Healthcare in Great BritainMay 7, 2015

Paul DavidsonMike Miller

Meagan DexterJake Kohn

Agenda1. History, Services, Funding, and Budget (Paul)● Beveridge model ● legislative changes● services covered ● spending and tax rates● Intro of private sector care

2. Hospitals and Physicians (Meagan)

3. Pharmaceuticals and Medical Technology, Patient Costs (Mike)

4. Patients (access and quality) (Jake)

Background Information★ Great Britain= England, Scotland,

and Wales★ Currency is in Pounds (£=$1.51 on May 1, 2015)

★ Labour Party after WWII; more socialist agenda

★ William Beveridge’s plan tackles healthcare in Great Britain

★ People use both public and private care

★ NHS Passed in 1946

Beveridge Model Basics★ National Health Services Bill

became effective on July 5, 1948. ★ Before NHS, only those who could

afford care had access

★ There are 3 Distinct Characteristics1. Universal, single payer insurance2. Public health care provision3. Free care

Economist William Beveridge

Early Stages of the NHS★ When bill was passed, budget

was £437 million (9B today)★ prescriptions, eye and dental

care not covered (Bhattacharya, Hyde, and Tu,

2014)

★ High Demand long waiting times and budget shortfalls

★ Life expectancy 10 years (ONS,

2010)

ADDITIONS:1960-1990

Vaccines, transplants, contraceptives, MRIs, Breast Screening, AIDS care (NHS Choices, 2013)

1990 Community Care Act

Trusts: What are they?

In order to become a provider, org must become a trust.

Trust has own management

Types: Acute (hospital), primary care, ambulance and there several of each type in geographic regions.

● Division of services now simpler● Start with primary care, and if necessary get

secondary referral (YAS Trust, 2012)

The Health and Social Care Act of 2012★ Aimed to efficiency and control costs ★ Clinicians were given autonomy to provide treatments without

having to negotiate with trusts, which were abolished under this law.

★ Money was now dispensed through Clinical Commissioning Groups (CCGs) (Health and Social Care Act, 2012)

★ The Public Health England program began. (UK gov, 2015)

★ Signed into law on March 27, 2012

Services OfferedFree Reduced Cost Not Covered

Primary care (through GP’s)

Dental (£18.80-222.50), Optical (depending on age, disability, income)

Cosmetic Procedures

Hospital, Mental Health, necessary specialty care (With referral from GP)

Prescriptions (£8.20 per month/prescription)

(NHS, 2015)

Private care*covers same services*option to buy specific types of care (NHS Choices, 2015)

Spending

(DH, 2012)

Spending

Office of National Statistics, 2013

● Graphs display total spending: public + private.

● Rates have been increasing at slower rate since Recession

Tax ratesfor individuals

*Citizens also pay national insurance tax; this does not go towards healthcare*

Income Tax Rates

VAT Rates (Sales Tax)

What funds British Government?

● Citizens pay income, VAT, and National Insurance

● National Insurance funds a different program (HM, 2014)

● Total GDP in 2014= $2.678T (World Bank, 2013)

Private Care● Private or

employment plans● 7.2 million people/

11.7% of population had plans in 2010

● 16% of total healthcare spending in 2012

-(Lang and Buisson, 2011)

OverviewHospitals

– Public Hospitals• Quality Issues• Access Issues

– Response to Issues• CCGs• Private Sector

Physicians– Demographics– Education– Shortages

• Solutions

Hospitals

Hospitals in Great Britain• Public and private providers are integrated

within NHS hospitals

• Public hospitals funded by NHS

• Hospitals and specialists concentrated in urban centers

London Metro AreaGreat Britain

Public Hospitals in Great Britain

• Funds for public health services distributed by Clinical Commissioning Groups

• 4 out of top 5 hospitals in UK are NHS run• Strict quality control

• Strong primary care focus• National vs. Local Commissioning• Acute & Emergency Departments

• 38 teaching hospitals• Uneven distribution

• 5 within London• Almost all within England

• Largest and most prestigious institutions

• 223 NHS trust hospitals

• Around 8,000 GP practices

NHS → CCGs → Hospitals, Physicians, Care Providers

Issues Facing Public Hospitals• Cost-containment pressure

– Cost of care rising faster than allocated funding

• Aging population– Around 10 million citizens of

UK over 65– Healthcare spending double

for 65+

Rise in Demand for Acute Care

Yellow = Avoidable AdmissionsRed = Non-avoidable Admissions

Num

ber

Of A

dmis

sion

s

Acute & Emergency Care

• Aging population is demanding more intensive and more frequent emergency care

• Emergency admissions have increased by 50% in 10 years• Severe shortages in acute care physicians and available beds

Acute care admissions

Acute care bed capacity

(public)VS.50% 3.5%

Rise in Demand → Decline in Quality

Rates of Readmission within 30 days of treatment have increased 50% in last 10 years due to incentives for hospitals to push people out

quicker.

