What does the UK Election result mean for the NHS?

Last week, the UK voted for a snap general election called by Theresa May, Prime Minister and leader of the ruling Conservative Party. Much has been written about why she took this unexpected decision, so I’m not going to recook that here.

The election results were perhaps surprising to anybody who still relies solely on the BBC Ten O’Clock News or newspapers to keep in touch with the world, but were probably not surprising to anybody keeping tabs on the popular opinion via social media. In case you missed it (yeah right!), the Conservatives lost 13 seats and therefore lost their majority, meaning they have to partner with a small Northern Ireland political party (the DUP) to make a majority government. It’s a complete embarrassment to Theresa May.

I’ve been asked multiple times since Friday, “what does this mean for the NHS?”. So I thought I’d answer here.

 

1) What the election result means for the NHS:

The Conservatives are still in power, and many of the Cabinet MPs (the top Members of Parliament who take up a leadership role at one of the many government departments and ministries) will remain. Jeremy Hunt retained his safe seat in Surrey South West so will likely remain as the Secretary of State for Health. So I suspect we will continue along the path we are currently on, which is one of progressive privatisation of the NHS.

Jeremy Hunt has made it clear (to the Health Select Committee) that he is intending to bring in an American model of healthcare “like Kaiser Permanente”. Kaiser Permanente are a huge healthcare insurer in the USA who operate a fleet of their own hospitals. People pay Kaiser Permanente a monthly insurance premium, and then can receive healthcare at any of the Kaiser-approved hospitals as they need it. So that’s the model Jeremy Hunt has, on the public record, said he is aspiring to for the NHS.

At the moment, the NHS exists in two halves:

a) Commissioners (e.g. Clinical Commissioning Groups) = These decide what healthcare services to spend money on in order to provide healthcare for the population.

b) Providers (e.g. GP practices, hospitals) = They get given money by the commissioners to actually provide diagnosis and treatment services to patients. These used to all be NHS not-for-profit “trusts”.

Historically, the NHS has been funded by general taxation. Around £120bn per year of tax revenue is handed to the Department of Health which cuts it up into smaller pots and hands those pots down to the country’s many Clinical Commissioning Groups, who then “purchase” healthcare services from the providers.

So far, NHS privatisation has involved replacing some NHS providers (hospitals, GP practices and community clinics) with private firms. For example, Virgin Care have taken over running musculoskeletal clinics, mental health services and community care in some parts of the UK. As privatisation rolls on, we’ll see more NHS providers disappear until eventually all hospitals and GP practices will be privately owned.

Then, for a while, the NHS will exist as a commissioner only. In other words the NHS will simply be an organisation which holds a pot of money and decides which private providers to spend the government money on.

Over the following few years, under Jeremy Hunt’s aspired-to model, the remaining NHS commissioning will be replaced by private insurers. They will take money from members of the public who subscribe and pay a monthly insurance premium, and use some of this to pay for the private hospitals and GPs (family doctors).

 

2) What this model of privatisation means for patients:

Compared to the free-at-the-point-of-use NHS as they know it, it’s generally bad news.

It is well proven that the American model of healthcare brings high costs and bad results per pound. The USA spends 18% of its GDP in healthcare, but only ranks 37th in the world for quality of healthcare. By contrast, the second biggest spender, France, spends 11.6% of its GDP and manages third place in the world rankings.

Back in the UK, the NHS has been in persistent deficit for 6 years. Hospitals, community healthcare services and GP practices are costing more to run than they are being given from public tax funds. Because of this shortfall, tax won’t go down very much (and certainly not by the amount we have been spending on the NHS) as more gets privatised. Instead, while the expenditure on the NHS is steadily reduced as more of it falls into private hands, the government will probably pocket the amount of public money saved to pay off historic debts.

Patients will be expected to make up the shortfall by paying for their own healthcare insurance. Many of the healthcare insurers and hospitals will be operating on a for-profit basis, so will price accordingly to make a profit margin. It’s patients who will pay to fund this margin. If the hospitals cannot operate any more “efficiently” than the current NHS entities they are replacing, the patient will end up paying more for the same care.

So the overall cost to patients will be increased, a little less tax + a lot more insurance premiums.

