Tag Archives: Health care

Identity Crisis (DC Comics)

Rescue is on the way; thank goodness for the superhero to save us. (DC Comics) (Photo credit: Wikipedia)

Right now, there is the proposed NHS Reinstatement Bill, a lobby document which lays out a way to reverse many NHS reforms.

This lobby document, which is what is it, is familiar reading, and brings back various structures that in the past have failed. You can find information on it at this link.

What is interesting about this approach is the aura of respectability that it wraps itself in, by proposing the changes as a legislative draft, almost as though it were ready to go to committee.  This is, obviously, an influencing tactic designed to force debate onto the topics covered in the proposed bill, and disarm critics who don’t agree that the points in the lobby document are the right starting points. In that respect, the lobby document polarises positions, particularly against current policy direction.

The whole lobby document’s comments and notes identifies proposed changes to a variety of existing legilsation. What we don’t find, though is any evidence that the authors were in any way persuasive  or influential during public consultations at the time. We call that ‘sour grapes’.

Approaches such as this suffer from the following:

  1.  a belief that the fundamental values underpinning the health service can only be protected in a particular way and these are the ways things used to be.
  2. a belief that the changes that have been made have violated these values; moreover, that the solutions have made things ‘worse’ as they see it.
  3. selective use of academic research to support the positions that one wishes to avoid changing.

New PublicManagement as reform of government itself must sit uncomfortably with this regressive thinking.

For the authors, they would no doubt point to market failure logic to prove that the NHS should not be ‘marketised’ as they put it, forgetting that a greater fear is ‘government failure’, for which there is ample evidence, not just with the NHS but a whole host of other public initiatives and legislation that has wasted public money.

Healthcare systems are complex and by trying to overlay what they see as simple solutions to the problems they claim arise from the reform agenda of past years, they misrepresent what the actual problems are. As messy, or complex/wicked, challenges, the authors believe that by taking away that messiness, they’ll also take away the problems. But they know just as well as anyone, that their solutions will only create, perhaps even recreate, the very problems that led to reform in the first place, except now they will be today’s problems, not yesterday’s.

One might argue that the authors are committing a type 3 error, of unintentionally solving the wrong problem well, but that would assume that they have are not clear in their minds what they are proposing. Therefore, it appears they are do know better and are committing a type 4 error, of intentially solving the wrong problem well because that fits with their policy preferences, or prejudices.

That’s why this is a lobby document, designed to intensionally convince, (is mislead too strong?) others of their definition of what the NHS problem is.

Regardless, the lobby document and the authors are caught by a fundament policy trap: of solving the wrong problem.

Want to know more?

Government failure in the UK is examined in Anthony King and Ivor Crewe, The Blunders of Our Governments, 2013 (@Amazon) and in Richard Bacon and Christopher Hope, Conundrum: Why every government gets things wrong and what we can do about it, 2013. (@Amazon)

New Public Management was originally conceptualised by Christopher Hood, in 1991, A Public Management for All Seasons. Public Administration, 69 (Spring), 3-19. Some (Dunlevey et al) argue that New Public Management is dead and that governance in the digital era requires greater, not less, government. That may be the case for some, but if you actually look at the tools that are available to government in a digital world, you’d find that there is little reason for government to own or run very much. See Christopher Hood and Helen Margetts, The Tools of Government in the Digital Age, 2007. (@Amazon)

I have found Leslie David Simon’s book, (Woodrow Willson Centre, 2000) an early, and compelling way of laying out the digital agenda in a policy context really well. (@Amazon)

I would also recommend Vito Tanzi, Government versus Markets: the changing economic role of the state, 2011. (@Amazon)


Conceptual work by Yves Klein at Rue Gentil-Be...

When rules don’t work [Conceptual work by Yves Klein at Rue Gentil-Bernard, Fontenay-aux-Roses, October 1960, photo by Harry Shunk. Le Saut dans le Vide (Leap into the Void) (Photo credit: Wikipedia)]







Sir Andrew Dillon, the erstwhile leader of NICE as said that it is irrational for the Cancer Drug Fund to pay for drugs that NICE has turned down.


He’s right of course, it is irrational. But only if NICE’s logic is compelling.


The problem for Sir Andrew, and likemined people, is that there is another logic that trumps NICE’s rational world. Don’t get me wrong. NICE performs a useful, but technocratic, function with analytical assessments that any rational person would indeed want to know. Where we part company is believing that NICE’s logic is the final word on the matter. Which it isn’t.


