COVER

TROUBLE AT THE SOURCE

BRITAIN’S MEDICARE IS IN CRISIS

ANDREW PHILLIPS February 13 1989
COVER

TROUBLE AT THE SOURCE

BRITAIN’S MEDICARE IS IN CRISIS

ANDREW PHILLIPS February 13 1989

TROUBLE AT THE SOURCE

BRITAIN’S MEDICARE IS IN CRISIS

They are striking symbols of the past and the future in British health care. Thirty-two kilometres south of London sits the 87-year-old Horton Hospital, a sprawling grey-brick complex of threestorey buildings that houses 790 psychiatric patients. With its depressing Victorian air, peeling paintwork and faded net curtains, it is testimony to the fact that much of the care that Britain’s publicly funded National Health Service (NHS) dispenses takes place in decidedly shabby surroundings.

But only five kilometres away is a sign of things to come— the Ashtead Hospital, a fouryear-old, ultramodern institution that at first glance could be mistaken for a comfortable hotel. One of eight hospitals operated by a private health care company, the Ashtead offers its 56 patients soothing decor and fine cuisine to aid their recovery. On the menu one day recently was fillet of plaice Ashtead—as well as Moet & Chandon champagne at $39 a bottle. But, inevitably, that kind of luxury care has a high price: a stay at the Ashtead costs $368 a night.

Squeeze: Throughout Britain, where state-operated health care was born 40 years ago, the gap between public and private medicine is growing. The government-funded NHS, which is almost entirely free universally, still provides excellent care for most patients. But it is caught in a tight cash squeeze as demand for health care outstrips the ability of the government to pay. As a result, public medicine in Britain is having difficulty keeping up with advances in medical technology, there is too little money to update deteriorating hospitals, and more than 700,000 people are on waiting lists for many kinds of operations. The number of people choosing private health care has doubled in the past 10 years, and now comprises up to 5.5 per cent of the patient population, which raises the possibility of a future two-tier health system with the best services reserved for those who can afford to pay.

In a step that could bring that day closer, Prime Minister Margaret Thatcher’s Conservative government last week introduced wideranging proposals that instil the profit motive

in the NHS and further encourage more affluent Britons to pay for medical care. Under the legislation introduced by Health Minister Kenneth Clarke, as many as 320 of Britain’s largest acute care hospitals would be allowed to sell their services to local health authorities, feepaying private patients and doctors—and would be able to earn handsome profits in the

process. In an effort to give the NHS greater control over its $50-billion budget, Clarke also proposed that doctors with large practices be given special funds to spend on medical services from profit-based hospitals. In a series of Clarke

also proposed new limits on the total value of prescriptions doctors could authorize—with financial penalties for physicians who exceed the targets. Opposition Labour Party spokesmen and union officials wasted no time in denouncing the stem measures. The changes, said Hector MacKenzie, general secretary of one of Britain’s largest health services unions, would result in a “commercialized system where competition breeds overtreatment of those re-

quiring profitable care, and chronic undertreatment of those in need.”

A two-tiered system was not the vision of the founders of the NHS, which began in July, 1948, as the first comprehensive, state-run medical service in a major Western nation. It was the most popular achievement of Britain’s postwar Labour government, designed to make health

care equally accessible to rich and poor. The system’s architect, the radical Labour health minister, Aneurin Bevan, declared at the time that illness was one area in which “poverty should not be a disability, and wealth not an advantage.”

Abolished: But unlike Canada, which effectively abolished the private sector in medical care, Britain allowed independent doctors and hospitals to coexist alongside the NHS—and demand for private care soared after Thatcher’s Tories took power in 1979. The main cause of the surge in demand was the publicity

that surrounded numerous strikes among health care

workers and other problems in the NHS, including growing waiting lists for elective surgery. As a result, the number of Britons covered by private health insurance has doubled to about 5.5 million in the past 10 years, and private health management companies, including such giant U.S. firms as Humana Inc. and American Medical International Inc., have invaded the British market. This year, experts predict, about 600,000 operations will take place in private hospitals—compared with 3.1 million in the public sector.