Access to Care in Great Britain

NHS Organizations’ Bed Capacity in England

Public Hospitals• ~ 104,000 beds available for

overnight stay• 3.0 beds per 1,000• Decrease since 2010

• Stagnant growth in bed capacity since 2012

Global Comparison of Bed Capacity

Notable disparity from other EU Countries

“There had been ambulances parked outside for five hours with their patients being treated by paramedics. They couldn’t even get in the A&E Department. Problem is, we’ve just got nowhere to

put people.” –Physician , NPR News

Clinical Commissioning GroupsClinical Commissioning Groups: NHS organizations set up by the Health and Social Care Act 2012 • Goal:

– Organize the delivery of NHS services to their local populations– Address geographic disparities

• 211 across UK

• Range from 61,000-850,000 people per “patch”– Median 250,000 people

• Funded by Weighted Capitation System

• Responsible for local commission of:– Urgent and Emergency Services– Elective Healthcare (outpatient services)– Community Health Services– Maternity and Newborn Care– Mental Health Services

Private Healthcare in Great Britain• Largest number of private services and

beds are within NHS trusts• Private care concentrated in London and

surrounding area

• Private spending on rise • Rise in demand for

cosmetic proceduresPrivate Healthcare Spending Correlated with:

Private Bed Availability

Demand for Cosmetic Procedures

NHS Waiting Times

Physicians

Types of Physicians

• United Kingdom: 2.8 physicians per 1,000 people• US: 2.5 per 1000• Canada: 2.1 per 1,000• World: 1.5 per 1,000• European Union: 3.5 per 1,000

• 266,890 Physicians• 83,501 (25.4%) GPs • 64,998 (31.2%) Specialists

Strong gender disparity in specialist roles

Top Specialties1. Anaesthetics (11,074)2. General (internal) medicine (10,128)3. Pediatrics (5,896)4. General Psychiatry (5,797)5. Clinical Radiology (5,117)6. General Surgery (4,694)7. Obstetrics and gynecology (4,367)

Particular shortages in A&E, Radiology,

Ophthalmology and General Practice

Physician EducationPhysicians complete 4-5 of medical school immediately after secondary education.

Physician Salary • General Practitioners

– Pay ranges from £53,781-£81,158

• Consultants– Pay ranges from £74,504-£100,446– Private sector salaries slightly higher

• Weighted Capitation• Salaries determined and distributed

by CCGs

Physician Shortage

• Incentives added in 2012 helping recruitment• Aggressive foreign recruitment

– 3,000 Foreign Doctors recruited in 2014

Age Demographics of Physicians

Aging Population• 40% of physicians

over 46

Medical School Enrollment• Decline in applications each year since 2012• 82,549 applications for 7,584 spots (2013)

– 10.6 applications per seat– No rise in available spots

• Foreigners make up 8% of students in UK– Capped enrollment– Challenge entering UK labor force

Combatting ShortagesHeavy recruitment of International

physicians to combat stagnant internal growth

Practicing in UK requires:• Certification under General

Medical Council• Proficiency in English

Pharmaceuticals & Medical Technology

Structure and Regulators

• Very similar to USA• Firms are represented by the Association of the British

Pharmaceutical Industry (ABPI) • Regulated by Medicines and Healthcare Products Regulatory

Agency (equivalent to our FDA)• Intellectual Property Office (IPO) – grants monopoly rights to firms

(patents)• National Institute for Health and Care Excellence (NICE)

• Part of Department of Health• Develops clinical guidelines

Industry• 500 firms (57 in Britain) employ

68k people in 2012• 23k are highly skilled (ABPI, 2014)

• Contributes £8.4 billion to GDP• 1/5 of best selling drugs are

developed in UK• GlaxoSmithKline and

AstraZeneca are 6th & 8th largest pharmaceutical firms globally (ABPI, 2013)

Source: TheMedica, 2009

Research and Development (R&D)

• £4.2 bn invested in 2012• ↓0.7 bn from 2011• Huge reliance on top two firms

• Responsible for 71% of R&D spending (National Audit Office, 2013)

• Success rate for launching a drug is 1/10,000 for large firms (PHRMA, 2007)

• Without patent protection R&D expenditures would fall 64% (Grabowski, 2002)

Daemmrich, 2009

Drug Approvals in U.S. and Euro Markets

Where is R&D?• Centered around London• R&D centers near

universities• Benefit from knowledge

spillover• An additional chemistry

department → 65% ↑ in # of R&D centers

(Abramovsky & Simpson 2011)