Tasked, perhaps unenviably, with parsing the performance of medicines and clinical practice, cannot also mean that they are above challenge. Many of NICE’s rulings fly in the face, not of logic, but of our beliefs as humans. It is why we do things when the odds are against us, because not to do so would be wrong. If we think of the challenges NICE faces as wicked problems, that is complex problems with a multiplicity of solutions, it becomes self-evident that their logic is just one way of deciding and choosing. We could use other rules, other criteria. The Cancer Drug Fund is just such an approach. It is another matter whether we should have in place alternative funding approaches that individuals can avail themselves of (such as co-payments or co-insurance); for extraordinarily costly therapies, co-funding would not apply, so we’ll back to the problem anyway.


NICE has a troublesome relationship with the notion of ‘rule of rescue’ and so has decided to ignore it. There replacement, the “end-of-life premium” is really just a reweighting of the logic they use.


You see, the rule of rescue is what we might call a meta-rule — it is a rule that tells us if other rules are working properly, and importantly, as a moral imperative which tells us what to do. The rule is often invoked in a particular form: that people facing death should be treated regardless of cost. The rule as originally formulated is really about assisting identifiable individuals facing avoidable death (Jonson, 1986); the bioethicists and economists have shifted this to a cost-effectiveness approach, making it one about trade-offs instead.


The problem for healthcare systems is that all patients are becoming identifiable as medicines become personalised (medicines may become orphan drugs). The problem for the NHS is that it does not allow such people to rescue themselves because it prohibits any sort of co-funding or other arrangements. The only option is an opt-out (and private medical insurance has rules about pre-existing conditions). Given the funding priorities of the NHS, we should be reflecting not so much on how to make the pot bigger, but on using the money that is available better (there will never be enough money), and ways to introduce practical co-funding.


Since individuals have no other options in the NHS, the rule of rescue as a moral imperative will be violated and we will act, not out of analytical error (i.e. make a technical mistake), but unethically. You see, the NHS must be the healthcare system of last resort and therefore of rescue, otherwise, identified individuals are destined to a death sanctioned by public policy and is that a policy or healthcare system worth having?


We have seen a similar challenge to NHS/NICE logic recently with the King family and proton beam therapy, and the NHS will also use NICE logic to determine access. Whether beams or drugs, it is the same argument.


But why cancer? The main public policy question is why should cancer patients be given preferential treatment as against any other deserving group? This may in part be driven by the often astronomical costs of new cancer therapies themselves, which demarcate cancer patients decisively from equally deserving patients with less cost-contentious therapies. I have just finished some work on motor neuron disease, for which there is one specific medicine and life expectancy from diagnosis is 3 to 5 years, with median survival rates that are measured in months. NICE reportedly is developing guidelines for this disease. Costs are considerable, and at least in the UK, highlight the bureaucratic illogic of separate healthcare and social care, but that is another story.


The moral dilemma that the economists at NICE are trying to reduce to an equation is whether a new therapy is extending life, or delaying death. The Oregon approach collapsed when the hard choices emerged and people were unable to resolve this dilemma, which is not a quantitative issue, but one of how we value our humanity. Kierkegaard’s Concluding Unscientific Postscript speaks of the leap to faith as involving self-reflection and the emergence of scepticism. It is worrisome that NICE is so confident.

Further reading


Cookson R, McCabe C, Tsuchiya A. Public healthcare resource allocation and the Rule of Rescue. J Med Ethics. 2008 Jan 7 [cited 2014 Sep 4];34(7):540–4.
Jonsen, AR 1986, Bentham in a box: technology assessment and health care allocation, Law, Medicine and Health Care, Vol 14, pp172–4.
Richardson J, McKie J. The rule of rescue, working paper 112, Centre for Health Program Evaluation, Monash University
Domino Spiral

Death spiral or solution? (Photo credit: FracturedPixel)

There is a flurry of alarmist writing on the financial state of the NHS at the moment. Solutions are usually three: spend more, spend less, find money from other places.

These are not solutions but facts of state involvement in healthcare. While I would not disagree that financing issues are important, they do not alone define the problem. Choices of funding mechanisms are essentially political in most countries and hence reflect the usual rhetoric of political positions. Is there another way forward?