Looking across the Atlantic to the USA, there will be certain quirks of the new healthcare-insurance led system:

a) Patients with insurance will find they are getting unexpected bills when their insurer decides to refuse to cover certain aspects of care as a technicality:

For example, many UK private healthcare insurers refuse to cover the cost of an initial appointment with a Consultant, and many even refuse to pay for Outpatient tests and treatment.

Seriously, go have a look at the AXA PPP Family Health Insurance, and buried right under “What’s Not Covered” at the bottom of the page:

Our Personal Health plan does not cover;

  • Pregnancy and childbirth
  • Charges when treatment is received outside of our directory of hospitals unless you are covered by our Extended Cover option
  • Any treatment incurred as a result of engaging in or training for any sport for which you receive a salary or monetary reimbursement
  • Any long term treatment of long term (chronic) conditions.

Our Personal Health plan will not cover the following unless you choose the relevant options:

  • Dental procedures
  • Out-patient diagnostic tests and out-patient consultations
  • Psychiatric treatment

– AXA PPP

So, if you opt for the standard package, you’re covered for any condition so long as it is acute, occurred after the start of your insurance, must be treated as an inpatient, and is treated in an AXA PPP approved hospital.

The logical conclusion of this behaviour is to stick all sorts of exclusions and mandatory requirements in a healthcare policy to make it almost impossible to claim:

You must be named “Xerxes” and film yourself spinning around hopping on your right leg saying “woobligah”, while holding a copy of the day’s newspaper in order to be covered for a qualifying condition which might befall you that day.

 

b) Patients who develop a long-term condition may find that the insurer will “drop them” after so many treatments.

Many insurers have a clause which allows them to ditch a customer (stop paying for your medical bills) if the customer racks up any more than a certain amount in costs. There are stories abound of cancer patients in the US being ditched mid way through (curative aim) treatment.

The USA tried to crack down on this with the Affordable Care Act 2010, but insurers have found other ways round such as charging huge co-payments on medications sick people need. Orange-faced Donald Trump wishes to repeal that act to help insurers along.

But to debate the pros and cons of the USA Affordable Care Act is to miss the point. The point is that healthcare insurers have a track record of wanting to ditch patients when they become sick. In other words, healthcare insurers only want to take money from well people and stop covering them when they get ill.

 

c) Patients with pre-existing conditions might not be able to get insurance for those things.

Insurers want to minimise “risk”, so will avoid taking on anything too risky. If you have diabetes and try to sign up for a new healthcare insurance, you will either be charged a huge monthly premium, or be refused as they know you’re very likely to need healthcare services in the future.

Don’t take my word for it, have a look at BUPA’s frequently asked questions page. Again, buried at the bottom is:

Health insurance does not generally cover pre-existing conditions… There are also certain conditions and treatments that, whichever plan you choose, will not be covered. These include chronic long-standing conditions like diabetes

– BUPA UK

 

d) Patients will be told they cannot see certain doctors or certain hospitals because they are “out of network”:

Certain insurers will only pay for treatment at certain hospitals where they have hatched deals for. That’s fine for your planned hip replacement, but not for when you’re rushed into the nearest Emergency Department for a burst appendix, requiring emergency surgery and find that the hospital cannot treat you.

Again, if we look at the USA, we can find many examples of where people have been denied treatment because they ended up at a hospital which was not “in network”, or were slapped with huge bills despite paying for a comprehensive medical insurance package for the same reason.

 

e) It will cost patients more overall:

As explained, the amount of tax reduction we will see will be much less than the amount of insurance people will have to pay. The WHO statistics on per-capita spend prove that private healthcare provision costs more compared to public for the same treatment so people will have to pay more in total.

 

3) As a doctor, there are mixed fortunes, depending on the doctor’s point of view:

a) Under a private system, doctors generally get paid more than under a public system.

I expect most doctors will see their pay increase by about 50%.

At the moment, in the UK there is a nationally agreed payment system for doctors which fixes the salary depending on grade and experience for permanently employed doctors. There is a general skills shortage in the UK in Medicine, especially affecting certain specialty areas like General Practice, General Medicine, Emergency Medicine, Paediatrics and Psychiatry. Market forces will dominate and doctors will demand higher salaries as they play off potential employers against each other.

