Last week the Health Select Committee confirmed what we have known for some time, “the scale of the funding challenge in health is colossal” and despite increases in spending, “the service is under unprecedented strain and struggling to keep pace with relentlessly rising demand”. Although there is some support for increased taxes to pay for the health services, none of the major political parties were willing to back tax rises to fund the NHS ahead of last year’s general election and there is no clear funding solution that will help to alleviate this strain.
As someone who has experience of living in the United States and paying for healthcare, comparisons with the US system are of particular interest to me. Data from private insurers was released last week showing that US health insurers pay more for drugs and surgery in almost every category than those in other countries. If one were to compare the prices paid by government funded services, the gap would be even greater.
It is well known that the US subsidises global pharmaceutical research and innovation through its higher drug prices. US pharmaceutical firms also make big profits and have large consumer advertising budgets which are not permitted in the EU. Private insurance companies are also looking to make a profit from healthcare. As a consequence, both government and personal spend on health in the US is high – it is estimated that healthcare spend will reach 20% of gross domestic product (GDP) by 2020. What does this mean for people living in the US? Individuals are picking up the tab.
Obamacare has opened up the option for health insurance for millions of US citizens who receive subsidies to cover all or some of the cost of their monthly premium. Employers are also required to provide health insurance to their employees under the Affordable Care Act (ACA).
I had always assumed that if you had insurance, you would be okay but having an insurance plan means that you will be able to access healthcare at a reduced cost as negotiated by your insurance company but you might still have to pay thousands of dollars each year for your personal healthcare costs. Health insurance plans are a complex arrangement of co-pays, co-insurance, deductibles, with a maximum threshold for out-of-pocket expenses each year. Even a simple GP visit costs money which acts as a deterrent preventing people from accessing treatment and care. Higher monthly premiums generally reduce the potential out-of-pocket expenses and the ACA limits the maximum out-of-pocket to $6,850 for an individual and $13,700 for a family plan (a limit that increases each year).
These out-of-pocket limits are significant sums – an accident requiring emergency admission can quickly result in your out-of-pocket maximum being reached with huge unplanned medical expenses to meet. For those without insurance a simple appendicectomy can cost in excess of $30,000, the average NHS reference costs for appendicectomy was just over £5,000 in 2014-15. Being diagnosed with cancer or a long-term condition can commence years of high medical expenses.
It is perhaps no surprise that health costs are the leading cause of personal bankruptcy in the US and there is little sign of this abating under the ACA. Many of these bankruptcy claims are from people who have health insurance but are unable to meet the mounting expenses. Crowdfunding for medical expenses is increasingly commonplace – between 2011 and 2014, the number of medical fundraising campaigns on the platform increased from 8,000 to 600,000.
It’s not a pretty picture, perhaps explaining why populist support for Bernie Sanders’ commitment to introduce universal healthcare was so high. At the same time, the focus on individual responsibility and the power of corporations means that fundamental change to the US healthcare system is unlikely for some time.
This turns me back to the UK. Although there is no doubt about the potential for improvement in service configuration and outcomes, the NHS is a relatively efficient and effective service. For the most part, it secures competitive prices for drugs and procedures and delivers good outcomes for the people it cares for. As the NHS grapples with funding pressures and delivering the Five Year Forward View vision, we all need to think about what we can do to protect this important institution and provide it with the resources it needs to thrive.