U.K.: MORE FAILED GOVERNMENT MEDDLING

Don't get sick late at night in Britain!

The Government’s reorganisation of out-of-hours medical care has failed patients and cost 70 million pounds more than was expected. The nine million patients a year who use the services were kept waiting for calls to be answered and 85 per cent of out-of-hours surgeries missed targets for urgent consultations, according to the National Audit Office. Primary care trusts (PCTs), which took on the services after GPs were allowed to opt out, were given insufficient funds by the Department of Health, increasing their financial difficulties. The findings are published as NHS hospitals and PCTs — responsible for planning and commissioning healthcare — are struggling with deficits and laying off staff. Better organisation of the out-of-hours service could have saved the NHS up to 134 million pounds in 2005-06, the audit office says.

The Department of Health had drawn up a list of 13 “quality requirements” for after-hours care, hardly any of which were met. For example, only 2 per cent of PCTs were able to answer patients’ calls within 60 seconds, and only 23 per cent began clinical assessment of patients within 20 minutes of their arrival at a medical centre. Fewer than one in ten surgeries could prove that they had assessed patients within 20 minutes of their making an urgent out-of-hours call for help, and fewer than one in six could provide emergency face-to-face consultations at a centre within an hour, or an urgent consultation within two hours. As for visiting patients’ homes, only 13 per cent of out-of-hours centres were able to arrange urgent consultations within two hours, and only 25 per cent could arrange less urgent consultations within six hours. But, despite these problems, the audit office found no evidence of serious incidents or deaths and says that, a year after they took on the service, “out-of-hours providers are beginning to deliver a satisfactory standard of service”.

The changes came about in 2004 when GPs were given the right to opt out of 24-hour care. By giving up 6,000 pounds a year they could hand over responsibility for patients from 6.30pm to 8am on weekdays, and on all weekends and public holidays. Nine out of ten did so. However, 6,000 did not represent the full cost of the service — as the Government knew. It was an amount reached in negotiation with the British Medical Association (BMA). The real figure was believed to be 9,500 a GP, or a total of 322 million in 2005-06. This was the sum provided to the PCTs— but the actual cost proved to be 22 per cent higher, or 392 million. In addition, PCTs lacked the “experience, time and reliable management data” to pick up the service. It was not even clear whether out-of-hours services should be restricted to urgent care, an issue that remained unresolved.

However, direct comparisons are difficult because nobody really knew how well or badly the old system worked. Chris Shapcott, the director of value-for-money studies at the audit office, said that PCTs were dealing with numerous other issues, such as changes to GP contracts and the payment-by-results reform. “The out-of-hours system probably did not get the attention it deserved in some areas,” he said. The audit office added that there appeared to be a discrepancy between patients’ experiences and the PCTs’ views of the care that they were offering, “suggesting that providers are currently not capturing negative feedback”.

Hamish Meldrum, the chairman of the GPs committee of the BMA, said that the old service had been unsustainable. “The finding that the costs of providing out-of-hours services were higher than the Government anticipated will not be a surprise to the thousands of family doctors who, in former years, provided it on the cheap to the NHS,” he said. Lord Warner, the Health Minister, said that the report “confirms the NHS is on the right track towards providing quality round-the-clock GP services”. [Amazing! What evidence would he need that they were on the wrong track??]

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Stuck in HSA Denial

Consumer-driven health care is beginning to show real signs of progress. A recent survey by America's Health Insurance Plans found that the number of people with a health savings account (HSA) tripled, from 1 million to 3 million, in barely a year's time. Companies are finding that high-deductible plans coupled with an HSA cost less. In his recent visit to Milwaukee, President Bush pointed to the hamburger giant Wendy's, which saw an increase of only 1 percent in its premiums after switching to an HSA plan.

