Monday, September 3, 2012

The NHS, Obamacare and the priorities of a US President
I just came back from the UK and as you know if you read my blog regularly, I was at the London Olympics but more importantly I was in the UK to soak up the Olympic spirit and the great atmosphere that settled on London.  Now I saw Danny Boyle's Olympic Opening Ceremony like many people on the planet and was, I confess, a little surprised that Boyle emphasized the NHS as one of the "firsts" that the UK should celebrate as a nation. Now most of my US friends don't know what the NHS, but the National Health Service as it is known in the UK is the state funded healthcare system that has been in force since it was introduced in 1948 in post-WWII UK under the most left-leaning UK government under Clement Atlee, as one of the consequences of a reconstruction of the UK after the terrible hardships suffered by the country during the war (see here for more).  Health Minister Aneurin Bevan introduced the NHS with the following principles - i) it meets the needs of everyone; ii) that it be free at the point of delivery and iii) that it be based on clinical need, and not the ability to pay.

Now as you can see on the left, the NHS isn't necessarily seen as the most wonderful institution by all concerned in the UK ( - here David Cameron (UK PM) and Boris Johnson (Mayor of London) - are seen grimacing) in the way Boyle was determined to celebrate the NHS as a real achievement using real NHS nurses and doctors.

But one thing I think that people not from the UK need to recognize is that even the right wing party in the UK, the Conservative party, is not about to scrap the NHS because it is a beloved part of the UK landscape and although most people complain about various facets of the system, in the UK the horror stories about the US healthcare system are such that most Brits have no wish to embrace a private healthcare system like the US's system.

Now to Obamacare. Paul Krugman recently noted on his blog (here) that references a CEPR blog article (here) that comments on an article that criticises President Obama for focusing so much on healthcare in his first term in office when in the opinion of the author he could have been focusing more on the economy.  But in my way of thinking reform of the US healthcare system will probably be one of the major accomplishments of the Obama Presidency.

My basis for making this statement is partly because healthcare costs are an extremely large part of the government budget and because also they are much higher as a percentage of GDP than for any other country in the world. Whether you like Michael Moore or not, one of his major contributions must be his film "Sicko", which points out how expensive and inefficient the US healthcare system is, considering the economic resources that are absorbed by the healthcare sector.

But also I can make this statement from a personal point of view as I have been a recipient of healthcare under the US, Canadian, UK, and Finnish healthcare systems - how many people do you know who can say that? Now admittedly I haven't been on the operating table in any of these systems, so I haven't gone through the whole GP, to specialist to operation procedure, but I have received treatment by doctors in all 4 countries, and received some basic tests (blood work or some other basic testing). These are my observations about the US compared to the other systems:
 - a doctor's visit in the US involves much more basic "triage" than elsewhere - which might yield some useful observations, but is likely to be superfluous in most cases.
 - US doctors have an incentive to give many more tests than in other countries as they can charge for these tests - but they are permitted to give these tests according to the HMOs and PPOs, so naturally, they do!
 - US doctors will not contact patients on the phone - but they do elsewhere.
 - the HMOs and PPOs really determine the charges and expense of the system - thereby setting the minimum prices for the system.

Critics of both the Canadian healthcare system and the NHS say that they are "socialist".  Certainly in the UK that cannot be further from the truth. The structure of the system has been to create decentralized NHS "trusts" which are given a budget and then tasked with delivering care as efficiently and effectively as possible. In both the UK and Finland there are private options if you want to pay, but everyone pays for the NHS through their taxes, so that leads to a minimum level of care. And when you go to the doctors in Canada, the UK and Finland, the doctor personally invites you into his or her office without all the "triage" tests, and basically gets straight down to business. This "personal touch", in my experience, sets these systems apart from the US system, in which lawsuits and rent extraction are the main foci.

So, what do I think of Obamacare?  I think it really comes up short compared to the "single payer" systems that I think work more efficiently than the US healthcare system, but it is certainly better than what the US has right now. Will the US ever get rid of the middlemen ( - the HMOs and PPOs)?  The answer is likely no - they have way too much power now and are completely entrenched in the system.

So did President Obama waste his time focusing on reforming the US healthcare system?  No, I don't believe he did - it was an important task to complete, and now ranks as one of his biggest achievements over the past 4 years. 

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