Let me begin by saying that many problems arise because of the descriptive models used and which limit creativity. The NHS has been compared to a supertanker, hard to turn around — so change the story to a school of fish (in organisational terms: greater autonomy and decision-making within smaller functional units). Candace Imison at the King’s Fund wrote recently on her blog that NHS reform was like ripping up plants in a garden and then sticking them back (or in policy terms: reform was careless and presumably didn’t pay enough respect to the fabric of the garden itself). Models such as this summarise a position, without the necessity of intellectual substance. May we be delivered from this.

I prefer to start my policy analysis at the other end, so to speak. What results do we want from healthcare systems and what do we need to realise those results. Keep in mind the current underlying logic of the NHS policy stems from a period that the majority of the population have no experience of, when the UK faced existential risks and government had almost no policy levers to do what needed to be done, except to take over and run the whole show. While evolved over the years, the essential organising logic of the NHS has not changed. Today, though, we have more nuanced policy instruments available, including much better educated clinical expertise, public literacy, higher general standards of education, better ways of looking after the health of people (not perfect, just better) and importantly the ability (not yet realised) of using information better, in real time, predictively, and to anticipate rather than react to healthcare needs of people.

What we do need to do is avoid the death spiral into thinking healthcare is only about funding (“health economics does not equal health policy” hard though that may be for some). Funding is in fact a policy tool, not an outcome. Regardless of how the money is provided, how it is used is what matters.

My suggestion to avoid this dealth spiral is to think about why disconnects arising from financial handoffs cause such major problems with service, impact patient care so badly and contribute to poorer rather than better outcomes. Indeed, my view is that there is enough money (the evidence is pretty clear that outcomes do not correlate with percentage of GDP spent, but on the organisation of care itself) but it will never actually be enough, so we need to be creative, not profligate.

One way forward is to embed payment in the patient, who is the only person to actually experience integrated care (i.e. care that is not disintermediated by funding gaps). The logic of patient action triggers connectivity amongst disparate providers and the patient takes on the responsibility for the stewardship of their own care. The NHS trivialises the potentially disruptive impact of patient choice by financially disempowering that choice as policymakers fear the consequences of disruption more than poor care. Many of the disconnects in NHS and social care are constructs of policy logic constrained by untenable premises. This is not so much about patient empowerment, but the consequences to the structure of healthcare delivery when patient actions determine the funding flows. Berwick and colleagues Triple Aim, which I have operationalised into a decision tool [email me], depends on the ability to intervene and set priorities within a whole-system view of healthcare. This is not hard. The will to do this is.

Organisational logic and clinical will-power alone will not be sufficient to integrate care — if that were true, then the last 20 years in the NHS should be the golden age of integrated care! But what is necessary (but not sufficient) is the ability to redesign and flexibly innovate and introduce change in service structure locally. We will no doubt hear a lot about accountable care organisations from the US, and like in so many cases, UK folk will flock off on site visits to tour these (stopping off for some shopping along the way). ACOs are interesting because they are an organisational solution to care integration (they are also a response to how provider performance will impact their income so survival is part of the logic here). There is nothing difficult about merging health and social care, as long as the providers of these can merge. It is, in this case, not about the money, but about the logic of organisational design for purpose. Regretfully, for the NHS, there is a fear of disruptive new entrants into care delivery. Policy objectives are constrained by two rules: the first is that there is no real (by that I mean meaningful)  failure regime (which is really a set of rules about financial viability) and second that there is a general avoidance within NHS policymaking of the creative destruction of publicly funded institutions (which is a rule about the prudential use of taxpayers’ money).

One last point is about the patient’s entry point to healthcare itself and the logic of general practice as a policy instrument to deliver primary care. I am worried that there are untested assumptions about general practice. I have asked whether general practice is fit for purpose, taking into account questions about what purpose general practice is supposed to have. If general practice is to meaningfully achieve its potential, then we need to see greater care integration around the general practice itself. This is a simple logic that suggests that services should migrate to the point at which they are most used or needed. Obvious examples are at least three. The first is that public over-reliance on accident and emergency (or emergency rooms) reflects a lack of timely resource availability in general practice. (US research shows that emergency room users have insurance and could use their GP, but for the lack of being open). So there is some logic in anchoring around GPs emergency care services. Hospitals, with their own integration logic, can extend their services into general practice (I worked in a hospital that did just that) — this is called the innovator’s dilemma and reflects the inability of incumbents (GPs) to meet their own challenges but we are faced with the fear of disruptive new entrants. The second is that patients often experience a diagnostic revolving door between GPs and hospitals/specialists, until they get a diagnosis and treatment. UK evidence is stark here with delayed diagnosis for many cancers, and I’ll highlight ovarian cancer, cardiovascular disease, and neurological disorders. What we need in general practice is direct access to specialists such as oncologists, neurologists and cardiologists and break the monopoly control by hospitals of these services. The third is whether there is an appetite for general practice to unbundle acute services into primary care, or for hospitals to vertically integrate into primary care. Some wil say, ah, polyclinics, tried that. Well, they weren’t tried. In fact many innovations from abroad have been tried and failed because of the failure of the system to alter its underlying assumptions. The Evercare programme from the US failed in the UK because the test sites would not send cardiologists into people’s homes — the essential enabling logic of the Evercare programme itself. Failure dogs NHS innovations because of the inability to alter assumptions (perhaps the new CEO of NHS England Simon Stevens will reflect on how his former employer, UnitedHealthcare achieved such good results over such a long perid of time and why the NHS failed). (have a look at this for some evidence)

