Health reformThe debate goes public                                                                            Commissione...
Health reform                                             The debate goes publicContentsPreface                           ...
Health reform    The debate goes public    Preface    H   ealth reform: The debate goes public is an Economist Intelligenc...
Health reform                                                                              The debate goes publicInterview...
Health reform                                                                                The debate goes publicExecuti...
Health reform    The debate goes public    that their government has the right approach to healthcare. By contrast, just 8...
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Health reform                                The debate goes public                                The need for reform    ...
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Health reform                           The debate goes public                           How strongly do you agree or disa...
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Health reform                                     The debate goes public                                     in the negoti...
Health reform                                                                                The debate goes public   Unta...
Health reform     The debate goes public     the NHS budget without significant reductions in spending elsewhere, or the in...
Health reform                                                                                The debate goes publicA new r...
Health reform                           The debate goes public The rise and rise of citizen                    guaranteein...
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Health reform                                 The debate goes public                                 Which of the followin...
Health reform                                                                                   The debate goes public   O...
Health reform     The debate goes public     If you had to go to hospital, which of the following factors would be most im...
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Health reform                            The debate goes public                            Steps forward for patients in t...
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Health reform     The debate goes public     be used to assess just a handful of common procedures—involving hips, knees, ...
Health reform: The debate goes public
Health reform: The debate goes public
Health reform: The debate goes public
Health reform: The debate goes public
Health reform: The debate goes public
Health reform: The debate goes public
Health reform: The debate goes public
Health reform: The debate goes public
Health reform: The debate goes public
Health reform: The debate goes public
Health reform: The debate goes public
Health reform: The debate goes public
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Health reform: The debate goes public

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Health reform: The debate goes public is an Economist Intelligence Unit report commissioned by Philips, the third in a series of four to be published in 2009. The Economist Intelligence Unit bears sole responsibility for the content of this report. The findings and views expressed within do not necessarily represent the views of Philips.

Our research drew on two main initiatives.

In June and July 2009 we conducted a major survey of citizens across four key economies: the US, UK, Germany and India. In total, 1,575 respondents took part in the survey, with an equal gender split. All respondents were of working age, with the sample including full- and part-time employees, students, the unemployed and retirees.

To supplement the survey results and help interpret their implications, we also conducted indepth interviews with numerous leading figures in the healthcare sector, including policymakers, practitioners and other experts.

Of the respondents, 481 were in the US, 461 in Germany, 360 in the UK and 273 in India. The survey sought to be broadly representative of each country’s population, across a range of age groups, levels of education and employment status. In the case of India, most respondents fell into the 18-55 age group, with only a small percentage aged 56 and over. Similarly, in line with demographic trends, the US cohort included the largest proportion of respondents aged 56 and over. Almost 40% of US and UK respondents, and 23% of Germans, were retired.

The report was written by Julie Sell and edited by Iain Scott and Gareth Lofthouse. We would like to thank everyone who participated in the survey, and all the interviewees, for their time and insight.

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Health reform: The debate goes public

  1. 1. Health reformThe debate goes public Commissioned by PhilipsThe third report in a series of four from the Economist Intelligence Unit
  2. 2. Health reform The debate goes publicContentsPreface 2Executive summary 5In search of the grand bargain 7The need for reform 8A unique opportunity in the US 10Germany: post-reform pessimism 10Prodding an elephant in the UK 13A new role for citzens 15Citizens as consumers of healthcare 16The rise and rise of citizen advocacy 16But what do they want? 19Steps forward for patients in the UK 22Indian healthcare: seeking a new route 22Conclusion—Policymakers’ grand bargain 25Appendix: Survey results 27© Economist Intelligence Unit Limited 2009 1
  3. 3. Health reform The debate goes public Preface H ealth reform: The debate goes public is an Economist Intelligence Unit report commissioned by Philips, the third in a series of four to be published in 2009. The Economist Intelligence Unit bears sole responsibility for the content of this report. The findings and views expressed within do not necessarily represent the views of Philips. Our research drew on two main initiatives. l In June and July 2009 we conducted a major survey of citizens across four key economies: the US, UK, Germany and India. In total, 1,575 respondents took part in the survey, with an equal gender split. All respondents were of working age, with the sample including full- and part-time employees, students, the unemployed and retirees. l To supplement the survey results and help interpret their implications, we also conducted in- depth interviews with numerous leading figures in the healthcare sector, including policymakers, practitioners and other experts. Of the respondents, 481 were in the US, 461 in Germany, 360 in the UK and 273 in India. The survey sought to be broadly representative of each country’s population, across a range of age groups, levels of education and employment status. In the case of India, most respondents fell into the 18-55 age group, with only a small percentage aged 56 and over. Similarly, in line with demographic trends, the US cohort included the largest proportion of respondents aged 56 and over. Almost 40% of US and UK respondents, and 23% of Germans, were retired. The report was written by Julie Sell and edited by Iain Scott and Gareth Lofthouse. We would like to thank everyone who participated in the survey, and all the interviewees, for their time and insight.2 © Economist Intelligence Unit Limited 2009
  4. 4. Health reform The debate goes publicIntervieweesEric Odom—Executive director, American Liberty Alliance (US)Dr James Rohack—President, American Medical Association (US)Sophia Schlette—Health programme director, Bertelsmann Foundation (Germany) and seniorinternational advisor, Kaiser Permanente Institute for Health Policy (US)John Castellani—President, Business Roundtable (US)Dr Richard Freeman—Professor, University of Edinburgh School of Social and Political Science (UK)Monika Sood—Vice-president of corporate advisory services, Feedback Ventures (India)Kavita Ramdas and Anasuya Sengupta—CEO and President, and Asia and Oceania programme director,respectively, The Global Fund for Women (US/India)Professor John Appleby—Chief economist, The King’s Fund (UK)Dr Peter Reader—Clinical director, Humana Europe (UK)Stefanie Ettelt—Research fellow, London School of Hygiene and Tropical Medicine (UK)Mary Wilson and Betsy Lawson—President and senior lobbyist, respectively, League of Women Voters (US)R T Rybak—Mayor of Minneapolis, Minnesota (US)Professor Laura Carstensen and Jane Hickie—Director and senior research scholar, respectively, StanfordUniversity Centre on Longevity (US)Jenn Brown—Minnesota state director, Organizing for America (US)Ted Marmor—Emeritus professor of public policy and management, Yale University (US)© Economist Intelligence Unit Limited 2009 3
