Vol. 50 August 15, 2011 “Want To Go Dutch?” …or French…or German?

August 15, 2011

Before we learn FROM other countries’ experiences with medical care,

we first need to learn ABOUT them. (1)

Since all other developed countries have universal health care insurance it is a no-brainer that we, the sole remaining developed country without universal health care insurance, should look to other countries’ experiences for help in our incremental struggle towards it. Looking to the United Kingdom’s NHS has been the most frequent step because of our common language. It has also been the most politically risky one because of the potential stigma of being labeled as “soft on Socialism”. All Dr. Berwick had to say was that there were parts of the NHS that he thought were good, and he was immediately barraged by Congressional criticism as the interim head of Medicare.

So, what about France and Germany that have 5% administrative costs as compared to our 20%? (Remember, Capital One Visa card charges about 7-8% to its users.) We spend around 16% of our gross domestic product on healthcare while the French (see SICKO by Michael Moore, 2007) and the Dutch spent around 10-11% in 2007. You are already familiar with peri-natal morality rates and other measures of quality showing that our health status is no better and is sometimes even worse than those countries despite our higher costs.

2007    Infant      Mortality  Life Expectancy
Germany    4.1 79
France    4.2 79.9
Canada    4.6 80.3
U.K.    5 78.7
U.S.    6.4 78

…the DUTCH ? !

The recent proposal from Congressman Paul Ryan (R-WI) to replace traditional Medicare with a voucher system for individuals to purchase private health insurance brought the Dutch universal health care system into our spotlight. Both Ryan’s Plan and the Dutch system rely on regulation of private insurance, so-called “managed competition”. In 2006 the Netherlands switched from a system of mandatory social insurance administered by nonprofit sick funds to mandatory basic insurance that citizens had to buy from private insurance companies.

A recent analysis of the Dutch system (1) indicates that despite the intention to control costs while continuing universal access, the reality of “managed competition” has fallen short in four key areas:

1. the growth of health care spending has NOT slowed and the administrative cost and complexity has increased (600 workers were added to the tax department to verify eligibility and dispense vouchers),

2. the number of Dutch people who have “defaulted” on their premiums and have, therefore, become “uninsured” has increased the number of uninsured from 1.5% to 3%,

3. the value of “consumer choice” has proved to be very small with an average of only 4% per year changing their insurance between the 4 insurance conglomerates that control 90% of the health insurance market,

4. the amount of government regulation did not decrease; price controls, global budgets, and patient cost-sharing remained in effect. (In 2010 payments to specialists were reduced in response to budget overruns)

The Dutch Ministry of Health requires that insurance companies accept all applicants regardless of health status and must charge only community-rated premiums to avoid “cherry picking” of the most healthy portions of the population. Also, risk equalization formulas are used to protect insurance companies from excessive losses incurred by the sicker, higher-risk populations. Insurance companies are expected to compete in price and quality through SELECTIVE contracting with networks of hospitals and physicians. These same policies are shared by many of the health care reform proposals in the U.S., including Ryan’s Plan.

The actual outcomes of this “managed competition” in the Netherlands include:

  • total costs of health insurance for Dutch families has increased by 41% since 2006
  • the country now spends 15% of its gross domestic product on health care rather than 10%
  • more than 40% of Dutch families receive government subsidies to pay their health insurance premiums, and that will increase as the government moves to protect “defaulters” from losing their insurance after six months of non-payment of premiums.
The article ends with this statement:
“The idea that the Dutch reforms provide a successful model for U.S. Medicare is bizarre.”
The Ryan Plan is based on the same principles, but would also gradually reduce governmental contributions so that a 65 year old beneficiary would pay for 2/3 of his or her medical costs. It is obviously no panacea for U.S. health care insurance problems.