In any case, I hold little hope for disruptive entrants or solutions that challenge the NHS paradigm. The strenght of the funding glue is far too great to let that happen.

United Kingdom

Empire Revisited?

The UK’s Department of Health and UK Trade and Investment are, once again, exploring how to commercialise the NHS ‘brand’ overseas. Drawing examples from where some highly recognisable UK hospitals have set up, notably in the Middle East (Moorfields, Great Ormond Street) the spectre of a steady income stream coming into the NHS from these commercial enterprises has apparently got some folks in government all excited.

It is not uncommon, certainly amongst naive entrepreneurs, to say that if they only got 1% of the market they would earn billions. It seems that some civil servant has run some numbers, and come up with some sort of business case that has big numbers at the bottom of the page — otherwise, why would the DH and UKTI be claiming there would be financial benefits to the NHS into which all these global profits will be ploughed. The DH has a poor track record with commercially-oriented projects, tried with a Texan, tried with local talent, and wasted so much taxpayers’ money on ideas that were obvious failures from the beginning: NHS University, Modernisation Agency, and so on.

Criticism aside, let’s consider the real commercial environment. Let me first say that I am not against this sort of activity, and there is considerable opportunities for success. So, let’s look at the world out there.

All countries in the world are grappling with the costs of care. Others are facing that plus the need to expand their healthcare infrastructure. Rising numbers of middle class taxpayers in many countries are now informed and affluent purchasers of healthcare from a range of sophisticated, domestic suppliers. The countries that are most likely to be interested in expanding the services on offer are also countries with high levels of profit-motivated healthcare, private clinics, extensive and often high patient co-payments. All these are a long way from the experience an NHS hospital would have with a fixed tariff, publicly funded NHS.

No doubt, setting up a hospital in China or India involves a degree of approval, but unless the services are particularly hard to structure, require considerable capital expense or rare expertise, these countries are quite capable of building their own clinical facilities, training their clinicians (many of whom had in the past emigrated to work in the NHS), and supplying the necessary equipment (much of which they already make, in Workshop China). Many poor countries incur substantial losses on buying healthcare from abroad, without creating any domestic value.  Nigeria, for instance, wants to increase tertiary care investments as this is where they most frequently must sent patients abroad. Commercial enterprises from the NHS could contribute to the problem if they are seen as remitting their profits back to the UK.

Medical tourism is something high on the agenda of many countries, such as India or Singapore and they are streets ahead of the NHS when it comes to the commercialisation of their clinical services. The Medical Tourism Association, based in the US, has no UK members, though organisations from France, Spain, Hungary and Poland are members. Medical tourism, of course, is offering less expensive care at world-class levels of clinical excellence (and not just a hip op in the sun!). Indeed, the Middle East used to be medical tourists to the UK, until they started buying in what they needed. It is clear, therefore, that there is some market for medical tourism, and it depends on marketing domestic excellence internationally, rather than necessarily setting up shop in these other countries.

The DH and UKTI refer to the success of US hospitals in exerting an international presence. These US organisations are highly commercial organisations, and have well-developed clinical costing systems, and access to capital, as well incentives to align staff. True, not all are overtly commercial though and Research Triangle Institute (RTI) in North Caroline is worth thinking about as a way of structuring NHS global objectives. In effect, the US is good at this sort of thing as are European counterparts where commercial hospitals are part and parcel of the public healthcare system.  The NHS has discouraged in the past this sort of entrepreneurialism, as counter to the values of the NHS (the Patients Association has used this argument).