  5. 5. Health reform The debate goes publicExecutive summaryH ealthcare systems are complex, enormous and unwieldy, whether they are state-managed monoliths such as the UK’s, or dominated by the private insurance sector, as in the US. They are traditionallyslow to adapt to change, but now those immovable objects are being forced to confront not just one, butseveral irresistible forces: demographic (ageing populations), epidemiological (increasing incidenceof chronic diseases), technological (more expensive drugs and technologies) and economic (globalrecession, high public debt, smaller pensions). The price for ignoring these forces could be disastrous—the US president, Barack Obama, has warned that if it is allowed to continue down its present course, theUS healthcare system will bankrupt the entire country. Try telling the end-users of healthcare about these pressures, and they will be nonplussed. In a majorsurvey for this report, the Economist Intelligence Unit set out to ascertain just what the citizens in fourlarge economies—the US, UK, Germany and India—think about their healthcare systems. The findingsshow clearly the kinds of dilemmas faced by healthcare policymakers who seek to implement reforms. The starkest example emerges when respondents were asked in basic terms about their expectations forchoice and cost in healthcare. Globally, 83% of respondents say that they would prefer to shop betweena range of options in order to get the best treatment. At the same time, however, more than half say thatthey are not prepared to pay more to get a better healthcare service, whether in the form of taxes, fees atpoint of provision or fees to insurers. Consumers want choice—but are not prepared to pay for it. Our survey shows that citizens’ expectations for healthcare are high—not just in developed countries,which have been used to high standards of care, but also in developing countries such as India, wherepeople are becoming accustomed to better standards. They want access to the latest treatments, timely,affordable care, and a range of choices. They are better informed than ever about their health and theirtreatment options. They are prepared to take some responsibility for their own health, but broadly theydo not want to have to pay a lot more than they already are for their healthcare. If they are unhappy withaspects of their healthcare, they largely lay responsibility at the feet of their governments. Key findings from the survey include the following:l Governments get a thumbs-down on their handling of healthcare. Not surprisingly, the economyand jobs are seen by respondents as the most important issues for their government, but healthcare takessecond billing in the US, Germany and India—ahead of education, the environment, crime, defence andhousing. In the UK it comes third, after crime, but 29% of Britons are generally more inclined to agree© Economist Intelligence Unit Limited 2009 5
  6. 6. Health reform The debate goes public that their government has the right approach to healthcare. By contrast, just 8% of Germans think their country is on the right track, whereas 62% think their government has the wrong approach, as do nearly half of American respondents. l If patients are now customers, they are not happy ones. When it comes to healthcare, Americans, arguably, have more choices than citizens of most other countries. However, when asked to indicate their levels of satisfaction with a range of aspects of healthcare (such as waiting times, quality and availability of care and doctors, cost of treatment and medicine), almost one-quarter of Americans say they are not satisfied with any. That was an even higher figure than in the UK (15%), where patients have far less choice. That does not mean Americans believe they receive poor-quality care—compared with other countries, more US respondents are satisfied with the quality of their doctors, with waiting times and with general quality and availability of healthcare—but the finding does indicate a high level of general dissatisfaction. Strikingly, about one in five respondents across the global sample say they are not satisfied with any aspect of their country’s healthcare system. l Some patients are more empowered than others. Only one-quarter of UK respondents feel they have much control and influence over where and how they are treated, compared with 64% of Americans. Nearly 60% of British respondents say that they are not encouraged to choose from a range of doctors or hospitals for their treatment. The UK government’s recent about-face, allowing patients to choose between public and private healthcare, without losing access to the National Health Service (NHS), appears to be a welcome one—three out of four respondents say that they would compare services to get the best possible treatment. Meanwhile, US residents are more optimistic (74%) than those in the UK (61%) or Germany (38%) that they will get prompt, effective treatment if they become ill. Some 74% of Americans, however, say they are concerned about being able to afford that treatment—far more than Germans (55%) or Britons (50%). l Britons are not keen on fees, but are more relaxed about tax. UK citizens are less keen than people elsewhere on the idea of paying fees at the point of provision (co-payments), or to insurers, for an improved healthcare service. However, the survey found that more Britons (27%) would be willing to pay higher taxes for improved healthcare services than would Americans (15%) or Germans (9%). Meanwhile, nearly 45% of Britons say that they would not be willing to pay anything extra, compared with 61% of Americans and 64% of Germans. The British are also wary of the notion that greater private-sector involvement would improve the country’s healthcare system, perhaps not surprising given that private healthcare takes up a relatively small amount of the country’s healthcare expenditure. l German gloom spells a warning to reformers. Germany began reforming its healthcare system a decade ago. Since then, according to Economist Intelligence Unit data, Germans are living longer and pay less for their healthcare than many of their neighbours. However, German citizens’ doubts about their healthcare system permeate the survey, just as German healthcare professionals revealed their pessimism in a separate Economist Intelligence Unit survey earlier this year1. Far fewer German citizens (38%) than6 © Economist Intelligence Unit Limited 2009
  7. 7. Health reform The debate goes publicthose elsewhere are optimistic that they will get prompt, effective treatment, more than half are worriedabout the costs of getting treatment, and far more (79%, compared with 57% in the UK and 36% in theUS) feel their healthcare professionals are working too many hours to be effective.In search of the grand bargainAgainst all this, policymakers are floundering to come up with solutions. They need to find a way to strikea grand bargain with patients, who are no longer simply passive recipients of care, but increasingly activeconsumers of health services. The key issue is not necessarily one of knowing which reforms to implement. No matter how sensiblereform plans may sound, there is generally one important stakeholder who remains unconvinced: citizens.There is a big gap between policymakers and consumers when it comes to appetite for health reform.The first group sees it as an essential way to relieve financial and social pressures, while the second isafraid that they might lose what they currently have. Consequently, selling healthcare reform is not atask for the faint-hearted. Even Mr Obama, who campaigned successfully on the issue in his presidentialcampaign, has struggled in his bid to implement a fairer system in the US. The example of Germany—which implemented major reforms a decade ago, but whose citizens remain broadly pessimistic abouttheir healthcare and distrustful of those who manage it—serves as a warning to would-be reformers. If they are to be successful, policymakers must be prepared to be thick-skinned and patient, and toavoid quick fixes. The results of broad-based reforms are unlikely to be seen overnight: South Korea’s planto introduce universal healthcare coverage began in 1977, and is still being developed today. The UK haspumped millions of extra pounds into its NHS in the last decade, but it may be that the country’s moresubtle reform strategies, such as patient-reported outcome measures, will be the ones that have mostimpact on cost containment and patient satisfaction in the long term. 1. Fixing healthcare: The professionals’ perspective, Economist Intelligence Unit, March 2009.© Economist Intelligence Unit Limited 2009 7