1. Managed Competition for Medicare? Sobering Lessons from the Netherlands , NEJM 365:4 , p. 287, July 28, 2011, Okma, Marmor, and Oberlander

Vol. 43 April 15, 2011 “I Told You So”

April 15, 2011

“The [U.K.] proposals draw heavily on market-style incentives to drive improvements in outcomes and increase responsiveness to patients and the public. But they also include new arrangements for accountability, fundamental changes to the structure of the NHS, and a shift in the responsibility for paying for health services to groups of capitated physicians. (1)

Sound familiar?  Those words describing the current British health care reform effort could serve as a description of U.S. health care reform and the creation of Accountable Care Organizations (ACO). I know I bill myself as an “evidence-based” blogger, and therefore distant from the personal ranting, either angry or self-serving, by other bloggers, but this article in the New England Journal of Medicine spurs me to electronically shout out in triumph, “I told you so!”  In my blog (2) and in a paper (3) I wrote in 1967 (when?) I opined that  there seemed to be more similarities than differences between the U.K. and U.S. health care systems.  This well-researched article in the NEJM  agrees with me.

BOTH the U.K. and U.S. reform acts:

Seek to reduce costs by making providers accountable for total per capita health care costs ($32B less for U.K.over 5 yrs. and $100B less for U.S over 5 yrs.)

Seek to strengthen primary care

Remove payment incentives to increase volume of patient visits (Pay for “value” in U.S.;  “fixed budget” in U.K.)

Do NOT require providers to “bear risks” for  catastrophic illness like insurance companies do now (but that is an option for ACOs in U.S.)

Primary Care Physicians (PCP)
While the U.S. pays lip service to strengthening the PCP, the U.K. proposal really means it. U.K. will give the general practitioners CONTROL of over 70% of the NHS budget! The GPs will form primary care groups called GP Consortia. These Consortia will buy additional care for their registered patients from hospitals and specialists competing for contracts. 170 Consortia have already been formed and another 100 are being planned. A physician-run ACO in the U.S. would be similar, but the ACO would include both primary care and specialty physicians like present day multi-specialty groups. No one knows how many ACOs will be developed, and many of them will be formed by hospital systems.

Commentators on both sides of the Atlantic have voiced concerns that physicians will not be able to deal with these new managerial responsibilities successfully; physicians in neither country like to develop budgets, live by budgets, or even value management/administrative skills.

Quality Incentives
In the U.K. the National Institute for Health and Clinical Excellence (NICE) will set care quality standards for the Consortia and the contracts they grant  or “commission”. The Center for Effective Research (CER) established by the U.S. Affordable Care Act will have the same role of issuing standards of care. The practice of setting national targets for care  will be dropped in the U.K. to be replaced with “a system of open reporting of data on performance and clinical outcomes.” This newly available data will allow patients (“the market forces”) to choose high quality care among the “any willing providers” in the absence of national targets and differential prices. As in the U.S. there is little evidence that patients actually use such data when it is available to make decisions about where to seek care.

Two Big Differences
The U.S. ACO incentivizes coordination of care between primary care, hospitals, and specialist physicians. The U.K. Consortia will control the money and issue contracts for hospital and specialist services. This could increase competition and hinder collaboration in the U.K.

U.K. patients will still have to register with one GP though they will have more freedom of choice of GP, i.e. patients will no longer be restricted to registering with the closest GP to their home.  ACO patients will be assigned based on “previous patterns of care” though there will be incentives to use “participating providers”.

What are the take home messages?
We are not the only country muddling through a major health care reform while walking the line between regulations and market forces.

Everyone seems to be seeking the goals of higher quality and lower costs through electronic information upgrades.

Given the similarities between the U.S. and U.K. systems,  the charge that Dr. Don Berwick, Head of CMS and a pediatrician, “likes the NHS too much” seems a bit ridiculous.


1. NEJM 364:14, April 7,2011, p.1360-66
2. http://www.hubslist.org, Feb. 1, 2011
3.Mathewson, H.O.. “General Thoughts About General Practice: a medical student’s view of the future of general practice in the United Kingdom.”  J Med Educ. 1968, Jan;43(1):36-41.

Vol. 38 February 1, 2011 Health Care Reform in the U.K. and U.S

February 1, 2011


“England and America are two great nations separated by a common language.”
-attributed to both Winston Churchill and George Bernard Shaw

In 1965 I spent the summer of my third year in medical school at the General Practice Teaching Unit of the Royal Infirmary in Edinburgh, Scotland because I wanted to learn more about the National Health Service (NHS). My impression then was that both the U.K. and U.S. medical care systems were evolving toward the same end result from very different directions. (1) That viewpoint has been reaffirmed by recent events. Both countries have embarked this past year on significant health care reform. Both countries are seeking to reduce costs, improve quality, become more patient-centered, and invest in health information technology (HIT). In both countries the majority of patients are highly satisfied with the NHS or Medicare and are vigilant about not giving up any of its benefits.

