NHS 2016 — Healthcare economics and the case of a broken debate
Back in the 1990’s, I had the good fortune to study medicine at Edinburgh, followed by a brief stint as a Junior doctor before heading off to the technology sector.
When I say Junior doctor, I mean a real junior who knew nothing and was less than useless until the fabulous registrars and consultants I worked under whipped me into shape. I was not one of those experienced doctors, qualified for 10 years or more, who make up the majority of the fraternity that the current UK government and media describes as junior merely because they haven’t been given a consultant post yet.
And when I say good fortune, what I mean is that I got an excellent training, with access to world class technology, research developments “hot off the press”, and a foundation in how to care for patients from talented and dedicated people working in a system that is in 2016 either being vilified (yes, I am speaking to you Daily Mail) or beaten upon and insulted (that’s you, Mr J Hunt).
Looking on from the outside, it is with sadness that I see what feels like the inexorable decline of a healthcare system that is the envy of any who see what it is truly made up of and what it achieves (in this, I am absolutely not speaking to you, Fox News).
I am however writing this not to present an emotional (of which I am capable) nor ideological (of which I am unwilling) defense of the NHS. I am writing firstly to point out that whatever happens to healthcare in the UK in the coming years, it is frustrating to see how ill informed, and poorly presented the debate is. I often complain to friends that the UK may lose the NHS by accident, through a combination of apathy and poorly presented arguments that seem to think the NHS as a system is broken in some way. This is my attempt to highlight some of the areas that I believe deserve most focus when considering the changes currently being made to the NHS.
Inefficient
The commonly heard argument is that the NHS is inefficient. As with many such assertions, it is easy to make, and for the customer (patients) to agree based on such detailed knowledge as having once seen a bunch of nurses and doctors congregating around a nursing station computer, apparently doing nothing.
There is no question that as with any large organisation (and there are few as large as the NHS, it is true), it is statistically likely that you will at some time or another see examples where motivation, delivery, outcomes, and performance are not as good as they might be. However, to determine that an entire system is inefficient and requires root and branch change surely requires at least a minimum of economic data to support it. Does the UK healthcare service on the whole cost more, for example than any of its peer group economies?
Healthcare spending per capita makes for interesting reading to those who see wanton waste in the NHS (yes, I’m speaking to you again Daily Mail). Looking at data collated by the World Bank, in 2013 the UK ranked 21st globally (for the raw data, visit here). In fact, when corrected for Purchasing Power Parity (a measure that corrects for relative wealth and spending power), the UK drops to 23rd place.
The only European countries that spend less per capita are the scornfully named PIGS (Portugal, Italy, Greece and Spain) and the former Eastern bloc accession countries.
There are a couple of detailed points worth mentioning at this point. Firstly, this data includes the full range of healthcare spending such as preventative care, nutrition, family planning, first aid and emergency care. Secondly, it is an aggregate of both state-provided and privately provided (and funded) care services. This shows that despite the UK private healthcare industry slicing the cream of profitable services, relying on the state to pick up the unprofitable areas of care, the total spend on healthcare is materially lower than any other major developed economy.
Given these facts in terms of absolute cost, one might expect the populations of Norway, Switzerland and the USA to be marching on the streets to demand action by their respective governments to deal with the cost of healthcare.
Unaffordable
Talking of which, there is then the question of whether the UK can actually afford the level of spending. In GDP terms, the UK ranks 19th of major developed economies (again, for raw data please visit here).
It is difficult to look at what percentage of national income the UK seems willing to invest in the health of the nation, and to believe that any talk of spending more on health is in some way unaffordable. It is also worth noting that the figure of 9.1% is after the series of Labour governments from 1997 onwards lavished cash on the NHS to increase spending from 7% of GDP. Frankly, it is impossible to look at any other developed economy and find one which manages to provide truly universal healthcare coverage on such a low budget. Only Ireland, Italy and Spain spend less as a proportion of national income, and some basic healthcare services are not just excluded, but deemed illegal (e.g. abortion).
This doesn’t automatically lead to saying that there is a direct relationship between spending more and getting a better service in return. Which leads nicely to value for money. How effective is the NHS really?