  8. 8. Health reform The debate goes public The need for reform F or all the different permutations in healthcare systems around the world, policymakers face several broadly similar challenges: spiralling costs and increased demand are putting these systems under growing pressure, just as the worst economic downturn in decades is stretching budgets even thinner. The need for healthcare reform is evident and in some countries, including the US and the UK, increasingly urgent. Unless major changes are implemented soon, President Obama has suggested, escalating healthcare costs could severely cripple—or even bankrupt—the world’s biggest economy. In the UK, the NHS Confederation, an independent body representing healthcare organisations, has warned that the National Health Service (NHS) could face real-term funding reductions of up to £10bn (US$15.5bn) from 20112. For political leaders grappling with tight budgets in a financial downturn, health is simply too big an issue to ignore. Healthcare is forecast to account for a whopping 16.3% of GDP in the US in 2009, about 10.6% of GDP in Germany and 9.9% of GDP in the UK. Even in India, a country long criticised for under- investing in health and social services, the World Health Organisation (WHO) forecasts that healthcare will account for about 5% of GDP in 2009. Demographic changes compound the problem. Population growth in many countries—not least India—is exacerbated in the US and UK by an ageing population. The wave of “baby boomers” (those born roughly between 1945 and 1960) is moving towards the inevitable increase in health problems that come with age. Germany, which faces a population decline, is confronted with an even starker demographic picture as the ratio of senior citizens to young workers steadily climbs. Yet unlike other complex policy topics facing political leaders, healthcare is also an intensely personal issue. The emotional response from many Americans to the healthcare reform debate in recent months is in part the result of their personal circumstances. More than 45m people across the country—many of them in working families—lack health insurance and the problem is escalating. According to a report by Families USA3, more than 44,000 people in the US are losing health coverage each week, equating to some2. Dealing with the 2.3m each year. Without healthcare reform, the report estimates, 6.9m more Americans will lose healthDownturn, The NHS coverage by the end of 2010.Confederation, June 2009.3. The Clock Is Ticking: More “The status quo is not acceptable,” says James Rohack, a cardiologist who serves as president of theAmericans Losing Health American Medical Association (AMA), the nation’s leading physicians’ group. In addition to endangeringCoverage, Families USA,July 2009. individuals’ health, the gaps in health coverage have knock-on effects on the wider system: growing8 © Economist Intelligence Unit Limited 2009
  9. 9. Health reform The debate goes publicnumbers of uninsured people turn up at hospital emergency rooms to be treated, for instance, anexpensive solution that is driving up healthcare costs for the majority of Americans who are insured. Even in countries with universal health coverage, there is a clear public concern about healthcare. Asurvey of citizens across four countries conducted for this report reveals that if people were asked to votetomorrow, they would rank healthcare as one of their top priorities for government—second only to theeconomy and jobs in the US, Germany and India. In the UK, healthcare is the third-highest priority ofthose polled, behind the economy and crime.If you had to vote tomorrow, which of the following issues would be most important to you, in terms of your government’spriorities? Please select up to two.(% respondents) Economy and jobs 65 Healthcare 41 Crime 17 Education 15Environment and climate change 13 Defence and terrorism 13 Other 6 Housing 3 None of the above 1 I do not have an opinion 1 Source: Economist Intelligence Unit survey, July 2009. While people in the US and the UK are generally optimistic that they would receive prompt andeffective treatment if they or a family member were to become seriously ill, the survey reveals thatmany people have doubts about their governments’ approaches to healthcare. Among those surveyed,Germans were the least likely to have confidence in their government’s approach (see box Germany: post-reform pessimism).If you or a member of your family fell seriously ill, how optimistic are you that they would receive prompt and effectivetreatment?(% respondents) US Germany UK India Very optimistic 32 8 19 44 Somewhat optimistic 42 30 42 35 Neither optimistic 10 33 22 9 nor pessimistic Somewhat pessimistic 9 16 12 4 Very pessimistic 3 6 4 1Don’t know what quality of treatment would 4 7 1 4 be received Source: Economist Intelligence Unit survey, July 2009.© Economist Intelligence Unit Limited 2009 9
  10. 10. Health reform The debate goes public How strongly do you agree or disagree with the following statement? My country’s government has the right approach to healthcare (% respondents) Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Don’t know USA 4 9 34 22 27 4 Germany 2 6 26 33 30 4 UK 7 22 32 25 12 2 India 10 30 30 18 11 1 Source: Economist Intelligence Unit survey, July 2009. For all their similarities in this time of financial crisis, the political environment for healthcare reform in each country is also shaped by unique pressures and processes. These range from political structures to economic realities as well as cultural and social mores. A closer look at the situation in the US and UK, two countries facing national political elections in 2010, illustrates why healthcare reform will be driven by characteristics particular to each country. Germany: post-reform pessimism the UK. There are about eight hospital beds benchmarks such as life expectancy are any for every 1,000 people, more than in the US guide, though, the German experiment could or the UK, and a German’s visit to the doctor well prove to be an enduring model for others German consumers’ mistrust of their for a check-up is more affordable than in to follow. country’s healthcare system emerges clearly many other countries (see chart). when they are asked whether they agree that So why the complaining? The main their government has the right approach difference between Germans’ experience Average cost of routine check-up at family doctor to healthcare. Fewer than one in ten agree, and that of comparable economies is that Price (US$) whereas nearly two-thirds disagree. This they have already gone through significant % of monthly personal disposable income makes Germans, on aggregate, even more healthcare reforms. Germans are now UK 260 11.0 disgruntled than American citizens, where expected to have to pay for some of their own US half disagree that the US government is on healthcare—a €10 fee when they pick up a 7.6 225 the right track. prescription, for example. Even so, their co- Japan Yet Germans’ general pessimism about payments are among the lowest in Europe. 105 5.6 their healthcare system does not necessarily As Sophie Schlette of the Bertelsmann France match the reality of healthcare in the Foundation points out, however, Germans 97 3.7 country, when compared with other regions. are not comparing their healthcare with that Germany 85 3.5 The country’s healthcare expenditure has of their neighbours, but to what they had Sweden been a respectable 10% of GDP (an estimated before. 1.0 23 US$331bn in 2009) for the last five years. More reforms need to be made to the India Over that time, average life expectancy has German healthcare system, no doubt leading 17 25.7 increased from 78 to 79 years, higher than to further mistrust from end-users. If Economist Intelligence Unit Worldwide Cost of Living Survey.10 © Economist Intelligence Unit Limited 2009
  11. 11. Health reform The debate goes publicA unique opportunity in the US?A confluence of pressures is driving the push for healthcare reform across America. President Obama madeit one of his signature campaign issues during 2008. His election victory, based in part on the support ofmillions of Americans who had never voted before, gave him a stronger mandate for change than any USpresident had enjoyed for years. Mr Obama’s campaign proposals to overhaul the US healthcare system fell into two broad categories:plans to improve medical practices and health outcomes (through emphasis on preventive medicine,payment reforms, wider adoption of electronic information systems, and research on the comparativeeffectiveness of specific diagnostic and treatment approaches), and plans to restructure the healthinsurance market (through creation of a new public insurance option, adoption of an insurance marketingexchange, and new regulations to cut insurance administration costs). It was an ambitious agenda. Yet the structure of America’s political system—a division of powers that gives Congress significantindependence and weight vis-à-vis the executive branch—as well as Mr Obama’s tactical decision once inoffice to let Congress craft the specific details of a health reform bill, have complicated his reform efforts.This strategy comes with its own challenges, including catering to the concerns of influential lawmakersin a highly partisan policymaking process. Even within his own party, so-called Blue Dog Democrats havebroken from the leadership on key reform issues. Lawmakers are particularly sensitive to projections about the impact that various healthcare reformproposals may have on a rising federal deficit. “It’s not good enough that [reform is] just paid for,”senator Mark Warner of Virginia told the Washington Post in August. “It actually has to start driving long-term costs down.” Ted Marmor, an emeritus professor of public policy and management at Yale University, says thekey role that Congress is playing in the reform debate results in an abundance of “veto points” in theUS political system that do