Both health care reform acts are being criticized for being too timid, or too bold, or too incremental, or too radical. The U.K. plan is being attacked by some as a disastrous turn toward privatization while the U.S. plan is “another step toward socialism”, i.e. very little change in the tenor since 1965. Vocal U.K. critics on the left decry the proposed move away from regulation (NHS) toward competition and market-place economics while the vocal U.S. critics on the right warn against more regulation and movement away from reliance on competition and market-place forces.

Increased Primary Care Support
The basic foundation of the NHS has always been General Practice physicians (GPs) who have no hospital privileges and refer all patients needing hospitalization to full-time hospital specialists (Consultants). (2) In 1965, and in 1996,  such a separation of outpatient and inpatient medical practice was threatening to community physicians in the U.S. (3) Today it is difficult to recruit primary care physicians (and some specialists) to a community unless the hospital has hospitalists to care for inpatients. The community-based internist in U.S. is now more like the GP in U.K. then ever before, and that is not a bad thing.

Accountable Care Organizations (ACOs)
In the U.K. regional Primary Care Trusts (PCTs) have been responsible since 1948 for “commissioning” (purchasing) care beyond primary care; hospitals, specialists (consultants), ambulance service, maternal health. GPs advised these trusts, but did not run them. By 2013 they will. 141 GP Consortia will commission (purchase by contract) all patient care services for a defined population and will control the allocation of 80% of the NHS budget. Secondary care providers (hospitals and consultants/specialists) will be competing on quality grounds for the contracts. Prices will remain regulated nationwide by the NHS. Sounds like a physician-run Accountable Care Organization (ACO) doesn’t it? (Remember 50% of U.S. medical care services are currently paid for by our government; Medicare, Medicaid, VA, or Federal Employee Health Benefits).

Medical Home
Since most GP practices have been closely connected for years with visiting home care nurses, social workers, and other ancillary social services through the Local Health Authority and every patient needs to “register” with a GP, GP practices closely match the newly-coined U.S. definition of “A Medical Home”; i.e. a multidisciplinary primary care unit that manages, but does not provide, all aspects of the patient’s care. Now the GP referrals will more directly affect the flow of money.

HIT Investment
A $20M (million) program started in the U.K. in 2003 to develop digital patient records and hospital administrative systems outsourced to two national major vendors its imhas been poorly implemented  . The new plan calls for incentives for more local and regional initiatives from the Trusts/Consortia to move HIT along.
“Improving IT is essential to delivery of a patient-centered NHS”..a modular approach based on”connect all” rather than “replace all”.
The government proposals call for an NHS-wide “information architecture” set around standards, improvements in data accuracy, and the opening up of records to patients online. The NHS looks to saving $32B (billion) by 2015 by implementation of the revised HIT plan. There is a concern about the Trusts/Consortia having enough HIT expertise to do this is. In the U.S. the establishment of 70 Regional Extension Centers and HIT Workforce Development Grants will help implement the “meaningful use” of HIT. Neither the U.K. nor the U.S. plans have established national standards for connectivity; standards that need to be “transparent and centrally mandated” to reduce complexity. This lack of connectivity will be an increasingly vexing problem for both providers and patients in both countries.

Bottom line: Both U.S. and U.K. are evolving toward a similar mixture of public/private health care schemes from their different historical directions. They share common objectives and common problems., and neither country is finding the path to be particularly smooth. Since EVERY country’s health care system is different, and critics of health care reform on both sides of the Atlantic are whipping up fear of the “other system”, it is time to move on and expand our vision by trying to learn more from France and Germany’s experiences.

1. Mathewson, H.O.. “General Thoughts About General Practice: a medical student’s view of the future of general practice in the United Kingdom.”  J Med Educ. 1968, Jan;43(1):36-41.
2. David J. Kerr, M.D., D.Sc., and Mairi Scott, M.B., Ch.B., “British Lessons on Health Care Reform” , September 9, 2009, at NEJM.org
3.Wachter R, Goldman L. “The Emerging Role of ‘Hospitalists’ in the American Health Care System”. N Engl J Med 335 (7): 514–7. 1966

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