Decentralizing Britain's National Health Service


Over the weekend, The New York Times noted that Britain's National Health Service—the country's socialized medical system—is gearing up for a major revamp, with a focus on reducing bureaucratic oversight and increasing local control. The gist:

Even as the new coalition government said it would make enormous cuts in the public sector, it initially promised to leave health care alone. But in one of its most surprising moves so far, it has done the opposite, proposing what would be the most radical reorganization of the National Health Service, as the system is called, since its inception in 1948.       

Practical details of the plan are still sketchy. But its aim is clear: to shift control of England's $160 billion annual health budget from a centralized bureaucracy to doctors at the local level. Under the plan, $100 billion to $125 billion a year would be meted out to general practitioners, who would use the money to buy services from hospitals and other health care providers. The plan would also shrink the bureaucratic apparatus, in keeping with the government's goal to effect $30 billion in "efficiency savings" in the health budget by 2014 and to reduce administrative costs by 45 percent. Tens of thousands of jobs would be lost because layers of bureaucracy would be abolished.       

The overhaul plans don't do anything to open the system up to private competition, but they do move some of the decision-making power from the center of the network to the edges. Within the context of government-run care, at least, it's a step toward a more decentralized outlook. But "within the context of government-run care" is a pretty big caveat.

Politico's daily health care briefing suggests that this could become a new GOP talking point. But that might prove awkward for Republicans, or at least not as straightforward a critique as it might seem.

That's because the reforms at least partially resemble changes proposed by Dr. Donald Berwick, President Obama's much-maligned new head of Medicare and Medicaid. As Ezra Klein noted earlier this month, in Berwick's infamous speech to the NHS—in which he called the system "one of the truly astounding human endeavors of modern times"—he urged the system's caretakers to 1) put individual patients and their individual needs at the center of care and 2) make local health systems stronger, and more powerful. We don't know all the details of the NHS overhaul yet, but Berwick's suggestions sound awfully similar to what's being proposed. If Berwick does indeed favor these changes, it will be harder for Republicans to talk them up.

Granted, Berwick may not like what's in store for the NHS. One of his other recommendations was to "stop restructuring"—a proposal he also delved into in this piece for the British Medical Journal. I'm pretty sure that dropping tens of thousands of bureaucrats from the system's payroll counts as a restructuring.

More broadly, I think it would be easy to overstate the value of these sorts of reforms. Are cost-cutting, patient-centered reforms within government-run systems a good thing? Absolutely. That's why I've argued that once you accept that government-run systems aren't going anywhere in the near term, it's probably not a terrible idea to have a dedicated cost-cutter like Berwick overseeing them. But in the long run, even seemingly smart administrative reforms like this fall terribly short. That's because they don't do much to alter the fundamental connection between the provision of health care and the government. Real health care reform means more than simply changing the way the government manages the system; it means significantly and permanently reducing the the size and scope of the government's control.