reform is needed. However, increasing funding from general taxation, or introducing a hypothecated tax, will do nothing to address the root cause of the problems of the NHS ¾ that it is a politically controlled state monopoly that is institutionally unresponsive to the needs of patients.  

The debate about the future of health care that has erupted in Britain has prompted serious examination of health systems in other countries ¾ including fees for service, social insurance and private insurance ¾ each of which have advantages and disadvantages.

Here we propose a new health system for Britain, which is capable of drawing broad political support, and giving the world's fourth largest economy the level of medical services it deserves. It is not re-inventing the wheel, but draws on the lessons learnt from health systems already seen in the rest of the developed world.

We propose a system of competing social insurance schemes that are independent of government, similar to those in the Netherlands, Germany and Switzerland.  Membership would be compulsory for all citizens, and the social insurance schemes would be banned from refusing membership to anyone. Premiums would be proportional to income, making sure the system is as fair as general taxation, with the premiums for the very poorest paid by the state. Hospitals and other health care providers would be separated from the social insurers, with the government acting not as a manager, but as a regulator, making sure the system works fairly and efficiently. All services will remain free at the point of access, unless people choose to pay fees for service in order to reduce the monthly premiums or to buy extra services.

This system will offer patients a full choice of who they are treated by and where, and it will bring more money into the health system making sure that the supply of health services keeps up with people's demand for them. It will be a one-tier service, ensuring those on low incomes get as good treatment as the better off, in contrast to the NHS which is rapidly deteriorating into a two-tier service. This will be a system that gives Britain the health service it deserves, improving medical care for rich and poor alike. 

Initial responses to this paper have been encouraging and a selection of the comments received are set out below:

Sir Graeme Catto

"This discussion paper makes a valuable contribution to the increasingly well-informed debate on the future of the health services within the UK.     Both the public and the medical profession are united in putting the interests of the patient first.   The issue now is to determine how best and within what timescale that can be achieved."

Professor Sir Graeme Catto, King's College London, President of the General Medical Council 3 April 2002

Lord Desai

“This paper is a constructive contribution, perhaps one of the very few constructive contributions, to the debate about the reform of the NHS. It deals with depoliticisation as well as decentralization of the NHS. But it goes beyond and proposes a viable alternative which will give patients a real sense of ownership. A real stimulus for radical thinking on health therefore can only come from such attempts which look critically at all arrangements but then doesn't fall back on the status quo because all other arrangements are not perfect. This paper comes up with a solid alternative that combines the best from many systems.”

Meghnad Desai, Director, Centre for the study of Global Governance, LSE

27 March 2002

Rt Hon Frank Field MP

“The model described here is essentially the one Lloyd George set up which ran from 1911 to 1948.  It had drawbacks but so too does the present system.  If the Government reforms do not soon show signs of success – crucial here will be a big hit on the waiting list front – a system of competing health suppliers regulated by government and run on insurance lines will begin to be practical politics."

Frank Field, House of Commons 27 March 2002

Nick Ross

It is first-class, brave, refreshingly clean of rhetoric and dogma, keeps faith with the egalitarian fairness which was the founding purpose of the NHS, and transfers power from the politicians to the people. I have some questions about the economic consequences, not least wage inflation, and would have preferred some specific emphasis on evidence-based clinical outcomes (for I do not believe market forces always lead to better health), but these are minor criticisms. In the snowstorm of reports, articles and speeches about reforming the NHS this is the most bracing. I'm only sorry I have read it too late to be able to help.

Nick Ross, broadcaster 9 April 2002

Indarjit Singh OBE JP

“In recent years there has been increasing concern over long hospital waiting lists, postcode disparities, inadequate consultation time in GP surgeries, a general shortage of nursing and other hospital staffing, and increasing evidence that the NHS, once the envy of other countries, is slowly slipping to 3^rd world standards.

Reading the Report, it is difficult to dispute its assertion that simple cash injections related to GDP are not enough to give us the standards of health care that we all desire and expect.

The idea of ‘entitlement cards’ funded by competitive compulsory insurance schemes, put forward in the Report, merits serious consideration.  Premiums would be based on total income, with payments from general tax for the lower paid, to ensure social equity.