From the start, Thatcher’s government has encouraged privately funded health services, and some cabinet members have personally used them. In 1987, during a round of strikes by nurses and controversy over the closing of 3,000 hospital beds because of a lack of money, the minister then in charge of the health system, John Moore, caught pneumonia—and booked himself into a private hospital for two weeks. Thatcher herself chose a private hospital when she had an eye operation in 1983. She later explained that she did it “to enable me to go into hospital on the day I want, at the time I want and with the surgeon I want—and for me that’s absolutely vital.”

Walkouts: Other factors, too, have contributed to growth in the private sector.

Last December, British nurses staged a series of walkouts at publicly operated hospitals to protest a government wage offer of about six per cent. And last winter, the closing of beds and a shortage of nurses in some critical areas created a crisis atmosphere. Several children with heart problems died, amid intense national publicity, after their operations had been postponed as many as five times because of a shortage of beds and intensive care nurses. One boy, four-year-old Matthew Collier, died in February—a month after undergoing heart surgery that had been postponed three times. His parents had unsuccessfully sought a court order to force health authorities to perform the operation sooner, and his death led to calls for the government to give the NHS more money. At his funeral, Deacon Beryl Morgan declared that “all eyes and minds are on the shortage of resources, both human and material, in the National Health Service.”

In response to such charges, Thatcher’s ministers say that the government has strengthened the NHS by increasing the amount spent on the system, after inflation, by 39 per cent since 1979. And many critics of British health care argue that the problem goes much deeper than the policies of any one government could possibly have brought about. They note that Britain devotes a far lower proportion of its national income to health care than do other comparable countries. While Britain spends 6.2

per cent of national income on health, Canada and France both spend 8.5—and the United States 11.1. Said Sir Raymond Hoffenberg, president of the Royal College of Physicians: “The bottom line is that we had a service which was the envy of the world which we ran very cheaply. We are now trying to run it too cheaply.”

Complexity: Indeed, despite its enormous size and complexity, the British system continues to deliver high-quality care at a comparatively low cost. That is accomplished in part by the system’s administrators paying relatively low wages to nonmedical staff and nurses. But it is also a result of the way the system is structured. While doctors in Canada are paid

for each medical act they perform, general practitioners working in the NHS are paid an annual fee for each patient on their list. As a result, British doctors have a built-in financial incentive to discourage patients from going to see them for trivial reasons—because an unnecessary visit does not add to their income. The result, say critics of the system, is that doctors may be tempted to cut back their hours and turn away time-consuming elderly or chronically ill patients.

Neglect: David Widgery, a 41-year-old general practitioner and author of two books on the NHS, also says that the system encourages doctors to build up a large list of patients without serious problems and sometimes neglect those who need help most. “The way to make money as a GP,” he said, “is to open your surgery for about eight hours a week, make it inconvenient to come in, and weed out patients from your list who are actually ill.” For his part, Widgery says that he sees an average of 40

patients a day in his clinic in Limehouse, a poor district of east end London.

Despite the Thatcher government’s tough treatment of the NHS, last week’s proposals for injecting a free enterprise element into the system caught most political observers by surprise. Although the Conservatives have made sweeping changes in many other sectors of British society, they had moved cautiously in the politically sensitive area of health care. When they have made changes in the past, the Tories have encountered opposition from within their own ranks. Last November, after the government approved charges for eye tests and dental checkups, several backbench Conservative members of Parliament voted

against the government in the first major revolt since 1987’s general election.

Still, even the public system’s strongest supporters have accepted that private medicine will remain as an integral part of British health care. In late November, the Labour Party quietly dropped its long-standing insistence that private hospitals should be nationalized. Previous Labour governments did not implement the policy—but some prominent Labour MPs said that the party’s November decision to abandon its stance entirely reflected a realization that private medicine has grown too big for the government to take it over. As a result, the British, who pioneered state medicine more than four decades ago, seem to have accepted that it must stand up to increasingly sharp competition from the private sector.

ANDREW PHILLIPS

JEREMY HART