Direct-to-Consumer Advertising

• Direct-to-Consumer advertising is illegal

•Reduces moral hazard• Improves doctor-patient

relationship• Positive externality – reduced

antibiotic prescriptions• Negative – asymmetrical

knowledge between doctor and patient

Medical Technology

• NICE – world’s most prominent Health Technological Assessment agency• Considers only technologies with large budgetary impact• Local providers must abide by NICE’s recommendations

• Medical Technology Data includes:• Medical devices (x-rays, MRI, CT Scanners, ultrasound, LASERs, etc…) • Data is independent of Pharmaceuticals

Industry Overview

• Represented by the Association of British Healthcare Industries (ABHI)

• 3,034 firms employ 56k people (BIS, 2010)

• Market valued at $9.9 billion in 2008 (EmergoGroup, 2015)

• Import led, but small company importers at disadvantage

• NHS’ barriers to entry for importers include:• Strict regulatory compliance• Price controls• NHS Hospitals are slow to adapt new medical technology

Source: MedTech Europe, 2013

Medical Technology Global Market Share

Great Britain’s overall global market share is 3.9%

Source: MedTech Europe, 2013

Patient Costs

Patient Costs

• Most healthcare is free for those utilizing NHS

• STDs, compulsory psychiatric treatment, contraception

• 88% of patients do not pay premiums or out-of-pocket costs (ONS, 2011)

• Dentistry services are subject to various copayments depending on area

• Not every service from NHS is free:

• Visitors, dental, prescriptions, abortions

• Out-of-pocket payments accounted for 11.9% of total expenditure on health in 2005 (World Health Organization 2007)

• Every 18p of every pound sterling earned goes toward health care

• 4.5% of the average citizen’s income (ONS, 2011)

Prescription Charges (Cost-sharing)

• Wales, Scotland, and Northern Ireland have no charges

• No charges in England if received from hospital, doctor, or NHS walk-in center, otherwise have to pay

• Exemptions:• Pregnant women (and those who just

gave birth less than 12 months prior)• > 60 years old• <16 years old• Enrolled in full-time schooling from

16-18 years old• Low income

Private Health Insurance (PHI)

• 11.7% utilize private system • Average premium of £42/month

(female in 30s)• Some plans as low as £4/month

• Employer-based (59% of PHI)• Market-based PHI – 31%• Remaining 10% are umbrella

organizations (Unions, Religious Institutions, etc…) – members voluntarily purchase insurance

• Who is most likely to have PHI:• Better educated

• College: 6x more likely• Higher income

• Corporate PHI for wealthiest • Conservative

• 3x more likely• Employed

• Non-manual labor 2x more likely• Independent of income

• Nonsmokers• London/southern England

Wallis, 2004; King & Mossialos, 2005

Top PHI Providers

BUPA

AXA

Standard Life Healthcare

Norwich Union

Healthcare

PPP 78% market share

Source: Laing & Buisson, 2004

VERY concentrated market

Mixed Insurance Market

• Sometimes, NHS patients have access to private facilities• NHS allows patients to upgrade services without acquiring private insurance

– for a fee• Very small number (1%) of patients utilize this option, but 94% prefer private room

• No tax incentives for individuals covered by PHI, but firms can deduct premiums from taxable profits (OECD 2004)

• Subsidy from wealthier patients to poorer patients• Wealthy pay more of their income in taxes• Purchase PHI, rarely use NHS• Lower hospital utilization rate

Sources: (Ballard & Goddeeris, 1999; ONS, 2011)

Patients Overview

● Access through Wait-Timeso General Practitioner o Consultantso Hospitals

● Measuring Quality of Careo Life expectancy/Infant Mortality rateso AMI mortalityo Hip and Knee replacement surgeryo Patient Reported Outcomes

Patient Choice in NHS

Great Britain citizens:● Have right to Health Care (NHS Choice, 2015)

o free at point of delivery certain services may apply (dental, optician, pharmaceutical)

Venues of care for Patients:● NHS website, UK's biggest health website. ● NHS Helpline:

o Phone service: 111o 24 hour non-urgent phone care

Issues with Waiting Time’s

General Practitioner: costing lives● Medical priority, rather than price mechanism● seeing GP in a fair amount of time● Availability and proximity of care

↓

Consultants:

● Elective referrals are too long

● Too long of time from consultation to surgery↓

Treatment/surgeries:● cancellations● time from RTT to outpatient

Primary Care Wait TimesWait Time for GP:

● Health Service Rationing● ↑ High Demand for Primary Care● Not enough doctors to see patients

o over worked doctors → ↓ standard of care

● Patient’s choice with GPo satisfaction: 1998: 78% → 2000: 58% (Mori, 2000)