The entitlement card will give the patient greater choice in GP and hospital treatment.  It is also suggested that there should be a ‘pooling of risk’ with insurers not being allowed to refuse cover to the elderly or those in poor health. The general tenor of the report is one of realism and rationality, and a concern for social equity and as such, its proposals deserve serious consideration”

Indarjit Singh Director, Network of Sikh Organisations UK 27 March 2002

Professor Stephen Smith

“This document provides the framework for the forthcoming health service debate.   All those who provide healthcare must be able, without fear, to contribute their knowledge and experience to this debate.   We must not be frightened into thinking that the current NHS is the only way that decent healthcare can be provided for all our peoples.”

S. K. Smith Professor of Obstetrics and Gynaecology, Cambridge 27 March 2002

The NHS is a politically controlled state monopoly, free at the point of use, funded out of tax, and almost identical to the old health services in the former communist countries of Eastern Europe. When those countries eventually dropped communism because it didn't work, they all examined their health systems and looked at what they could learn from elsewhere. Every one of them dropped their NHS-style systems and built up new health services from scratch.

Britain has long suffered the drawbacks of not having regular revolutions, but it is time we too reinvented our health system, learning the lessons of what works in other countries.

There is almost universal consensus — among health professionals, the government, patients and the media — that the NHS is in crisis. Few people pretend that patients in Britain are getting the medical services they should be able to expect in what is the world's fourth largest economy.

There is also widespread consensus on the urgent need for reform. The government set out its agenda for reform — which it claimed to be the most revolutionary for a generation — in The NHS Plan: A plan for investment, a plan for reform[i] published in 2000. Sadly, this passionate declaration of faith in state management, is just another instalment of centrally-driven change and falls woefully short of the fundamental reform that is needed.

There is further widespread consensus that we need to spend more money on health in Britain, and that the reforms must make the services far more patient-centred. 

And that is where the consensus ends.

In 2001, a 'debate' on the future of the NHS took off — with its founding principles, so long held almost sacrosanct, being publicly questioned for the first time. Previously, it had been taken for granted that Britain should stick to the NHS model of a free-at-the-point-of-access state monopoly of funding and provision.

The questioning of the NHS model has exploded so fiercely that the Labour government has been forced to repeatedly defend what it had at the last election considered its trump card — its thorough commitment to the NHS, the Labour Party's proudest invention.

Both in the National Plan, and in the Wanless Report[ii] commissioned by the Treasury, the government laid out why it believed that the NHS model is the most fair and efficient. In March, 2002 the Chancellor Gordon Brown dedicated an entire speech[iii] to defending tax-based funding of the NHS, criticising in turn all the main alternatives, including private insurance, user charges and social insurance.

The argument from the NHS critics can be largely characterised as 'The NHS doesn’t work — it's better over the Channel.' Numerous reports have looked at the mixture of social insurance, user charges, state and private hospitals that make up health care in France, Germany, Netherlands and other developed countries. The Conservative Party launched a high-profile tour of several countries to see what can be learnt.

The advantages and disadvantages of the NHS and other systems have been debated. But no one has yet proposed a viable alternative for Britain, learning from other countries, and laying out not just the principles, but very specific policies for change to build a new health service of which Britain can be proud. Any new system must be capable of attracting widespread political and public support, and be delivered quickly, giving real tangible benefits.

This is what this paper sets out to achieve. It is a first proposal, which can be debated, criticised, improved — or, if decided to be unworkable, discarded.

We describe the symptoms of the NHS's malaise, diagnose its root causes, and then offer a treatment that will hopefully lead to a cure. The reality is that there is no perfect system but we believe the proposals here provide a practical foundation capable of attracting widespread support and implementable within 3-5 years.

 The NHS has a severe shortage of capacity, directly costing the lives of tens of thousands of patients a year. We have fewer doctors per head of population than any European country apart from Albania. We import nurses and doctors from the world's poorest countries, and export sick people to some of the richest.

Practising physicians and nurses

Total and Per 1000 population (1999)