2015-12-25T19:56:00.001+01:00

Health Care System and Reforms in the United Kingdom: Lessons for Patient Protection and Affordable Care Act

Background

The health care systems in the United Kingdom (UK) and the United States of America (USA) have been very distinct in their structure, financing, efficiency and effectiveness. The UK health care system has been considered better performing, good quality, and less expensive, compared to the US health care system (Roe and Liberman 2007; Blumenthal and Dixon 2012: 1353). The UK health care system has undergone tremendous change in the last two decades. In July 2010, the Department of Health presented a White Paper to the Parliament of the UK, which laid out the new Governments’ strategy for the NHS. The strategy emphasized the need to increase choice and control for patients, improving health care outcomes, empowering health professionals, reducing bureaucracy, and improving efficiency (Department of Health 2010: 3-6). This was followed by the Health and Social Care Act, which was enacted in 2012 and came into effect on 1 April 2013. It proposed a drastic overhaul of the organizational structures and financing of health care system in the UK[1]. Just a few months before the White Paper in the UK, the President of the United States of America signed the Patient Protection and Affordable Care Act (ACA), which aimed to improve the quality and affordability of care for all Americans, increase quantity and efficiency of health care, and introduce measures to contain costs of health care (Democratic Policy and Communication Centre. No date)[2].

The present paper will examine the experience of the United Kingdom in health care reforms in the recent years, with a view to learn lessons for the implementation of the ACA. The first section will discuss the key features of the health care system in the UK, which will be followed by a short description of the recent health care reform in the UK. A comparative analysis of the recent health care reforms in the UK and USA will be discussed in the subsequent section. The paper will also explore some of the key features of the UK’s health care system that would be desirable for the USA, and its feasibility.

Main features of the health care system in the United Kingdom

Health care in the UK is provided mainly through the National Health Service (NHS), although the role of private sector is growing, especially in the recent years (Perlman and Fried 2012: 611). The key features of the UK heath care system are the following:

Organisational structure: The NHS consists of the following healthcare systems: the National Health Services (England), NHS Scotland, NHS Wales and Health and Social Care in Northern Ireland. Each of these systems has its own specific characteristics, policies and regulations and each system is administrated separately. Overseas visitors are not entitled to receive free NHS treatment excluding some exceptional cases. Responsibility for publicly funded health care rests with the Secretary of State for Health, who is accountable to the United Kingdom Parliament (Boyle 2011: xxiv). The Department of Health governs the NHS including various policy decisions, budget and other related issues. The purchasing of services is delegated to regional bodies (10 Strategic Health Authorities) and the provision of health services to the local public providers (151 primary care organizations, mainly Primary Care Trust) (Boyle 2011: xxiv). Strategic Health Authorities are responsible for several other trusts such as Primary care trusts, National Health Service trusts (acute trusts), Ambulance trusts, Care trusts, and Mental Health trusts.

Coverage: For over six decades, the UK has provided universal free health care to all its legal residents through an organised network of service providers (Odeyami, Nixon 2013: 111; Murray CJL et al. 2013: 997; Stevens 2004: 37). The NHS covers preventive services; inpatient and outpatient (ambulatory) hospital (specialist) care; physician (general practitioner) services; inpatient and outpatient drugs; dental care; mental health care; learning disabilities care; and rehabilitation (Thomson et al. 2011: 19). Under the NHS, drugs prescribed by general practitioners, dentists, and other independent prescribers are charged a fixed rate (Thomson et al. 2011: 19).

Payment mechanisms: Approximately 80 percent of the NHS funds are allocated directly to primary care trusts, and the secondary providers are paid a set amount for each patient treated according to the services provided (Perlman, Fried 2012: 616-7). Although the NHS services are universal and free of charge at point of use, there is a range of health services that are not covered by the NHS or are covered partially, leaving patients to pay for these services through (a) direct payments or (b) co-payments.

(a) Direct payments: cover private treatment in NHS facilities, over-the-counter medicines, ophthalmic care and social care.

(b) Co-payments: cover NHS prescriptions and NHS dental care (Boyle 2011: 96).