● Delays in access → worsening clinical outcomes (Murray, 2000)

o 2011: 11% → 2014: 16% o 14 % of population wait week or more for GP appointment (Hammet, 2013)

o 1 in 6 wait longer than week (2014)

→ 48-hour maximum wait for a GP appointment by 2004 (Department of Health)

● Patient’s consume scarce resources waitingo → “fail to show” rate ↑o more costly clinical conditions

Primary Care and ED visitsA&E Admission Patients A&E visits between April 2010 and March 2011:(Cowling 2013)

● 4,537,622 visit to ED● 61.3% self referred visits to ED

Making improvements in GP visits:Increasing time with patients during visit (Murray, 2000):

● GP see’s 20 patients/day● 20 days/month● 10 months/year

o ↓ 200 visits per yearo ↑ 7% capacity

● Visits can be avoided to ED, if access is available for patients for primary care (Cowling, 2013)o ↓ costs for ED careo ↑ preventative care

Consultants Wait TimesReferral to treatment time’s too long (RTT):Doctors have to refer patients to specialists

● Trauma and Orthopaedics, Ear, Nose, and Throat, General Surgeryo 30% waited 6 months + in 2000 (Department of Health, 2008)

Elective referrals:● Joint replacement surgery (Light, 2003)

o Hip Replacements & Knee Surgerieso non-emergency surgery

o 1.6 million in 1997

o ↓ 845,000 in 2004● 19.1 million referred (Morse, 2013)

o 61% made by a GP● 2.94 million waiting (Morse,2013)

o 11% ↑ compared to 2012Results:

o 18 week max from referral to treatment (RTT) for elective (planned) procedures (NHS 2015)

o inpatient and day-case treatment: (Lewis, 2006)

reduced from 18 → 6 months; outpatient appointment : reduced from 6 → 3 months o GP’s to center of NHS care

preventative care, ↓ costso Remove waiting-list → appointments

(Thompson, 2015)

Median Wait-times in Hospitals

Hospital Wait Time:

● 1994: o 14 day median

waiting time hospitalo Large waiting-times

● 2009: o 4 day median (inpatient)o 2 day median (outpatient)

Results: ↓ waiting-days for patients ↑patient access to

hospitals

(Department of Health, 2010)

Wait Times Across Great Britain

(Godden, Pollock, 2009)

Target England Scotland Wales

Primary Care within 24 hours to primary care doctor

within 48 hours Guaranteed to a GP, nurse or other HC professional

24 hours to access member of primary care team

A&E(Accident & Emergency)

98% patients, wait no longer than 4 hours (arrival to admission)

98% patients wait no longer than 4 hours (betw. arriving and admission, to discharge)

95% patients, < 4 hours (from arrival to admission, to transfer or discharge)

Health Performances of Patients (late 90’s) Late 90’s Great Britain compared to OECD Countries: (Anderson, 1996 & 1998)

● Life Expectancy: ○ Female: 79.7○ Male: 74.6

■ OECD (respectively): 80.5 F, 74.6 M■ USA: 79.4 F, 73.9M ■ Canada: 81.4 F, 75.8 M

● Infant Mortality (per thousand):○ 6.1

■ OECD: 5.8■ US: 7.8■ Canada: 6.0

● Immunization rate:○ DPT (12 months old): 92%○ Measles (12 months old): 91%

■ OECD: 93%, 91%■ USA: 84%, 92%■ Canada: 87%, 96%

Performances continued (compared in 2010-12)

● Life expectancy in UK (2010-12): (OECD, 2013)

o Men: 78.9 yearso Women: 82.7 years

OECD: 82.8F, 77.3M USA: 81 F, 76 M Canada: 84 F , 80 M

● Infant Mortality Rate (per 1000):o 4.3

OECD: 4.1 USA: 6.1 Canada: 4.9

● Obesity amongst Adults, +15 y/o (2011):o 24.8% of population

OECD: 17.6 % USA: 36.5 % Canada: 25.4 %

Measuring Quality: Case-fatality after admission of AMI

● 7.8 per 100 admissions,admission-based (same hospital)

● OECD: 7.9● Canada: 5.7● USA: 5.5

● 10.0 per 100 patients,Patient-based (different hospital)

● OECD: 10.8● Canada: n.a.● USA: n.a.

(OECD Indicators, 2013)

Hip and Knee Replacement Surgery

Patient Reported Outcomes (PROs)● 2012 - 1997

● ↓ waiting-times

● ↑Patient Satisfaction

2013: 61.3% (Thompson,

2013) satisfaction of Patients● Older population

● ↓ waiting-times

(Department of Health, 2013)

Discussion

1. What solutions would you propose to improve the NHS if you were to win the election today?

2. Do you think the ACA will lead to some of the problems faced in Great Britain?