The National Health Service - Requirement for Cost-Control, Efficiency, and Equality - Case Study Example

THE NATIONAL HEALTH SERVICE: REQUIREMENT FOR COST-CONTROL, EFFICIENCY AND EQUALITY INTRODUCTION: “Medical care is a basic human need; a healthful community is a basic social need. The present system gives medical care to less than half the population, and it gives it under conditions which militate against a firstclass service. It is impossible to see any changes within the existing framework which would remedy these main defects”, stated Clarke (1943) Unlike health services which provide public subsidies to private insurance funds or compulsory levies in support of national insurance schemes, a national health service assumes direct powers to provide medical care for the entire population. According to Webster (1998) the state also takes over the ownership of institutions where health care is provided, as well as the employment of health personnel. The National Health Service (NHS) established in 1948 created a framework for the application of desperately needed improvements in the United Kingdom system of health care. The NHS was was a very specific U.K. response to the problem of post-war reconstruction. The new health service dramatically eliminated all the discrimination of the old system and planned to provide the entire community with a first-class and comprehensive level of care from “the cradle to the grave”. The historical background for the U.K.’s unorthodoxy in opting for a system of health care financed by general taxation and provided in public sector institutions is that: there was deep public resentment at the government’s failure to effectively confront health and related social welfare issues during the Depression years between World War I and World War II. With its landslide victory after the second world war, the Labour government’s first priority towards its welfare state was the new health service, which became recognized as one of the most radical experiments in health care in the western world (Webster, 1998). DISCUSSION: Life Expectancy: The life expectancy of a nation is a good indicator of the citizens’ health status. Britain is observed to be above average in its life expectancy at birth, as compared to other industrialized countries (Pollock, 2006): (Table 1 below). According to Beaglehole and Bonita (2004), life expectancy, the simplest measure of the health of a population is the average number of years of remaining life, and is always an estimate because it is based on the risk of dying at successive ages within the current population; it assumes no change in the death rates in the future. The dramatic reduction in death rates over the last two hundred years is due to a number of factors: the most important relate to changes in the cultural, social, economic and behavioural determinants of health, and to a lesser extent to public health interventions. The decline in death rates has led to a major improvement in life expectancy. Table 1 __________________________________________________________________________ Life Expectancy at Birth (year) 1950-55 1960-65 1970-75 1980-85 1990-95 OECD 63.2 66.4 67.8 70.0 72.2 EU 64.8 67.6 68.7 70.8 72.9 USA 66.2 66.7 67.5 70.9 72.2 UK 66.7 67.9 69.0 71.0 73.7 ___________________________________________________________________________ OECD: Organization for Economic Cooperation and Development EU: European Union UK: United Kingdom USA: United States of America (Pollock, 2006) Reducing Inequalities in Health: There is growing evidence that health inequalities are not only a function of the maldistribution of economic and social resources that lie outside the health system but are also exacerbated by differential access to health services. Any comprehensive strategy to reduce avoidable inequalities in health must therefore try to improve equality of access to healthcare (Bakker, 2002). Health needs cannot be defined solely in terms of medical conditions: they are conditioned by social circumstances. As a consequence, the equality imperative requires that all patients should be provided with timely and quality services appropriate to their particular needs and circumstances and their capacity to benefit, states Bakker (2002). This means that judgements about equality of access to healthcare ought to be made in terms of the degree to which potentially achievable health outcomes associated with healthcare system interventions are actually realized for all social groups. Benefits of the National Health Service As It Was Initially Conceived: The NHS secured many benefits for all members of the nation, without any discrimination: integrated hospital services with minimal internal administrative costs, district general hospitals bringing specialist services for all within reach of every family, general practice to offer 24-hour primary care by doctors trained for the job, and continuity of care for everyone; robust structures for data collection and planning to match resources to needs, the education and training of medical staff, and the gradual equalization of service provision across the country, states Pollock (2006). Allowing for experimentation and innovation has contributed to making British clinical practice and research among the best in the world. Another advantage of the NHS is Benefit Portability: According to Ulman, et al (1993), the existence of the National Health Service