The apparent lack of commercial entrepreneurialism by the NHS is likely to put NHS organisations at some risk unless they make greater domestic efforts to test out and understand healthcare markets, many of which are not planned or regulated in the way the UK market is. Take for instance walk-in clinics. a sensible idea, but why are the ones at the train stations private? US instincts to be responsible to consumer preferences has led to an explosion in retail clinics, for instance, to respond to co-payment and cash patients — many countries would see these as particularly interesting.

Now let’s look at these profits. As any company will tell you, they spend considerable time thinking of ways to manage taxation across many countries. If an NHS hospital were to set up in another country, and it generated a profit, then I would think that country would want to tax it. If the hospital has set itself up as a non-profit, they that country would most likely expect any such surplus revenue to be put back into the services available in their country. Think about it. Why should, say, India, permit an NHS hospital to generate profits there which would be sent back to the UK to bulk up NHS services? The NHS and the UK are hardly broke despite the hand-wringing of government, and have no real barriers to service development except those that are self-imposed. India, on the other hand, or China or Malaysia or whereever, are using the private sector to build domestic capacity to benefit their own citizens. How should the NHS feel about shifting overseas profits from a low income country with serious health challenges, to wealthy olde GB, simply because the UK government doesn’t want to spend any more money than it has to?

And just to close the circle at this stage, other countries have similar ideas, and had spectacular failure, or lacked the necessary domestic knowledge and skills to work in this international arena. Any proposed activities will be overseen by some new review board called Healthcare UK, and what will it do?

So what are some conclusions?

I would think the best approach is to focus on helping build a country’s domestic capacity; but this sounds more like an aid programme than a commercial enterprise which DH and UKTI have identified. I might focus on India, China, Brazil, and other countries in Asia where there is considerable investment available and the need for services a priority. It may be worth noting that in many countries, the real problems lie in primary care, as patients already have direct access to specialists on a cash/copayment basis. SInce citizens/patients are used to paying cash or large co-payments, governments tend only to be concerned with regulation, rather than owning or running their own facilities. In India, Tata Steel, for instance, run their own chain of hospitals to world standards. Well-structured commercial thinking that address a country’s economic and healthcare priorities would also help them stem the flow of money to 3rd countries for the costs of care of patients sent abroad — perhaps someone in the UK will try to understand Nigeria’s objectives and offer to set up a productive tertiary centre and perhaps link it to some training facilities so they can build domestic expertise (however, Nigeria’s ICU at University College Hospital, Ibadan, is described as the best in Africa for cardiac care and was built as a public/private initiative by UCH and JNC International, based in Nigeria).

Obvious examples where I have had some inkling that opportunities exist (and not engage in vampire economics) include Libya which needs a complete refit of its healthcare delivery infrastructure (not just ambulances though that is no doubt worthy), including higher education (some hotel chains are looking to expand into hospital construction…), and other countries which have emerged from periods of conflict, and then there are those in the throws of revolution to consider — post-conflict reconstruction would bring the added benefit of advising on building fully integrated service structures (primary and secondary/tertiary/quaternary capacity) which in the end is what we all preach, isn’t it.

There is some market for contract management of hospitals, but many countries are taking a more nationalistic approach with a preference for local talent, than imported talent to run hospitals — I run seminars for health managers from many countries and they were quite sophisticated in their knowledge). Health management training centres in the UK are not really addressing the blend of commercial issues with healthcare, in the way that other countries, are able to (I’ve taught in one in the UK). Expertise is the real issue and few UK universities offers a post-graduate qualification in commercial hospital management, strategic capital planning and all that (they do offer courses more suited to public officials managing state-run hospitals, e.g. Leeds and Anglia Ruskin University’s Hospital MBA; but there is no UK or European equivalent of AUPHA in the US/Canada, so standards and practices reflecting real-world requirements are weak).

Now, if the few that could do this do it well, then it would do wonders for host countries and build the reputation for excellence that the NHS has been losing. Whether it returns profits to offset NHS underfunding is another matter.

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In Canada, healthcare in British Columbia is slowly coming apart because of the existence of a private health clinic.


Afraid, very afraid.

This link is to a legal foundation that takes on legal cases such as this and provides a reasonable overview of the situation: LINK

In Canada there is continuing debate whether the Canada Health Act‘s language that healthcare be publicly administered, means that it must be government-run. A Senate report (LINK here to the final report) of some years ago drew the view that this one of the great myths of Canadian healthcare, but the more publicly acceptable Romanov report caved in to political correctness and said that people preferred a government monopoly.

