What does it take to make the UK and other similar health systems efficient

December 3rd, 2008 by Teodor Todhe

From time to time I have had the urge to try figure out which between the two different models of health systems in the developed world, namely the USA health system in one side or the UK, Canadian, Australian, New Zealandian, Danish etc. in the other, is better or worse than the other.

It is quite difficult to give an answer to that, simply because of lack of reliable and systemic data (Sicko aside) to quantify the loss of wellbeing and health stock in each of the system. We all know that in USA the loss of wellbeing and health stock happens in a brutal way (denying care to a sick can’t be but brutal). I believe, though, that in UK and all the other countries I mentioned above, the wellbeing and population and its health stock is lost any way, but in a very subtle way. In the long waiting lists versus clean denial of services for the uninsured in USA or routing them to ER or sending them scary bills frightening them for life and make them sit tight at home when otherwise they would go to primary care doctors or be admitted to a hospital when they need such services. For the time being,

I strongly believe that it is not quantifying the suffering in both systems to see which system is better or worse will make a difference. Important is to admit that both systems have huge problems and a long way to go to better themselves.

The second question in my mind has been which system is in a better shape and likely to become the ideal system after appropriate policy measures would be implemented and what would take to achieve that. I might be wrong but I think that the health systems similar to the UK system are. Here is the fix they need:

The main characteristic of health systems in UK, Australia, Canada, Netherlands, Denmark, and any other western/developed country is the PUBLIC provision of most of diagnostic and treatment (medical care). As mentioned above the policy problem is the loss of population well being and health stock due to long waiting time for needed medical procedures. There is plenty evidence in literature indicating that people in those countries are placed in long waiting list even for life saving procedures and not only for hip replacements and cataracts. Why this is the case? The root cause of this undesired social condition should be looked at working arrangements of public providers. Inherently public agencies determine a certain behavior among their employees known as BUREAUCRATIC LABOR SUPPLY, a behavior characterized by providers shirking instead of providing services. This leads to market shortages for services needed by population given the demand and the capacity of the system.

The SOLUTION is the PRIVATIZATION of all the public hospitals, ambulatory care settings, and other diagnostic centers and labs and keep the market operational by instituting effective ant monopolistic policies. Providers immediately will start to increase service output to generate revenue that are needed first to cover operating costs of their new businesses and than make a profit. (operating costs of their private entities will hit them as a rock in the head from which they will learn how to cope with the new situation; no training to acquire management skills needed). In ideal competitive conditions they will do it by charging prices that clear the demand bringing demand and supply in equilibrium. In economic parlance they will increase the services output up to the point marginal price will equal marginal costs, which in turn will take care of unneeded services and lead to bankruptcy of inefficient entities”

Bringing prices of services in market equilibrium does not necessarily mean that prices of services will be affordable for all. This move does only make market efficient. There will still be services that for whatever reasons (such as new equipment or technology, lack go specialists, etc.) will have higher prices than most of the population will be able to afford and willing to spend. It is the government with its national health system that will cover such services through risk pooling mechanisms.

Ironically, the opposite is needed here in USA. The main task here is creating a risk pooling system to pay for care for all. But that would be hardly enough. Other easily applicable measures are needed to complement the universal coverage and all would bring efficiency in the system. However, elaborating on these measures is beyond of the scope of this writing. My intent was to provide a one shot fix in a health system.

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2 Responses to “What does it take to make the UK and other similar health systems efficient”

  1. paul Says:

    As a Canadian, we used to get top notch medical attention without any waiting. Today, the system creates wait lines for some procedures etc. but health care is still free.Why? Because our federal government cut funding to the medical system, offloading the cost on the provinces, effectively removing the necessary money to continue rendering the same level of service. Why? If you follow the “debate” up here it becomes clear it is because large corporations salivating at the opportunity for profit are engaged in a propaganda war to discredit publically funded universal health care.This phenomena is also ocurring in European nations. The U.S. government spends more money per capita on the medical system than any other nation but is the only western nation that leaves millions of its citizens with no medical coverage. It also leads all western nations in such categories as infant death rate, shortened lifespan etc. An adequately funded universal health care system does not have to fund corporate profits and unlike corporate run healthcare can make the overiding priority patient health rather thn profit.

  2. dblacklock Says:

    As I mentioned in related subject, the PBS recently had a program comparing the healthcare systems in England, Germany, Japan, Switzerland, and Taiwan. Taiwan seemed to have the best system. Unlike the US, that seems to think it’s unAmerican to look at other countries for examples, it revamped everything 10 - 15 years ago or so, picking and choosing the best features of each. Not every country had long waits for surgical procedures. If they did have, like for total joints, it wouldn’t be a big deal. Those who get these operations frequently wait too long of their own accord anyway. It’s not an acute situation. Germany didn’t pay their doctors enough but several of the countries did. There is not nearly enough looking around at the successful socialized medicine that occurs in every other industrialized country.


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