means that even those who opt for private health insurance have a back-up health plan regardless of job change. National Health Service Policy: During the period 1948 to 1964, to prevent the NHS from being a drain on national resources, its costs were restricted in many areas. Resources were denied for obvious and urgent requirements, such as those connected with demographic change, medical advance, capital investment, or policy changes needed to keep up with the pace of improvement experienced elsewhere in the Western world (Webster, 1998). According to Gabe and Calnan (1991), privatization had become the biggest challenge to the National Health Service (NHS). The reasons for privatization include the free play of market forces, the impact of the new Right’s social and economic doctrines, the direct influence of government concessions to the private sector; the indirect effect of expenditure policies on the NHS and more significantly, the wider economic and political strategies pursued by the Conservatives. In 1980 privatization began to be official policy. By then the NHS had suffered thirty years of serious underfunding and a good deal of administrative reshuffling. Its hospitals were often dilapidated and some still dated from the Victorian era. Staff shortages and long waiting times for non-urgent hospital treatment were common. Pay for nurses and support staff had been kept low, and morale was at a low level. However, the NHS’s founding principles of comprehensive, universal care equally available to all on the basis of need, not ability to pay, continued to prevail. Moreover, the country’s overall health statistics compared well with those of other industrialized countries, not to mention those of the United States of America, which spent twice as much per head on health care (Table 2 below). In spite of its weaknesses, the NHS remained extremely popular (Pollock, 2006). Table 2 Health Expenditure per Capita (pounds), and as percent of GDP (in brackets). _____________________________________________________________________________ 1960 1970 1980 1990 2000 OECD average 26 (4.5) 74 (6.0) 346 (7.3) 839 (8.7) 1,500 (10) EU 15 average 15 (4.0) 53 (5.4) 333 (7.3) 837 (7.8) 1,193 (8.7) USA 51 (5.1) 145 (6.9) 506 (8.7) 1553 (11.9) 3,057 (13.0) UK 19 (3.9) 41 (4.5) 234 (5.6) 555 (5.7) 1,126 (7.1) ______________________________________________________________________________ From the year 1960, health expenditure per capita in U.K. is seen to be the minimum as compared to other industrialized nations. The percent of gross domestic product (GDP) given in brackets is also seen to be the least for U.K, on a comparative basis. Only in 1960 was the health expenditure per capita and the GDP of U.K. less than that of the European Union. Maynard (1988) states that the Report of the Central Policy Review Staff in September 1982 argued that one way by which the projected gap between government revenue and expenditure could be bridged was the denationalization or privatization of the National Health Service. Public reaction was hostile and the conservative government responded by apparently rejecting this option. This was a temporary measure because the government continued to advocate partnership between the private and public sectors, and various private groups continued to demand competition in health care markets, the reduction of bureaucracy, and greater choice for consumers. No official proposal to privatize the National Health Service was ever made, though the NHS had been in conflict with the Thatcher government’s political tilt towards privatization. The NHS appears to be the most popular form of British social insurance. According to the Central Statistical Office (1990) reports, privatization of the system is not an idea that could win broad public support, even though employees of the NHS accounted for about 4 % of the total British employment in the late 1980s. Even attempts to structure the NHS on a more cost-sensitive model are politically difficult for the British government (Ulman, et al, 1993). According to Pollock (2006), in 1980 the Thatcher government began radically reshaping the NHS, fragmenting its structures, significantly reducing its coverage, and not maintaining evenness of provision from one district to another, while financial targets increasingly displaced health care needs as the focus of concern. Twenty-three years later, the NHS had abandoned to the private sector almost all long-stay in-patient care and other treatments. The government also pushed through legislation by which most NHS services including hospitals will eventually become more or less independent corporations run on business lines. Farazmand (2000) supports this, stating that for more than fifteen years after 1980, the United Kingdom passed through a turbulent process of reform in the management of public services. Sweeping reforms also affected the health service, during the Thatcher government. During the 1980s the NHS was massively reformed by the creation of an internal market in health care. Groups of institutions such as hospitals and medical laboratories were formed into independent non-profit health-trusts offering services in return for fees to local doctors: general practitioners and to each other. The doctors met these fees out of budgets allocated by the department of health in order to obtain the best treatment for their patients and the best