Comparing apples to apples: NHS still ranks below average

Most healthcare reporting is deeply biased. From blogs to papers to policy, most people have strong preferences for different kinds of healthcare systems that they believe to be ‘the best’, often based on what they view the role of the state to be. Obviously some beliefs are grounded in more facts and stats than others, but given how complicated healthcare systems are, it’s possible to come up with all different kinds of conclusions that appear, at least on the surface, like they’re grounded in fact.

Compare, for example, The Commonwealth Fund 2014 report to the 2014 European Health Consumer Index: two studies that compare international healthcare systems. Both published within one year of each other, The Commonwealth Fund ranked the NHS the best healthcare system out of 11 countries, while the EHCI threw it down the list, ranking it 14th after all your obvious competitors, including The Netherlands, Switzerland, Germany, but also after your less obvious contenders, like Portugal.

Both reports appear to be thoroughly researched and have lots of numbers to back them up. So who do you believe? Well, if you favour single-payer health systems, you’re probably going favour the Commonwealth Fund’s report, which inherently favours centralised systems. (For example: out-of-pocket costs and insurer rejection of full cost reimbursement were considered a black mark against a healthcare system, regardless of access to treatment.) If you rank results higher than the principles around who delivers healthcare or who makes a profit, you’re probably going to favour the EHCI’s report, that gives more weight to things like waiting lists.

I personally give more credit to the EHCI report because my primary concern when it comes to healthcare systems is patient outcomes. That’s my bias.

Which is why the OECD’s healthcare efficiency reports are so important. The OECD’s stance is that “there is no “one-size-fits-all” approach to reforming health care systems. Policymakers should aim for coherence in policy settings by adopting best practices from the many different health care systems that exist in the OECD and tailor them to suit actual circumstances.” So while the OECD does make some comparisons of countries across the board, it also intentionally group countries together based on different kinds of healthcare systems in order to compare like with like.

Specifically, they break countries down into six groups to compare the efficiencies of similar healthcare institutions to each other, in an attempt to identify where the most improvement can be made within specific systems:

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The UK falls into Group 6, which is characterised as:

Mostly public insurance. Health care is mainly provided by a heavily regulated public system, with strict gate-keeping, little decentralisation and a tight spending limit imposed via the budget process

Seven countries fall into this category: Hungary, Ireland, Italy, New Zealand, Norway, Poland, and the UK. The OECD uses nifty radar charts (click on links) to illustrate how each country compares to both the OECD average as well as Group 6’s average in different areas including efficiency and quality, amenable mortality, prices, resources, consumption, financing and policy. The final chart ranks each country’s to measure its comparative efficiency. The results:

High DEA Score: Norway, Italy
Above Average: Poland
Average: New Zealand
Below Average: UK
Low: Hungary, Ireland

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The OECD’s analysis: “The quantity and quality of health care services (in the UK) remain lower than the OECD average while compensation levels are higher. Reinforcing competitive pressures on providers could help mitigate price pressures, e.g. by increasing user choice further and reforming compensation systems.”

On Tuesday I noted that the UK is one of the OECD countries that could do the most to improve its efficiency in public healthcare spending . But breaking that down even further, the UK doesn’t come close to topping the charts in its own group.

Perhaps the UK should be looking to make improvements to resemble Norway, which tops the ranks for public health services. Or maybe it should be looking towards other categories that focus on social insurance systems. Either way, it’s time for the UK to start looking beyond the NHS.

Myth busting: NHS not so efficient after all

The NHS has long coasted on the widely held belief that it is one of the best healthcare systems in the world because it is so efficient. While European systems boast better patient outcomes, and the United States points to its excellent pre-emptive care measures, NHS loyalists cast that all aside, because unlike any of those other countries, the UK is able to keep its healthcare spending below 10% of GDP, free at the point of use, with relatively good outcomes. No other country can beat that efficiency.

Well, it turns out most of them do.

In 2010, the OECD published multiple papers that specifically looked at the efficiencies of different health care systems. In its report “Health care systems: getting more value for money”, the OECD found that there was “room in all countries surveyed to improve the effectiveness of their health care spending.” Some countries, however, could see significant efficiencies gained. And the top three countries that could benefit the most: Greece, Ireland, and the United Kingdom.

By improving the efficiency of the health system, public spending savings would be large as compared to a no-policy-change scenario, amounting to almost 2% of 2017 GDP on average in the OECD. It would be over 3% for Greece, Ireland and the United Kingdom.

Potential savings

Breaking with myth, the UK is one of the countries that could do the most to improve its efficiency in public healthcare spending. Even more than the United States.

What the loyalists don’t seem to realise is that efficiency can’t simply be determined by how much money a country puts towards healthcare. The real question is how efficiently those monetary resources are being used to obtain better health outcomes.

And according to the OECD, both the UK and the US still have a long way to go:

Australia, Iceland, Japan, Korea and Switzerland perform best in transforming spending into health outcomes

In more than one third of OECD countries, exploiting efficiency gains in the health care sector would allow improving health outcomes as much as over the previous decade while keeping spending constant (Figure 2, Panel B). Germany, the United Kingdom and the United States fall into this group.

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I’m not predicting the end of this health care tale. Perhaps, if the right reforms were made to the NHS to drastically improve efficiencies, the UK would have a system that not only demands less public spending, but also creates better health outcomes too. To compare apples with apples, Norwegian healthcare is ” is mainly provided by a heavily regulated public system, with strict gate-keeping” and grouped together with the UK in the OECD’s categorisations for healthcare systems; yet Norway‘s system is ranked much better for efficiency (more details to come in next blog…).