Financing: The UK operates a low-cost health system (Perlman, Fried 2012: 615). It spends 9.6 percent of gross domestic product (GDP) on health, with public funding accounting for over 81 percent of total health care spending (Odeyami, Nixon 2013: 112). A budget of the NHS is established by the British government on a three-year period. The NHS is funded mainly by public sources including, general taxation with a fixed budget available to spend on services for the whole population and national insurance contribution (Boyle 2011: xx). NHS funded services also include both NHS provider organisations, and other providers of health services such as charities, private organisations, and social enterprises. Public sources of finance for health care are allocated by central government to the Department of Health, which is then responsible for the further disbursement of monies (Boyle 2011: 69). This scheme of direct control of spending has proved to be highly effective (Blumenthal and Dixon 2012: 1353). Apart from the income the NHS receives for the provision of prescription drugs and dentistry services to the general population, there is some income from other fees and charges, particularly from private patients who use NHS services (Thomson et al. 2011: 19)

Cost containment: The financial crises of 2008 have urged reform of the NHS and its financial structure. Reformed NHS of the UK assumes that control of spending has been shifted to primary-care doctors to help “…to counteract the power of hospitals to offer a level, mix, and type of service without effective challenge” (Blumenthal and Dixon 2012: 1353). To control utilisation and costs, the Government sets a capped overall budget for Primary Care Trusts (PCTs), and the NHS trusts and PCTs are expected to achieve financial balance each year (Boyle 2008). When there is a need for austerity, the NHS limits services to patients and restricts staff compensation or training opportunities (Blumenthal and Dixon 2012: 1353). Centralised administrative system also has its impact on controlling the overhead costs (Boyle 2008). However, the increased contracting in the 1990’s has resulted in increase in administrative costs (Le Grand 1999: 31).

Medical delivery system: Health care in the UK is separated mainly into primary and secondary care (Perlman and Fried 2012:612). Apart from this, special care has been provided for people with disability and mental health problems. The UK medical delivery system consists of the following components (Boyle 2011: xxvi; Perlman and Fried 2012: 612-3):

· NHS-funded primary care: Self-employed general practitioners (GPs) provide primary care for people- for any need of general medical care, emergency care or for a referral of a patient to specialized health care services. Every UK citizen has the right to register with a GP. Primary care is provided free of charge. General practitioners are paid by Primary Care Trusts[3].

· NHS-funded secondary care: Specialty care is provided by salaried specialist doctors and other health care professionals working in government-owned hospitals, which are managed by NHS trusts. There are over 160 such trusts, including 100 foundation trusts[4]overseeing 1600 NHS hospitals (Perlman and Fried 2012: 614).

· Social care: For those who need special care is the statutory responsibility of 152 councils with adult social services responsibilities. The provision of social care has been shifted from the public sector to private- and voluntary-sector organizations.

· Mental health system: The mental health system is a mix of primary care and community-based services supported by specialist inpatient care. Services provided through the NHS are available free at the point of delivery.

System principles and philosophy: The basis of key principles of NHS at its’ establishment in 1948 were: NHS meets the needs of everyone; is free at the point of delivery; and, that it would be financed entirely from taxation[5]. These core principles still guide the work of the NHS. The NHS constitution gives the following principles (Department of Health 2013a:14-6; (Department of Health 2013b: 3-4): (a) The NHS provides a comprehensive service, available to all irrespective of gender, race, disability, age, sexual orientation, religion, belief, gender reassignment, pregnancy and maternity or marital or civil partnership status; (b) access to NHS services is based on clinical need, not an individual’s ability to pay; (c) the NHS aspires to the highest standards of excellence and professionalism; (d) patients are at the heart of everything the NHS does; (e) the NHS works across organisational boundaries and in partnership with other organisations in the interest of patients, local communities and the wider population; (f) the NHS is committed to providing best value for taxpayers’ money and the most effective, fair and sustainable use of finite resources; and, (g) the NHS is accountable to the public, communities and patients that it serves. The handbook of the NHS Constitution lists the following NHS values (Department of Health 2013b:8) : (a) working together for patients; (b) respect and dignity; (c) commitment to quality of care; (d) compassion; (e) improving lives; and, (f) everyone counts.