There is, however, an interesting problem that state monopolies can cause: namely that they may be manifestly unable to provide the services that they monopolise. That is to say, the government controls the whole healthcare system in some form (what in Canada is referred to in part as a single payer system, but in the case of providers, excludes providers that are emantions of the state — i.e. publicly mandated in some form) and in so doing does not provide the range of services or access provisions to meet those obligations. Now, at a simple level, would a rational person accept to buy a service from an organisation acting as a monopoly that could not meet their needs? Unlikely and we’d most likely find somewhere else to get what we needed; but what if you have no choice? This is the essence of the problem in Canada.

The European Court of Justice rulings have caused so much change in access to healthcare across Europe but the really important, in my view, relevant to healthcare actually aren’t about healthcare.  In some work I did a few years ago, some ECJ cases are instructive and may serve to help Canadian authorities identify key factors for their own decision making; the last one of the list is the one that is most interesting:

  • CBEM v CLT and IBP Case C 311/84 [1985] ECR 3261: statutory monopolies have a dominant position in the market
  • Bobson v Pompes Funebres des regions liberyees Case 30/87 [1988] ECR 2479: states may not use a dominant economic position to fix prices and restrict market entry of competitors
  • RTT v GB-INNO Case C 18/88: public undertakings operating public infrastructures abuse their dominant position by excluding third-party service and content competitors
  • Merci Convenzionali Porto di Genova SpA v Siderurgica Gabrielle Case C 179/90: dominant positions are not in illegal, but undertakings may not be created which cannot help but abuse that dominant position in what they are tasked to do by the state
  • Hofner and Elser v Macrotron GmbH Case C 41/90 [1993] 4 CMLR 306: states may not create economic entities with dominant positions that are unable to meet the demand for services, or distort the competitive structure of economic markets.

Now, the ECJ rulings may or may not interest folks in Canada as this would not necessarily present a ‘made in Canada’ solution. It is a sine qua non of Canadian healthcare that the state edifice, constructed by the Canada Health Act, protects Canadians from healthcare costs and trades off greater choice and service access (i.e. waiting times) for that benefit.

Of course, one might argue that healthcare isn’t an economic market, but in fact it is hard not to think of it as such for a number of reasons. It accounts for about 10% of most economies, perhaps 5% of the workforce is employed in healthcare, it comprises provider and payer bodies that interact with each other through contractual arrangements of one sort or another, and there are user fees/copayments, or reimbursements to patients which clearly suggest some sort of economic transaction. Keeping things simple helps, and avoiding the usual arguments that patients are unable to make informed choices or generally do not as such ‘choose’ healthcare as a consumable good, but are forced into a transaction by their liver or heart or an accident. How we get their seems irrelevant: it would be like arguing that the housing market wasn’t a market because people are ‘forced’ into needing housing, or even food….

In my view it is time for the Canada Health Act to be interpreted in the form that Kirby and others in their Senate report urged and enable greater contestability of the provision of healthcare, as long as the basic underlying principles of community risk sharing on the payment side isn’t compromised. It is this latter point that was the essence of the ruling of the US Supreme Court (the bit about mandates and whether payment was a tax or a penalty).

No country today sensibly tries to restrict provision so long as they have control of the payment levers. However, and here austerity raises an ugly presence, healthcare is the biggest item in the provincial budgets and unless the provincial governments figurer out how to bend the cost curve down, this cost area will continue to consume a larger and larger chunk of provincial expenditure. Solutions lie, in part, in creating conditions for consumer (patient) driven reforms; there are no incentives for health professionals to do things differently (i.e. less expensively) when the state decides the structure and capacity of the healthcare system, which might actually under specify what is needed, but overpay for that capacity. Across Europe, healthcare costs are included in the national debt restructuring but we don’t see enough reform efforts as the bulk of the research has focused on state-mandated health reform so little is know about how to take apart a health system. The same holds true in countries like Canada. Sclerotic administrative practices and controls that manifestly restrict freedom of consumers to choose and those choices to lead to system reform need rooting out.

Regretfully, it appears, like in all things that really matter, the courts will force the health reform debate.