not exist in parliamentary democracies such as the UK or Germany, makingagreement harder to achieve. The division of political power also provides openings for special-interest groups—ranging frompharmaceutical companies to hospital owners—to influence the policy-making process at multiplepoints. This fact, combined with the competitive and highly fragmented nature of the US healthcaremarket (among both providers and payers) has fuelled an explosion of lobbying in Washington and 50state capitals, where state lawmakers also play a role in setting rules for healthcare in their individualjurisdictions. The Center for Responsive Politics (CRP), a group that tracks lobbying activity, reported that thehealthcare industry spent more dollars lobbying national politicians in 2008 and the first part of 2009than any other sectors, including financial services and energy4. Spending continued to rise as thedebate heated up. Last year, CRP reported that healthcare interest groups spent a huge US$484.7m onlobbying—more than any other sector. An important element driving the healthcare debate this year is the fact that key lobbying groups,ranging from big business to hospitals and physicians, have backed calls for change more forcefully thanever before. Pharmaceutical companies and hospital groups are among those that offered concessions early 4. www.opensecrets.org/lobby/index. php© Economist Intelligence Unit Limited 2009 11
  12. 12. Health reform The debate goes public in the negotiations over reform. Some credited Mr Obama for convening a series of White House summits on healthcare to bring together long-time adversaries, but pragmatic self-interest is clearly a prime motivator for these stakeholders—and they are far from united on the specifics of what needs to be done. For Business Roundtable, a group representing chief executives of some of the largest US corporations, “healthcare is the biggest single cost pressure our members face”, says its president, John Castellani. His members’ companies—which include giants such as Boeing, DuPont, Microsoft and Motorola—are responsible for the healthcare coverage of about 35m people. Increasingly, they are being hampered by high healthcare costs that their foreign competitors do not face. Reform is necessary, they argue, to keep US business competitive internationally. In Mr Castellani’s view, the confluence of factors in favour of healthcare reform is “greater now than it has been at any time in the history of our country”. The AMA, which has been blamed in the past for obstructing meaningful reform, is also advocating change. “The demographics say the status quo won’t work,” says Dr Rohack, the group’s president, noting that a wave of baby boomers will soon be eligible to collect Medicare, which provides health insurance cover to people over the age of 65. He also predicts the severity of health problems, from obesity to diabetes, will continue to grow. “As physicians, we know what the disease burden is, coming down the pike,” he adds. Part of the current frustration in the US stems from the fact that, for all it is spending on healthcare— far more per head than other rich countries such as the UK and Germany (see chart below)—the US performs worse in certain key health measures, such as average life expectancy or infant mortality rates, than countries that spend less5. Yet in other measures, such as cancer outcomes, the US performs relatively well. The McKinsey Global Institute, a consultancy, found that based on 2003 data, US healthcare spending was US$477bn above what would be expected from comparable OECD countries. Worlds apart Healthcare spending per head, US$ Country 2004 2005 2006 2007 2008 US 6,049 6,385 6,756 7,236 7,553 Germany 3,533 3,622 3,675 4,216 4,692 UK 3,057 3,258 3,589 4,225 4,100 India 32 37 41 50 53 Source: Espicom; OECD; WHO; Economist Intelligence Unit, World Development Indicators. Dr Rohack of the AMA blames some of this on high administration costs (derived from dealing with more than 1,500 insurance companies) and a legal system that he deems hostile to doctors who feel compelled to practice “defensive medicine”—in which doctors prescribe medical tests and procedures that may not be necessary, purely to guard against malpractice lawsuits. McKinsey reports that reducing incentives for the practice of defensive medicine could save as much as US$50bn per year in the US with minimal impact on quality of care6.5. US Census Bureau and OECD data. While more stakeholders in the US healthcare system are advocating reform this year than at any6. McKinsey Global Institute, time in the past, the finger-pointing between them—physicians blaming insurers and lawyers, insurersAccounting for the Cost of USHealthcare, November 2008. blaming drugmakers, and so on—is unlikely to be resolved anytime soon.12 © Economist Intelligence Unit Limited 2009
  13. 13. Health reform The debate goes public Untangling exactly what makes the US system so expensive, vis-à-vis other countries in the developedworld, is part of the challenge. McKinsey found that outpatient care (including same-day hospital visits) isthe biggest and fastest growing part of the US health system, accounting for US$436bn, or two-thirds ofthe spending that is above the OECD average. Reasons for these ballooning costs range from an increasein provider capacity because of the profitability of such procedures, costly new technologies, and alarge group of patients who are fairly insensitive to price, because of so-called “gold-plated” insurancecoverage that limits out-of-pocket costs. Timing will be a critical factor in determining whether and how healthcare reform survives the USpolitical process, as the window to achieve meaningful reform will not be open forever. Further delays willgive opponents more time to “stir up public anxieties”, as the former US secretary of labour, Robert Reich,puts it7. Furthermore, congressional elections are looming in November 2010, so lawmakers running forre-election may be less inclined to make hard political choices that could upset voters. Yet others with significant influence in Washington are in less of a hurry. Mr Castellani, of BusinessRoundtable, urges care and caution. “We understand the political process, we know it is not smooth,” hesays. “It’s more important to get it right than to be quick.”Prodding an elephant in the UKIf the US political environment surrounding healthcare reform looks a bit like the Wild West to Europeaneyes—replete with agitated citizens attending town-hall meetings carrying loaded firearms—the Britishreform scenario might be likened to policymakers prodding an elephant to perform. The NHS is big, grey,and reasonably well-liked, but also increasingly costly to maintain and slow to change direction. The vastness of the NHS, which turned 60 in 2008, is hard to overstate. With about 1.5m staff, it isEurope’s largest employer and is responsible for the overwhelming majority of healthcare delivered in theUK today. Because the private healthcare system has not yet achieved a scale sufficient to pose a majorcompetitive threat to the NHS, any efforts to get a handle on healthcare reform in the country must tacklethis giant. The social principles that underpin the NHS—that it is funded by taxpayers and available free ofcharge to everyone—make it intimately connected to government, both financially and politically. Inthe past, when the economy was booming, the spending issue was less politically delicate than it istoday. Lord Darzi, a surgeon who served as UK minister of health until submitting his resignation to theprime minister, Gordon Brown, in mid-2008, noted earlier this year: “The government has significantlyincreased the expenditure in the NHS from somewhere around £42bn in the year 2002 to somewhereapproaching £110bn next year. That’s massive growth.” Now, though, the NHS’s financial future looks significantly less rosy, thanks to the dire state of thepublic finances. A recent report by The King’s Fund, a London-based research centre focused on healthpolicy, and the Institute for Fiscal Studies described prospects for future funding of the NHS as “bleak”8. 7. Robert Reich, The future of universal “The financial crisis is estimated by the Treasury to have dealt a permanent blow to the size of the UK healthcare, Salon.com, July 27th, 2009.economy, with a significant knock-on impact on the strength of the public finances,” wrote Professor John 8. The King’s Fund and The InstituteAppleby, chief economist at The King’s Fund. “Given this, it is hard to see how the next spending review— for Fiscal Studies, How Cold Will It Be? Prospects for NHS Funding: 2011-17,which might not report until after a 2010 general election—could unveil further real-term increases in July 2009.© Economist Intelligence Unit Limited 2009 13
