Single Payer Healthcare: Case study in running out of The People’s money

Currently there is significant and contentious debate about providing and paying for healthcare in America. In 2010, the Affordable Care Act (ACA) was passed by Congress and included a dozen different new taxes, a specific cadre of policy designs, and mandates for employer participation as well as mandates for individuals to carry insurance. Penalties went along with the mandates, of course. A full discussion of the ACA is beyond the scope of this blog, but suffice it to say that a major issue was how to pay for the expansion of healthcare services. Insurance companies signed up to provide healthcare policies to many individuals, Medicaid rolls were expanded in many states, and a unique provision was made to ‘bail out’ insurance companies if they sustained significant losses.

In short, with its continued funding of Medicare, and its role in partially funding Medicaid and [through bailouts] insurance companies, the extensive role of the federal government makes the United States almost a ‘pseudo’ single payer system with many of the provisions found in other single payer systems (SPSs).

While various factions continue to argue about the future of the ACA, and whether or not it was designed to devolve into a SPS, it would be prudent to look at well-established SPSs to see if there are lessons to be learned. The National Health Service (NHS) in the United Kingdom is a classic and longstanding example of a SPS. The NHS has separate bodies to handle the separate countries in the system. England, Wales, Ireland and Scotland each have separate, very complex organizational systems (1).

From the development of the NHS until now, the evolution of the system in England has devolved to decision-making bodies called Clinical Commissioning Groups, which are regional groups of general practitioners, nurses and consultants that plan and commission the best services for their local patients and population, and collectively have a fiduciary responsibility to the NHS in doing so. (1,2). Over the years, the National Institute for Health and Care Excellence (NICE) has evaluated new therapies and technologies to see if they are worthy to be reimbursed by the NHS. (3)

NICE is not known for readily adopting new medications and technologies. It withdrew NHS funding for newer and more expensive modalities that could potentially impact over 20,000 cancer patients, and more recently rationed treatments for Hepatitis C treatments (4,5,6,7)

No coverage for some products or rationing of others is just the tip of the iceberg in England. Surgery for cataracts is not permitted until the patient is nearly blind (x), knee and hip replacements are denied until “pain is so severe that it interferes with your quality of life and sleep….everyday tasks, such as shopping or getting out of the bath, are difficult or impossible.”(8, 9) And most recently, the “most severe [rationing] ever” by NHS, already adopted by several Clinical Commissioning Groups, is the ban of obese patients and smokers from ‘routine’ surgery. (10)

In addition to these specific issues, there is a movement within the NHS/NICE system to establish a new (lower) financial cap for costs per Quality Adjusted Life Year (QALY) as well as a potentially not approving any treatment that will cost the system more than 20 million pounds during the first three years. (10)

Rationing is the unseemly underbelly of Single Payer healthcare, and when discussed in abstract terms tends to lose its true meaning for the individual. If it is your mothers pain awaiting a new hip, your grandmothers inability to read her romance novels, or even your fathers heart attack while awaiting surgery because he is overweight or some other of the myriad possibilities these very real possibilities need to be discussed openly in light of what is going on with the NHS .

Despite these measures, the NHS is still several billions of dollars in the hole. Clearly these draconian measures are an attempt at slowing the rising healthcare debt, yet they haven’t cut any of the huge bureaucracy that adds to these costs. (12) Think the US government can do a better job? I have a bridge I’d like to sell you…

1. The organisation of the NHS in the UK: comparing structures in the four countries. Doheny S., National Assembly for Wales – Research Service. May 2015. http://www.assemblywales.org/research

2. The NHS in England
http://www.nhs.uk/NHSEngland/thenhs/about/Pages/nhsstructure.aspx

3. NHS Commissioning https://www.england.nhs.uk/commissioning/

4. National Institute for Health and Care Excellence https://www.nice.org.uk

5. Betrayal of 20,000 cancer patients: Rationing body rejects ten drugs (allowed in Europe) that could have extended lives
http://www.dailymail.co.uk/health/article-1257944/NICE-rejects-cancer-drugs-extended-patients-lives.html

6. 25 cancer drugs to be denied on NHS http://www.telegraph.co.uk/news/politics/11340860/25-cancer-drugs-to-be-denied-on-NHS.html

7. NHS ‘abandoning’ thousands by rationing hepatitis C drugs https://www.theguardian.com/society/2016/jul/28/nhs-abandoning-thousands-by-rationing-hepatitis-c-drugs

8. Thousands of elderly are losing their sight as NHS rations cataract surgery
http://www.dailymail.co.uk/news/article-2363857/Thousands-elderly-losing-sight-NHS-rations-cataract-surgery.html

9. Pain-level rationing of hip and knee surgery due to cash crisis, admits NHS
https://www.theguardian.com/society/2017/jan/26/royal-college-surgeons-slam-plans-hip-knee-replacements-ccgs

10. Obese patients and smokers banned from routine surgery in ‘most severe ever’ rationing in the NHS
http://www.telegraph.co.uk/news/2016/09/02/obese-patients-and-smokers-banned-from-all-routine-operations-by/

11. Daniel Zeichner MP: Proposed changes to NICE & NHS England must not be implemented without a real debate
https://www.politicshome.com/news/uk/health-and-care/pharmaceuticals/opinion/house-commons/84774/daniel-zeichner-mp-proposed

12. Perspectives on the European Health Care Systems: Some Lessons for America http://www.heritage.org/health-care-reform/report/perspectives-the-european-health-care-systems-some-lessons-america

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3 thoughts on “Single Payer Healthcare: Case study in running out of The People’s money

  1. Rationing of health care is an undesirable and sometimes inhumane approach to containing costs, and as you have pointed out is a major concern with a single payer system. However, haven’t the insurance companies essentially been rationing care for years in this country, despite lack of a SPS? Your thoughts are welcome in this complex topic

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  2. June,

    Yes, rationing is a practice everywhere. Indeed, the very concept of a formulary is a form of rationing. In an SPS, disapproval of a new drug or technology is one form of rationing that we have seen little of. One example of how the system should work would be the very high cost of Hep C treatment. Payers working with the two companies with new products allowed them to compete for the business on price. The free market had a role in the decision, not a bureaucrat from some agency…

    The NHS has taken rationing to a whole new level, not approving drugs that could save a number of lives, or years of pain or even eyesight. What sparked the blog this month was the recent decision by one of the Commissioning Groups to withhold ‘routine’ surgery from people who are obese or who smoke. Yes, both obesity or smoking are major health issues and increase the risk in routine surgeries. But with obesity being SO common, it was my view that many people would go without care under this new edict. Obesity is one of the last conditions where you can discriminate against an individual and get away with it. With certain surgically remediable conditions being more common in patients who are obese I feel that this carries that discrimination to a whole new level that I (for one) feel very uncomfortable with. Thank you for your thoughts!

    Kim

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