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Capturing race

Is HTA like GO? (Photo credit: Wikipedia)

Increasingly widespread amongst the world’s healthcare systems is the assessment of medicines and devices using various types of cost-benefit or cost-utility analysis; this is called health technology assessment or HTA. HTA seeks to determine, using evidence of one sort or another, whether something is broadly speaking affordable, taking account of the cost of the medicine/device taken against the benefit to a particular constellation of diagnostic attributes in patients. This is usually quantified in a measure called a QALY: a quality-adjusted life year, which is a way to assess the value for money of a particular health technology. In short, it is a way of valuing lives.

HTA is a utilitarian approach to assessment. To some extent, this is not surprising as HTA is in the main a method developed by health economists, who, like economists in general, hypothesise that we make daily decisions based on the utilty of this or that, in terms of trade-offs (Pareto optimisation, for instance) and rational decision making (that people seek to maximise value, or utility in what they do). This approach is increasingly in dispute in light of the findings from neurosciences and behaviour economics: by posting that people do not always make decisions that are in their own best interests, a key assumption of traditional economics, that of the rational actor, always calculating trade-offs and maximising benefits, and so on, is questioned.

The problem with utilitarianism, though, is it doesn’t pay attention to the freedom of the individual; it positions the justification of its results on the net benefit to society, regardless of the impact on rights of individuals. Obviously, health economists don’t watch Star Trek or they would know that the needs of the one outweigh the needs of the many. But then, that, too, is a moral position.

Indeed, it is perhaps the sense that utilitarian conclusions don’t seem to correlate with many people’s moral sentiments that may explain why decisions of HTA agencies, for instance NICE in the UK (England) lead to moral outrage and a sense of, if not injustice, at least unfairness. While the results of an HTA process may lead to a quantitatively defensible conclusion, people sense that this conclusion is not morally defensible.

How are we to judge? Few would use utilitarian arguments in this way in other spheres: would we calculate who needs welfare in terms of the net benefit to society in terms of quality of life years, though perhaps we do allocate welfare on moral assumptions that some people deserve welfare while others don’t.

Do we allocate support to communities ravaged by floods based on their overall contribution, or utility, to society.  If you could donate £10 million to a university, would you pick Oxford University or Thames Valley University; which one is more worthy? But would you want to treat people this way?

HTA doesn’t even let us value lives in quite this way, since it neatly avoids deciding about the worth of any particular type of person, who just happens through misfortune to find themselves needing some medicine that fails the HTA tests. HTA keeps us from confronting the fact that HTA is a way of drawing a conclusion, without actually having to decide any allocations for any one person in particular. Bentham would approve.

There is, though, a technical problem with HTA and it has to do with whether at one level of assessment outcome, a utilitarian models can be used when the decision to be made does not have life threatening consequences for some people.

If the QALY threshold is, say £35,000, as it apparently is in the case of NICE, are the decisions below that threshold, which tend toward ‘yes’ or ‘approval’ morally different from decisions above that threshold?  I suggest that different moral criteria come into play above the threshold and this is where I think out moral outrage should be directed and where HTA fails.  Regretfully, HTA models see the results as broadly continuous, that is, decisions above and below this threshold are seen as essentially of the same type.  But I have argued elsewhere that above the threshold, HTA models fail but for reasons other their analytical soundness, because above this threshold, the conclusions may lead to a lessened quality of life, in other words, they actually crystallise the health outcome rather than avoid it.

Therefore, in valuing lives, those above the threshold experience greater injustice than those below; they are treated differently, unfairly, unjustly, perhaps less worthy, but certainly differently.  Indeed, above the threshold, we feel we are more in the realm of our moral sentiments about the value of human life, and less our moral sentiments about the allocation of scarce resources.

If this were not so, then we would be living in a society that believes that the determinant of all important moral and political decisions is affordability, and if that were so, they we could not even afford the costs of inefficiency brought on by democracy, the inconvenience of not being able to exploit people, the costs of equal rights.

Perhaps, though, on our financially contaminated world, all we can think about today is money and that is further contaminating our perception of what sort of society we are actually trying to foster.  Certainly, protests on Wall Street and elsewhere point to the view that there seems to be some unjust allocation of the benefits of government bail-outs that just doesn’t benefit those ‘at the bottom’.

John Rawls wrote that the we should distribute opportunity in a society in such a way as to ensure that the least well off benefit the most. In the context of HTA, medicines and technologies that benefit only a few, but at great cost, represent a cost worth having as the least well off, namely those who would need it most ( have the condition it treats, and in some societies can afford it least), would benefit, even if a little, as that is the price we pay for justice.

This, I suggest, is the root of our moral outrage at HTA, that is unjustly fails to serve those who need it most.