Performance on key dimensions: It has been widely acknowledged that the UK health care system has been able to produce better results at lower costs compared to many of its developed country counterparts, especially the USA (see figures 2, 3 and 4). It has also been reported that in the last two decades, mortality in every age group in the UK has decreased, and disability prevalence has not increased (Murray et al. 2013: 1012). However, the above study also suggests that in comparison with other developed countries, significant improvement in age-specific mortality in the UK is only for men older than 55 years, and that the UK’s performance in relation to chronic obstructive pulmonary disease has been significantly worse than others in the same group of countries (Murray et al. 2013: 1016).

It is emphasised in the Guidance to Health Care of the UK that quality is the overriding priority for the healthcare system (Department of Health 2013b:4). It means that rather than counting the number of performed surgeries one should consider a patient’s opinion on the quality of a service provided to this patient. It is thus concluded that: quality = good medical outcomes + safe care + good patient experience (Department of Health 2013a:35-38). NHS has successfully implemented pioneering efforts in quality control in the last decade. One such example is that of NICE, established in 1999 to improve standards of NHS (Pearson, Rawlins 2005: 2618-22). Quality issues are addressed through various regulatory and assessment bodies. The health service has performed well during recent years. It has: “…maintained or improved performance against a range of indicators set out in the NHS Operating Framework, while meeting the financial challenge” (Department of Health 2012: 5). Some of the major criticisms of the UK’s health care system include: far too little emphasis on prevention; too much emphasis on reliance on hospitals; and, quality of general practice, though high, is too variable (Ham 2013: 9). Reduction of waiting times for secondary care through NHS has not yielded much success, while the private sector has an abundance of underused facilities (Doyle, Bull 2000: 564).

Recent health reforms, emerging issues and policy debates

Recent health reforms: The NHS in England initiated the most radical reforms with the implementation of the 2012 Health and Social Care Act, and Care and Support Bill 2012[6]. These reforms include re-structure of the NHS, changes in the health care commission, changes to health care education and are applicable to England only. The reforms also focus on lowering medical costs and patient waiting times and, in general, improvement of the health care services. The following are the aims of the Act (The Royal College of Nursing, 2013): (a) a stronger voice for patients through a patient-centered care approach (no decision about me without me), and creation of Healthwatch England and Local Healthwatch organisations to represent the voice of service users; (b) focus on patient outcomes rather than processes; (c) extend choice and competition; (d) overhaul of the commissioning structure; (e) increase autonomy of providers with all NHS trusts becoming foundation trusts (FTs); and (f) new approach to provider regulation- creation of a license issued by Monitor. Table 1 and 2 explains the major organizational changes in the Health and Social Care Act (compiled from The Royal College of Nursing, 2013; Holmes 2013; Edwards 2013:1). For details of the complete health system structure within the UK after the current reform, please see Figure 1.

Table 1: Changes to the commissioning system – from April 2013

§ Abolition of PCTs and strategic health authorities (SHAs)

§ NHS England (previously known as the NHS Commissioning Board) established – provides leadership for the NHS in England and commissions primary and specialist care. Has regional and local offices throughout the country.

§ Clinical Commissioning Groups (CCGs) commission the majority of local health services. Include the groups of GPs from the geographical areas.

§ Transfer of public health from the NHS to local authorities, with a new body - Public Health England - taking a national leadership role.

§ Creation of Health and Wellbeing Boards at local level, bringing together people from commissioning, health care, social care and public health to develop Joint Strategic Needs Assessments and Joint Health and Wellbeing Strategies.

§ Healthwatch – the independent ‘consumer champion’, replacing the patient representative bodies Local Involvement Networks (LINks)

Table 2: Who commissions what according to the Health and Social Care Act 2012

New organisations	Services
NHS England	Primary medical services; dental services; community pharmacy; specialised services; offender health care; heath care of the Armed Forces and their families
Clinical commissioning groups (CCGs)	Planning and designing health care; rehabilitative care; urgent and emergency care; most community health services; mental health and learning disability services. 152 Primary Care Trusts have been replaced by 211 CCGs.
Local authorities	Public health services. Works under the Health and Wellbeing Boards, and will include: hospitals, health centres, care homes, pharmacies etc.