  14. 14. Health reform The debate goes public the NHS budget without significant reductions in spending elsewhere, or the introduction of tax-raising measures. The financial future remains uncertain, and will depend on the nature and path of the economic recovery, particularly the extent to which this boosts tax revenue and reduces spending pressures through lower debt interest payments or falls in unemployment.” Managers within the health service are equally concerned. “The NHS is facing a severe contraction in its finance with an £8bn-10bn real-terms cut likely in the three years from 2011,” the NHS Confederation report stated in June 2009, calling this “the most severe leadership challenge the NHS is ever likely to face”. It predicted that the government healthcare system “will not survive the impending spending squeeze unchanged”. Therein lies a dilemma for public policymakers: a general sense among the public that the NHS as an institution is doing a decent job, despite grumbling about various elements of it, makes it something of a political hot potato. “For the public, the NHS is not quite untouchable but it is very well-supported,” says Professor Appleby. As a result, in the run-up to a general election that Mr Brown must call before June 2010, the two major political parties—Labour and the Conservatives—are keeping quiet about the details of their funding proposals for the NHS in years to come. “It’s a case of the main parties inching towards an admission that at very best the NHS will receive little or no extra real funding”, says Professor Appleby. The fact that Labour—after more than a decade in office—has fared poorly in public opinion polls this year, with the Conservatives looking relatively strong, gives neither side an added political incentive to reveal detailed spending plans beyond hinting that past levels of NHS funding cannot be guaranteed. The centralised nature of the UK parliamentary system—the prime minister has a much greater degree of control over government decision-making, not to mention its own party members, than a US president does—is also significant, giving Mr Brown tighter control over healthcare spending and policy than Mr Obama has. The UK system means that a government “can convert sentiment into action more readily”, says Professor Marmor. “If a bedpan falls in Leeds, the secretary of state has to answer for it in parliament.” Yet in contrast with the US—where fundamental questions about who needs health coverage and the nature of public versus private markets is being hotly debated by politicians—the debate in the UK (not to mention other countries in Europe) is now more muted. Dr Richard Freeman, professor at the University of Edinburgh, author of a book on the politics of health in Europe, says that “the big politics of healthcare are about establishing and maintaining universal coverage. Beyond that, it’s as much about competence as ideology.” In his view, there are no great ideological differences at the moment between the UK’s two major parties on the NHS. “It’s about competence rather than ideology.”14 © Economist Intelligence Unit Limited 2009
  15. 15. Health reform The debate goes publicA new role for citizensA n email from the US president, Barack Obama, to millions of Americans on August 5th 2009, made it clear that he thinks citizens should be at the heart of the US healthcare debate. The message,echoing his presidential campaign last year, read in part: “This is the moment our movement was built for.For one month, the fight for health insurance reform leaves the backrooms of Washington, DC, and returnsto communities across America.” What has ensued is one of the most intense public debates about a US policy issue in recent years. Aslawmakers returned to their home districts for the August recess to gauge the mood of citizens, heatedarguments, shouting matches and violence broke out at some of the town-hall meetings they hadorganised. In 2009 it is clear that any US politician who ignores public sentiment on healthcare reformdoes so at his or her peril. Personal experience plays a powerful role in shaping the public debate. “Healthcare is simultaneouslya complex issue and one of the most personal issues you could lobby on … everybody has a healthcarestory,” says Betsy Lawson, a Washington lobbyist with the League of Women Voters who has worked onhealthcare issues for decades. Is the public anger shown at some town-hall meetings justified, however? “Absolutely, it’s justified,”says Eric Odom, executive director of a libertarian group called American Liberty Alliance (ALA), membersof which advocate a more limited role for government in areas ranging from healthcare to offshore oildrilling. “This is a very emotional and passionate issue.” (See box, The rise and rise of citizen advocacy) The US public debate has, in turn, sparked an outpouring of public sentiment in the UK, including morethan 1m people following a Twitter campaign supporting the National Health Service (NHS). Much of itis in response to American criticisms about how the UK’s health service is run. The UK prime minister,Gordon Brown, and his wife, Sarah, showing a growing awareness of social networking as a political tool,joined the Twitter campaign in early August. The NHS “often makes the difference between pain andcomfort, despair and hope, life and death,” Mr Brown wrote, adding “thanks for always being there” in hispost on Twitter’s “welovetheNHS” feed9 . Indeed, new technologies are truly changing the way citizens and lawmakers communicate on public-policy issues, including healthcare. A visit to the White House website in mid-August revealed a string ofblog postings about healthcare, including news that the site was offering “La Realidad: the truth abouthealth insurance reform”, in Spanish. There was also a video of Mr Obama’s weekly address to the public, 9. http://news.bbc.co.uk/2/hi/uk_talking about healthcare reform, and a place to sign up for regular updates through seven different social news/politics/8199615.stm© Economist Intelligence Unit Limited 2009 15
  16. 16. Health reform The debate goes public The rise and rise of citizen guaranteeing choice (including “a public In which ways would you be most willing to pay (more) for an improved healthcare service? advocacy insurance option”); and ensuring quality, Select up to two. affordable care for all Americans. (% respondents) Swapan Chakraborty and his wife Sunita, Increased taxes loaded down with shopping and children, 17 The emotionally charged debate over US stopped to sign the petition. Born and raised healthcare reform has prompted advocacy in India, they lived and worked in Germany (Increased) fees at the point of provision groups across the political spectrum to for three years before emigrating to the 17 target citizens who, they hope, will in turn US. Mr Chakraborty, a research engineer, (Increased) fees to healthcare insurer back different reform proposals. The surge in did not hesitate when asked which of the 16 volume of emails, calls, petition signatures different healthcare systems he prefers. None of the above: I am not willing to pay more and other contact with lawmakers during the “Europe is best,” he said. “Healthcare is a 52 summer congressional recess illustrates how fundamental right. It’s like your home. It I have no opinion profoundly such organisations are shaping should be separated from your job.” His wife, 8 the debate, and how divided public opinion an assistant bank manager, chimed in on Source: Economist Intelligence Unit survey, July 2009. remains. the US system: “Everyone should be able to Amid the bustling weekend farmers’ afford it”. market in Minneapolis, Minnesota, a group Both husband and wife said they would be new-style campaign tactics to mobilise called Organizing for America spent a willing to pay higher taxes for a public health citizens to back the president’s broad reform weekend button-holing people for their option. This position, however, is out of tune principles. In late July, for instance, more signatures on a petition in favour of the with the majority of the respondents to our than 1,000 people turned out for a free healthcare reform platform put forward by citizen survey, who are not willing to pay barbeque at a healthcare gathering put on the US president, Barack Obama. The group, more for improved healthcare (see chart). by the group’s Minnesota branch. The same an offshoot of the Democratic National Throughout the weeks of public debate petition that the Chakrabortys signed was Committee, was advocating three broad over healthcare, Organizing for America circulated and people were urged to write principles: reducing healthcare costs; has employed a combination of old and to their lawmakers. “The response was network tools (including Twitter, Facebook and MySpace). Lawmakers and their national parties are similarly jumping on the technology bandwagon. Meanwhile, numerous special-interest groups and activist organisations have embraced new technologies, in efforts to influence the policy debate. From upstarts like the ALA to established groups like the AARP (formerly the American Association of Retired Persons) and the American Cancer Society, the result has been a significant increase in involvement on policy reform discussions. On a more personal level, especially within the US, patient groups offering advice and support on topics ranging from cancer care to diabetes and mental health have connected people across vast distances and given them the ability to inform themselves and organise as never before. Many of these groups are less focused on change than on patient information, but they too have had an impact on the healthcare system. Citizens as consumers of healthcare The political drama of 2009 masks a broader trend: citizens increasingly see themselves as consumers who want to make choices about their healthcare. Health-related websites, publications and support groups have proliferated in recent years. Patients today go in to see their doctors armed with questions16 © Economist Intelligence Unit Limited 2009