I am left with wondering about the underlying morality of HTA as a government scheme. Governments, as we know, are the last resort, when things are tough and one would hope, ensure that the least well-off in society are not penalised simply in virtue of being least well-off.  In healthcare, someone has to be the carer of last resort; using HTA as a way of avoiding this responsibility is not morally defensible.

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Map of countries by public debt from CIA 2009 ...

Green is good = lower public debt

Vito Tanzi’s book on the modern state “Government versus Markets” is a mine of fresh perspectives. His subtle challenging of the ability of governments to intervene in market failure is thoughtful — when is market failure simply an excuse for hyperactive civil servants to do something, rather than clear evidence of a problem? And not to speak of motives as we are familiar with the ‘rent-seeking’ behaviour of public bodies/officials which can frustrate efforts to streamline and prioritise public services.

European governments are today the cause of considerable global anxiety with their bloated state bureaucracies, high levels of taxation and disincentivised, but pampered (subsidised) industries. It is instructive to reflect that a large component of state debt arises from their healthcare sectors; that much Greek debt lies in the capital funding of hospital construction, and that rising taxes in France are designed to protect social welfare and health benefits through the regressive social charges (contribution, in French).

Tanzi also challenges the scale of modern governments, as a percentage of the economy.  An article by Neil Reynolds, writing in Toronto’s Globe and Mail started the discussion. (lead article here) A subsequent article in The Globe and Mail listed the following countries as a short list of small state sector countries: (specific reference here):

Hong Kong: Population: 7.1 million. GDP: $302-billion (U.S.). Per-capita GDP: $42,748. Unemployment: 5.3 per cent. Inflation: 0.5 per cent. Five-year compound average growth rate: 3.1 per cent. Percentage of GDP spent by the state: 18.6 per cent.

Singapore: Population: 4.8 million. GDP: $240-billion. Per-capita GDP: $50,523. Unemployment: 3.0 per cent. Inflation: 0.2 per cent. Five-year compound annual growth rate: 4 per cent. Percentage of GDP spent by the state: 17.2 per cent. Singapore requires its citizens to buy their own health and employment insurance – a requirement that has produced an exceptionally high level of savings and one of the richest countries on Earth.

Chile: Population: 17 million. GDP: $243-billion. Per-capita GDP: $14,341. Unemployment: 10.8 per cent. Inflation: 1.7 per cent. Five-year compound annual growth rate: 2.8 per cent. Percentage of GDP spent by the state: 21.1 per cent.

Costa Rica: Population: 4.6 million. GDP: $35-billion. Per-capita GDP: $11,579 (the highest in the country’s Central American neighbourhood). Unemployment: 7.8 per cent. Inflation: 5.8 per cent. Five-year compound annual growth rate: 4.5 per cent. Percentage of GDP spent by the state: 20.9 per cent. (Costa Rica is running a deficit these days – keeping tax revenue as a percentage of GDP to 15 per cent.)

Taiwan: Population: 23.1 million. GDP: $736-billion. Per-capita GDP: $31,834. Unemployment: 5.9 per cent. Inflation: 0.9 per cent. Five-year compound annual growth rate: 2.5 per cent. Percentage of GDP spent by the state: 18.5 per cent.

Now, returning to healthcare, these countries also tend toward healthcare systems that are not social insurance or national taxation based, but are what some authors (see S-Y Lee and C-B Chun, The National Health Insurance system as one type of new typology: the case of South Korea and Taiwan. Health Policy  2008 Jan;85(1):105-13. Epub 2007 Aug 20. Abstract here) are called “national health insurance systems”, characterised by a large government interest through establishing rules and standards, but mainly private delivery, with high co-payments, consideration patient choice, and rising levels of investment. These emerging successful, small state sector economies may also be inventing an affordable and sustainable healthcare system, which could be explored in more detail in European countries as they grapple with public debt. The current financial crisis in Europe, entails the need for root and branch reform of the largest elements of public expenditure — health and social care, university funding, etc. — along with venting the gaseous expansion of the regulatory state.

It will be difficult for European-level policymakers to engage in sensible policies when key drivers of cost are driven at the member state level. An obvious example is Spain, where the debt resides at the regional level, but the policy tools for that debt are owned by the national government. To illustrate, Castille La-Mancha can’t pay the pharmacists for drugs, so pharmacists are asking patients to pay cash. (article here: scroll down to find the specific reference).

Having 19th century sized governments, does not entail having 19th century healthcare.