Care and Support Bill 2012[7]proposed the establishment of national eligibility criteria to reduce local variation in access; introduction of a code of conduct and minimum standards for care workers; and, establishment of a capital fund to develop specialised housing for older and disabled people.

Emerging issues and policy debates: The recent reforms are aimed to move away from the top-down approach of the NHS to a people-centered approach led by the clinical practitioners, with a view to improve accountability and transparency. Hence the proposal to abolish Primary Care Trusts and hand over the power largely to groups of GPs has also invited criticisms due to the fact that the GPs are best trained to be clinicians, and not to be managers (Guardian 2011). There is an on-going debate among scholars that new reforms will threaten accountability of the NHS (Davies 2012: 564; Klein 2010: 292). It is argued that there are three reasons for this threat: the reforms make the relationships between the Secretary of State for Health and the NHS more complex, “…they create opaque networks of non-statutory bodies which may influence NHS decision-making, and (especially in relation to competition) they ‘juridify’ policy choices as matters of law” (Davies 2012: 564). Another debatable issue is whether the NHS becoming a market player is beneficial - there is no sufficient evidence that competition in the NHS market have a positive impact on the quality, equity, or efficiency of health care services (Brereton, Vasoodaven 2010: 37; Ronald, Rosen 2011: 1361; Asthana 2010: 815). Moreover, it is also feared that over emphasis on market forces through the abolition of PCTs and formation of CCGs will undermine core NHS services and put patients at risk (Homes 2013:1169). There are also doubts that the new English reform will fulfil its goal to promote integration between health care and local government – in fact, it is argued, that this attempt may merely “…fragment rather than integrate care” (Roland, Rosen 2011: 1365). Moreover, procurement and competition rules are contentious and confusing (Edwards 2013: 1).

It has also been argued that the report by McKinsey and Company published in by the Government 2010 is the basis of the current health care reforms in the UK. The report made recommendations on how to save up to £20 billion by 2014 through regulated competition, improved choice for patients, and increased cost savings, but with little prior benchmarking (Maynard 2013a: 1). Despite the introduction of increasing role of private sector through Independent Sector Treatment Centers (ISTCs) in the early 2000s, the expected outcomes such as ‘value for money’ have been not been achieved, and the intended benefits are yet to materialise (Vaid N No date: 10). ISCTs are owned and operated by private companies and are aimed to expand NHS capacity, reducing waiting times and increase patient choice (Department of Health 2005). Critics argue that in any emergency, choice does not matter, but the quality and timely care is important (Guardian 2011).

The recent NHS reform has its adverse impact on the health workforce as well as the users. Many Members of Parliament argue that the efficiency savings may be at the expense of service cuts and staffpay (O’Dowd 2013). For example, a recent study from British Medical Association suggests that specialty trainees and newly qualified GPs in the UK are experiencing rising levels of stress and a deteriorating work-life balance due to poor job security and the rapid and evolving change that the NHS experienced in 2011 and 2012 (Jaques 2013). From April 1, the public health staff from previous PCTs has been moved to local authorities under the newly formed Public Health England. This would have a major negative impact on the structure of public health delivery and planning (Holmes 2013: 1170; O’Dowd 2013a:1). On the other hand, long waiting times has been one of the key factors for user dissatisfaction with the UK health care system (Odeyami and Nixon 2013: 115; Klein 2006: 413-5).

The UK health care system and the ACA

Distinction between the UK health care reform and the ACA

The health systems of the USA and UK were always considered as very distinct. Blumenthal and Dixon aptly summed up the main distinctions between two systems: “The NHS covers all citizens, is tax-funded, is free at the point of service, and is governed centrally. Conversely, the US health-care system is funded by a patchwork of private and public insurance, imposes large point-of-service fees on many users, and provides care through private, not-for-profit, and public providers in a largely competitive delivery system that is proudly ungoverned” (Blumenthal and Dixon 2012: 1352).