  17. 17. Health reform The debate goes publicoverwhelming,” says Jenn Brown, state healthcare and other areas. Its founder, Eric year ago—was helping to mobilise moredirector for the group that organised the Odom, a 29-year-old computer consultant than 800,000 people to attend hundreds ofevent. from Chicago, says the ALA has amassed “tea party” rallies across America on April R T Rybak, the Democrat mayor of more than 40,000 email addresses from 15th, the day that residents must file theirMinneapolis, drew cheers at the barbeque supporters in the past year, leveraging tax returns every year. He also cites theafter he lambasted healthcare lobbyists online social networking sites. Culling and congressional decision to ease limits ontrying to “protect the status quo” and asked sorting the data by postal codes, he is trying offshore oil drilling after a campaign that thethe crowd to “fight for the change we need to link local and national organisations that ALA helped to co-ordinate. “That was a prettyin Washington”. As the audience broke into share its principles and notify supporters of significant victory using only Twitter andchants of “Yes we can, yes we can”, Mr Rybak opportunities to influence the healthcare Facebook,” he says.told them “the election was just a start—now debate. Yet he rejects the suggestion of somewe’re part of a movement”. The mayor said “The free-market movement is absolutely Democrats that a network of online advocacylater that as a local public official, he cannot our target market,” says Mr Odom. “We want groups with links to the Republican Partyafford to ignore the healthcare issue. “Mayors to limit the government’s power as much as and big corporate interests are driving thesee the consequences of our healthcare possible while getting things accomplished.” angry outcries against Mr Obama’s healthcaresystem on the streets, in emergency rooms, In the healthcare debate, that includes proposals at town hall meetings across thein schools and in mainstream businesses,” he opposition to the so-called “public option” country. The ALA, he says, has no such formalsaid. “Any mayor who opens their eyes sees for insurance coverage, as well as protection backing and is merely trying to link like-the system is deeply broken, especially for of patient privacy and limits on regulation. minded people. “It’s very uncontrolled,” hethose most in need.” Healthcare is just one issue that the group says of the outcry against reform proposals. While groups such as Organizing for is targeting; others include an end to the “We’d love to take credit for this, but theseAmerica are mobilising citizens broadly ban on offshore oil drilling, lower taxes and happened very organically.” As for Mr Odomsupportive of Mr Obama’s reform agenda— opposition to government bailouts for big himself, he says he lives in “a crooked houseincluding coverage for the uninsured—the automakers. in Chicago with a train in my backyard”. HeAmerican Liberty Alliance (ALA) is working Mr Odom says that one of its greatest doesn’t have health insurance, either. He saysto reduce government involvement in successes to date—it was only launched a he cannot afford it.and information gleaned from the Internet, creating a dynamic that has greatly altered the paternalisticrelationship of old. Dr Peter Reader, clinical director at Humana Europe and a former manager in the NHS, says the trendin the UK is a logical extension of growing consumerist sentiment in a variety of services, stretching backto the 1980s. Yet the shift presents some serious challenges to a big, relatively monolithic organisationlike the NHS. Now people want their healthcare “to fit them, rather than the other way around,” he says.Humana Europe is currently supporting the NHS with commissioning expertise, service redesign andstrategies for improving its patient focus and communication with the public. The Economist Intelligence Unit’s survey provides insights into what consumers think of their healthsystems today and what they would like to see change. As noted earlier, Americans are more optimistic thantheir counterparts in the UK that they or a family member would receive prompt and effective treatment ifthey were seriously ill, and both groups are more optimistic than their counterparts in Germany. However, satisfaction levels with various aspects of the health systems vary by country. People in theUK are significantly less satisfied than Americans with the time they have to wait for operations and thequality and availability of healthcare in general, but are notably more satisfied than Americans with the© Economist Intelligence Unit Limited 2009 17
  18. 18. Health reform The debate goes public Which of the following aspects of your country’s healthcare system are you satisfied with? Select all that apply. (% respondents) US Germany UK India Waiting times for operations 30 21 18 18 Quality and availability of 46 33 33 35 healthcare information Quality and availability 45 28 36 45 of healthcare Quality of your GP/physician 52 59 63 32 The cost of medicine 11 10 27 35 The cost of hospital treatment 7 12 30 30 State/government-sourced 5 8 19 24 health advice and campaigns Other, please specify 1 0 1 1 None of the above 24 20 15 12 Don’t know 6 5 5 3 Source: Economist Intelligence Unit survey, July 2009. quality of their physicians, and (less surprisingly) the cost of hospital treatment and drugs. Strikingly, nearly one in five respondents overall say they are not satisfied with any aspect of their country’s healthcare system (see chart). Our survey also shows a willingness by most citizens to take responsibility for their own healthcare, with more than 80% of respondents agreeing with this sentiment in all four countries. The increasingly diverse resources that they consult to obtain health information has helped reduce what the McKinsey Global Institute, a consultancy, has identified as the “information asymmetry” that has traditionally existed in healthcare10. Although doctors remain the most consulted source overall, friends and family, Google, the news media and specialist healthcare sites are all regarded as common sources for health information. Dr Reader, of Humana Europe, notes that the Internet has made Britons savvier consumers of healthcare information and “many professionals in the NHS still struggle” with this fact. His firm is trying to help the health service and its clinicians adapt. Which of the following sources do you regularly consult for health information? Select all that apply. (% respondents) My doctor 67 General Internet searches 35 My family and friends 34 Specialist healthcare websites 30 Magazines/ newspapers 30 TV/radio 21 Patient groups 410. McKinsey Global Institute,Accounting for the Cost of US Other 4 Source: Economist Intelligence Unit survey, July 2009.Healthcare, November 2008.18 © Economist Intelligence Unit Limited 2009
  19. 19. Health reform The debate goes public Of course, part of the challenge with the proliferation of online information, as Dr Rohack of theAmerican Medical Association (AMA) notes, is that “anything can go up on the Internet.” As a result, hesays, “The question is ‘are you getting it from a trusted source’?” McKinsey notes that consumers still face a big “knowledge gap” in healthcare, relative to their careproviders. As a result, they still rely heavily on their GPs or physicians for guidance on how to proceed, andeven if they have many choices available to them, are ill-equipped to source the most cost-effective care.Because their health is so important to them, they may also be inclined to assume that more care is bettercare, although this is not necessarily the case. In addition, while the explosion in new voices in the health discussion and ensuing “noise” is driving theconsumerist trend among patients, it is not clear how well this translates into influence in the policy arena.Professor Ted Marmor, of Yale University, argues that “we have very poor connectors in America” betweenpublic views and policy-making mechanisms. “We’ve got plenty of educated people, but they don’t knowwhat to do with their thoughts.” Nevertheless, healthcare providers, too, have started to embrace the notion of patients as partners.The NHS Confederation issued a rallying cry in its report earlier this year, suggesting a greater collectiveresponsibility to chart the path forward: “Work to deal with this unprecedented [funding] challenge isneeded today with the support and help of all NHS staff and leaders, politicians, policymakers and thepublic.”11But what do they want?Greater citizen involvement in