Ineffective
This is probably the most tricky (and contentious) area when looking to benchmark a healthcare service. The World Health Organisation provided a global benchmark in their annual report back in 2000. In that evaluation of a wide range of interrelated factors (e.g. mortality, fairness in financial contribution, Disability Adjusted Life Years, goal responsiveness and achievement), the UK ranked 18th (page 200, WHO Health Report 2000), whilst ranking 26th in healthcare spending per capita. The United States, which was the most expensive per capita, ranked 37th (largely due to well known uneven health outcomes across the population).
In looking at health system attainment only (e.g. health system performance, looking at healthcare reach across the population etc), the UK ranked 9th globally (page 196 of the same report), again outperforming the US at 15th.
The results were so controversial and created such a fuss politically that the WHO has refrained from a formal ranking ever since. Other organisations have meanwhile continued to try to provide better clarity on relative performance. For example, a research and lobby group called the Commonwealth Fund found similarly poor value for money from the US healthcare system in 2010 when they looked at this question, ranking the UK number one for effectiveness and efficiency measures amongst wealthy countries.
When looking at some of the raw data from the OECD, the story appears similar. The UK sees a better life expectancy (from birth) than the US, which appears to be even more acute in men than women.
In looking at specific disease outcomes however, it is possible to argue that investment in technology and the latest treatments can yield better results. According to the current dataset from the WHO/IARC found on Globocan (2012), the performance of the top 5 spenders on healthcare is pretty strong for cancer mortality rates (looking at Age-Standardised Rates) compared to the UK.
The ASR is essentially a measure that normalises 5-year mortality rates for cancer across a range of populations and ages. In the case of the graph above, the orange line shows the 5-year survival rates for each country per 100,000 of population — the lower the data point, the better the mortality rate.
As can be seen however, the picture is confusing, with some countries such as the Netherlands yielding poor results despite being the second highest globally for healthcare spend as a percentage of GDP. At the other end of the performance spectrum, Switzerland has much better cancer outcomes than the US, despite spending over 30% less on healthcare.
However, a more consistent picture came out from the Concord-2 study published in a March 2015 edition of the Lancet. The table below shows data excerpts from that paper for the same top 5 spending countries and the UK.
It is clear from this snapshot from that paper that the UK is a relative laggard compared to other developed, high-spending countries for cancer survival at 5 years across most cancer types.
Of course, healthcare must cover a multitude of sins, and whilst cancer is an important contribution to mortality (roughly one in four of us will die from it), the performance of the entire healthcare system must be evaluated in the round. What appears to be a contradiction between the older WHO reports and recent cancer mortality data merely emphasises one harsh truth. Whilst overall care can be managed with good performance across an entire population at a low cost, certain diseases are resistant to anything but the latest drugs and technologies — and cancer is one of the most extreme examples of this. It is unsurprising that the UK lags in performance in an area where being more efficient is simply not enough — raw pharmacological firepower is what is needed, and frankly that costs.
A strong economy makes for a strong NHS?
The current vintage of Conservative government in the UK has long argued that it is only with a strong economy that there can be a strong NHS.
In fact, it is arguably the reverse. The eponymous Black report in 1980 was a watershed in health economics, showing in some detail that there were substantial inequalities in health outcomes across the wealth divide. Over 35 years later, much of that report is unfortunately still valid, adding in diet (with high sugar diets in low income groups leading to obesity and diabetes) and educational inequalities to cement the issues with social mobility that remain stubbornly fixed.
It is impossible to ask those millions below the poverty line to work their way to the median, whilst fighting the effects of health inequality which are becoming more acute due to under-resourced health prevention and treatment. In fact, more recent work in 2010 by Michael Grimm at the ISS in The Hague has shown how increased access to health care can positively impact economic growth.
The arguments being made currently are that the NHS is failing due to structural issues, inefficiency and a lack of motivation to succeed. Certainly, there should be no ideological barriers to change, and as such the NHS should be open to bringing in ideas and services from the public and private sectors, both home and away, if it provides a clear advantage.
However, what this commentary set out to do was to dispel the myth that there is a structural problem, or a persistent and malign inefficiency that is stopping the NHS deliver world class services to its customer, the UK taxpayer. The evidence is clear — the NHS is providing value for money that is unmatched globally, and if the UK electorate decides they wish to benefit from the same access to technology and pharmacology as other developed countries, they will need to accept the price tag.
The sooner politicians and the media wise up to the real debate that must be had, the better.