Although I haven't had much to cheer about regarding the White House as of late, health care is an exception. President Bush has released a relatively bold agenda that would add steam to consumer-driven health care. The proposals include allowing all taxes, including payroll taxes, to be deducted from HSA contributions; putting individually-purchased health insurance on a more equal footing with employer-purchased insurance by permitting those who buy an individual HSA policy to deduct the cost of the premium from their income taxes; and also putting individual-purchased insurance on an equal footing with that of large employers by allowing individuals to purchase their insurance out of state.

Despite the progress, the political left refuses to acknowledge consumer-driven health care's promise and persists in promoting misconceptions about it. Jason Furman, of the liberal Center for Budget and Policy Priorities, in a missive against HSAs, complained that:

Our nation is suffering from two chronic health challenges: spiraling insurance premiums and 46 million Americans with no coverage at all. Just since 2000, premiums have skyrocketed by 73% and 6 million more people have become uninsured. The President's Health Savings Account "solution" would likely make these problems even worse.

Actually, consumer-driven health insurance provides relief from higher premiums. The Deloitte Center for Health Solutions released a survey showing that while premiums for more traditional plans rose between 6.6 and 7.5 percent last year, premiums for consumer driven plans rose only 2.6 percent. That's lower than the 2005 inflation rate of 3.4 percent.

Furman also overlooks improvement in the insured/uninsured numbers since HSAs came on line in 2004. While Census Bureau statistics show the number of uninsured has increased by 6 million since 2000, in 2004 the growth in the uninsured slowed. In the previous three years, the growth in the uninsured had ranged from about 3.2 percent to 5.7 percent; in 2004, it was under 2 percent. Another promising development in 2004 was that the total number of privately insured and those with employer-based insurance increased for the first time in five years. The arrival of a lower cost insurance product in the form of HSAs is likely one factor leading to these positive developments.

In reaction to Bush's agenda, many liberals like Ted Kennedy trotted out the increasingly tired "only for the healthy and the wealthy" charge against HSAs. While it is tempting to go through all the evidence showing it isn't true, it may be more instructive to consider the example of Wendy's touted by Bush. The average worker at Wendy's is likely part of the "working poor." And since the health of the poor tends to be worse than that of general population, chances are that Wendy's employees are a bit sicker on average. In other words, Wendy's is an excellent example of consumer-driven plans not being primarily for the healthy and the wealthy.

Furthermore, other parts of Bush's health care agenda make HSAs more accessible for the poor and sick. Bush's agenda permits a low-income family to take a refundable tax credit to purchase an HSA. It also allows small businesses and civic and religious groups to form associations that enable them to pool their resources to purchase insurance for their members. Finally, Bush enables employers to put additional contributions in the HSA of an employee with a chronic health condition.

Despite all the promising news, the path toward a more consumer-oriented health care system will not be without some serious obstacles. Many people are still stuck in an "entitlement" mentality regarding health care, for years accustomed to employers and insurance companies picking up the tab. A recent article in the Chicago Tribune examined the experience of Lutheran Social Services, which switched to an HSA plan last July. On balance, it has not been positive:

Larry Lutey, the agency's vice president of human resources, said many employees "don't like the HSA, to be quite frank," because it's a new way of thinking about buying medical services, and workers think it costs them more. "If my position had been an elective one," he added, "I would have been voted out of office this year."

Lutey said employees are unhappy with HSAs because "it feels like they're paying more upfront. The perception is, this is a very expensive type of plan. Even though there is money in [employee] accounts to cover these expenses, people end up feeling they're paying more out of pocket."

As the example of Whole Foods shows, companies can minimize such problems if they make a serious effort to educate employees about the switch to a consumer-driven plan. Nevertheless, there will be both some resistance and resentment as people change from health-care dependents to health-care consumers.

Despite some problems, consumer-driven health care can be expected to grow as it lowers costs and gives people more control over their health care choices. Congress can move the process along even more if it acts on Bush's health care agenda.

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For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation. Both Australia and Sweden have large private sector health systems with government reimbursement for privately-provided services so can a purely private system with some level of government reimbursement or insurance for the poor be so hard to do?

Comments? Email me here. If there are no recent posts here, the mirror site may be more up to date. My Home Page is here or here.

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