 

b) Private healthcare providers will judge doctors on certain metrics like “endoscopies performed per month” or “patients seen per hour”, or patient satisfaction scores:

Private healthcare providers are likely to be much more “performance” orientated, so will pick certain metrics to reward or discipline their staff on. The metrics chosen usually closely relate to what the hospital gets paid the most for. The problem for doctors is that these sorts of metrics don’t always correlate with good medical practice.

For example, I can see 4 majors patients an hour in A&E if I take massive shortcuts and do a sloppy job. But I’m likely to miss diagnoses, inappropriately admit people and inappropriately send people home. It’s much better for patient safety to see two patients per hour and do the job properly. There is nothing in Good Medical Practice which says “you shall hit corporate targets”.

 

c) There will be a gulf between emergency and elective care:

Elective (planned) care like hip replacements, knee replacements, cataract surgery, gallbladder removal, hernia repair will attract the most attention from the private providers. These are controlled, predictable activities where it’s easy to calculate the cost and so deliver a safe profit margin.

Emergency care is unpredictable in time and quantity. A patient can come in after a road traffic accident with nothing more than a bump to the forehead (home with advice + paracetamol = cheap), or can end up having a collapsed lung, intra-abdominal bleeding, depressed skull fracture requiring CT scans, a chest tube, surgery under three different doctors and an ICU admission. You have to staff Emergency Departments fully because you can’t easily predict when it will be busy, so you end up with some wastage in quiet times. Emergency theatres have to be kept available, meaning less theatre space / surgeons / anaesthetists for the profitable joint replacements. Bottom line, emergency stuff is financially risky as you don’t know how much profit you’ll make from emergency patients.

Most private hospitals groups have limited experience of operating Emergency Departments or providing urgent and emergency care services. There is a lack of familiarity, corporate systems and management skills for emergency care in private wings.

So emergency activities will get under-resourced and I suspect A&E departments will start being shut where hospital providers can get away with it.

So privatisation will probably mean that doctors get paid more, will be paid by how well they hit certain targets, and the expensive emergency stuff will be left to die on the vine. Personally, as a doctor, this is bad news. I am not hugely bothered by money, but care deeply about patient safety.

 

There’s one more angle which I have to examine though…

 

4) As a healthcare entrepreneur, I’ll probably do better under a private model:

NHS Trusts are terrible at changing their practice. They are paralysed with anxiety about spending public money on “the wrong thing”, so they avoid anything with potential risk, to the point that they will preserve a very risky status quo (like paper drugs charts), than spend money on a new system out of fear of a new minuscule risk (electronic prescribing systems may occasionally crash), despite the new system being much less risky overall.

NHS Trusts are gummed up with bureaucracy which means that making decisions takes a lot of people’s time and involves lots of paperwork. This raises the bar for how much benefit a new product / service must offer before it becomes worth the while going through with all this paperwork.

Under private hands, profit wins. If a new system is going to be less risky and will save more money than it costs (to implement and to run), then they’ll go for it. The costs to implement will be less as there is less bureaucracy in private hands.

So a company supplying healthcare solutions will find fewer barriers in supplying private hospitals than in supplying NHS hospitals.

But in this world as a health entrepreneur doctor, I can have my cake and eat it (for now). I can undertake small scale company-funded clinical trials with new technology in the highly regulated and respected NHS. These are the sort of deals where a cash-strapped NHS hospital gets something for free in exchange for participating. Then, once the technology has a proven efficacy, I can export it to countries where there are hospitals who are able to put themselves in a position to buy new healthcare technology.

 

 

In conclusion:

The UK Election results mean an onward march to the world of private healthcare, healthcare insurance and all the systemic flaws that come with it.

Patients will probably be worse off, doctors will be paid more but be more frustrated with the system, and healthcare entrepreneurs might be able to actually start selling their innovation in the UK.

Weighing that all up… the patient impact is the most important outcome here, and they lose hard, far eclipsing the doctor pay and health tech market improvements. If we’re going down this road, there are much better destinations than the USA style of healthcare.

 

So, what would I do if I were Secretary of State for Health?

That, I shall leave to another post…

 

Featured Image: Derived from Freepik.com and remixed by me for the lolz.
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