value for money. This is reiterated by Williams and Flynn (1997) who state that the meaning and form of privatization has varied. In the NHS, many of the functions were retained while their structure and operation were reformed. The government attempted to increase managerial control over doctors and other health professionals. There were three strands to this strategy: general management, clinical budgets and separation of purchasers and providers. The ‘internal market’ as the latter came to be known was believed to combine the virtues of private sector discipline with welfare values, and would therefore limit potential political damage to the government.. According to Thatcher (1983), the NHS “attempts to provide a service for everyone in the community according to their need, and for the service to be financed by every one in the community according to their means”. In this new system, contracts were regarded as the main instrument for bringing about change, and a complex system of commissioning and contracting was established. This represented a new method of working which entailed significant administrative and organizational turbulence, it also required a new set of values and the evolution of a new organizational culture: the culture of competition and contract negotiation, business planning, and marketing. It is widely accepted by commentators, practitioners, and politicians that the creation of an internal market within the NHS constituted the most fundamental change in organization and culture since its inception in 1948 (Williams and Flynn, 1997). This is supported by Pollock (2006) who observes that after the introduction of the internal market in 1991, the basis of funding altered dramatically. The link between the allocation of funding and the meeting of residents’ needs and service priorities was broken. Instead hospitals were established as financially independent corporations and required to generate enough income to break even. Now hospitals’ main source of income was from contracts placed by NHS purchasers (the health authorities and some General Practitioners called fund-holders who were given the funds to buy elective hospital services for their patients; the rest came from private patients and income generation. Choice was not expanded but in fact was curtailed by the internal market. Some health authorities placed strict limits on what health care would be provided, and so their hospitals had to seek authorisation before proceeding to treat certain categories of patients. These patient s were usually those with complex, expensive to treat conditions such as heart or kidney transplants or with severe conditions such as anorexia or bulimia which needed special placements. Increasingly, health authorities began to draw up criteria for denying care, with little clinical decision making involved. Poor people often had to pay privately for treatment, or go without. Other health authorities began to restrict access to care for certain treatments and conditions using the extra-contractual referral mechanism. Conflicts and dilemmas arose because of the separation of power and responsibility for care under a market system. Some hospitals had to bail out some some services at the expense of others, due to funding being destabilized and unpredictable (Pollock, 2006). One interpretation of privatization would see it as being solely the result of the free play of market forces: as the result of individuals exercising free choice in the market place with rising standards of living. The NHS’s near-monopoly of health-care provision is such that private-sector growth is related to developments in the NHS. Economic, political and ideological reasons account for the government’s preference for privatization (Gabe and Calnan, 1991). According to Pollock (2006), the forecourts of hospitals today look more like shopping malls cluttered with retail outlets. This transformation began after the introduction of the internal market, when hospitals were expected to supplement their incomes from commercial retail rentals and private patients. NHS income-generating schemes are also behind the contracting-out of hospital car-parking, TV and phone services to companies such as Patientline. Besides expensive parking charges, exorbitant phone charges and the high cost of television use are especially prohibitive since pensioners and the poor are more likely to require hospital care than other people. These costs are only the visible tip of the iceberg. The DoH (2000) states that the market ethos undermined teamwork among professionals and organizations vital to patient-centered care, and it hampered planning across the NHS as a whole. On the other hand, McMaster (2002) counters that crucial aspects of the restructuring of the UKs health service are predicated on an essentially neoclassical, and utilitarian, basis, which implies that a market-orientation is the inevitable consequence of reform. Privatization can also be seen as contributing to the government’s aims of stimulating small-business formation and entrepreneurial initiative which promote economic recovery Gabe and Calnan (1991). Broadly, the government’s policies have prioritized the “productive”, who produce goods and services that can be profitably marketed, and marginalized the “parasitic”, who are either dependent on state benefits or whose economic activities are deemed “unprofitable” in