The National Health Service (NHS), the health care system in the UK was founded as a publicly-funded body that provides universal health care services to all its legal residents. Since then, NHS is about national identity, and pride for the UK (Holmes 2013: 1170). Until recently, the private sector played only a complementary role, with just 11 percent of the population covered by private insurance providers in 2004 (Foubister et al. 2006: xv). However, the private sector traditionally played important role in providing psychiatric services, long term residential care for people with learning disabilities, care of elderly people, termination of pregnancy, and through reduction of waiting list initiatives (Doyle and Bull 2000: 563). Since 2002, NHS contracted several Independent Sector Treatment Centres (ISTCs), privately owned, but publicly funded treatment centres to treat NHS patients with the aim of reducing waiting lists, increasing competition among providers, facilitating innovation and reducing spot purchasing prices, and thereby trying to ensure value for money (Vaid N No date: 8-10). The future of the UK health care is likely to involve more extreme forms of McDonaldization (Waring, Bishop 2013: 154). Health care in the UK is much cheaper compared to the USA and several other developed countries (Refer Table 3).

Table 3: Health care expenditure and example private health insurance formats in the UK and USA

Country	THE (% GDP) 2010	Per capita HE (US$) 2010	Public HE (% of THE) 2010	Out of Pocket Expenditure (% of THE) 2007`	Private health insurance (% of THE) 2007
UK	9.6	3503	81.3	11.1	2.9
USA	17.9	8362	44.9	13.5	35

Source: Doran T, Roland M. 2010- compiled from several other sources.

The recent UK health care reform aims to contain cost through increased competition, improved efficiency, and thereby offers more choices for people for health care. It has taken steps to completely overhaul the organizational structures to make it more action at the local level. Major focus of the UK reform is to make the clinicians more accountable, including for taking care of the public health functions at the local level. On the other hand, although the ACA is aimed to ensure that all Americans have access to quality, affordable health care, and to transform the health care system, major focus is on increasing the insurance coverage. Insurance regulation, expansion of Medicaid (to people with incomes up to 133 percent of the Federal Poverty Level), and ensuring of individual and employer mandates are the key actions in the ACA (Lischko, Waldman 2013: 107-11). Harrington summarises the ACA as follows: “[ACA will] significantly expand health insurance coverage in the United States through its individual mandate, premium subsidies, and expanded eligibility for Medicaid. The law will transform private health insurance markets through its creation of state-level exchanges and federal government prescription of individual and small-group health insurance benefits, coverage, and allowable underwriting/rating criteria” (Harrington 2010: 707). Blumenthal emphasizes that the ACA will improve health system performance, in particular “…payment policy, organization and infrastructure, public health, and essential information for healthcare decision making” (Blumenthal 2012: 1953).

Health reforms in both the countries are politically highly sensitive issue, and hence both the UK reform and the ACA have and are facing severe resistance at the political level as well as from pressure groups (Guardian 2011; O’Dowd 2013, Homes 2013; Lischko, Waldman 2013; Oberlander 2012). However, the difference in the way the political leadership in both the countries planned the implementation of the reform are worth discussing. In the UK, the political resistance has not prevented the leadership from going ahead with the reform and plan for its implementation at one go (Timmins 2012: 148). This does not mean that the UK is ready for its implementation, but as Timmins (2013), the leadership pursued for reform at a record speed mainly looking at the history of reforms in the country. In contrast, the resistance in the USA for the reform process has been extremely complex, and this has been mainly dealt with by allowing greater flexibility through regulations and guidance and the possibility of the waiver of certain provisions (Lischko, Waldman 2013: 134). The US reform implementation also has been done in a paced manner with its different provisions, and there is still lack of clarity on how many states would be ready for implementation of major provisions by October 2013 (Oberlander 2012:2166).

Similarities between the UK health care reform and the ACA

Universality: With the introduction of the ACA and new reform in the UK American and British health systems acquired many similar features. The NHS of the UK provides service available to all and free of charge. In 2010 the ACA proclaimed that almost 95% of the Americans will have access to quality, affordable health care by 2019 (United States Department of Labour No date), although critics argue that the US system inherently creates inequity (Light 2003: 27) Secondly, quality is the overriding priority for the healthcare system of the UK and the USA will create a new program to develop community health teams supporting medical homes to increase access to community-based, coordinated care (United States Department of Labour No date).

Pay for performance:Both health systems encourage so-called “pay-for-performance” schemes: “In the USA the ACA’s value based purchasing initiatives will reward hospitals with increased Medicare payments for improved quality of care and penalise low-performing institutions … Similar pay-for-performance developments are underway in England” (Blumenthal and Dixon 2012: 1354). Third similar feature of two health systems is on-going trainings and education of medical staff.

