Aug 042015

The constant knee-jerk response to the NHS’ perennial financial tribulations – more here – usually takes the form of a politicised barrage of criticism about how ‘Dave and his cronies’ are deliberately starving the health care system of cash in order to somehow force it into being rescued by a cabal of privateers crouched slavering in the wings waiting to pounce and bleed dry what is patently not a cash cow. Empirically this makes no sense, but it’s worth having a look at just how ‘cash-starved’ the NHS really is. Figure 1 below from independent think tank The King’s Fund shows UK spend vs a number of developed countries, including some – often cited by the political left as examples of progressive health care utopias – who are ahead in terms of overall expenditure. Indeed, those countries (excluding the US for its obvious outlier status) spend a maximum of about 15% more overall on health (not the 40-50% trotted out by the usual suspects). Nevertheless, 15% (or an additional 1-2% of GDP) is a very significant amount and would undoubtedly dig the NHS out of a hole, but where is that money coming from? The figure clearly shows that almost without exception (the exception being Norway, which can reap the rewards of decades of prudent investment of its oil revenues) all of those countries have a higher private component of health care expenditure. Indeed, if all private components were removed it would look as if the UK spends no less of its public money on health (in fact possibly on the contrary it might even spend more) than other developed states.

Private-public health care spending in OECD

Figure 1. Private-Public Health Care Spending in OECD (The King’s Fund)

Data published by The World Bank (see summary in Figure 2, and original data at bottom of this post) would indeed seem to support this viewpoint. While the data for % GDP health, and by implication health care spend per capita are lower in the UK vs other high income OECD countries, UK public spending on health is clearly shown to be higher. What else can explain this gap other than the under contribution of the private sector hinted at in Figure 1?

Back to Figure 1, and another way of interpreting this chart is to look at those countries that spend overall less than the UK but almost invariably have a higher private component. Of course we are told nothing here about health outcomes but I doubt that the populations of Korea or Ireland are significantly more sick than Britons. So, this could well be an indicator that a higher increased private health care expenditure component is an efficient way of driving down overall costs with no detriment to outcomes. But why let reasonable questioning stand in the way of ignorant apoplexy and a rational debate on the future of the NHS?

Health Care Spend World Bank Data

Figure 2. Health Care Spend World Bank Data



Data from World Bank


Data from World Bank


Data from World Bank
Jul 032014

Going by almost daily anecdotal evidence the UK’s NHS is not a system in whose care you’d look forward to putting your life. On the other hand its sacrosanct nature is part of the national psyche. The recent publication by the US Commonwealth Fund, which attracted significant coverage in the UK acted as a lightning rod for the ‘it’s not broke so don’t touch it’ brigade. And while interpretation of its findings leaves something to be desired by the mainstream press, let alone the public it should be noted that the analysis was undertaken through the lens of the US health care system. So pretty much anything else is going to look relatively good. Nevertheless the NHS tops out on multiple measures and commenters have leapt on these findings as valid reasons to leave the NHS well alone, heaping vitriol on anyone who talks of reform, and more particularly on any suggestion of private involvement.


Don’t touch what’s not broken is the mantra. Except that the real issue is that the NHS is very broken but just manages to deliver in spite of its hamstringing. So why does any attempt to reshape the NHS inspire this response? Without comprehensive reform the NHS will die. What the public doesn’t understand is that the destruction of the NHS is not going to be due to effective use of public private partnerships. For the last two decades billions have been wasted by meddling, tweaking, restructuring, devolving and recentralising and etc. It’s a mess, and as the report notes, the UK lags on health outcomes. When you look at the world’s best health care systems (and I mean best in terms of health outcomes – not ‘best’ in the sense of the usual sentimental, untouchable infallibility notion of ‘best’ that is ascribed to the NHS) they are mostly partly privatised – or at least more integrated with private partners than is the NHS – and partly co-paid.

Take Singapore or Australia as examples – spend on health is similar or lower than the UK and outcomes are better. There are more pragmatic aspects to health care provision that this report doesn’t really touch on. In the UK a GP appointment can be nigh on impossible to get, which drives urgent cases to the emergency room – which wastes resources. At least in markets with a moderate co-pay you can see a primary care practitioner when you want, and importantly out of office hours. Again, reducing indirect economic costs. Specialist referrals tend to be much faster too and because private care is more widespread, it is more accessible and more affordable.

Societally, privatisation has tended to be stigmatised in the UK because of a focus on the bad (British Rail) over the good (British Airways) and the suspicion that national assets have been sold off at below value to enrich the few. However, if regulated, privatisation means managers perform roles at which they are expert. The NHS has for years had highly paid and totally disconnected managers interfering with clinicians’ ability to carry out their work. A lot of the criticism has been about managers interfering with clinicians, yet one of the biggest recent changes – the creation of 211 Clinical Commissioning Groups (CCGs), has placed about 60% of the NHS budget in the hands of local doctors and health workers. Some CCGs have figured out ways to realign the incentives of hospitals, which are often paid per procedure, with those of GPs, who aim to keep people healthy and at home.

For me the single most telling point in this report is the placing of the UK in 10th out of eleven on the ‘healthy lives’ measure.  A healthy life of course is very much a personal choice and way beyond the remit of the NHS. However it is evident that much of this self-inflicted unhealthiness is what is burdening the health care system in the first place. People need to start to take a degree of responsibility for their own long-term health as a starting point for unburdening the system.

Even the USA has lately taken a more proactive and collaborative approach to fixing its horrendously inefficient and outrageously unaffordable healthcare system. So yes, as commenters say, the NHS has some of the best clinicians in the world. But if it continues to be run as it is it will fall over. The problem of the NHS won’t be solved with a ‘don’t touch’ approach, by ring-fencing it and pouring unlimited amounts of money into it. It needs to be disassembled and rebuilt fit for the present day.

Feb 052014

After reviewing the space, agency imperatives and some of the challenges over the last weeks, let’s take a look at some of the growth drivers… some of which might seem a bit counterintuitive

  • Inevitable increasing focus on value and rationalised access to newer more expensive therapies vs restrictions to listing on grounds of cost
  • Emerging models of universal healthcare systems, which will both constrain expenditure and call for rational prescribing of innovative tx, but grow overall volume potential
  • Increasingly complex and evidence-based messaging will be required by healthcare providers to its publics, payors and prescribers
  • Connections and value of exchange between opinion leaders are not well understood (despite intensive use of social media); this offers scope for more rationally targeted communications
  • Increasing westernisation of lifestyle-driven disease, increasing class of consumers able to pay out of pocket for unreimbursed products (private market), increasing access to healthcare through progressive move to universal access will drive growth