narrowly conceived terms. While the former are to be rewarded through the market for their contribution to production, the latter suffer for their failure to contribute adequately to the market. This suggests encouragement of private forms of service provision and tax structures which prioritize the interests of the “productive”, while at the same time seeking deliberately to limit, as far as possible, state support for and provision of welfare services: Gabe and Calnan (1991). As far as direct steps are concerned, private nursing-home expansion by changes in Department of Health benefit regulations, minor legislative changes such as relaxations in controls on private hospital developments or permitting consultants to undertake additional private practice, have undoubtedly facilitated private sector growth (Gabe and Calnan, 1991). Among the indirect steps are that the government’s policies on the NHS have undoubtedly created a climate in which the private sector can flourish (Webster, 1998). An overview shows that, on the positive side the NHS for over nearly sixty years has managed to maintain its conitnuity of providing health care, maintaining mutual confidence between the community and its health workers. However, for many groups, best practice remains as remote a prospect today as in 1939. “The unemployed, the poor, the elderly, the physically disabled, or other vulnerable groups remain in a situation of disadvantage too reminiscent of before the existence of the NHS, while inequalities in resource distribution remain as glaring today as when they were first revealed” (Webster, 1998: p.216). The effect of limited resources together with inefficiencies within the system due to lack of an established system of organization and management, has been compounded by vested interests who perpetuate dysfunction for their own financial benefit. Britain’s National Health Service now faces an uncertain future, states Luna (2006). Besides the best defenses of the Labour Government, the Conservative opposition has outlined a number of failures in the NHS: the lack of a family doctor service, inefficient long-term care services, and diminished priority for cancer patients. Similarly an independent King’s Fund Report from March 2004 blames the Labour Government for failing to meet the public’s priorities on elder care, waiting time and patient choices. Given the developed world’s aging population and burgeoning demand for increasingly scarce health services, Britain must create a new innovative framework for nationalized health care. CONCLUSION: Current British government policy and US managed care have many good points, state Donaldson and Ruta (2007). Building on these, their model of integrated care based on genuine practice based contracting, would make it much easier to control overall NHS costs and manage scarcity without compromising clinical standards or equity. If foundation trusts take over and develop these roles, more emphasis is likely to be placed on acute care, and demand would be led by supply rather than by patient and primary care. They would safeguard the founding principles of the NHS and guarantee its continuation as an asset for the twin goals of economic efficiency and social justice in Britain. The conception of innovative solutions which integrate all the criteria to be considered, help to achieve successful organizational performance. REFERENCES Bakker, Martijntje. (2002). Reducing Inequalities in Health: A European Perspective. United Kingdom: Routledge. Beaglehole, R; Bonita R (2004). Public Health at the Crossroads Achievements and Prospects. United Kingdom: Cambridge University Press. Clarke, Joan Simeon. (1943). “National Health Insurance” in W.A.Robson (ed) Social Security. London: Allen and Unwin. DoH (Department of Health) (1989) Working for Patients, London: Her Majesty’s Stationery Office. DoH (Department of Health) (2000) The NHS Plan: A Plan for Investment, A Plan for Reform, Cm 4818-, London: Her Majesty’s Stationery Office. Donaldson, Cam; Ruta, Danny. (2005). “Should the NHS Follow the American Way?” The British Medical Journal, Vol.331: pp.1328-1330. Farazmand, Ali. (2000). Privatization or Public Enterprise Reform: International Case Studies. Gabe, Jonathan; Calnan, Michael. (1991). The Sociology of the Health Service. London: Routledge. Luna, Joseph. (2006). “Falling Sick: Britain’s National Health Service”. Harvard International Review, Vol.28. Maynard, A. (1988). “Privatizing the National Health Service” in Johnson, C (Ed.) Privatization and Ownership, London: Pinter. McMaster (2002). “A Socio-Institutionalist Critique of the 1990s’ Reforms of the United Kingdom’s National Health Service”. Review of Social Economy, Vol.60, 2002. Pollock, Alysson M. (2006). NHS Plc: The Privatisation of Our Health Care. New York: Verso. Smith, George Davey. (2003). Health Inequalities: Life Course Approaches. United Kingdom: The Policy Press. Thatcher, Margaret. (1983). Health Care Debates, Vol.42, Column 730, 10 May, 1983. Ulman, Lloyd; Eichengreen, Barry J; Dickens, William T. (1993). Labor and an Integrated Europe. Washington, D.C: Brookings Institution Press. Webster, Charles. (1998). The National Health Service: A Political History. United Kingdom: Oxford University Press. Williams, Gareth; Flynn, Robert. (1997). Contracting for Health: Quasi-Markets and the National Health Service. New York: Oxford University Press. Read More