Market players: Next similar feature is that both health systems now have autonomous ‘market players’ (United States Department of Labour No date; Davis 2012: 564; Allen et al. 2011: 77). The government of the UK proposed a commercial system which reduced the role of the NHS to government player equivalent to Medicare and Medicaid in the US (Pollock and Price 2011: 803). Among similar feature may be listed recent focus on health inequalities reduction – as important issues as ever before for both countries (Curtis and Leonardi 2012: 640). The UK system still maintains a strong primary care base built around GPs, similar to family practitioners in the USA (Doran, Roland 2010: 1023).

Features or policies in UK health care system that would be desirable for the U.S.

The socio-political contexts in both the UK and USA are different. There are several widespread beliefs about health care in the USA. Replicating the successful institutions such as NICE from the UK in the USA resulted in failure (Pearson 2005). Hence a pragmatic approach by assessing the feasibility would be important before implementing any aspects of health reforms from other countries.

Primary care: The UK health system traditionally focused on primary care, and on reduction of health inequalities. The USA health care system may consider focusing on reducing health inequalities with in the country not only by increasing insurance coverage, but also expanding focused work on affordability and accessibility such as Medicare and Medicaid for the most vulnerable populations. ACA faces several challenges related to ensuring universal coverage.

Effective budget control and regulation of private sector: The control of budget by the Central government in the UK for NHS found to be very effective (Blumenthal and Dixon 2012: 1353). This is mainly feasible due to the fact that over 80 per cent of the health care budget is centrally managed in the UK. In the US, no binding overall budget is set prospectively for federal spending on Medicare and Medicaid (Blumenthal and Dixon 2012: 1353). As health care in the USA is predominantly taken care through private insurance coverage, effective budget control and regulation of private sector is important.

Quality and equity: The UK considers issues of quality and equity as a high priority. Thus, it is interesting to mention at least some actions for enhancing equity and improving quality of health care. For example, in 2010 Equality Act (that covers England, Wales and Scotland) came into effect to legally protect people from discrimination and reduce inequalities, among all, for care (Equality Act 2010). This Act clarifies the definitions of discrimination and expands positive duties on public authorities to advance equality in respect of all protected characteristics (Hepple 2010: 11), which is an important part in moving towards improved health care service. It is worth noting that the budget of the NHS allocates a significant proportion of funds (around 13%) to tackle and prevent inequalities (Ashtana 2010: 818). Also, another example is a new organisation “HealthWatch[8]” launched in 2013 to gather and represent opinions and concerns of patients about health and social care services.

Conclusion

This paper was prepared to compare public health systems employed by the UK and the US. The UK has six decades of experience with a nationalized health care system, which is free at the point of use. The UK health care system has been considered successful overall, and continues to evolve. For the USA, important issues include primary care coverage, budget maintenance, quality, and equity. With the passage of the ACA, the USA will be able to rely on the UK experience for valuable lessons as they implement the new law.

[1] The Health and Social Care Act was passed on 27 March 2012, and came in to effect starting 01 April 2013, and aims to rapidly reorganise the NHS. Refer http://www.legislation.gov.uk/ukpga/2012/7/pdfs/ukpga_20120007_en.pdf Accessed 30 May 2013.

[2] http://www.gpo.gov/fdsys/pkg/BILLS-111hr3590enr/pdf/BILLS-111hr3590enr.pdf Accessed 30 May 2013.

[3] Primary Care Trusts are formed by the have been formed by GPs.

[4] Refer: http://www.nhsconfed.org/priorities/political-engagement/Pages/NHS-statistics.aspx Accessed 20 April 2013.

[5] http://www.nhs.uk/NHSEngland/thenhs/nhshistory/Pages/NHShistory1948.aspx Accessed 20 April 2013

[6] http://www.publications.parliament.uk/pa/jt201213/jtselect/jtcare/143/143.pdf Accessed 20 May 2013

[7] http://www.publications.parliament.uk/pa/jt201213/jtselect/jtcare/143/143.pdf Accessed 20 May 2013

[8] http://www.healthwatch.co.uk/

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