healthcare, while desirable, brings challenges, too. The fact that there aremore voices chiming in on healthcare doesn’t necessarily give them greater influence in the decision-making process, and one of the headaches for policymakers amid the sound and fury over healthcarereform comes from determining what, exactly, patients want. While millions of Americans have signed petitions supporting broad principles including costreductions, guaranteed choice in coverage (including a public insurance option) and quality care forall, many others have expressed concern and even outrage at proposals for a greater government rolein healthcare and rising national debt. There are growing expressions of concern about the nationalfinancial burden that will be left for future generations. One of many ironies in the situation is highlighted by the McKinsey analysis, which suggests that manyAmericans—most often those with employer-provided health coverage—are largely insensitive to costsin their individual healthcare. The situation in the UK is different in the sense that healthcare costs perhead are lower and taxpayers know they are footing the bill for the NHS, yet it is still fair to say that mostpatients do not know what their care actually costs. The public’s desire for healthcare reform, without clarity about costs and direction, presents clearchallenges for policymakers. This year “more people recognise the need for reform, but there’s lessagreement on what to do,” says Mary Wilson, president of the League of Women Voters of the US. “Wehave more buy-in for the concept that something is wrong with the system and it needs to be fixed.” Our survey offers some guidance on factors affecting patients’ choice of hospitals (assuming they 11. The NHS Confederation, Dealinghave a choice) and their willingness to pay more for faster or better service. Although access to the latest with the Downturn, June 2009.© Economist Intelligence Unit Limited 2009 19
  20. 20. Health reform The debate goes public If you had to go to hospital, which of the following factors would be most important to you, assuming you could choose? Please select up to three. (% respondents) US Germany UK India Access to the latest technologies 65 57 51 59 and treatments Clear and timely information from 43 54 46 46 doctors and/or nurses Caring and supportive nurses 42 35 53 42 and doctors Cleanliness and hygiene 47 56 78 53 Good value for money 16 12 1 25 General ambience of hospital, 7 17 14 6 including food and comfort Proven or documented results in 39 30 24 20 treating my condition Other, please specify 2 1 1 0 I do not have an opinion 3 2 3 0 Source: Economist Intelligence Unit survey, July 2009. technologies and treatments unsurprisingly tops the list of key factors for patients when choosing a hospital, it is matched by a simple desire for cleanliness and hygiene, in part prompted, perhaps, by fears about hospital-acquired infections. This was followed overall by a desire for clear and timely information (see chart). These hardly seem overly demanding. About one in three respondents overall would be willing to pay (or pay more) to receive good quality hospital treatments, although a greater proportion (42%) are unwilling to pay extra for anything. As part of this data suggests, the “fix” for healthcare can be couched to a large extent in national cultural values and norms. Yale’s Professor Marmor, who has written extensively on international health policy, notes that cultural norms influence the way that patients express their likes and dislikes. Although British patients are becoming more outspoken as consumers of healthcare, for instance, “you can’t ignore the role of social hierarchy and deference in the English context”. Attitudes towards doctors have changed in recent decades, but he still sees a deference towards them by many patients that is not found in places like the US. Which of the following would you be willing to pay (more) for, in order to receive a faster and/or higher quality of service? Select up to two. (% respondents) US Germany UK India Doctor/GP consultations 17 18 14 48 Waiting time for operations 5 9 26 7 Quality of hospital staff 21 15 9 26 and environment Quality of hospital 26 33 21 55 treatments/operations Medicines 9 4 9 28 Advice on healthcare and preventive medicine 5 4 2 11 (eg, via Internet, phone, etc) Other, please specify 2 1 1 0 None of the above: I would 49 49 51 4 not be willing to pay more Source: Economist Intelligence Unit survey, July 2009.20 © Economist Intelligence Unit Limited 2009
  21. 21. Health reform The debate goes publicIn your country, would you say that people are encouraged to choose from a range of hospitals and/or GPs/physicians for theirtreatment?(% respondents) US Germany UK India Yes 69 48 31 74 No 23 39 58 20Don’t know 9 13 11 6 Source: Economist Intelligence Unit survey, July 2009.How strongly do you agree or disagree with the following statement? I feel I have a lot of control and influence over mychoices of where and how I am treated(% respondents) Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Don’t knowUS 21 43 15 14 5 1Germany 9 31 30 17 11 2UK 7 18 31 32 11 1India 36 44 14 3 21 Source: Economist Intelligence Unit survey, July 2009. American politicians across the spectrum have acknowledged that retaining a choice in providers andinsurers is important to the American people, whose cultural values tend to favour individual decisionsover the sort of collective decision-making that prevails in places like Europe. In general, Americans areused to having a choice in many aspects of life; Europeans perhaps less so. Indeed, our survey reveals that Americans feel more encouraged to choose from a range of hospitalsand doctors for their treatment than people surveyed in other countries, which helps to explain someof the current public concerns about reforms that would reduce their choices. The survey shows thatAmericans also feel they have much more control and influence over how they’re treated than theirBritish counterparts—about seven in ten respondents feel they are encouraged to shop around fordoctors and hospitals. In the UK, by contrast, nearly six in ten respondents say they are not. A recent study by Stanford University’s Center on Longevity on specific consumer preferences regardinghealthcare reform revealed that there is a good deal of ambivalence among voters on these issues,according to centre director, Professor Laura Carstensen. When presented with a series of detailedhealthcare reform proposals, the people polled showed no clear preference12. The Stanford results revealed that when it comes to healthcare coverage, a majority of Americans are“pretty happy with their own, but they know the system is broken,” says Professor Carstensen. In her view,the results seem to reinforce the status quo. Another significant finding was a deep partisan divide overhealth policy issues: Democrats showed a strong concern for uninsured Americans, whereas Republicanswere much more worried about preventing greater government involvement in the healthcare system. 12. Stanford Centre on Longevity, Health Security Project: Building Sensible Health Care Solutions, 2009.© Economist Intelligence Unit Limited 2009 21
  22. 22. Health reform The debate goes public Steps forward for patients in the UK Healthcare reform in the UK is unlikely to be on the same scale as that proposed in the US. Nonetheless, two relatively recent strategic reforms may have a more direct, immediate impact on how healthcare is delivered to better meet patient needs. One of them, at least, involves a closer role for patients as part of the process of improving healthcare, as the NHS aims to live up to the “patients as partners” ethos espoused by the former health minister, Lord Darzi. The NHS’s new patient-reported outcome measures (PROMs) are a tool for compiling patient-reported satisfaction outcomes on specific medical procedures. Launched in early 2009, the system is still in its infancy, but the aim is to report health outcomes that are significant to patients, and may differ from what doctors, nurses or NHS managers think are important. In theory, this will lead to a more equitable distribution of health resources. Indian healthcare: seeking a Yet the Economist Intelligence Unit’s Which of the following would you be willing to pay (more) for, in order to receive a faster and/or new route citizen survey also finds glimmers of hope. higher quality of service? Select up to two. The Indians surveyed (mostly urban dwellers, (% respondents) more than three-quarters of them with India college degrees) were more optimistic than Quality of hospital treatments/operations “India is a goddess with many faces,” says people surveyed in the US, UK or Germany 55 Kavita Ramdas, CEO and president of the that they would receive “prompt and effective Doctor/GP consultations Global Fund for Women. The statement rings treatment” if they or a member of their family 48 as true in healthcare as in many other sectors were to be ill. While they expressed more Medicines affected by variations in income, education, concern than their foreign counterparts 28 caste, gender and