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.


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  1. I have an idea. Decentralize control to individual doctors, patients, and insurers.

  2. Letting people make healthcare decisions for themselves is evil.

    1. Your check is in the mail.

  3. “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.”

    Unless you are old sick and not politically connected. Let’s take a look at what that kind of cost cutting looks like.

    An investigation by The Sunday Telegraph has uncovered widespread cuts planned across the NHS, many of which have already been agreed by senior health service officials. They include:

    * Restrictions on some of the most basic and common operations, including hip and knee replacements, cataract surgery and orthodontic procedures.

    * Plans to cut hundreds of thousands of pounds from budgets for the terminally ill, with dying cancer patients to be told to manage their own symptoms if their condition worsens at evenings or weekends.

    * The closure of nursing homes for the elderly.

    * A reduction in acute hospital beds, including those for the mentally ill, with targets to discourage GPs from sending patients to hospitals and reduce the number of people using accident and emergency departments.

    * Tighter rationing of NHS funding for IVF treatment, and for surgery for obesity.

    * Thousands of job losses at NHS hospitals, including 500 staff to go at a trust where cancer patients recently suffered delays in diagnosis and treatment because of staff shortages.

    * Cost-cutting programmes in paediatric and maternity services, care of the elderly and services that provide respite breaks to long-term carers.


    No it is not a good idea to have sick bastards like Berwick in charge of anything.

    Sudderman has officially taken the Reason Dave Weigel honorary endowed chair for leftists masquerading as Libertarians because they can’t get a job elsewhere.

    1. But of course you are bound to have those types of things happen no matter what kind of healthcare plan you have. There is almost unlimited demand for healthcare services, and limited resources to meet that demand.

      Care will be rationed somehow, either through indvidual choice (ie can’t afford it), or through government choice (IE government can’t afford it).

      Either way, someone somewhere, is going to have to make decisions about what care is going to take place.

      1. The problem is that the government will always chose the welfare of the bureaucrat over that of the patient. If they had cut all of the fat out of the administration of the NHS, you would have a point. But I guarantee you they haven’t. Under a government run system, we will suffer and die so SEIU members can have lifetime pensions.

        1. I certainly wouldn’t argue with that.

      2. The same is true of food, cars, computers, cell phones, and etc.

      3. Very true. The only question is whether care is rationed through voluntary exchanges, e.g. each person is free to 1) insure against the risks that frighten them the most and 2) shop around for the best prices OR some unelected, unaccountable bureaucrat somewhere decides who gets what, based mainly on the political influence of different provider and patient advocacy groups.

        1. I don’t think it’ll be just political influence… I think they’ll take into account potential revenue from taxes when making medical decisions, too.

  4. 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.

    I can’t even imagine how this is supposed to work. It sounds like some kind of whacked-out capitated plan/HMO, with GPs simultaneously acting as gatekeepers for care and taking the role of insurance companies. Key questions:

    (1) How is that money “meted out” to the GPs?

    (2) What happens to any money meted out to a GP that isn’t spent on care?

    (3) What happens to a patient when their GP runs out of money to pay hospitals and other providers?

    1. The answer to number three is that the last four months of the year are going to be quite unpleasant.

      1. Unless they mete out the money monthly, in which case the last week of each month will be unpleasant.

  5. “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.”

    Overall I do agree with this, but there are some problems.

    If government is funding the expenses, then of course there will be government controls.

    If government is NOT funding the expenses (ie end Medicare/Medicaid etc) then what do we do about old people/pre exisiting conditions etc.

    Insurance only works if you have a large group of people where you spread the risk about. What do you do if none of the high risk people can get insurance (ie ALL old people etc).

    Anyway, food for though.

    1. You make it seem as if people become old overnight. There is a period called ‘working life’ before that, when people can save for their retirement needs.

      1. That’s true, but often times once you reach that age you can’t get insurance for any price.

        Of course one could simply argue that people should save up for the entire amount and do without insurance, but so far, most people haven’t seemed to be very interested in that idea.

        1. If they didnt have any other choice, they might get interested in a hurry.

          1. I’m not so sure, I think most people tend to discount the future to much, especially when it comes to the chances of something bad happening to them.

            For example look at America’s savings rate.

            1. Thats the choice freedom allows them to make.

              If you oppose freedom just fucking say so.

              1. Now, don’t get snippy.

                These are just the types of things that must be considered. Even if we went to a complete cash system, and shut down, Medcair…

                What about ER care? Would we just flood the ER’s with seniors that didn’t have inusrance? Right now, ER’s are required by law to see everyone.

                And so far I haven’t seen much desire by the public to change that.

                Think of the sob stories…

                1. Freedom means ignoring the desires of the public.

                2. These really arent “the types of things that must be considered.” If liberty is your highest political value, you dont have to consider them at all.

            2. America’s savings rate didn’t happen in a vacuum, it happened because our culture and political system tends to punish saving. Because saving caused the Great Depression or whatever.

        2. They’re not interested in the idea because tax-wise, it might not be the best way to go.

  6. Don’t ask us, all we do is keep getting better and cheaper. No lessons to be learned here.

  7. Don’t ask us, all we do is keep getting better and cheaper. Nothing to be learned from us. Move along.

  8. Great Britain can certainly afford to lay off many of these bureaucrats. They really don’t need death panels there for the simple reason that their whole system amounts to one giant death panel. If you get seriously ill there you have bascically have Vegas casino odds of long-term survival.

    Anyone who doesn’t believe me should actually talk to any real person unfortunate enough to have suffered through the NHS. It’s easily the worst of out all the first world health systems; just a total nightmare.

  9. Kroneborge|7.26.10 @ 5:05PM

    For example look at America’s savings rate.

    While there are certainly other factors work I think it is not a coincidence that the decline in America’s savings rate has occured at the about the same time as Medicare and Social Security kicked in.

    I realize that SS has been around since 1937, but it was not until the 1970s that it started being seen as a basic source of retirement income.

    Benefits were increased and COLAs introduced in the 70s after a rash of stories about grannies eating cat food surfaced. Up until then people took the notion that SS was just a supplement seriously.

    Like many other things this change occurred at just about the time that the need for new and sustainable ways for people to plan to provide for themselves in old age. Who knows what kinds of financials plans might have been developed in the absence of the belief that government would provide.

  10. This news makes me want to kill myself.

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