I just thought I’d flag up that, as things stand, the NHS under-performs on just about everything that matters.

Lies, damned lies, and electioneering statistics: privatising the NHS

Now the election campaign is in full swing, there has been a sharp rise in questionable statistics used in public discourse. This is distressing, as there is a risk people vote on the basis of misinformation. It seems that by using the same bogus assertions repeatedly, politicians of all stripes are able to eventually change the ‘facts’. The debate around the NHS has been the most dishonest.

“Reverse the tide of privatisation in our NHS”

There has NOT been a tide of privatisation in our NHS. Privatisation if the process of transferring ownership of an organisation from government to the private sector. No shares have been issued in the NHS, nor distributed as vouchers to citizens. The NHS remains publically owned and funded, resources have grown in terms of real cash and people, and services are free at the point of the use. They must still provide services to all, whilst a ‘privatised’ company could choose to only serve those who pay.

Outsourcing isn’t privatisation, and is slowing

The government has encouraged competitive tendering of services, and outsourcing has increased, but only from 4.4% under Labour to under 6% with the Coalition. The rate of outsourcing has actually slowed under the Coalition. Regardless, outsourcing isn’t privatisation, maintains free at the point of use access, and can result in better services.

What about Hinchingbrooke Hospital?

Hinchingbrooke Hospital is the closest example to privatisation, as it is now run (though not owned) by a private company. The tender process for the hospital happened in October 2009, under Labour, further exposing their hypocrisy. Regardless, its core assets are publicly owned, and it still delivers NHS services free at the point of use.

An honest debate would consider alternative models that would improve services 

As an aside, it’s worth noting that Hinchingbrooke has gone from one of the worst ranked hospitals, on the verge of shutdown, to one of the best for patient happiness and waiting times.

A proper discourse on health care would focus on ways to improve the quality. We should examine the merits of private (profit and non-profit) providers, rather than being blocked by ideological labelling. We should explore how alternative models that don’t reply on as much government management, like in Germany or Singapore, could deliver better services for all.

Miliband’s attack on profit is an attack on patients

Either Ed Miliband is struggling to understand the basics or his ideology is spiralling out of control.

The latest Labour pledge:

Labour would cap the amount of profit private firms can make from the NHS, Ed Miliband will say as he launches the party’s election campaign.

He will pledge to halt the “drive to privatisation” he claims has taken place in the health service since 2010.

The future of the NHS is “on the ballot paper” and only Labour can guarantee the funding it needs, he will say.

Under his plans, private firms will have to reimburse the NHS if they exceed a 5% profit cap on contracts.

Companies make profit by keeping costs as low as possible while producing a product or service that people want (and ideally choose) to consume. Apologies for the simplicity, but apparently Ed needs it.

Pledging to fix levels of profit that a company can make ruins any motivation for the company to bring costs down. Given the NHS’s current financial situation, Miliband should not be so quick to toss aside the importance of efficiency gains.

Nor should he be ignorant of private firm’s impacts on patient outcomes.

Private firms are hardly private when working for the NHS; they are still under the jurisdiction of NHS bureaucracy and are often dependent on public funds for their operations. But where private firms and independent sector treatment centres do differ from the public sector is in their record on patient outcomes. Research from 2011 showed that ISTC surgery patients are healthier and experience less severe recovery conditions than patients undergoing the same surgeries with NHS providers.

Furthermore, Circle’s management of Hitchingbrooke Hospital turned a failing trust into one of the highest ranked hospitals for patient happiness and cut waiting times drastically; their recent failings were not a result of bad healthcare but rather bad business.

One of the reasons Circle reneged on its government contract is because it’s a struggle to make efficiency gains under NHS regulations as they currently exist; if Labour gets its way, this will become nearly impossible.

Miliband’s attack on privatization and profit is an ideological attack on buzzwords; unfortunately, his crackdown could have real affects on patient outcomes.

Keep Politicians out of the NHS

In the run-up to the election, politicians are trying to out-bribe us with our own money to pay for escalating NHS expectations. Democracy has a dark side. Doctors are telling politicians to: “stop messing with NHS to win votes.” (The Times, 17th February, p.15).

Demand will always outstrip capacity for a free good such as health. The questions are simply two: how much money should be allocated to the NHS and how should those resources be best managed to maximise welfare?  The former question is essentially political but the latter should not be. The budget should be set annually and not agonised over every day.

As every government IT project demonstrates, government does not do management well. One can blame either politicians or civil servants but it is the combination that is fatal. Apparently the present Secretary of State for Health assembles his entire team every Monday morning to micro-manage NHS issues in Darlington, Taunton or wherever. Or rather to attempt to micro-manage. This may improve media coverage but it builds confusion and disheartenment throughout the NHS.

All the best-run large businesses know that those at the top should lead, not manage. The first level of management should be empowered to deal with the micro-stuff and thereafter the next level of management should deal with matters the lower level cannot sensibly address. Because the NHS is so very large, that lesson is the more important.

How can politicians be removed from NHS management? Simple. We have a relatively new, well experienced, NHS England Chief Executive. He seems excellent and a great improvement on his predecessor. NHS England and the other national NHSs should be converted into public corporations, like the BBC, i.e. a stand alone operations funded and responsible to government but managed, day to day, independently. Whether to close, say, a cottage hospital would be a matter for NHS England. Politicians will still, rightly, lobby but they should not be making the decision.

Our political leaders should lead, not second guess local NHS doctors and managers. In addition to setting the budget, politicians should agree the budget and the strategy, i.e. what, overall, we should expect for our money. Then they should get out of the operating theatre.