geography across a country about the cost of such care, they also voiced a Quality of hospital staff and environment 26 of more than 1bn people. greater willingness to pay more for better and Advice on healthcare and preventive medicine Rich urbanites (and “medical tourists” faster hospital treatment. (eg, via Internet, phone, etc) from abroad) plump for elective treatments The growth of private healthcare providers 11 in private clinics, the growing middle class and insurance plans is one factor improving Waiting time for operations has rising expectations about the quality the outlook and choices for patient care. It 7 Other and speed of its care, and poor Indians (the may be out of reach for the rural masses in 0 majority) are served by an overstretched and India, but a growing middle class of some None of the above: I would not be willing to pay more underfunded network of government-run 250m people (larger than the combined 4 primary health centres that is woefully short populations of western Europe’s three biggest Source: Economist Intelligence Unit survey, July 2009. of skilled medical staff, especially in rural countries) is increasingly turning to private areas where 70% of the population lives. care. The government, accordingly, sees the on healthcare, says Monika Sood of Feedback The challenges include a shortage of skilled private sector as a key element in its aim to Ventures, an advisory company that works medical personnel, and feeble expenditures increase the country’s healthcare capacity. with government and private clients in the on healthcare by some states. Grim statistics As more middle and upper-class Indians sector, noting campaign pledges to cut the on average life expectancy and infant get treated privately, more space becomes inequalities in care between urban and rural mortality—sobering even by standards in the available in the government health service for areas. She points to additional funding developing world—reveal how far India lags poorer people who have no alternatives. for a national insurance plan for the poor, behind much of the world in health. The current government is “fairly bullish” and an increasing role for government as a22 © Economist Intelligence Unit Limited 2009
  23. 23. Health reform The debate goes public The rollout of PROMs is expected to have a dramatic impact on how patients and clinicians assess theeffectiveness of healthcare. An example of how patient feedback can be used involves cataract patients,who were asked about the change in their quality of life after surgery. Despite the expectations ofclinicians that the changes would be profound, about half the cataract patients surveyed said that theyhad not experienced any improvement in quality of life as a result of surgery. The data, collected for theUK’s Department of Health, found that many of them in fact had a fairly good quality of life before theiroperations. The result raised questions about how high a priority cataract surgery should be going forward. “If the NHS has switched from making Trabants to Rolls Royces […] we’re still only counting cars,” saysProfessor Appleby of The King’s Fund. But PROMs, he adds, can show healthcare administrators whereproductivity improvements are most needed. Measuring patients’ views of the impact of treatment ontheir own health will in turn show where the NHS is making the greatest impact. Initially, the tool willbuyer of healthcare services—not simply as a offering “greenfield routes” with public land the Indian Institute of Management and aprovider—as indications of its willingness to provided for private investors to build and local non-profit group, for instance, havebecome more active in the sector. operate health facilities. collaborated to bring theatre performances to Still, there are limits on how far the Tensions remain, though: one current rural villages, trying to raise awareness aboutgovernment can go. One issue is funding: problem is the drift of doctors to the private health issues and encourage local dialogue. ARajat Gupta, who was instrumental in sector, where they can earn four or five times as growing number of community groups, as wellsetting up the Public Health Foundation of much money. Moreover, the knotty problem of as medical staff, are supporting such outreachIndia, has noted that spending on hospital underserved rural areas—the least appealing efforts as a way to reach the poor, uneducatedinfrastructure will probably only increase by assignments for many doctors—remains. and most vulnerable Indians.2% per year over the next decade13. Rural women are especially affected, as they Amid the many challenges, there are other While there is clearly a temptation to and their families regard their health as a low signs of hope. Mr Gupta claims India is well-encourage more private-sector development, priority for the family—a contributing factor in placed to tackle its health challenges for twosavvy officials also recognise the politically India’s high rate of maternal mortality. While key reasons: it can learn from and avoid “thetricky nature of privatising health services, the government is encouraging more private- costly errors” of more advanced economies,especially given the tradition of free sector investment in rural and semi-urban and create its own, new models bygovernment healthcare. Ten years ago, “the areas, it is unlikely that rural areas will ever be integrating the strengths of business and themindset was ‘healthcare is free’,” said adequately served by private firms. “Health non-profit sector. Ms Sood concurs that thereMs Sood. Now there is a greater willingness is one area where it can’t just be left to the are lessons to be learned. “In the US, thereto pay for quality care, as borne out by our private sector,” says Ms Sood. was a lot of money available for healthcare.survey: more than half (55%) of Indian Anasuya Sengupta, Asia and Oceania Investment went into things like diagnostics.respondents stated they would pay more for director of the Global Fund for Women, says Insurance rates are also driving the US, andbetter quality hospital treatments, and nearly rural populations face particular challenges the result is fairly high costs of healthcareas many (48%) would do the same for better with access, awareness and accountability delivery,” she says. In India, where pricing isdoctor consultations. in healthcare. Accordingly, more non- an important variable in uptake of services, Officials, though, are still wary of touching government entities, citizens’ groups and policymakers are asking how they canthe core of the free system. Privatisation communities are taking matters into their avoid some of those pitfalls. “In India we’reefforts have instead focused on allowing the own hands, emboldened by past successes in wondering how we ensure we don’t face theprivate sector to operate new hospitals with pressuring the government on issues like HIV/ same issues the US is facing today.”the government supplying the buildings, AIDS. The state government of Karnataka, 13. McKinsey Quarterly, A Healthier Future for India, January 2008.© Economist Intelligence Unit Limited 2009 23
  24. 24. Health reform The debate goes public be used to assess just a handful of common procedures—involving hips, knees, cataracts and varicose veins—but proponents are understandably pushing for an expansion into other areas as well. For a public that tends to assume a degree of relatively consistent quality across the system, the results could be a real eye-opener. A more established NHS procedure, aimed at offering a sort of best-buy guide for healthcare products and services, is the National Institute for Clinical Excellence (NICE). The goal of this body, set up a decade ago, is methodically and independently to assess the value for money of different approaches. The goal is to make NHS decision-making more transparent and public. When patients want to challenge its judgements—about payment for cancer drugs, for instance, or limits on end-of-life care—they have an ability to take their cases to court. While this is a useful mechanism for keeping a lid on costs, the political reality has at times been too much to bear. The uproar surrounding certain contested cases has meant that NICE’s standards for end-of-life care have been relaxed under pressure; in February this year, for example, NICE was forced to reverse a decision it had made and to allow the cancer drug, Sutent, to be used on the NHS. This political reality—the hard trade-offs that policymakers face—can undercut even the most carefully crafted strategy. Indeed, by the time Lord Darzi resigned as health minister to focus solely on his medical work, some were questioning whether his focus on quality was at odds with the government’s focus on targets. The grand bargain that policymakers must strike with the public over healthcare is not an easy one in these difficult times. This is as true in countries like the US and UK as it is in strikingly different markets, such as India (see box, Indian healthcare: seeking a new route).24 © Economist Intelligence Unit Limited 2009

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